Synopsys Posts Financial Results for First Quarter Fiscal Year 2023

MOUNTAIN VIEW, Calif., Feb. 15, 2023 -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its first quarter of fiscal year 2023. Revenue for the first quarter of fiscal year 2023 was $1.361 billion, compared to $1.270 billion for the first quarter of fiscal year 2022.

"Synopsys delivered a solid start to the year. Building on our strength and momentum from 2022, we met or exceeded all of our guidance targets, and based on the continued robust design activity, we remain confident in our business," said Aart de Geus, Chair and CEO of Synopsys. "As a key technology catalyst in the 'Smart Everything' world, we are driving groundbreaking innovations that radically advance the design of complex chips and software. For FY'23, we are reaffirming our targets of 14-15% revenue growth and continued non-GAAP operating margin expansion, and expect to grow non-GAAP earnings per share by 18-19%."

GAAP Results
On a generally accepted accounting principles (GAAP) basis, net income for the first quarter of fiscal year 2023 was $271.5 million, or $1.75 per diluted share, compared to $313.7 million, or $1.99 per diluted share, for the first quarter of fiscal year 2022.

Non-GAAP Results
On a non-GAAP basis, net income for the first quarter of fiscal year 2023 was $406.7 million, or $2.62 per diluted share, compared to non-GAAP net income of $376.9 million, or $2.40 per diluted share, for the first quarter of fiscal year 2022.

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
Beginning in fiscal year 2023, Synopsys began reporting revenue and operating income in three segments: (1) Design Automation, which includes digital and custom integrated circuit (IC) design software, verification hardware and software products, manufacturing-related design products, field-programmable gate array (FPGA) design software, optical products, professional services, and other; (2) Design IP, which includes our Synopsys IP portfolio; 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 2023. 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.

Second Quarter and Fiscal Year 2023 Financial Targets (1)
(in millions except per share amounts)

	Range for Three Months Ending		Range for Fiscal Year Ending
	April 30, 2023		October 31, 2023
	Low	High	Low	High
Revenue	$ 1,360	$ 1,390	$ 5,775	$ 5,825
GAAP Expenses	$ 1,085	$ 1,105	$ 4,544	$ 4,591
Non-GAAP Expenses	$ 917	$ 927	$ 3,810	$ 3,840
Non-GAAP Other Income (Expense)	$ (1)	$ 1	$ (12)	$ (8)
Non-GAAP Tax Rate	16 %	16 %	16 %	16 %
Outstanding Shares (fully diluted)	155	158	155	158
GAAP EPS	$ 1.62	$ 1.72	$ 7.12	$ 7.30
Non-GAAP EPS	$ 2.45	$ 2.50	$ 10.53	$ 10.60
Operating Cash Flow			~ $1,650

(1) Synopsys' second quarter of fiscal year 2023 and fiscal year 2023 will end on April 29, 2023 and October 28, 2023,
respectively. For presentation purposes, we refer to the closest calendar month end.

For a reconciliation of Synopsys' second quarter and fiscal year 2023 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 +1-800-770-2030 (+1-647-362-9199 for international callers), access code 6444570, beginning at 5:00 p.m. Pacific Time today, until 11:59 p.m. Pacific Time on February 22, 2023. 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 fiscal year 2023 in May 2023. Synopsys will post copies of the prepared remarks 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.

Effectiveness of Information
The targets included in this press release, the statements made during the earnings conference call and the information contained in the financial supplement and the corporate overview presentation (available on Synopsys' corporate website at www.synopsys.com) represent Synopsys' expectations and beliefs as of February 15, 2023. Although this press release, copies of the prepared remarks made during the earnings conference call, the financial supplement, and the corporate overview presentation will remain available on Synopsys' website through the date of the earnings call for the second quarter fiscal year 2023, 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 fiscal year 2023 in its quarterly report on Form 10-Q to be filed on or before March 9, 2023.

Financial Tables

To read financial tables, click here

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 an S&P 500 company, Synopsys has a long history of being a global leader in electronic design automation (EDA) and semiconductor IP and offers the industry's broadest portfolio of application security testing tools and services. Whether you're a system-on-chip (SoC) designer creating advanced semiconductors, or a software developer writing more secure, high-quality code, Synopsys has the solutions needed to deliver innovative products. Learn more at www.synopsys.com.