Q3 2019 Financial Highlights
MOUNTAIN VIEW, Calif., Aug. 21, 2019 — (PRNewswire) — Synopsys, Inc. (Nasdaq: SNPS) today reported results for its third quarter of fiscal year 2019. Revenue was $853.0 million, compared to $779.7 million for the third quarter of fiscal year 2018, an increase of 9.4 percent."Synopsys continues to execute very well and delivered excellent third fiscal quarter revenue, operating margin, non-GAAP earnings and cash flow. In Q3, we also implemented a $100 million share repurchase, bringing our total for the year to $229 million," said Aart de Geus, chairman and co-CEO of Synopsys. "Despite the uncertain geopolitical and economic backdrop, global design activity and customer engagements are thriving. Our product platforms are the strongest they've ever been, driving technology wins and competitive displacements. As a result of our year-to-date overachievement and broad-based strength across the business, we're raising our annual guidance ranges."
GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal 2019 was $99.9 million, or $0.65 per share, compared to $79.4 million, or $0.52 per share, for the third quarter of fiscal 2018.
Non-GAAP Results
For the third quarter of fiscal 2019, on a non-GAAP basis, net income was $182.5 million, or $1.18 per share, compared to non-GAAP net income of $145.6 million, or $0.95 per share, for the third quarter of fiscal 2018.
For a reconciliation between GAAP and non-GAAP results, see "GAAP to Non-GAAP Reconciliation" and the accompanying tables below.
Business Segments
Effective in fiscal year 2019, Synopsys reports revenue and operating income in two segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and associated services, and (2) Software Integrity, which includes security and quality solutions for software development across many industries. Further information regarding these segments is provided at the end of this press release.
Financial Targets
Synopsys also provides its consolidated financial targets for the fourth quarter and full fiscal year 2019, which do not include any impact of future acquisition-related activities or costs. These financial targets reflect the current status of certain customers currently on the U.S. government's "Entity List," and do not assume any revenue in the fourth fiscal quarter from such customers. 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.
Fourth Quarter and Fiscal Year 2019 Financial Targets - ASC 606 | |||||
(in millions except per share amounts) | |||||
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| Q4'19 |
| FY'19 | ||
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| Low | High |
| Low | High |
Revenue (2) | $ 830 | $ 860 |
| $ 3,340 | $ 3,370 |
GAAP Expenses | $ 701 | $ 733 |
| $ 2,820 | $ 2,852 |
Non-GAAP Expenses | $ 630 | $ 650 |
| $ 2,512 | $ 2,532 |
Other Income (expense) | $ (2) | $ - |
| $ (4) | $ (2) |
Normalized Annual Tax Rate (1) | 16% | 16% |
| 16% | 16% |
Outstanding Shares (fully diluted) | 153 | 156 |
| 153 | 156 |
| GAAP EPS | $ 0.69 | $ 0.82 |
| $ 3.11 | $ 3.24 |
| Non-GAAP EPS | $ 1.10 | $ 1.15 |
| $ 4.52 | $ 4.57 |
| Operating Cash Flow |
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| ~$750 |
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| (1) Applied in non-GAAP net income calculations. | |||||
| (2) We operate and plan the business under current ASC 606 rules and regulations. In previous quarters, we provided a set of FY19 comparative metrics based on the former ASC 605 rules. However, our estimates of what revenue would have been under the previous rules have become increasingly inconsistent with, and therefore do not reflect, the underlying fundamentals of the business. Nevertheless, we estimate that FY19 target revenue using the previous ASC 605 would be approximately $80 million less than our actual target range under the current ASC 606. Given the lack of relevance, we no longer provide detailed comparative metrics. |
