Synopsys(US:SNPS)2021-12-02 03:40Financial Data and Key Metrics Changes - Synopsys reported a revenue increase of 14% to $4.2 billion, with more than 20% earnings growth and a non-GAAP operating margin of 30.5% [8][44] - Non-GAAP earnings per share rose to $6.84, reflecting a 23% increase year-over-year [43] - Operating cash flow reached a record $1.49 billion, with cash and short-term investments totaling $1.58 billion [45][41] Business Line Data and Key Metrics Changes - Semiconductor and System Design segment revenue was $3.8 billion, driven by broad-based strength across all product groups and geographies [44] - Software Integrity segment revenue increased by 10% to $394 million, with expectations to return to 15% to 20% growth in 2022 [44][31] - The IP business surpassed $1 billion in revenue, growing approximately 20% due to strong demand for outsourcing [16][44] Market Data and Key Metrics Changes - The company noted strong demand across various verticals, including automotive, high-performance computing, and AI, indicating a robust market environment [10][12] - Synopsys has secured approximately 500 IP wins in the automotive sector, reflecting the electrification and push for autonomous driving [18] Company Strategy and Development Direction - Synopsys is focusing on the "Smart Everything" era, emphasizing the integration of hardware and software to address complex design challenges [10][14] - The company is raising its long-term financial objectives, targeting strong double-digit revenue growth and mid-teens non-GAAP earnings per share growth [9][50] - Investments in AI and advanced technologies are expected to drive future growth, particularly in design automation and verification [22][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to meet growing customer demands, supported by a strong backlog of $6.9 billion [41][63] - The semiconductor industry is experiencing significant growth, with increased investments from various sectors, including hyperscalers and automotive companies [58][96] - Management highlighted the importance of security and software integrity in the evolving technological landscape, with a commitment to enhancing these areas [30][31] Other Important Information - The CFO, Trac Pham, announced plans to retire in fiscal 2022, with a commitment to ensure a smooth transition [37][39] - The company has launched a new partner program to expand its market reach and enhance customer engagement [32] Q&A Session Summary Question: Long-term guidance changes - Management indicated confidence in the upgraded long-term guidance due to strong customer commitments and market demand for advanced technologies [54][56] Question: Ending backlog details - The $6.9 billion backlog reflects strong business momentum and significant customer renewals, indicating confidence in future growth [62][63] Question: Customer engagement themes - Customers are increasingly focused on optimizing chip performance and integrating advanced technologies, driving demand for Synopsys' solutions [67][68] Question: EDA market growth assumptions - Management expects EDA growth to be in the double digits, supported by competitive technologies and customer alignment [76][78] Question: Impact of semiconductor pricing on business - Rising semiconductor prices are seen as a positive for Synopsys, as they enhance the value of advanced technologies and create opportunities for gradual price increases [99][100] Question: Backlog trajectory - Management did not provide specific guidance on future backlog levels but noted strong bookings and renewals contributing to the current backlog [106]