Synopsys (SNPS) 10-K risk factor changes: FY2022 vs FY2021

[Table of [removed: Contents](#i8d49c110af324515b9e0fdba8a8d58b7_7)][added: Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)]

For the fiscal year ended October 31, [removed: 2021][added: 2022]

[removed: ][added: ]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was approximately [removed: $27.5] [added: $32.2] billion.

Aggregate market value excludes an aggregate of approximately [removed: 41.3] [added: 40.8] million shares of [added: the registrant's] common [removed: stock] [added: stock, par value of $0.01 per share (Common Stock)] held by the registrant’s executive officers and directors and by each person known by the registrant to own 5% or more of the outstanding common stock on such date.

Portions of the registrant’s [added: definitive] Proxy Statement relating to the registrant’s [removed: 2022] [added: 2023] Annual Meeting of Stockholders, scheduled to be held on April 12, [removed: 2022,] [added: 2023,] are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

Fiscal year ended October 31, [removed: 2021][added: 2022]

| Item 1. | | | | | | [removed: [Business](#i8d49c110af324515b9e0fdba8a8d58b7_16)] [added: [Business](#i4e1043bb74d64d75b0a80505c3195e4f_16)] | | | | | | [removed: [3](#i8d49c110af324515b9e0fdba8a8d58b7_16)] [added: [3](#i4e1043bb74d64d75b0a80505c3195e4f_16)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i8d49c110af324515b9e0fdba8a8d58b7_19)] [added: Factors](#i4e1043bb74d64d75b0a80505c3195e4f_19)] | | | | | | [removed: [15](#i8d49c110af324515b9e0fdba8a8d58b7_19)] [added: [16](#i4e1043bb74d64d75b0a80505c3195e4f_19)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i8d49c110af324515b9e0fdba8a8d58b7_22)] [added: Comments](#i4e1043bb74d64d75b0a80505c3195e4f_22)] | | | | | | [removed: [29](#i8d49c110af324515b9e0fdba8a8d58b7_22)] [added: [30](#i4e1043bb74d64d75b0a80505c3195e4f_22)] | | |

| Item 2. | | | | | | [removed: [Properties](#i8d49c110af324515b9e0fdba8a8d58b7_25)] [added: [Properties](#i4e1043bb74d64d75b0a80505c3195e4f_25)] | | | | | | [removed: [29](#i8d49c110af324515b9e0fdba8a8d58b7_25)] [added: [30](#i4e1043bb74d64d75b0a80505c3195e4f_25)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i8d49c110af324515b9e0fdba8a8d58b7_28)] [added: Proceedings](#i4e1043bb74d64d75b0a80505c3195e4f_28)] | | | | | | [removed: [29](#i8d49c110af324515b9e0fdba8a8d58b7_28)] [added: [30](#i4e1043bb74d64d75b0a80505c3195e4f_28)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i8d49c110af324515b9e0fdba8a8d58b7_31)] [added: Disclosures](#i4e1043bb74d64d75b0a80505c3195e4f_31)] | | | | | | [removed: [30](#i8d49c110af324515b9e0fdba8a8d58b7_31)] [added: [31](#i4e1043bb74d64d75b0a80505c3195e4f_31)] | | |

| Item 5. | | | | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i8d49c110af324515b9e0fdba8a8d58b7_37)] [added: Securities](#i4e1043bb74d64d75b0a80505c3195e4f_37)] | | | | | | [removed: [31](#i8d49c110af324515b9e0fdba8a8d58b7_37)] [added: [32](#i4e1043bb74d64d75b0a80505c3195e4f_37)] | | |

| Item 6. | | | | | | [removed: [\[Reserved\]](#i8d49c110af324515b9e0fdba8a8d58b7_40)] [added: [\[Reserved\]](#i4e1043bb74d64d75b0a80505c3195e4f_40)] | | | | | | [removed: [32](#i8d49c110af324515b9e0fdba8a8d58b7_40)] [added: [33](#i4e1043bb74d64d75b0a80505c3195e4f_40)] | | |

| Item 7. | | | | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i8d49c110af324515b9e0fdba8a8d58b7_43)] [added: Operations](#i4e1043bb74d64d75b0a80505c3195e4f_43)] | | | | | | [removed: [32](#i8d49c110af324515b9e0fdba8a8d58b7_43)] [added: [33](#i4e1043bb74d64d75b0a80505c3195e4f_43)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i8d49c110af324515b9e0fdba8a8d58b7_76)] [added: Risk](#i4e1043bb74d64d75b0a80505c3195e4f_73)] | | | | | | [removed: [44](#i8d49c110af324515b9e0fdba8a8d58b7_76)] [added: [45](#i4e1043bb74d64d75b0a80505c3195e4f_73)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i8d49c110af324515b9e0fdba8a8d58b7_79)] [added: Data](#i4e1043bb74d64d75b0a80505c3195e4f_76)] | | | | | | [removed: [47](#i8d49c110af324515b9e0fdba8a8d58b7_79)] [added: [48](#i4e1043bb74d64d75b0a80505c3195e4f_76)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i8d49c110af324515b9e0fdba8a8d58b7_190)] [added: Disclosure](#i4e1043bb74d64d75b0a80505c3195e4f_148)] | | | | | | [removed: [91](#i8d49c110af324515b9e0fdba8a8d58b7_190)] [added: [95](#i4e1043bb74d64d75b0a80505c3195e4f_148)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i8d49c110af324515b9e0fdba8a8d58b7_193)] [added: Procedures](#i4e1043bb74d64d75b0a80505c3195e4f_151)] | | | | | | [removed: [91](#i8d49c110af324515b9e0fdba8a8d58b7_193)] [added: [95](#i4e1043bb74d64d75b0a80505c3195e4f_151)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i8d49c110af324515b9e0fdba8a8d58b7_196)] [added: Information](#i4e1043bb74d64d75b0a80505c3195e4f_154)] | | | | | | [removed: [91](#i8d49c110af324515b9e0fdba8a8d58b7_196)] [added: [95](#i4e1043bb74d64d75b0a80505c3195e4f_154)] | | |

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i8d49c110af324515b9e0fdba8a8d58b7_8246337210291)] [added: Inspections](#i4e1043bb74d64d75b0a80505c3195e4f_157)] | | | | | | [removed: [91](#i8d49c110af324515b9e0fdba8a8d58b7_8246337210291)] [added: [95](#i4e1043bb74d64d75b0a80505c3195e4f_157)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i8d49c110af324515b9e0fdba8a8d58b7_202)] [added: Governance](#i4e1043bb74d64d75b0a80505c3195e4f_163)] | | | | | | [removed: [92](#i8d49c110af324515b9e0fdba8a8d58b7_202)] [added: [96](#i4e1043bb74d64d75b0a80505c3195e4f_163)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i8d49c110af324515b9e0fdba8a8d58b7_205)] [added: Compensation](#i4e1043bb74d64d75b0a80505c3195e4f_166)] | | | | | | [removed: [92](#i8d49c110af324515b9e0fdba8a8d58b7_205)] [added: [96](#i4e1043bb74d64d75b0a80505c3195e4f_166)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i8d49c110af324515b9e0fdba8a8d58b7_208)] [added: Matters](#i4e1043bb74d64d75b0a80505c3195e4f_169)] | | | | | | [removed: [92](#i8d49c110af324515b9e0fdba8a8d58b7_208)] [added: [96](#i4e1043bb74d64d75b0a80505c3195e4f_169)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i8d49c110af324515b9e0fdba8a8d58b7_211)] [added: Independence](#i4e1043bb74d64d75b0a80505c3195e4f_172)] | | | | | | [removed: [92](#i8d49c110af324515b9e0fdba8a8d58b7_211)] [added: [96](#i4e1043bb74d64d75b0a80505c3195e4f_172)] | | |

| Item 14. | | | | | | [Principal Accountant Fees and [removed: Services](#i8d49c110af324515b9e0fdba8a8d58b7_214)] [added: Services](#i4e1043bb74d64d75b0a80505c3195e4f_175)] | | | | | | [removed: [92](#i8d49c110af324515b9e0fdba8a8d58b7_214)] [added: [96](#i4e1043bb74d64d75b0a80505c3195e4f_175)] | | |

| Item 15. | | | | | | [Exhibits and Financial Statement [removed: Schedules](#i8d49c110af324515b9e0fdba8a8d58b7_220)] [added: Schedules](#i4e1043bb74d64d75b0a80505c3195e4f_181)] | | | | | | [removed: [93](#i8d49c110af324515b9e0fdba8a8d58b7_220)] [added: [97](#i4e1043bb74d64d75b0a80505c3195e4f_181)] | | |

This Annual Report on Form 10-K (this Form [removed: 10-K or Annual Report)] [added: 10-K)] contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and the Private Securities Litigation Reform Act of 1995.

- our business, product and platform [removed: strategies;][added: strategies and business outlook;]

- the [removed: continued] impact [removed: and duration] of the [added: ongoing] COVID-19 pandemic;

- the impact of macroeconomic conditions, [removed: supply shortages, and] [added: rising global interest rates, legislative developments,] trade [added: disruptions, including export control restrictions, semiconductor shortages and supply chain] disruptions on our business and our customers’ businesses;

- our license mix, [removed: our] business [removed: model,] [added: model] and variability in our revenue;

- our ability to attract and retain senior management and key [removed: employees;][added: employees worldwide;]

Such risks and uncertainties include, among others, those listed in Part I, Item 1A, *Risk Factors* [added: and Item 3, *Legal Proceedings*; and Part II, Item 7, *Management’s Discussion and Analysis] of [added: Financial Condition and Results of Operations*, Item 7A, *Quantitative and Qualitative Disclosures About Market Risk* and Item 9A, *Controls and Procedures* of] this Form 10-K.

All subsequent written or oral forward-looking statements attributable to Synopsys, Inc. or persons acting on our behalf are expressly [added: qualified in their entirety by these cautionary statements.]

[removed: Readers are urged to carefully review and] consider the various disclosures made in this report and in other documents we file from time to time with the Securities and Exchange Commission (SEC) that attempt to advise interested parties of the risks and factors that may affect our business.

Fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] were 52-week years and ended on October [added: 29, 2022, October] 30, [removed: 2021,] [added: 2021 and] October 31, 2020, [removed: November 2, 2019,] respectively.

Fiscal [removed: 2022] [added: 2023] will be a 52-week year.

Synopsys, Inc. [added: (Synopsys, we, our or us)] provides products and services used across the entire Silicon to [removed: Software*™*] [added: Software] spectrum to bring Smart Everything to life.

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

On December 7, 2022, 152,417,194 shares of Common Stock were outstanding.

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

| [PART I](#i4e1043bb74d64d75b0a80505c3195e4f_13) | | | | | | | | | | | | | | |

| [PART II](#i4e1043bb74d64d75b0a80505c3195e4f_34) | | | | | | | | | | | | | | |

| [PART III](#i4e1043bb74d64d75b0a80505c3195e4f_160) | | | | | | | | | | | | | | |

| [PART IV](#i4e1043bb74d64d75b0a80505c3195e4f_178) | | | | | | | | | | | | | | |

| [SIGNATURES](#i4e1043bb74d64d75b0a80505c3195e4f_184) | | | | | | | | | | | | [100](#i4e1043bb74d64d75b0a80505c3195e4f_184) | | |

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

- the status of litigation and/or regulatory investigations;

Readers are urged to carefully review and

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

Our website is https://www.synopsys.com/.

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

It also includes PrimeSim, which was launched in fiscal 2021.

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

- WhiteHat® Dynamic, our latest dynamic application security testing solution, which rapidly and accurately finds vulnerabilities in websites and applications;

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

Our products utilize

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

Our Software Integrity segment continues to grow its indirect sales partner program, enabling our Software Integrity segment to engage geographies beyond the reach of our direct sales force and opening opportunities in targeted vertical markets.

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

Risks related to disruptions in our supply chain affecting our business are described in Part I, Item 1A, *Risk Factors*.

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

Risks related to competitive factors affecting our business are described in Part I, Item 1A, *Risk Factors*.

Sustainable, just and secure business practices are at the core of who we are as a company and influence our behavior as individuals.

Our "Smart Future" Corporate Social Responsibility (CSR) strategy provides a framework for how we manage our own operational impact, so that we can conduct business in a manner that we believe both drives commercial success and contributes to a better world.

[Table of Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)

increasingly vital component of protecting human health and well-being.

At Synopsys, we are helping our employees pursue their passion and make their mark on the world of Smart Everything.

We believe this creates value for us, our stockholders, and the lives of the people we impact every day.

Our commitment to attracting, developing and retaining the brightest and best talent makes this goal possible.

Risks related to our human capital are described in Part I, Item 1A, *Risk Factors*.

In fiscal 2022, we held employee vaccination clinics in our offices and as the year progressed our focus shifted from supporting our employees during a pandemic to helping them thrive in the new hybrid work environment.

With employee wellness at the forefront of our efforts, we provided our employees with a variety of benefits and resources to address the inherent challenges of working remotely, transitioning to a hybrid work environment, or returning to the office full-time.

This included a focus on building skills to navigate a hybrid work environment in a way that enables employees to be successful at work and in their personal lives.

We also continued our Stronger Through Wellbeing campaign, focused on the importance of employees prioritizing their health and overall wellbeing.

SYNOPSYS, INC.

On December 8, 2021, 153,438,336 shares of the registrant’s Common Stock, par value of $0.01 per share, were outstanding.

| [PART I](#i8d49c110af324515b9e0fdba8a8d58b7_13) | | | | | | | | | | | | | | |

| [PART II](#i8d49c110af324515b9e0fdba8a8d58b7_34) | | | | | | | | | | | | | | |

| [PART III](#i8d49c110af324515b9e0fdba8a8d58b7_199) | | | | | | | | | | | | | | |

| [PART IV](#i8d49c110af324515b9e0fdba8a8d58b7_217) | | | | | | | | | | | | | | |

| [SIGNATURES](#i8d49c110af324515b9e0fdba8a8d58b7_223) | | | | | | | | | | | | [97](#i8d49c110af324515b9e0fdba8a8d58b7_223) | | |

- our business outlook;

- litigation;

- the impact of new and recently adopted accounting pronouncements;

qualified in their entirety by these cautionary statements.

This customer shift in interest has started and continues to grow.

Services, Microsoft Azure, Google Cloud and Alibaba Cloud, to further enhance our EDA-on-cloud products and platforms.

our design tools.

The platform also includes PrimeSim™ Continuum.

By providing consistent

- IP subsystems for audio, sensor, and data fusion functionality that combine IP blocks, an efficient processor, and software into an integrated, pre-verified subsystem;

- Analog IP including data converters and audio codecs; and

Our international headquarters are located in Dublin, Ireland.

support, flexibility of tool use, and interoperability with our own and other vendors’ products.

We recognize that our significant role in shaping a future of Smart Everything brings important responsibilities.

The future is not smart if it is not sustainable, fair and secure.

Our "Smart Future" Corporate Social Responsibility (CSR) program provides a focus and structure for how we address both our own operational impact on the world and our ability to influence others around us.

The contents of our website,

Synopsys continues our commitment to attracting and retaining the brightest and best talent, and investing in and inspiring our people to do their best work is critical for our success.

We have held multiple clinics in our offices for employees to be vaccinated, and have provided ongoing assistance to our employees and their families throughout the pandemic.

With employee wellness at the forefront of our efforts, we provided our employees with a variety of benefits and support initiatives to address the inherent challenges of working remotely during the pandemic, including a parental resources website with information to assist working parents co-educating children at home, and our Stronger Through Wellbeing campaign focused on employee empowerment, which included five recharge days to ensure employees were taking time off and truly getting a restful break.

We are highly technical, enjoy pushing the boundaries of what is possible and are individually innovative.

While we experienced an increase in employee turnover in 2021, our turnover rate remains notably lower than our competitive benchmarks.

In addition, we established employee resource groups, which are employee led communities that serve to foster an inclusive and diverse workplace and align with Synopsys’ mission and values in support of our goals for inclusion and diversity.

We were pleased to see strong scores from our people in both how they were coping with the challenging circumstances related to the pandemic, and our managers’ demonstrated ability to consider the wellbeing of their team members.

We also observed positive scores and trends on items related to the employee experience.

We regard every member of our employee base as a leader.

He has served as Co-Chief Executive Officer with Dr. Chi-Foon Chan since May 2012.

*Chi-Foon Chan* has served as our Co-Chief Executive Officer since May 2012 and a member of our Board of Directors since February 1998.

Prior to his appointment as our Co-Chief Executive Officer in May 2012, he served as our President from February 1998 to October 2021.

Dr. Chan joined Synopsys in May 1990 and has held various senior management positions, including Chief Operating Officer from April 1997 to May 2012.

Dr. Chan has also held senior management and engineering positions at NEC Electronics and Intel Corporation.

Dr. Chan holds a B.S. in Electrical Engineering from Rutgers University, and an M.S. and a Ph.D. in Computer Engineering from Case Western Reserve University.

*Trac Pham* is our Chief Financial Officer.