"We continued our strong operational execution and business momentum in Q2. Customers continue investing in Synopsys solutions to maximize their R&D and power their future innovations for this era of pervasive intelligence," said Sassine Ghazi, president and CEO of Synopsys. "We expect our planned acquisition of Ansys, which was approved today by Ansys shareholders, to further our mission of empowering technology innovators everywhere with essential silicon to systems design solutions."
"Synopsys' strong Q2 results were driven by our team's relentless focus on execution, our leading technology that is mission-critical to customers, and our resilient business model," said Shelagh Glaser, Synopsys CFO. "We remain confident in our business, and as a result, we are again raising our full-year targets for revenue and non-GAAP EPS."
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1 Synopsys' Software Integrity business has been presented as a discontinued operation in the consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis unless otherwise noted. |
Continuing Operations
On May 5, 2024, Synopsys entered into an agreement to sell its Software Integrity business. Unless otherwise noted, Synopsys' Software Integrity business has been presented as a discontinued operation in the consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis.
GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal year 2024 was $299.1 million, or $1.92 per diluted share, compared to $275.6 million, or $1.78 per diluted share, for the second quarter of fiscal year 2023.
Non-GAAP Results
On a non-GAAP basis, net income for the second quarter of fiscal year 2024 was $466.9 million, or $3.00 per diluted share, compared to non-GAAP net income of $368.3 million, or $2.38 per diluted share, for the second 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 two 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 and (2) Design IP, which includes our Design IP products.
Financial Targets
Synopsys also provided its consolidated financial targets for continuing operations for the third 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.
Third Quarter and Full Fiscal Year 2024 Financial Targets (1)(2) | |||||
(in millions except per share amounts) | |||||
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| Range for Three Months Ending |
| Range for Fiscal Year Ending | ||
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| July 31, 2024 |
| October 31, 2024 | ||
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| Low | High |
| Low | High |
Revenue | $ 1,505 | $ 1,535 |
| $ 6,090 | $ 6,150 |
GAAP Expenses | $ 1,099 | $ 1,119 |
| $ 4,559 | $ 4,614 |
| Non-GAAP Expenses | $ 920 | $ 930 |
| $ 3,770 | $ 3,810 |
| Non-GAAP Interest and Other Income (Expense), net | $ 4 | $ 6 |
| $ 32 | $ 36 |
| Non-GAAP Tax Rate | 15 % |
| 15 % | ||
| Outstanding Shares (fully diluted) | 155 | 157 |
| 155 | 157 |
| GAAP EPS | $ 2.22 | $ 2.35 |
| $ 9.14 | $ 9.36 |
| Non-GAAP EPS | $ 3.25 | $ 3.30 |
| $ 12.90 | $ 12.98 |
| Operating Cash Flow |
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| ~ $1,300 | |
| Free Cash Flow (3) |
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| ~ $1,100 | |
| Capital Expenditures |
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| ~ $200 | |
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| (1) Synopsys' third quarter of fiscal year 2024 and its fiscal year 2024 will end on August 3, 2024 and November 2, 2024, respectively. For
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| (2) Presented on a continuing operations basis. | |||||
| (3) Free cash flow is calculated as cash provided from operating activities less capital expenditures and capitalization of software
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