"The fourth quarter was a strong finish to a transformational year for Synopsys. We achieved record financial results while doubling down on our strategy with the sale of our Software Integrity business and the pending acquisition of Ansys," said Sassine Ghazi, president and CEO of Synopsys. "Looking ahead, the AI-driven reinvention of compute is accelerating the pace, scale and complexity of technology R&D, which expands our opportunity to solve engineering challenges from silicon to systems."
"Continued strong execution drove excellent Q4 results, which exceeded the midpoint of our guidance targets and capped a year of 15% revenue growth for the company," said Shelagh Glaser, CFO of Synopsys. "The combination of our execution focus, operating discipline, and the critical nature of our industry-leading technology positions us well for the future. In 2025, we expect to deliver double-digit revenue growth grounded in pragmatism given continued macro uncertainties and the impact of our fiscal year calendar change."
Synopsys' previously announced acquisition of Ansys is expected to close in the first half of 2025, subject to the receipt of required regulatory approvals and other customary closing conditions. This week marked the expiration of the Hart-Scott-Rodino (HSR) Act waiting period, and Synopsys is working cooperatively with Federal Trade Commission (FTC) staff to conclude the investigation and the staff's review of Synopsys' proposed remedies.
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1 On September 30, 2024, Synopsys completed the sale of its Software Integrity business. 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 September 30, 2024, Synopsys completed the sale of its Software Integrity business. Unless otherwise noted, Synopsys' Software Integrity business has been presented as a discontinued operation in the Synopsys' 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 fourth quarter of fiscal year 2024 was $279.3 million, or $1.79 per diluted share, compared to $346.1 million, or $2.23 per diluted share, for the fourth quarter of fiscal year 2023. GAAP net income for fiscal year 2024 was $1.442 billion, or $9.25 per diluted share, compared to $1.227 billion, or $7.91 per diluted share, for fiscal year 2023.
Non-GAAP Results
On a non-GAAP basis, net income for the fourth quarter of fiscal year 2024 was $529.9 million, or $3.40 per diluted share, compared to non-GAAP net income of $464.1 million, or $3.00 per diluted share, for the fourth quarter of fiscal year 2023. Non-GAAP net income for fiscal year 2024 was $2.058 billion, or $13.20 per diluted share, compared to non-GAAP net income of $1.636 billion, or $10.54 per diluted share, for 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 IC design software, verification software and hardware products, manufacturing software products and other and (2) Design IP, which includes our interface, foundation, security, and embedded processor IP, IP subsystems, and IP implementation services.
Financial Targets
Synopsys also provided its consolidated financial targets for the first quarter and full fiscal year 2025. These targets reflect a change in Synopsys' fiscal year from a 52/53-week period ending on the Saturday nearest to October 31 of each year to October 31 of each year. As a result of this change, there will be ten fewer days in the first half of fiscal year 2025 and two extra days in the second half of fiscal year 2025, which results in eight fewer days in the aggregate in Synopsys' fiscal year 2025 as compared to its fiscal year 2024. These targets also 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.
First Quarter and Full Fiscal Year 2025 Financial Targets (1) | |||||
(in millions except per share amounts) | |||||
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| Range for Three Months Ending |
| Range for Fiscal Year Ending | ||
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| January 31, 2025 |
| October 31, 2025 | ||
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| Low | High |
| Low | High |
| Revenue | $ 1,435 | $ 1,465 |
| $ 6,745 | $ 6,805 |
| GAAP Expenses | $ 1,142 | $ 1,162 |
| $ 4,926 | $ 4,983 |
| Non-GAAP Expenses | $ 945 | $ 955 |
| $ 4,045 | $ 4,085 |
| Non-GAAP Interest and Other Income (Expense), net | $ 20 | $ 22 |
| $ 94 | $ 98 |
| Non-GAAP Tax Rate | 16 % | 16 % |
| 16 % | 16 % |
| Outstanding Shares (fully diluted) | 156 | 158 |
| 157 | 159 |
| GAAP EPS | $ 1.81 | $ 1.95 |
| $ 10.42 | $ 10.63 |
| Non-GAAP EPS | $ 2.77 | $ 2.82 |
| $ 14.88 | $ 14.96 |
| Operating Cash Flow |
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| ~ $1,800 | |
| Free Cash Flow (2) |
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| ~ $1,600 | |
| Capital Expenditures |
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| ~ $170 | |
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| (1) Synopsys' first quarter of fiscal year 2025 will end on January 31, 2025 and its fiscal year 2025 will end on October 31, 2025. | |||||
| (2) Free cash flow is calculated as cash provided from operating activities less capital expenditures. | |||||
