Synopsys(US:SNPS)2025-12-10 21:12Revenue Performance - Fourth quarter revenue for fiscal year 2025 was $2.255 billion, a 38% increase from $1.636 billion in the same quarter of fiscal year 2024[2] - Full-year revenue for fiscal year 2025 reached $7.054 billion, reflecting a 15% increase from $6.127 billion in fiscal year 2024[2] - Total revenue for the twelve months ended October 31, 2025, increased to $7,054,178, up from $6,127,436 in the previous year, representing a growth of approximately 15.1%[33] - Revenue from the Design Automation segment for the twelve months ended October 31, 2025, was $5,302.4 million, up 25.6% from $4,221.1 million in 2024[44] - The Design IP segment revenue decreased to $1,751.8 million in 2025, down 8.1% from $1,906.3 million in 2024[44] Income and Earnings - Non-GAAP net income for the fourth quarter of fiscal year 2025 was $543.1 million, or $2.90 per diluted share, compared to $529.9 million, or $3.40 per diluted share, in the fourth quarter of fiscal year 2024[6] - GAAP net income for fiscal year 2025 was $1.336 billion, or $8.07 per diluted share, down from $1.442 billion, or $9.25 per diluted share, in fiscal year 2024[5] - Non-GAAP earnings per diluted share for fiscal year 2025 was $12.91, compared to $13.20 in fiscal year 2024[6] - Net income attributed to Synopsys for the twelve months ended October 31, 2025, was $1,332,220, compared to $2,263,380 in the previous year, indicating a decrease of about 41.2%[34] - Net income for the twelve months ended October 31, 2025, was $1,333,251, a decrease of 40.4% compared to $2,235,810 in 2024[40] Backlog and Future Expectations - The company reported a record backlog of $11.4 billion, indicating strong business resilience[3] - The company expects fiscal year 2026 revenue to be approximately $9.610 billion, including $2.9 billion from Ansys[4] - The anticipated impact of divested businesses is approximately $110 million on revenue for fiscal year 2026[4] Expenses and Costs - Research and development expenses for the twelve months ended October 31, 2025, were $2,479,338, an increase from $2,082,360 in the previous year, reflecting a growth of approximately 19.1%[33] - Total current assets decreased to $6,012,102 as of October 31, 2025, from $6,469,666 a year earlier, a decline of about 7.1%[36] - Total liabilities increased to $19,897,446 as of October 31, 2025, compared to $4,050,355 in the previous year, showing a significant rise[36] - The company reported a gross margin of $5,430,629 for the twelve months ended October 31, 2025, compared to $4,882,147 in the previous year, representing an increase of approximately 11.2%[33] Strategic Initiatives - The company plans to integrate Ansys fully and drive operational efficiency in fiscal year 2026[3] - The company plans to reallocate resources in its Design IP segment to focus on higher growth opportunities, indicating a strategic shift[30] - Synopsys expects to realize synergies from the integration of Ansys, which is anticipated to impact future performance positively[30] - The company has planned stock repurchases as part of its capital allocation strategy, reflecting confidence in its financial position[30] Cash Flow and Financing - Cash flows from operating activities increased to $1,518,608 in 2025 from $1,407,029 in 2024, reflecting a growth of 7.9%[40] - Cash, cash equivalents, and restricted cash at the end of the period were $2,893,721, down from $3,898,729 at the beginning of the year, reflecting a decrease of 25.7%[41] - The company reported a net cash used in investing activities of $(15,881,269) in 2025, compared to a net cash provided of $1,223,013 in 2024[40] - Proceeds from debt in financing activities amounted to $14,329,340 in 2025, with a significant increase compared to no proceeds in 2024[40] Operating Margins - Adjusted operating income for the Design Automation segment increased to $2,213.5 million in 2025, a rise of 35.6% from $1,631.9 million in 2024[44] - Total adjusted segment operating income for the twelve months ended October 31, 2025, was $2,632.9 million, compared to $2,362.1 million in 2024, marking an increase of 11.4%[46] - The adjusted operating margin for the Design Automation segment improved to 41.7% in 2025 from 38.7% in 2024[44] Tax and Restructuring - Synopsys will transition to a three-year normalized non-GAAP tax rate starting in fiscal year 2026, enhancing consistency across reporting periods[60] - The projected annual non-GAAP tax rate is influenced by the acquisition of Ansys in Q3 of fiscal year 2025 and the enactment of the One Big Beautiful Bill Act, affecting taxable income from fiscal year 2026[60] - Restructuring activities are initiated to align costs with operating plans, including severance and facility closures, which are not considered part of core operations[58] Core Business Assessment - Gains and losses from the sale of equity investments in privately held companies are excluded from core business assessments[59] - Changes in the fair value of non-qualified deferred compensation plans are not used to assess core profitability[59] Company Overview - Synopsys is a leader in engineering solutions, focusing on silicon design, IP, simulation, and analysis solutions[62] - The company partners with customers across various industries to enhance R&D capabilities and productivity[62]