Synopsys Posts Financial Results for Fourth Quarter and Fiscal Year 2010

MOUNTAIN VIEW, Calif., Dec. 1, 2010 -- Synopsys, Inc. (Nasdaq: SNPS), a world leader in software and IP for semiconductor design, verification and manufacturing, today reported results for its fourth quarter and fiscal year 2010.

For the fourth quarter of fiscal 2010, Synopsys reported revenue of $375.5 million, compared to $338.3 million for the fourth quarter of fiscal 2009. Revenue for fiscal year 2010 was $1.38 billion, an increase of 1.5 percent from $1.36 billion in fiscal 2009.

"Synopsys had a strong year, relative to the industry and our expectations, and we enter fiscal 2011 with an even better outlook," said Aart de Geus, chairman and CEO of Synopsys. "Building on significant technology and customer momentum, and an improved customer landscape, we expect to deliver growth in both traditional EDA and the adjacencies in which we've been steadily investing over the past several years."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of fiscal 2010 was $25.4 million, or $0.17 per share, compared to $19.5 million, or $0.13 per share, for the fourth quarter of fiscal 2009. GAAP net income for fiscal year 2010 was $237.1 million, or $1.56 per share, compared to $167.7 million, or $1.15 per share for fiscal 2009. Net income for fiscal year 2010 includes a one-time $94.3 million, or $0.62 per share, tax benefit associated with the IRS settlement for fiscal years 2002-2004, announced on January 12, 2010.

Non-GAAP Results

On a non-GAAP basis, net income for the fourth quarter of fiscal 2010 was $59.9 million, or $0.39 per share, compared to non-GAAP net income of $49.5 million, or $0.33 per share, for the fourth quarter of fiscal 2009. Non-GAAP net income for fiscal 2010 was $242.4 million, or $1.60 per share, compared to non-GAAP net income of $255.3 million, or $1.75 per share, for fiscal 2009. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

Financial Targets

Synopsys also provided its financial targets for the first quarter and full fiscal year 2011. These targets do not include future acquisition-related expenses that may be incurred in fiscal 2011. These targets constitute forward-looking information 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.

First Quarter of Fiscal Year 2011 Targets:

Revenue: $360 million - $368 million
GAAP expenses: $305 million - $323 million
Non-GAAP expenses: $278 million - $288 million
Other income and expense: $0 - $2 million
Tax rate applied in non-GAAP net income calculations: approximately 27 percent
Fully diluted outstanding shares: 149 million - 154 million
GAAP earnings per share: $0.21 - $0.28
Non-GAAP earnings per share: $0.38 - $0.41
Revenue from backlog: greater than 90 percent

Full Fiscal Year 2011 Targets:

Revenue: $1.5 billion - $1.525 billion
Other income and expense: $2 million - $6 million
Tax rate applied in non-GAAP net income calculations: approximately 27 percent
Fully diluted outstanding shares: 149 million - 154 million
GAAP earnings per share: $1.06 - $1.24
Non-GAAP earnings per share: $1.67 - $1.77
Cash flow from operations: approximately $220 million - $240 million
Revenue from backlog: greater than 80 percent

Financial Tables

To read financial tables, click here.

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 (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 chief executive officer and chief financial officer made during the call and the financial supplement will remain available on Synopsys' website through the date of the first quarter fiscal year 2011 earnings call in February 2011, 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 first quarter of fiscal 2011 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 fourth quarter and fiscal 2010 in its annual report on Form 10-K to be filed by December 29, 2010.

About Synopsys

Synopsys, Inc. (Nasdaq: SNPS) is a world leader in electronic design automation (EDA), supplying the global electronics market with the software, intellectual property (IP) and services used in semiconductor design, verification and manufacturing. Synopsys' comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and field-programmable gate array (FPGA) solutions helps address the key challenges designers and manufacturers face today, such as power and yield management, system-to-silicon verification and time-to-results. These technology-leading solutions help give Synopsys customers a competitive edge in bringing the best products to market quickly while reducing costs and schedule risk. Synopsys is headquartered in Mountain View, California, and has approximately 70 offices located throughout North America, Europe, Japan, Asia and India. Visit Synopsys online at http://www.synopsys.com/.