MOUNTAIN VIEW, Calif., Feb. 16, 2011 -- Synopsys, Inc. (Nasdaq: SNPS), a world leader in software and IP for semiconductor design, verification and manufacturing, today reported results for its first quarter of fiscal year 2011.
For the first quarter of fiscal year 2011, Synopsys reported revenue of $364.6 million, compared to $330.2 million for the first quarter of fiscal 2010, an increase of 10.4%.
"Synopsys began fiscal 2011 with a strong first quarter, putting us well on-track towards meeting our objectives for the year," said Aart de Geus, chairman and CEO of Synopsys. "With a backdrop of a healthy semiconductor industry, we continue to deliver strong technology with our traditional EDA solutions, while achieving meaningful scale with our solutions in higher-growth adjacencies."
On a generally accepted accounting principles (GAAP) basis, net income for the first quarter of fiscal 2011 was $48.2 million, or $0.31 per share, compared to $132.8 million, or $0.88 per share, for the first quarter of fiscal 2010. Net income for the first quarter of fiscal 2010 included a one-time $91.6 million, or $0.61 per share, tax benefit associated with the IRS settlement for fiscal years 2002-2004, announced on January 12, 2010.
On a non-GAAP basis, net income for the first quarter of fiscal 2011 was $68.3 million, or $0.44 per share, compared to non-GAAP net income of $62.4 million, or $0.41 per share, for the first quarter of fiscal 2010. Reconciliation between GAAP and non-GAAP results is provided at the end of this press release.
Synopsys also provided its financial targets for the second quarter and full fiscal year 2011. These targets do not include future acquisition-related expenses that may be incurred in fiscal 2011. 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.
Second Quarter of Fiscal Year 2011 Targets:
- Revenue: $386 million - $394 million
- GAAP expenses: $319 million - $338 million
- Non-GAAP expenses: $292 million - $302 million
- Other income and expense: $0 - $2 million
- Tax rate applied in non-GAAP net income calculations: 26 - 27 percent
- Fully diluted outstanding shares: 150 million - 155 million
- GAAP earnings per share: $0.26 - $0.31
- Non-GAAP earnings per share: $0.43 - $0.45
- Revenue from backlog: greater than 90 percent
Full Fiscal Year 2011 Targets:
- Revenue: $1.5 billion - $1.525 billion
- Other income and expense: $1 million - $5 million
- Tax rate applied in non-GAAP net income calculations: 25 - 26 percent
- Fully diluted outstanding shares: 149 million - 154 million
- GAAP earnings per share: $1.03 - $1.20
- Non-GAAP earnings per share: $1.67 - $1.77
- Cash flow from operations: approximately $230 million - $250 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, (iv) other significant items, including the effect of a tax benefit from a settlement with the Internal Revenue Service, and (v) the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes; 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 First Quarter Fiscal Year 2011 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.
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.
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 191466, 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 second quarter fiscal 2011 in May 2011. Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and 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.
Effectiveness of Information
The targets included in this release, the statements made during the earnings conference call and the information contained in the financial supplement (available in the Investor Relations section of Synopsys' 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 chief executive officer and chief financial officer made during the call and the financial supplement will remain available on Synopsys' website through the date of the second quarter fiscal year 2011 earnings call in May 2011, 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 second quarter of fiscal 2011 or comment to analysts or investors on, or otherwise update, the targets given in this earnings release.
Availability of Final Financial Statements
Synopsys will include final financial statements for the first quarter fiscal 2011 in its quarterly report on Form 10-Q to be filed by March 10, 2011.
Synopsys, Inc. (Nasdaq:SNPS) is a world leader in electronic design automation (EDA), supplying the global electronics market with the software, intellectual property (IP) and services used in semiconductor design, verification and manufacturing. Synopsys' comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and field-programmable gate array (FPGA) solutions helps address the key challenges designers and manufacturers face today, such as power and yield management, system-to-silicon verification and time-to-results. These technology-leading solutions help give Synopsys customers a competitive edge in bringing the best products to market quickly while reducing costs and schedule risk. Synopsys is headquartered in Mountain View, California, and has approximately 70 offices located throughout North America, Europe, Japan, Asia and India. Visit Synopsys online at http://www.synopsys.com/.