Synopsys Posts Financial Results for Second Quarter Fiscal Year 2016

 

Earnings Call Open to Investors

Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m. Pacific Time.  A live webcast of the call will be available at Synopsys' corporate website at www.synopsys.com.  A recording of the call will be available by calling +1-800-475-6701 (+1-320-365-3844 for international callers), access code 392961, beginning at 4:00 p.m. Pacific Time today.  A webcast replay will also be available on the website from approximately 4:30 p.m. Pacific Time today through the time Synopsys announces its results for the third fiscal quarter in August 2016.  Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and co-chief executive officer, and Trac Pham, chief financial officer, on its website following the call.  In addition, Synopsys makes additional information available in a financial supplement and corporate overview presentation, also posted on the corporate website.

Effectiveness of Information

The targets included in this release, the statements made during the earnings conference call and the information contained in the financial supplement and corporate overview presentation (available in the Investor Relations section of Synopsys' website at www.synopsys.com) represent Synopsys' expectations and beliefs as of the date of this release only.  Although this press release, copies of the prepared remarks of the co-chief executive officer and chief financial officer made during the call, the financial supplement, and corporate overview presentation will remain available on Synopsys' website through the date of the third quarter fiscal year 2016 earnings call in August 2016, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity.  Synopsys does not currently intend to report on its progress during the third quarter of fiscal year 2016 or comment to analysts or investors on, or otherwise update, the targets given in this earnings release.

Availability of Final Financial Statements

Synopsys will include final financial statements for the second quarter fiscal 2016 in its quarterly report on Form 10-Q to be filed by June 9, 2016.

About Synopsys

Synopsys, Inc. (Nasdaq: SNPS) is the Silicon to Software™ partner for innovative companies developing the electronic products and software applications we rely on every day. As the world's 16th largest software company, Synopsys has a long history of being a global leader in electronic design automation (EDA) and semiconductor IP and is also growing its leadership in software quality and security solutions. Whether you're a system-on-chip (SoC) designer creating advanced semiconductors, or a software developer writing applications that require the highest quality and security, Synopsys has the solutions needed to deliver innovative, high-quality, secure products. Learn more at www.synopsys.com.   

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including, but not limited to, information in the sections entitled "Financial Targets" and "Reconciliation of Target Non-GAAP Operating Results." These statements involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements.  Accordingly, we caution stockholders and prospective investors not to place undue reliance on these statements.  Such risks, uncertainties and factors include, but are not limited to: uncertainty in the growth of the semiconductor and electronics industry; consolidation among our customers; continued uncertainty in the global economy; our ability to realize the potential financial or strategic benefits of acquisitions we complete; changes in accounting principles or standards; fluctuation of our operating results; our highly competitive industries and our ability to meet our customers' demand for innovative technology at lower costs; our ability to protect our proprietary technology; application of the actual consolidated GAAP tax rate, or our decision to change our non-GAAP normalized tax rate, as a result of a number of factors, including the actual geographic mix of revenue during the quarter and year, tax law changes, actions by government authorities, or judgment by management, based upon the status of pending audits and settlements, to increase or decrease an income tax asset or liability; investments of more resources in research and development than anticipated; risks and compliance obligations relating to the global nature of our operations; cybersecurity threats or other security breaches; liquidity requirements in our U.S. operations; claims that our products infringe on third-party intellectual property rights; product errors or defects; litigation; the ability to obtain licenses to third-party software and intellectual property on reasonable terms or at all; the ability to timely recruit and retain senior management and key employees; evolving corporate governance and public disclosure regulations; the inherent limitations on the effectiveness of our controls and compliance programs; the impairment of our investment portfolio by the deterioration of capital markets and the change in the fair value of our non-qualified deferred compensation plan obligations; the accuracy of certain assumptions, judgments and estimates that affect amounts reported in our financial statements; and the impact of catastrophic events.  More information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings it makes with the Securities and Exchange Commission from time to time, including in the sections entitled "Risk Factors" in its Annual Report on Form 10-K for the fiscal year ended October 31, 2015 and in its Form 10-Q for the fiscal quarter ended April 30, 2016 to be filed with the SEC.  The information provided herein is as of May 18, 2016.  Synopsys undertakes no duty, and does not intend, to update any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law.

 

SYNOPSYS, INC.

Unaudited Consolidated Statements of Operations (1)

(in thousands, except per share amounts)

               
               
 

Three Months Ended 

 

Six Months Ended

 

April 30,

 

April 30,

 

2016

 

2015

 

2016

 

2015

Revenue:

             

  Time-based license

$       484,175

 

$       447,844

 

$       948,455

 

$       878,870

  Upfront license

58,163

 

44,313

 

101,600

 

90,793

  Maintenance and service

62,667

 

65,047

 

123,554

 

129,584

      Total revenue

605,005

 

557,204

 

1,173,609

 

1,099,247

Cost of revenue:

             

  License

85,444

 

70,350

 

161,837

 

141,134

  Maintenance and service

21,631

 

29,010

 

44,156

 

56,993

  Amortization of intangible assets

24,555

 

25,612

 

55,081

 

51,478

     Total cost of revenue

131,630

 

124,972

 

261,074

 

249,605

Gross margin

473,375

 

432,232

 

912,535

 

849,642

Operating expenses:

             

  Research and development

216,172

 

188,315

 

412,877

 

369,925

  Sales and marketing

120,926

 

120,579

 

243,546

 

226,748

  General and administrative

41,553

 

40,975

 

81,250

 

77,329

  Amortization of intangible assets 

7,024

 

6,436

 

13,959

 

12,878

  Restructuring charges

894

 

-

 

2,987

 

15,336

     Total operating expenses

386,569

 

356,305

 

754,619

 

702,216

Operating income

86,806

 

75,927

 

157,916

 

147,426

Other income (expense), net

10,417

 

7,957

 

3,649

 

13,073

Income before income taxes

97,223

 

83,884

 

161,565

 

160,499

Provision (benefit) for income taxes

27,847

 

28,288

 

32,154

 

39,714

Net income

$         69,376

 

$         55,596

 

$       129,411

 

$       120,785

               

Net income per share:

             

  Basic

$             0.46

 

$0.36

 

$             0.85

 

$0.78

  Diluted

$             0.45

 

$0.35

 

$             0.84

 

$0.77

               

Shares used in computing per share amounts:

             

  Basic

152,250

 

154,515

 

152,609

 

154,486

  Diluted

154,536

 

157,483

 

154,921

 

157,409

               

(1)  Synopsys' second quarter of fiscal year 2016 and 2015 ended on April 30, 2016 and May 2, 2015, respectively. For presentation purposes, we refer to the closest calendar month end.


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