Synopsys (SNPS) 10-K risk factor changes: FY2023 vs FY2022

[Table of [removed: Contents](#i4e1043bb74d64d75b0a80505c3195e4f_7)][added: Contents](#i78985efb233548bca58219f866b28d1b_7)]

For the fiscal year ended October 31, [removed: 2022][added: 2023]

[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: $32.2] [added: $46.4] billion.

Aggregate market value excludes an aggregate of approximately [removed: 40.8] [added: 27.3] million shares of the registrant's common 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.

On December [removed: 7, 2022, 152,417,194] [added: 6, 2023, 151,986,878] shares of Common Stock were outstanding.

Portions of the registrant’s definitive Proxy Statement relating to the registrant’s [removed: 2023] [added: 2024] Annual Meeting of Stockholders, scheduled to be held on April [removed: 12, 2023,] [added: 10, 2024,] are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

Fiscal year ended October 31, [removed: 2022][added: 2023]

| Item 1. | | | | | | [removed: [Business](#i4e1043bb74d64d75b0a80505c3195e4f_16)] [added: [Business](#i78985efb233548bca58219f866b28d1b_16)] | | | | | | [removed: [3](#i4e1043bb74d64d75b0a80505c3195e4f_16)] [added: [3](#i78985efb233548bca58219f866b28d1b_16)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i4e1043bb74d64d75b0a80505c3195e4f_19)] [added: Factors](#i78985efb233548bca58219f866b28d1b_19)] | | | | | | [removed: [16](#i4e1043bb74d64d75b0a80505c3195e4f_19)] [added: [16](#i78985efb233548bca58219f866b28d1b_19)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i4e1043bb74d64d75b0a80505c3195e4f_22)] [added: Comments](#i78985efb233548bca58219f866b28d1b_22)] | | | | | | [removed: [30](#i4e1043bb74d64d75b0a80505c3195e4f_22)] [added: [30](#i78985efb233548bca58219f866b28d1b_22)] | | |

| Item 2. | | | | | | [removed: [Properties](#i4e1043bb74d64d75b0a80505c3195e4f_25)] [added: [Properties](#i78985efb233548bca58219f866b28d1b_25)] | | | | | | [removed: [30](#i4e1043bb74d64d75b0a80505c3195e4f_25)] [added: [30](#i78985efb233548bca58219f866b28d1b_25)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i4e1043bb74d64d75b0a80505c3195e4f_28)] [added: Proceedings](#i78985efb233548bca58219f866b28d1b_28)] | | | | | | [removed: [30](#i4e1043bb74d64d75b0a80505c3195e4f_28)] [added: [31](#i78985efb233548bca58219f866b28d1b_28)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i4e1043bb74d64d75b0a80505c3195e4f_31)] [added: Disclosures](#i78985efb233548bca58219f866b28d1b_31)] | | | | | | [removed: [31](#i4e1043bb74d64d75b0a80505c3195e4f_31)] [added: [32](#i78985efb233548bca58219f866b28d1b_31)] | | |

| Item 5. | | | | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i4e1043bb74d64d75b0a80505c3195e4f_37)] [added: Securities](#i78985efb233548bca58219f866b28d1b_37)] | | | | | | [removed: [32](#i4e1043bb74d64d75b0a80505c3195e4f_37)] [added: [33](#i78985efb233548bca58219f866b28d1b_37)] | | |

| Item 6. | | | | | | [removed: [\[Reserved\]](#i4e1043bb74d64d75b0a80505c3195e4f_40)] [added: [\[Reserved\]](#i78985efb233548bca58219f866b28d1b_40)] | | | | | | [removed: [33](#i4e1043bb74d64d75b0a80505c3195e4f_40)] [added: [34](#i78985efb233548bca58219f866b28d1b_40)] | | |

| Item 7. | | | | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i4e1043bb74d64d75b0a80505c3195e4f_43)] [added: Operations](#i78985efb233548bca58219f866b28d1b_43)] | | | | | | [removed: [33](#i4e1043bb74d64d75b0a80505c3195e4f_43)] [added: [35](#i78985efb233548bca58219f866b28d1b_43)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i4e1043bb74d64d75b0a80505c3195e4f_73)] [added: Risk](#i78985efb233548bca58219f866b28d1b_73)] | | | | | | [removed: [45](#i4e1043bb74d64d75b0a80505c3195e4f_73)] [added: [47](#i78985efb233548bca58219f866b28d1b_73)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i4e1043bb74d64d75b0a80505c3195e4f_76)] [added: Data](#i78985efb233548bca58219f866b28d1b_76)] | | | | | | [removed: [48](#i4e1043bb74d64d75b0a80505c3195e4f_76)] [added: [50](#i78985efb233548bca58219f866b28d1b_76)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i4e1043bb74d64d75b0a80505c3195e4f_148)] [added: Disclosure](#i78985efb233548bca58219f866b28d1b_157)] | | | | | | [removed: [95](#i4e1043bb74d64d75b0a80505c3195e4f_148)] [added: [98](#i78985efb233548bca58219f866b28d1b_157)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i4e1043bb74d64d75b0a80505c3195e4f_151)] [added: Procedures](#i78985efb233548bca58219f866b28d1b_160)] | | | | | | [removed: [95](#i4e1043bb74d64d75b0a80505c3195e4f_151)] [added: [98](#i78985efb233548bca58219f866b28d1b_160)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i4e1043bb74d64d75b0a80505c3195e4f_154)] [added: Information](#i78985efb233548bca58219f866b28d1b_163)] | | | | | | [removed: [95](#i4e1043bb74d64d75b0a80505c3195e4f_154)] [added: [99](#i78985efb233548bca58219f866b28d1b_163)] | | |

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i4e1043bb74d64d75b0a80505c3195e4f_157)] [added: Inspections](#i78985efb233548bca58219f866b28d1b_166)] | | | | | | [removed: [95](#i4e1043bb74d64d75b0a80505c3195e4f_157)] [added: [99](#i78985efb233548bca58219f866b28d1b_166)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i4e1043bb74d64d75b0a80505c3195e4f_163)] [added: Governance](#i78985efb233548bca58219f866b28d1b_172)] | | | | | | [removed: [96](#i4e1043bb74d64d75b0a80505c3195e4f_163)] [added: [100](#i78985efb233548bca58219f866b28d1b_172)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i4e1043bb74d64d75b0a80505c3195e4f_166)] [added: Compensation](#i78985efb233548bca58219f866b28d1b_175)] | | | | | | [removed: [96](#i4e1043bb74d64d75b0a80505c3195e4f_166)] [added: [100](#i78985efb233548bca58219f866b28d1b_175)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i4e1043bb74d64d75b0a80505c3195e4f_169)] [added: Matters](#i78985efb233548bca58219f866b28d1b_178)] | | | | | | [removed: [96](#i4e1043bb74d64d75b0a80505c3195e4f_169)] [added: [100](#i78985efb233548bca58219f866b28d1b_178)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i4e1043bb74d64d75b0a80505c3195e4f_172)] [added: Independence](#i78985efb233548bca58219f866b28d1b_181)] | | | | | | [removed: [96](#i4e1043bb74d64d75b0a80505c3195e4f_172)] [added: [100](#i78985efb233548bca58219f866b28d1b_181)] | | |

| Item 14. | | | | | | [Principal Accountant Fees and [removed: Services](#i4e1043bb74d64d75b0a80505c3195e4f_175)] [added: Services](#i78985efb233548bca58219f866b28d1b_184)] | | | | | | [removed: [96](#i4e1043bb74d64d75b0a80505c3195e4f_175)] [added: [100](#i78985efb233548bca58219f866b28d1b_184)] | | |

| Item 15. | | | | | | [Exhibits and Financial Statement [removed: Schedules](#i4e1043bb74d64d75b0a80505c3195e4f_181)] [added: Schedules](#i78985efb233548bca58219f866b28d1b_190)] | | | | | | [removed: [97](#i4e1043bb74d64d75b0a80505c3195e4f_181)] [added: [101](#i78985efb233548bca58219f866b28d1b_190)] | | |

This Annual Report on Form 10-K (this Form [removed: 10-K)] [added: 10-K or the Annual Report)] 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.

- the impact of macroeconomic conditions, [removed: rising] [added: increased] global [added: inflationary pressures and] interest rates, [added: potential economic slowdowns or recessions,] legislative developments, trade disruptions, including export control restrictions, [removed: semiconductor shortages] [added: geopolitical pressures] and [added: conflicts,] supply chain disruptions [added: and fluctuations in foreign exchange rates] on our business and our customers’ businesses;

- the expected realization of our contracted but unsatisfied or partially unsatisfied performance [removed: obligations;][added: obligations (backlog);]

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

Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in [removed: the future.]

[added: 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: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] were 52-week years and ended on October [added: 28, 2023, October] 29, 2022, [removed: October 30, 2021] and October [removed: 31, 2020,] [added: 30, 2021,] respectively.

Fiscal [removed: 2023] [added: 2024] will be a [removed: 52-week] [added: 53-week] year.

For presentation purposes, this [added: Annual Report on] Form 10-K refers to the closest calendar month end.

From engineers creating advanced semiconductors to product teams developing advanced electronic systems to software developers seeking to ensure the security and quality of their code, our customers trust that our technologies will enable them to meet new requirements for [removed: low power,] [added: energy efficiency,] reliability, mobility, security and more.

We are a global leader in supplying the electronic design automation (EDA) software that engineers use to design and test integrated circuits (ICs), also known as [removed: chips.][added: chips or silicon.]

| 675 Almanor Avenue | | | | | | | | | | | | 94085 | | | | | |

| Sunnyvale, California | | | | | | | | | | | | | | | | | |

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b).

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

| [PART I](#i78985efb233548bca58219f866b28d1b_13) | | | | | | | | | | | | | | |

| Item 1C. | | | | | | [C](#i78985efb233548bca58219f866b28d1b_1641)[ybersecurit](#i78985efb233548bca58219f866b28d1b_1641)[y](#i78985efb233548bca58219f866b28d1b_1641) | | | | | | [30](#i78985efb233548bca58219f866b28d1b_1641) | | |

| [PART II](#i78985efb233548bca58219f866b28d1b_34) | | | | | | | | | | | | | | |

| [PART III](#i78985efb233548bca58219f866b28d1b_169) | | | | | | | | | | | | | | |

| [PART IV](#i78985efb233548bca58219f866b28d1b_187) | | | | | | | | | | | | | | |

| [SIGNATURES](#i78985efb233548bca58219f866b28d1b_193) | | | | | | | | | | | | [104](#i78985efb233548bca58219f866b28d1b_193) | | |

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

- the exploration of strategic alternatives for our Software Integrity segment;

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

These products and services are part of our Design Automation segment.

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

dense features and requiring creative and complicated new approaches.

Design Automation Segment

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

offering that provides customers additional options for accessing our EDA products in their own cloud environments and in the industry’s first EDA Software-as-a-Service solution developed in partnership with Microsoft Azure.

- AI driven EDA solutions, which include AI and machine learning tools to complement our EDA software stack.

This groundbreaking solution handles design complexity and takes over repetitive tasks such as design space exploration, verification coverage and regression analytics, as well as test program generation, while helping to optimize power, performance, and area.

This frees up engineers to focus on chip quality and differentiation and enables them to quickly migrate their chip designs from foundry to foundry or from process node to process node.

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

*AI Driven EDA Stack*

Our EDA software stack spanning design, verification, and manufacturing is augmented with AI and machine learning through our Synopsys.ai suite of complementary solutions.

Starting in design with design space optimization that autonomously learns through quickly exploring potential design alternatives, enabling engineers to develop superior design outcomes with significantly reduced effort as well as learning-based design retargeting to derivative processes, improved test coverage through AI-driven models while reducing test vectors and tester time, and analysis of silicon performance and quality that is leveraged for optimizing next-generation revisions of design.

The Synopsys.ai solutions include:

- DSO.ai – Design Space Optimization for best quality of results and productivity with scaling of exploration design workflows;

[Table of Contents](#i78985efb233548bca58219f866b28d1b_7)

- VSO.ai – Verification Space Optimization for improved functional verification coverage & faster turnaround time;

- TSO.ai – Test Space Optimization for reduced pattern count, turnaround time and higher coverage;

- ASO.ai – Analog Space Optimization for analog layout optimization & migration;

- Design.da – Design data analytics for actionable insights to unlock untapped power, performance, and area;

- Silicon.da – Silicon data analytics for root-cause analysis and part-level traceability of failures; and

- Fab.da – Manufacturing data analytics for improved process control, time-to-market, and user productivity.

Our Other product group includes revenue from sales of products to university programs as well as our optical products, mechatronic simulation, and the impact of gains and losses from foreign currency hedges.

Our Design IP segment includes our Design IP products, which service companies primarily in the semiconductor and electronics industry.

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| 690 East Middlefield Road, | | | Mountain View, | | | California | | | | | | 94043 | | | | | |

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

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

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

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

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

- the impact of the ongoing COVID-19 pandemic;

Readers are urged to carefully review and

To complement these offerings, we provide technical services and support to help our customers develop advanced chips and electronic systems.

We are also a leading provider of software tools and services that improve the security, quality and compliance of software in a wide variety of industries, including electronics, financial services, automotive, medicine, energy and industrials.

This groundbreaking solution autonomously learns through quickly exploring potential design alternatives, enabling engineers to develop superior design outcomes with our design tools.

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

The individual products included in the Verification Family are reported in our EDA and IP and System Integration revenue categories.

The solutions reported in our EDA revenue include the following:

The verification IP, virtual prototyping, and FPGA-based prototyping solutions that are part of our Verification Family are included in our IP and System Integration category and further described below.

IP and System Integration

Our Verification IP portfolio, part of our Verification Family, is also part of the IP Products category.

*System Integration Solutions*

We also provide a series of tools used in the design of optical systems and photonic devices.

Our CODE V® solution enables engineers to model, analyze and optimize designs for optical imaging and communication systems.

Our LightTools® design and analysis software allows designers to simulate and improve the performance of a broad range of illumination systems, from vehicle lighting to projector systems.

Our Other revenue category includes revenue from sales of products to academic and research institutions.

Our products utilize

In each such year, the revenue derived from such customer and its subsidiaries was primarily attributable to our Semiconductor & System Design segment.

Corporate Social Responsibility at Synopsys

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.

Through CSR, we are taking action on important Environmental, Social and Governance (ESG) matters to build a more sustainable business, including initiatives to procure more renewable energy and to reduce our operational footprint, as well as driving a culture of inclusion and diversity throughout our workforce and on our Board of Directors.

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

As the role of computing increases exponentially, the Internet of things (IoT), 5G and machine learning applications risk driving similarly exponential energy consumption and carbon emissions.

This makes our work to enable low-power computing at the device level and in the cloud especially critical to the industry’s sustainability.

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

The health and safety of our employees and their families remains a top priority.

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.