Synopsys Posts Financial Results for Fourth Quarter and Fiscal Year 2019

MOUNTAIN VIEW, Calif., Dec. 4, 2019 -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its fourth quarter and fiscal year 2019. Revenue for the fourth quarter was $851.1 million, compared to $795.1 million for the fourth quarter of fiscal 2018. Revenue for fiscal year 2019 was $3.361 billion, an increase of 7.7 percent from $3.121 billion in fiscal year 2018.

"Fiscal 2019 was another outstanding year for Synopsys. Even as we navigated several external challenges, we significantly exceeded our beginning-of-year plan, and delivered strong growth in revenue, non-GAAP operating margin, earnings-per-share, and cash flow, and across both operating segments. We also returned $329 million to shareholders via stock repurchases," said Aart de Geus, chairman and co-CEO of Synopsys. "Against a challenging global market backdrop, design activity remains strong. Our unrelenting innovation push has resulted in stronger-than-ever platforms, which are driving notable benchmark wins and increased competitive displacements. As we move into 2020, well on our way to our next milestone of $4 billion in revenue and beyond, we are targeting solid revenue growth, continued non-GAAP operating margin expansion, mid-teens non-GAAP earnings per share growth, and strong cash flow."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of fiscal 2019 was $160.7 million, or $1.04 per share, compared to $254.3 million, or $1.66 per share, for the fourth quarter of fiscal 2018. GAAP net income for fiscal year 2019 was $532.4 million, or $3.45 per share, compared to $432.5 million, or $2.82 per share, for fiscal year 2018.

Non-GAAP Results

On a non-GAAP basis, net income for the fourth quarter of fiscal 2019 was $177.1 million, or $1.15 per share, compared to non-GAAP net income of $119.6 million, or $0.78 per share, for the fourth quarter of fiscal 2018. Non-GAAP net income for fiscal year 2019 was $702.5 million, or $4.56 per share, compared to non-GAAP net income of $599.7 million, or $3.91 per share, for fiscal year 2018.

For a reconciliation between GAAP and non-GAAP results, see "GAAP to Non-GAAP Reconciliation" and 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 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 first quarter and full fiscal year 2020. These financial targets do not assume any revenue from companies currently on the U.S. government's "Entity List." 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.

First Quarter and Fiscal Year 2020 Financial Targets
(in millions except per share amounts)

(1) Applied in non-GAAP net income calculations

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 1966519, beginning at 5:00 p.m. Pacific Time today, until 11:59 p.m. Pacific Time on December 11, 2019. A webcast replay will also be available on the website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the first quarter of fiscal year 2020 in February 2020. Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and co-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.

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 corporate overview presentation (available in the Investor Relations section of Synopsys' corporate 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 co-chief executive officer and chief financial officer made during the call, the financial supplement, and the corporate overview presentation will remain available on Synopsys' website through the date of the first quarter fiscal year 2020 earnings call in February 2020, 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 year 2020 or comment to analysts or investors on, or otherwise update, the targets given in this release.

Availability of Final Financial Statements

Synopsys will include final financial statements for fiscal year 2019 in its annual report on Form 10-K to be filed by January 1, 2020.

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 the world's 15th largest software company, Synopsys has a long history of being a global leader in electronic design automation (EDA) and semiconductor IP and is also growing its leadership in software security and quality solutions. Whether you're a system-on-chip (SoC) designer creating advanced semiconductors, or a software developer writing applications that require the highest security and quality, Synopsys has the solutions needed to deliver innovative, high-quality, secure products. Learn more at www.synopsys.com .