Synopsys(SNPS) - 2024 Q1 - Quarterly Results

Financial Performance - Record quarterly revenue of $1.649 billion, up approximately 21% year over year compared to $1.361 billion in Q1 FY 2023[2] - GAAP net income for Q1 FY 2024 was $449.1 million, or $2.89 per diluted share, compared to $271.5 million, or $1.75 per diluted share in Q1 FY 2023[5] - Non-GAAP net income for Q1 FY 2024 was $553.7 million, or $3.56 per diluted share, compared to $406.7 million, or $2.62 per diluted share in Q1 FY 2023[6] - Total revenue for the first quarter of fiscal year 2024 was $1,649.2 million, a 21.2% increase from $1,361.3 million in the same period of fiscal year 2023[36] - Net income attributed to Synopsys for the first quarter was $449.1 million, a 65.5% increase compared to $271.5 million in the prior year[36] Revenue Segmentation - Design Automation segment revenue was $985.3 million, representing 59.7% of total revenue, while Design IP segment revenue rose to $525.7 million, accounting for 31.9% of total revenue[46] - Time-based products revenue increased to $904.4 million, up 15.6% from $782.3 million year-over-year[36] Guidance and Targets - The company reaffirmed its full-year 2024 targets for revenue and non-GAAP operating margin, while raising non-GAAP EPS guidance[3] - Financial targets for Q2 FY 2024 include revenue range of $1.560 billion to $1.590 billion and non-GAAP EPS range of $3.09 to $3.14[12] - For the full fiscal year 2024, revenue targets are set between $6.570 billion and $6.630 billion, with non-GAAP EPS targets between $13.47 and $13.55[12] Operational Highlights - The company highlighted strong execution driven by AI investments from customers in silicon and systems[3] - Synopsys operates in three segments: Design Automation, Design IP, and Software Integrity, contributing to robust design activity among semiconductor and systems customers[7] Financial Metrics - The effective non-GAAP tax rate for Q1 FY 2024 was 15.0%[24] - Cash and cash equivalents decreased to $1,118.9 million from $1,438.9 million at the end of the previous quarter[39] - Total assets increased to $10,558.3 million, up from $10,333.1 million at the end of the previous quarter[39] - The company reported a gross margin of $1,320.1 million, reflecting a strong operational performance compared to $1,077.0 million in the same quarter last year[36] - GAAP total operating income for the three months ended January 31, 2024, was $359.6 million, up from $255.9 million in the same period of 2023, representing an increase of 40.5%[48] - Total adjusted segment operating income increased to $638.4 million in Q1 2024 from $479.2 million in Q1 2023, reflecting a growth of 33.3%[48] Expenses and Adjustments - Stock-based compensation expenses rose to $180.7 million in Q1 2024 from $134.2 million in Q1 2023, an increase of 34.5%[48] - Amortization of acquired intangible assets increased to $27.1 million in Q1 2024 compared to $25.4 million in Q1 2023, a rise of 6.7%[48] - Non-qualified deferred compensation plan expenses increased significantly to $40.1 million in Q1 2024 from $20.2 million in Q1 2023, marking a 98.0% increase[48] - Acquisition/divestiture related items accounted for $30.9 million in Q1 2024, up from $2.6 million in Q1 2023, indicating a substantial increase[48] Strategic Initiatives - The company plans to explore strategic alternatives for its Software Integrity segment amid ongoing macroeconomic uncertainties[33] - Synopsys is in the process of acquiring ANSYS, Inc., with expectations regarding financing and regulatory approvals still pending[33] Non-GAAP Measures - The company has adopted a non-GAAP tax rate of 15% for fiscal year 2024 to provide better consistency across interim reporting periods[61] - Synopsys has begun excluding gains (losses) on the sale of strategic investments from non-GAAP financial measures in Q1 2024[54] - Synopsys emphasizes that non-GAAP financial measures are intended to supplement GAAP measures and provide a clearer view of core business operations[53] Additional Notes - The first quarter included a favorable impact of one additional week compared to FY 2023[2] - The first quarter of fiscal year 2024 included one extra week compared to the first quarter of fiscal year 2023[51]