Q4 2018 Financial Highlights

MOUNTAIN VIEW, Calif., Dec. 5, 2018 — (PRNewswire) —   Synopsys, Inc. (Nasdaq: SNPS) today reported results for its fourth quarter and fiscal year 2018. Revenue for the fourth quarter was $795.1 million, compared to $696.6 million for the fourth quarter of fiscal 2017. Revenue for fiscal year 2018 was $3.121 billion, an increase of 14.5 percent from $2.725 billion in fiscal year 2017.  

"Fiscal 2018 was another excellent year for Synopsys. We delivered double-digit revenue and earnings growth, with strength across all product groups and all geographies," said Aart de Geus, chairman and co-CEO of Synopsys. "Notwithstanding expectations of more modest semiconductor industry growth in 2019, design activity across the Silicon to Software spectrum continues unabated. Over the past five years we've made significant investments in developing next-generation EDA platforms, elevating the impact of our IP portfolio, and diversifying into an exciting new software security and quality market. As we look to our next phase of growth to $4 billion in revenue and beyond, we are raising our long-term financial objectives. Our objective is to drive annual double-digit non-GAAP earnings per share growth, through a mix of continued solid revenue growth and expansion of non-GAAP operating margins to the high 20s over time, with a goal of ~26% in 2021."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the fourth quarter of fiscal 2018 was $254.3 million, or $1.66 per share, compared to net loss of $120.1 million, or $(0.80) per share, for the fourth quarter of fiscal 2017. GAAP net income for fiscal year 2018 was $432.5 million, or $2.82 per share, compared to $136.6 million, or $0.88 per share, for fiscal year 2017.

Non-GAAP Results

On a non-GAAP basis, net income for the fourth quarter of fiscal 2018 was $119.6 million, or $0.78 per share, compared to non-GAAP net income of $106.5 million, or $0.69 per share, for the fourth quarter of fiscal 2017. Non-GAAP net income for fiscal year 2018 was $599.7 million, or $3.91 per share, compared to non-GAAP net income of $529.1 million, or $3.42 per share, for fiscal year 2017. Reconciliation between GAAP and non-GAAP results is provided later in this press release.

Financial Targets

Synopsys also provided its financial targets for the first quarter and full fiscal year 2019, which do not include any impact of future acquisition-related activities or costs. 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. 

Synopsys will adopt new revenue recognition requirements under ASC 606, "Revenue from Contracts with Customers," in the first fiscal quarter of 2019. Using the modified retrospective method, the cumulative effect of initially applying the new recognition standards is recognized at the date of initial application. Revenue during the fiscal 2019 transition year is estimated to be approximately $40 million lower under ASC 606 than it would be under ASC 605, "Revenue Recognition," and the impact is expected to decline to roughly neutral within two years. Throughout the 2019 transition year, actual results will be presented under both ASC 606 and ASC 605 revenue recognition rules. Synopsys is providing both official targets under ASC 606 and comparable numbers under ASC 605 for ease of comparison to prior periods. Additional details are available in the financial supplement on Synopsys' corporate website.

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