Synopsys, Inc. reported results for its third quarter fiscal year 2022. Revenue for the third quarter of fiscal year 2022 was $1.248 billion, compared to $1.057 billion for the third quarter of fiscal year 2021.
"Synopsys continues to execute very well. We delivered excellent fiscal third quarter results, with broad-based strength, and are increasing our outlook for the year," said Aart de Geus, chairman and CEO of Synopsys. "Technology strength across the board, including multiple game-changing innovations, drove outstanding technical, competitive, and business results. While our customers navigate through the ebbs and flows of the market, they are simultaneously investing heavily in more complex chips, more sophisticated systems, and more software. The combination of Synopsys' powerful portfolio and constructive market dynamics, plus the resilience of our business model, position us for a strong finish to the year. We expect to cross the $5 billion revenue mark in FY'22, with over 20% revenue growth, strong margin expansion and EPS growth, and more than $1.6 billion in operating cash flow."
GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2022 was $222.6 million, or $1.43 per diluted share, compared to $198.6 million, or $1.27 per diluted share, for the third quarter of fiscal year 2021.
Non-GAAP Results
On a non-GAAP basis, net income for the third quarter of fiscal year 2022 was $327.4 million, or $2.10 per diluted share, compared to non-GAAP net income of $284.5 million, or $1.81 per diluted share, for the third quarter of fiscal year 2021.
For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Business Segments
Synopsys reports revenue and operating income in two segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and other associated revenue categories, and (2) Software Integrity, which includes a comprehensive solution for building integrity—security, quality and compliance testing—into the customers' software development lifecycle and supply chain. Further information regarding these segments is provided at the end of this press release.
Financial Targets
Synopsys also provided its consolidated financial targets for the fourth quarter and full fiscal year 2022. These financial targets assume that there are no further changes to the current U.S. government "Entity List" restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.
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Fourth Quarter and Fiscal Year 2022 Financial Targets |
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Range for Three Months |
Range for Fiscal Year |
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October 31, 2022 |
October 31, 2022 |
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Low |
High |
Low |
High |
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Revenue |
$ 1,263 |
$ 1,293 |
$ 5,060 |
$ 5,090 |
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|
GAAP Expenses |
$ 1,076 |
$ 1,096 |
$ 3,978 |
$ 3,998 |
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|
Non-GAAP Expenses |
$ 919 |
$ 929 |
$ 3,395 |
$ 3,405 |
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|
Other Income (Expense) |
$ 3 |
$ 5 |
$ 12 |
$ 14 |
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Non-GAAP Tax Rate |
18 % |
18 % |
18 % |
18 % |
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|
Outstanding Shares (fully diluted) |
156 |
159 |
156 |
159 |
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GAAP EPS |
$ 1.06 |
$ 1.18 |
$ 6.37 |
$ 6.49 |
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|
Non-GAAP EPS |
$ 1.80 |
$ 1.85 |
$ 8.80 |
$ 8.85 |
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Operating Cash Flow |
$ 1,600 |
$ 1,650 |
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For a reconciliation of Synopsys' Fourth Quarter and Fiscal Year 2022 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
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 on Synopsys' corporate website at www.synopsys.com. A recording of the call will be available by calling +1-866-207-1041 (+1-402-970-0847 for international callers), access code 6337628, beginning at 5:00 p.m. Pacific Time today, until 11:59 p.m. Pacific Time on August 24, 2022. A webcast replay will also be available on the corporate website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the fourth quarter and fiscal year 2022 in November 2022. Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and chief executive officer, and Trac Pham, chief financial officer, on its website following today's call. In addition, Synopsys makes additional information available in a financial supplement and corporate overview presentation, also posted on the corporate website.
