Synopsys Posts Financial Results for Third Quarter Fiscal Year 2024

SUNNYVALE, Calif., Aug. 21, 2024 — (PRNewswire) —   Synopsys, Inc. (Nasdaq: SNPS) today reported results for its third quarter of fiscal year 2024. Revenue for the third quarter of fiscal year 2024 was $1.526 billion, compared to $1.354 billion for the third quarter of fiscal year 2023.  

"Our strong third quarter results and expectations for a record year continue to demonstrate the resiliency of Synopsys' business," said Sassine Ghazi, president and CEO of Synopsys. "The complexity and pace of technology innovation is accelerating as silicon and systems companies race to capitalize on AI in this era of pervasive intelligence. Synopsys is mission-critical to technology innovation and our customer set is expanding as more companies in more industries define and optimize system performance at the silicon level."

"Synopsys delivered an excellent third quarter, setting a new quarterly revenue record and achieving non-GAAP EPS above our guidance range," said Shelagh Glaser, CFO of Synopsys. "The strong momentum across the business is a result of our leadership products and relentless execution. For the full year, we expect to achieve revenue growth of approximately 15% and non-GAAP EPS growth of approximately 24% while expanding non-GAAP operating margin by two points."

____________________________________________

1 Synopsys' Software Integrity business has been presented as a discontinued operation in the consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis unless otherwise noted.

Continuing Operations 
On May 5, 2024, Synopsys entered into an agreement to sell its Software Integrity business. Unless otherwise noted, Synopsys' Software Integrity business has been presented as a discontinued operation in the consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis.

GAAP Results 
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2024 was $425.9 million, or $2.73 per diluted share, compared to $335.7 million, or $2.17 per diluted share, for the third quarter of fiscal year 2023.

Non-GAAP Results
On a non-GAAP basis, net income for the third quarter of fiscal year 2024 was $535.5 million, or $3.43 per diluted share, compared to non-GAAP net income of $419.0 million, or $2.70 per diluted share, for the third quarter of fiscal year 2023.

For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below. 

Business Segments 
Synopsys reports revenue and operating income in two segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, system integration products and services, digital, custom and field programmable gate array IC design software, verification software and hardware products, manufacturing software products and other and (2) Design IP, which includes our Synopsys IP portfolio.

Financial Targets 
Synopsys also provided its consolidated financial targets for continuing operations for the fourth quarter and full fiscal year 2024. The fiscal year targets include the impact of an extra week in fiscal year 2024, which was included in the first quarter of fiscal year 2024. These financial targets assume no further changes to export control restrictions or the current U.S. government "Entity List" restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below. 

Fourth Quarter and Full Fiscal Year 2024 Financial Targets  (1)(2)

(in millions except per share amounts)

           
 

 Range for Three Months Ending

 

Range for Fiscal Year Ending

 

October 31, 2024

 

October 31, 2024

 

Low

High

 

Low

High

Revenue

$              1,614

$              1,644

 

$              6,105

$              6,135

GAAP Expenses

$              1,210

$              1,230

 

$              4,577

$              4,597

Non-GAAP Expenses

$              1,027

$              1,037

 

$              3,760

$              3,770

Non-GAAP Interest and Other Income (Expense), net

$                     8

$                   10

 

$                   41

$                   43

Non-GAAP Tax Rate

15 %

15 %

 

15 %

15 %

Outstanding Shares (fully diluted)

155

157

 

155

157

GAAP EPS

$                2.25

$                2.39

 

$                9.71

$                9.85

Non-GAAP EPS

$                3.27

$                3.32

 

$              13.07

$              13.12

Operating Cash Flow

     

~ $1,300

Free Cash Flow (3)

     

~ $1,100

Capital Expenditures

     

~ $200

           

(1) Synopsys' fourth quarter of fiscal year 2024 and its fiscal year 2024 will end on November 2, 2024. For presentation purposes, we refer to the
closest calendar month end. The first quarter of fiscal year 2024 included one extra week. 

(2) Presented on a continuing operations basis.

(3) Free cash flow is calculated as cash provided from operating activities less capital expenditures and capitalization of software development costs.


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