Synopsys Inc. (SNPS) has seen a sharp decline of more than 18% in its stock price over the past three months, underperforming both its industry and the broader technology sector. During this period, the Zacks Computer – Software industry declined 4.2%, and the Zacks Computer and Technology sector fell by 6.7%. Several factors have contributed to this decline, including mounting fears over a potential U.S. recession and a slowdown in the company's growth within its key design automation segment. Despite thes ...

"In today's competitive markets for imaging products, the ability to comprehensively and accurately prototype imaging systems virtually is a game-changer," said Emilie Viasnoff, head of Optical Solutions at Synopsys. "ImSym embodies our commitment to innovation by offering a comprehensive, intuitive, and physics-based software solution for imaging system design and validation. After decades at the forefront of software for optical design, we are proud to expand our trusted solutions into the virtual prototy ...

1 22 1 and H+ t II E H appen u t 10 n Sundry Photography The Synopsys Investment Thesis When I heard about the proposed merger of Synopsys Inc. (NASDAQ:SNPS) and Ansys Inc. (ANSS) , I was very interested as I consider both companies to be of high quality. Therefore, I wanted to see what upside potential I see over the next 5 years and what factors were likely to drive returns. And here I found the shortcoming of the high multiple, which together with the likely rising number of shares outstanding will defin ...

Core Insights - Synopsys is a leading supplier in the semiconductor industry, particularly in electronic design automation (EDA) software, controlling a significant market share alongside competitors [2][3] - The company has underperformed compared to the broader semiconductor industry, with a total return of 10% this year, while the Invesco PHLX Semiconductor ETF has returned over 26% [1] Business Segments - Synopsys operates in three segments: Design Automation (EDA), Design IP (IP cores), and Software Integrity, with EDA contributing 63% of revenues, Design IP 26%, and Software Integrity 9% in fiscal 2023 [3] - The Software Integrity business is currently being sold and is reported under "discontinued operations" [3] Market Position - The EDA market is highly concentrated, with three firms controlling 75% to 80% of the market, providing Synopsys with a competitive advantage and high operating margins [5] - EDA software and IP cores contribute a small percentage (2% to 3%) of the overall value added in the semiconductor industry, but are essential for chip design [3][4] Financial Performance - In fiscal Q3 2024, Synopsys reported adjusted EPS of $3.43, a 27% increase year-over-year, and sales of $1.53 billion, exceeding expectations by $10 million and reflecting a 13% increase [6] - The company raised its full-year adjusted EPS guidance to a midpoint of $13.10, slightly above analyst expectations [7] Industry Trends - Concerns were raised about the impact of Intel's layoffs on Synopsys, as Intel is a major customer; however, there are indications that this could lead to increased outsourcing of EDA services to Synopsys [8][9] - Synopsys is positioned to adapt to industry trends, as indicated by the CEO's comments on partnerships and solutions relevant to the evolving data center market [11]

Core Viewpoint - Synopsys reported better-than-expected earnings for Q3 FY2024, with non-GAAP EPS of $3.43, exceeding the Zacks Consensus Estimate of $3.28, and a year-over-year increase of 27% driven by higher revenues and improved cost management [1] Financial Performance - Revenues increased by 13% year over year to $1.53 billion, aligning with the Zacks Consensus Estimate, supported by growth across multiple business segments [1] - License-type revenue breakdown: Time-Based Product revenues (52.6% of total) decreased by 2.9% to $803.1 million, Upfront Product revenues (29%) rose by 51.2% to $442.5 million, and Maintenance and Service revenues (18.4%) increased by 19.5% to $280.1 million [3] - Segment-wise, Electronic Design Automation (EDA) revenues (66.9% of total) were $1.02 billion, up 4.9% year over year, while Design IP revenues (30.4% of total) amounted to $463.1 million [4] Geographic Performance - Revenue distribution: North America (44% of total) generated $672.6 million, Europe (9%) contributed $144.6 million, Korea (13%) brought in $194.8 million, China (17%) accounted for $266.7 million, and Other regions (16%) generated $247 million [5] Profitability Metrics - Non-GAAP operating margin was 40%, expanding by 360 basis points year over year [5] - EDA's adjusted operating margin increased by 70 basis points to 41.5%, while the Design IP segment's margin improved significantly to 36.7% from 23.6% in the previous year [6] Balance Sheet & Cash Flow - As of July 31, 2024, Synopsys had cash and short-term investments of $1.99 billion, up from $1.66 billion as of April 30, 2024 [7] - Total long-term debt decreased to $15.6 million from $17 million in the previous quarter [7] - Cash flow from operating activities, including discontinued operations, was $844.2 million for the first nine months, compared to $1.37 billion in the same period last year [7] Guidance - For FY2024, Synopsys expects revenues between $6.105 billion and $6.135 billion, with non-GAAP earnings projected in the range of $13.07-$13.12 [8] - For Q4 FY2024, expected revenues are between $1.614 billion and $1.644 billion, with non-GAAP EPS estimated between $3.27 and $3.32 [9]

Core Insights - Synopsys reported earnings per share of $3.43, exceeding the analyst estimate of $3.28 [1] - The company achieved revenue of $1.53 billion, which is 0.39% higher than the analyst estimate of $1.52 billion [1]

Synopsys (SNPS) reported $1.53 billion in revenue for the quarter ended July 2024, representing a year-overyear increase of 2.6%. EPS of $3.43 for the same period compares to $2.88 a year ago. The reported revenue represents a surprise of +0.04% over the Zacks Consensus Estimate of $1.53 billion. With the consensus EPS estimate being $3.28, the EPS surprise was +4.57%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expe ...

Synopsys (SNPS) came out with quarterly earnings of $3.43 per share, beating the Zacks Consensus Estimate of $3.28 per share. This compares to earnings of $2.88 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 4.57%. A quarter ago, it was expected that this maker of software used to test and develop chips would post earnings of $3.03 per share when it actually produced earnings of $3, delivering a surprise of -0.99%. Over the l ...

Adjusted Segment Operating Income - Total adjusted segment operating income for the three months ended July 31, 2024, was $610.6 million, compared to $492.8 million for the same period in 2023[32] - Total adjusted segment operating income for the nine months ended July 31, 2024, was $1,758.8 million, compared to $1,380.5 million for the same period in 2023[32] Stock-Based Compensation - Stock-based compensation for the three months ended July 31, 2024, was $164.4 million, compared to $131.5 million for the same period in 2023[32] - Stock-based compensation for the nine months ended July 31, 2024, was $492.6 million, compared to $384.5 million for the same period in 2023[32] Acquisition/Divestiture Related Items - Acquisition/divestiture related items for the three months ended July 31, 2024, were $41.7 million, compared to $4.8 million for the same period in 2023[32] - Acquisition/divestiture related items for the nine months ended July 31, 2024, were $91.8 million, compared to $9.8 million for the same period in 2023[32] Amortization of Acquired Intangible Assets - Amortization of acquired intangible assets for the three months ended July 31, 2024, was $18.6 million, compared to $13.0 million for the same period in 2023[32] - Amortization of acquired intangible assets for the nine months ended July 31, 2024, was $53.3 million, compared to $38.6 million for the same period in 2023[32] Non-Qualified Deferred Compensation Plan - Non-qualified deferred compensation plan for the three months ended July 31, 2024, was $25.8 million, compared to $21.5 million for the same period in 2023[32] - Non-qualified deferred compensation plan for the nine months ended July 31, 2024, was $76.3 million, compared to $44.1 million for the same period in 2023[32]

Results Summary1 Record quarterly revenue of $1.526 billion, up approximately 13% year over year. Quarterly GAAP earnings per diluted share of $2.73; non-GAAP earnings per diluted share of $3.43, up approximately 27% year over year and exceeding guidance. Expecting record full-year revenue with growth of approximately 15% driven by continued, strong execution and business momentum. SUNNYVALE, Calif., Aug. 21, 2024 /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its third quarter of ...