MOUNTAIN VIEW, Calif., May 21, 2014 -- Synopsys, Inc. (Nasdaq: SNPS), a global leader providing software, IP and services used to accelerate innovation in chips and electronic systems, today reported results for its second quarter of fiscal year 2014.
For the second quarter of fiscal year 2014, Synopsys reported revenue of $517.7 million, compared to $499.3 million for the second quarter of fiscal 2013, an increase of 3.7 percent.
"Our fiscal second quarter results were very strong, driven by robust business in all key areas," said Aart de Geus, chairman and co-CEO of Synopsys. "In addition, we introduced several important new products, including IC Compiler II, a game-changer in digital design, and we completed the acquisition of Coverity, bringing us into the emerging market of software quality, test and security."
On a generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal 2014 was $63.3 million, or $0.40 per share, compared to $68.7 million, or $0.44 per share, for the second quarter of fiscal 2013.
On a non-GAAP basis, net income for the second quarter of fiscal 2014 was $101.7 million, or $0.65 per share, compared to non-GAAP net income of $103.7 million, or $0.66 per share, for the second quarter of fiscal 2013.
Synopsys also provided its financial targets for the third quarter and full fiscal year 2014. These targets do not include any future acquisition-related expenses that may be incurred in fiscal 2014. These targets constitute forward-looking information 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 of Fiscal Year 2014 Targets:
- Revenue: $515 million - $525 million
- GAAP expenses: $450.5 million - $471 million
- Non-GAAP expenses: $400 million - $410 million
- Other income and expense: ($1) million - $1 million
- Tax rate applied in non-GAAP net income calculations: approximately 20 percent
- Fully diluted outstanding shares: 155 million - 159 million
- GAAP earnings per share: $0.30 - $0.38
- Non-GAAP earnings per share: $0.60 - $0.62
Full Fiscal Year 2014 Targets:
- Revenue: $2.05 billion - $2.075 billion
- Other income and expense: $10 million - $12 million
- Tax rate applied in non-GAAP net income calculations: approximately 21 percent
- Fully diluted outstanding shares: 155 million - 159 million
- GAAP earnings per share: $1.55 - $1.68
- Non-GAAP earnings per share: $2.45 - $2.50
- Cash flow from operations: $450 million - $475 million
Synopsys continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its ongoing business operations and what Synopsys uses to evaluate its ongoing operations and for internal planning and forecasting purposes. Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Synopsys' management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, including inventory fair value adjustments, (iv) other significant items, including facilities restructuring charges and the effect of tax and legal settlements, and (v) the income tax effect of non-GAAP pre-tax adjustments as well as unusual or infrequent tax adjustments; and the non-GAAP measures that exclude such information in order to assess the performance of Synopsys' business and for planning and forecasting in subsequent periods. Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed below.
Reconciliation of Second Quarter Fiscal Year 2014 Results
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income and earnings per share for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Second Quarter Fiscal Year 2014 Results
(unaudited and in thousands, except per share amounts)
Reconciliation of Target Non-GAAP Operating Results
The following tables reconcile the specific items excluded from GAAP in the calculation of target non-GAAP operating results for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2014 Targets
(in thousands, except per share amounts)
(1) Synopsys' third quarter and fiscal year end on August 2, and November 1, 2014, respectively. For presentation purposes, the periods refer to the closest calendar month end.
To read financial tables, click here
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 at Synopsys' corporate website at www.synopsys.com. A recording of the call will be available by calling +1-800-475-6701 (+1-320-365-3844 for international callers), access code 326039, beginning at 4:00 p.m. Pacific Time today. 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 third quarter fiscal 2014 in August 2014. Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and co-chief executive officer, and Brian Beattie, chief financial officer, on its website following the call. In addition, Synopsys makes additional financial information available in a financial supplement also posted on the corporate website.
Availability of Final Financial Statements
Synopsys will include final financial statements for the second quarter fiscal 2014 in its quarterly report on Form 10-Q to be filed by June 12, 2014.
Synopsys, Inc. (Nasdaq: SNPS) accelerates innovation in the global electronics market. As a leader in electronic design automation (EDA) and semiconductor IP, its software, IP and services help engineers address their design, verification, system and manufacturing challenges. Since 1986, engineers around the world have been using Synopsys technology to design and create billions of chips and systems. Learn more at http://www.synopsys.com.