Synopsys Posts Financial Results for First Quarter Fiscal Year 2024

Results Summary

Record quarterly revenue of $1.649 billion, up approximately 21% year over year.
Quarterly GAAP earnings per diluted share of $2.89; non-GAAP earnings per diluted share of $3.56, which exceeded high end of guidance.

SUNNYVALE, Calif., Feb. 21, 2024 /PRNewswire/ — Synopsys, Inc. (Nasdaq: SNPS) today reported results for its first quarter of fiscal year 2024. Revenue for the first quarter of fiscal year 2024 was $1.649 billion, compared to $1.361 billion for the first quarter of fiscal year 2023.  Fiscal year 2024 results include a favorable impact of one additional week compared to fiscal year 2023, which occurred in our first fiscal quarter.

“The first quarter marked an excellent start to the year with strong execution across the company as AI continues to drive our customers’ investments in silicon and systems that position them for future growth,” said Sassine Ghazi, president and CEO of Synopsys. “These results underscore the strength of our technology and our strategy. In the face of mounting design complexity, technology R&D teams are counting on Synopsys’ broad portfolio of semiconductor IP and leading design solutions from silicon to systems. There is no one more capable than Synopsys of helping companies innovate for this era of pervasive intelligence.”

“The Synopsys team delivered a solid start to the year, achieving record quarterly revenue and non-GAAP earnings above the high end of our target range,” said Synopsys CFO, Shelagh Glaser. “These results reflect our execution and leadership position across segments and continued, robust design activity among our semiconductor and systems customers. Looking ahead, we are reaffirming our full-year 2024 targets for revenue and non-GAAP operating margin and raising our non-GAAP EPS guidance.”

GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the first quarter of fiscal year 2024 was $449.1 million, or $2.89 per diluted share, compared to $271.5 million, or $1.75 per diluted share, for the first quarter of fiscal year 2023.

Non-GAAP Results
On a non-GAAP basis, net income for the first quarter of fiscal year 2024 was $553.7 million, or $3.56 per diluted share, compared to non-GAAP net income of $406.7 million, or $2.62 per diluted share, for the first quarter of fiscal year 2023.

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 three segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, system integration products and services, digital, custom and field programmable gate array (FPGA) IC design software, verification software and hardware products, manufacturing software products and other; (2) Design IP, which includes our Design IP products; and (3) Software Integrity, which includes solutions that test software code for security vulnerabilities and quality defects, as well as professional and managed services. 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 second quarter and full fiscal year 2024. The fiscal year targets include the impact of an extra week in fiscal year 2024, which was included in the first quarter of fiscal year 2024. These financial targets assume no further changes to export control restrictions or 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. 

For a reconciliation of Synopsys’ second quarter and fiscal year 2024 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAP basis and a discussion of the financial targets that we are not able to reconcile without unreasonable efforts, 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.investor.synopsys.com. Synopsys uses its website as a tool to disclose important information about Synopsys and comply with its disclosure obligations under Regulation Fair Disclosure. 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 second quarter of fiscal year 2024 in May 2024. 

Effectiveness of Information
The targets included in this press release, the statements made during the earnings conference call, the information contained in the financial supplement and the corporate overview presentation, each of which are available on Synopsys’ corporate website at www.synopsys.com (collectively, the “Earnings Materials”), represent Synopsys’ expectations and beliefs as of February 21, 2024. Although these Earnings Materials will remain available on Synopsys’ website through the date of the earnings call for the second quarter of fiscal year 2024, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys undertakes no duty and does not intend to update any forward-looking statement, whether as a result of new information or future events, or otherwise update, the targets given in this press release unless required by law.

Availability of Final Financial Statements
Synopsys will include final financial statements for the first quarter of fiscal year 2024 in its quarterly report on Form 10-Q to be filed on or before March 14, 2024.

About Synopsys
Catalyzing the era of pervasive intelligence, Synopsys, Inc. (NASDAQ:SNPS) delivers trusted and comprehensive silicon to systems design solutions, from electronic design automation to silicon IP and system verification and validation. We partner closely with semiconductor and systems customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.

Reconciliation of First Quarter Fiscal Year 2024 Results
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income, earnings per diluted share, and tax rate for the periods indicated below.

Reconciliation of 2024 Targets
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP targets for the periods indicated below.

Full story available on Benzinga.com