Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Synopsys, Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Synopsys, Inc. and subsidiaries (the Company) as of November 2, 2024 and October 28, 2023, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the fiscal years in the three-year period ended November 2, 2024, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of November 2, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of November 2, 2024 and October 28, 2023, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended November 2, 2024, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of November 2, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,

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accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the Company's analysis of terms and conditions in software and intellectual property license contracts with customers

As discussed in Notes 2 and 6 to the consolidated financial statements, the Company generates revenue from the sale of products that include software and intellectual property (IP) licenses, hardware products, maintenance and services. The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Arrangements with customers can involve hundreds of products and various license rights, and customers negotiate with the Company over many aspects of these arrangements. The Company's customers often request a broader portfolio of solutions, support and services and seek more favorable terms such as expanded license usage, future purchase rights and other unique rights at an overall lower total cost. The Company recognized total revenue of $6,127.4 million for the fiscal year ended November 2, 2024, which included revenue related to software and IP licenses.

We identified the evaluation of the Company's analysis of terms and conditions in significant software and IP license contracts with customers and their effect on revenue recognition as a critical audit matter. Complex auditor judgment was required to assess the Company's judgments made in applying revenue recognition requirements to certain terms and conditions.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company's revenue recognition process, including the Company's analysis of terms and conditions in software and IP license contracts with customers and their effect on revenue recognition. We tested certain software and IP license customer contracts by inspecting the underlying customer agreements and evaluating the Company's assessment of the contractual terms and conditions in accordance with revenue recognition requirements. For a selection of software and IP license contracts with customers entered during the year, we inquired of personnel outside of the accounting function to corroborate our understanding of certain terms and conditions.

/s/ KPMG LLP

We have served as the Company’s auditor since 1992.

Santa Clara, California

December 18, 2024

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SYNOPSYS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

			October 31,
			2024						2023
ASSETS
Current assets:
Cash and cash equivalents			$	3,896,532					$	1,433,966
Short-term investments			153,869						151,639
Total cash, cash equivalents and short-term investments			4,050,401						1,585,605
Accounts receivable, net			934,470						856,660
Inventories			361,849						325,590
Prepaid and other current assets			1,122,946						548,115
Current assets of discontinued operations			—						114,654
Total current assets			6,469,666						3,430,624
Property and equipment, net			563,006						549,837
Operating lease right-of-use assets, net			565,917						559,923
Goodwill			3,448,850						3,346,065
Intangible assets, net			195,164						239,577
Deferred income taxes			1,247,258						853,526
Other long-term assets			583,700						444,820
Long-term assets of discontinued operations			—						908,759
Total assets			$	13,073,561					$	10,333,131
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities			$	1,163,592					$	1,059,914
Operating lease liabilities			94,791						79,832
Deferred revenue			1,391,737						1,559,461
Current liabilities of discontinued operations			—						286,244
Total current liabilities			2,650,120						2,985,451
Long-term operating lease liabilities			574,065						579,686
Long-term deferred revenue			340,831						150,827
Long-term debt			15,601						18,078
Other long-term liabilities			469,738						381,531
Long-term liabilities of discontinued operations			—						33,257
Total liabilities			4,050,355						4,148,830
Redeemable non-controlling interest			30,000						31,043
Stockholders’ equity:
Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding			—						—
Common stock, $0.01 par value: 400,000 shares authorized; 154,112 and 152,053 shares outstanding, respectively			1,541						1,521
Capital in excess of par value			1,211,206						1,276,152
Retained earnings			8,984,105						6,741,699
Treasury stock, at cost: 3,148 and 5,207 shares, respectively			(1,025,770)						(1,675,650)
Accumulated other comprehensive income (loss)			(180,380)						(196,414)
Total Synopsys stockholders’ equity			8,990,702						6,147,308
Non-controlling interest			2,504						5,950
Total stockholders’ equity			8,993,206						6,153,258
Total liabilities, redeemable non-controlling interest and stockholders’ equity			$	13,073,561					$	10,333,131

See the accompanying Notes to Consolidated Financial Statements.

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SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

			Year Ended October 31,
			2024						2023						2022
Revenue:
Time-based products			$	3,224,299					$	3,016,256					$	2,657,724
Upfront products			1,802,222						1,400,125						1,221,240
Total products revenue			5,026,521						4,416,381						3,878,964
Maintenance and service			1,100,915						901,633						736,750
Total revenue			6,127,436						5,318,014						4,615,714
Cost of revenue:
Products			770,238						697,686						594,007
Maintenance and service			367,055						287,876						259,332
Amortization of acquired intangible assets			107,996						45,281						44,674
Total cost of revenue			1,245,289						1,030,843						898,013
Gross margin			4,882,147						4,287,171						3,717,701
Operating expenses:
Research and development			2,082,360						1,849,935						1,589,846
Sales and marketing			859,342						724,934						642,729
General and administrative			568,496						376,677						313,554
Amortization of acquired intangible assets			16,238						9,295						11,637
Restructuring charges			—						53,091						11,221
Total operating expenses			3,526,436						3,013,932						2,568,987
Operating income			1,355,711						1,273,239						1,148,714
Interest and other income (expense), net			158,147						32,231						(45,262)
Income before income taxes			1,513,858						1,305,470						1,103,452
Provision (benefit) for income taxes			99,718						90,188						139,385
Net income from continuing operations			1,414,140						1,215,282						964,067
Income from discontinued operations, net of income taxes			821,670						2,843						14,369
Net income			2,235,810						1,218,125						978,436
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest			(27,570)						(11,763)						(6,158)
Net income attributed to Synopsys			$	2,263,380					$	1,229,888					$	984,594
Net income attributed to Synopsys:
Continuing operations			$	1,441,710					$	1,227,045					$	970,225
Discontinued operations			821,670						2,843						14,369
Net income			$	2,263,380					$	1,229,888					$	984,594
Net income per share attributed to Synopsys - basic:
Continuing operations			$	9.41					$	8.06					$	6.34
Discontinued operations			5.37						0.02						0.10
Basic net income per share			$	14.78					$	8.08					$	6.44
Net income per share attributed to Synopsys - diluted:
Continuing operations			$	9.25					$	7.91					$	6.20
Discontinued operations			5.26						0.01						0.09
Diluted net income per share			$	14.51					$	7.92					$	6.29
Shares used in computing per share amounts:
Basic			153,138						152,146						153,002
Diluted			155,944						155,195						156,485

See the accompanying Notes to Consolidated Financial Statements.

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SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

			Year Ended October 31,
			2024						2023						2022
Net income			$	2,235,810					$	1,218,125					$	978,436
Other comprehensive income (loss):
Change in foreign currency translation adjustment			8,150						(13,912)						(108,145)
Change in unrealized gains (losses) on available-for-sale securities, net of tax of $0 for periods presented			1,460						1,513						(2,353)
Cash flow hedges:
Deferred gains (losses), net of tax of $(3,052), $(8,940), and $28,416 for fiscal years 2024, 2023 and 2022, respectively			9,625						24,986						(79,069)
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $(446), $(10,053), and $(1,342) for fiscal years 2024, 2023 and 2022, respectively			(3,201)						25,276						4,894
Other comprehensive income (loss), net of tax effects			16,034						37,863						(184,673)
Comprehensive income			2,251,844						1,255,988						793,763
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest			(27,570)						(11,763)						(6,158)
Comprehensive income attributed to Synopsys			$	2,279,414					$	1,267,751					$	799,921

See the accompanying Notes to Consolidated Financial Statements.

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SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

															Capital in Excess of Par Value						Retained Earnings						Treasury Stock						Accumulated Other Comprehensive Income (Loss)						Total Synopsys Stockholders’ Equity						Non-controlling Interest						Stockholders' Equity
			Common Stock
			Shares						Amount
Balance at October 31, 2021			153,062						$	1,531					$	1,576,363					$	4,549,713					$	(782,866)					$	(49,604)					$	5,295,137					$	3,806					$	5,298,943
Net income																					984,594																		984,594						(1,306)						983,288
Other comprehensive income (loss), net of tax effects																																	(184,673)						(184,673)												(184,673)
Purchases of treasury stock			(3,609)						(36)						36												(1,135,000)												(1,135,000)												(1,135,000)
Equity forward contract, net															35,000																								35,000												35,000
Common stock issued, net of shares withheld for employee taxes			2,922						29						(581,001)												644,911												63,939												63,939
Stock-based compensation															456,728																								456,728						2,301						459,029
Balance at October 31, 2022			152,375						$	1,524					$	1,487,126					$	5,534,307					$	(1,272,955)					$	(234,277)					$	5,515,725					$	4,801					$	5,520,526
Net income																					1,229,888																		1,229,888						(1,761)						1,228,127
Other comprehensive income (loss), net of tax effects																																	37,863						37,863												37,863
Purchases of treasury stock			(2,992)						(30)						30												(1,160,724)												(1,160,724)												(1,160,724)
Equity forward contract, net															(45,000)																								(45,000)												(45,000)
Common stock issued, net of shares withheld for employee taxes			2,670						27						(725,211)						(19,108)						758,029												13,737												13,737
Stock-based compensation															558,078																								558,078						5,214						563,292
Adjustments to redeemable non-controlling interest																					(3,388)																		(3,388)												(3,388)
Recognition of non-controlling interest upon issuance of subsidiary stock															1,129																								1,129						(2,304)						(1,175)
Balance at October 31, 2023			152,053						$	1,521					$	1,276,152					$	6,741,699					$	(1,675,650)					$	(196,414)					$	6,147,308					$	5,950					$	6,153,258
Net income																					2,263,380																		2,263,380						(5,552)						2,257,828
Other comprehensive income (loss), net of tax effects																																	16,034						16,034												16,034
Purchases of treasury stock			(74)						(1)						1												(45,000)												(45,000)												(45,000)
Equity forward contract, net															45,000																								45,000												45,000
Common stock issued, net of shares withheld for employee taxes			2,133						21						(799,210)												694,880												(104,309)												(104,309)
Stock-based compensation															687,765																								687,765						4,551						692,316
Adjustments to redeemable non-controlling interest																					(20,974)																		(20,974)												(20,974)
Recognition of non-controlling interest upon issuance of subsidiary stock															1,498																								1,498						(2,445)						(947)
Balance at October 31, 2024			154,112						$	1,541					$	1,211,206					$	8,984,105					$	(1,025,770)					$	(180,380)					$	8,990,702					$	2,504					$	8,993,206

See the accompanying Notes to Consolidated Financial Statements.

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SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

			Year Ended October 31,
			2024						2023						2022
Cash flows from operating activities:
Net income			$	2,235,810					$	1,218,125					$	978,436
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation			295,065						247,120						228,405
Reduction of operating lease right-of-use assets			97,273						97,705						89,541
Amortization of capitalized costs to obtain revenue contracts			73,587						82,190						73,026
Stock-based compensation			692,316						563,292						459,029
Allowance for credit losses			19,724						19,932						(3,477)
Gain on sale of strategic investments			(55,077)						—						—
Gain on divestitures, net of transaction costs			(868,830)						—						—
Amortization of bridge financing costs			33,677						—						—
Deferred income taxes			(407,649)						(211,045)						(36,913)
Other			(1,295)						13,295						10,188
Net changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable			(103,460)						(178,432)						(251,390)
Inventories			(51,449)						(123,752)						1,320
Prepaid and other current assets			(410,432)						(106,396)						(89,983)
Other long-term assets			(168,255)						(100,618)						(15,283)
Accounts payable and accrued liabilities			187,564						170,496						(34,066)
Operating lease liabilities			(96,966)						(73,281)						(85,828)
Income taxes			(73,215)						198,078						1,644
Deferred revenue			8,641						(113,435)						414,251
Net cash provided by operating activities			1,407,029						1,703,274						1,738,900
Cash flows from investing activities:
Proceeds from maturities and sales of short-term investments			138,961						130,435						93,696
Purchases of short-term investments			(136,821)						(131,079)						(97,245)
Proceeds from sales of strategic investments			55,696						8,492						582
Purchases of strategic investments			(1,293)						(435)						(7,000)
Purchases of property and equipment, net			(123,161)						(189,618)						(136,589)
Acquisitions, net of cash acquired			(156,947)						(297,692)						(422,374)
Proceeds from business divestiture, net of cash divested			1,446,578						—						—
Capitalization of software development costs			—						(2,204)						(2,493)
Other			—						—						(1,200)
Net cash provided by (used in) investing activities			1,223,013						(482,101)						(572,623)
Cash flows from financing activities:
Repayment of debt			(2,607)						(2,603)						(76,838)
Payment of bridge financing and term loan costs			(72,265)						—						—
Issuances of common stock			232,212						252,986						237,956
Payments for taxes related to net share settlement of equity awards			(337,541)						(241,408)						(174,005)
Purchase of equity forward contract			—						(45,000)						—
Purchases of treasury stock			—						(1,160,724)						(1,100,000)
Other			(1,096)						(122)						(3,413)
Net cash used in financing activities			(181,297)						(1,196,871)						(1,116,300)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			8,797						(2,979)						(65,296)
Net change in cash, cash equivalents and restricted cash			2,457,542						21,323						(15,319)
Cash, cash equivalents and restricted cash, beginning of year, including cash from discontinued operations			1,441,187						1,419,864						1,435,183
Cash, cash equivalents and restricted cash, end of year, including cash from discontinued operations			3,898,729						1,441,187						1,419,864
Less: Cash, cash equivalents and restricted cash from discontinued operations			—						4,947						4,269

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Cash, cash equivalents and restricted cash from continuing operations			$	3,898,729					$	1,436,240					$	1,415,595
Supplemental disclosure of cash flow information:
Cash paid for income taxes during the year:			$	680,064					$	97,956					$	167,768
Interest payments during the year:			$	814					$	996					$	1,258
Non-cash activities:
Purchase of property and equipment included in accounts payable			$	32,014					$	21,672					$	17,857
Conversion of notes receivable to non-marketable equity securities			$	—					$	2,000					$	14,280
Contingent consideration receivable in connection with divestiture			$	22,202					$	—					$	—

See the accompanying Notes to Consolidated Financial Statements.

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SYNOPSYS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of Business

Synopsys, Inc. (Synopsys, we, our or us) delivers trusted and comprehensive silicon to systems design solutions, from electronic design automation (EDA), including system verification and validation solutions, to silicon intellectual property (IP). We partner closely with semiconductor and systems customers across a wide range of industries to maximize their engineering and research and development capacity. We are catalyzing the era of pervasive intelligence, powering innovation today that ignites the ingenuity of tomorrow.

We are a global leader in supplying the mission-critical EDA software that engineers use to design and test integrated circuits (ICs), also known as chips or silicon, and we are pioneering artificial intelligence (AI) driven chip design across the full-stack EDA suite to improve efficiency and accelerate the design, verification testing and manufacturing of advanced digital and analog chips. We provide software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them, including cloud-based digital design flow to boost chip-design development productivity. We also provide technical services and support to help our customers develop advanced chips and electronic systems. These products and services are part of our Design Automation segment.

We also offer a broad and comprehensive portfolio of semiconductor IP solutions, which are pre-designed circuits that engineers use as components of larger chip designs to reduce integration risk and speed time to market. Our high quality, silicon-proven semiconductor IP includes logic libraries, embedded memories, analog IP, wired and wireless interface IP, security IP, embedded processors and subsystems. To accelerate IP integration and silicon bring-up, our IP Accelerated initiative provides architecture design expertise, hardening, and signal and power integrity analysis. These products and services are part of our Design IP segment.

Note 2. Summary of Significant Accounting Policies and Basis of Presentation

Basis of Presentation and Principles of Consolidation. Historically, our fiscal years have been 52- or 53-week periods ending on the Saturday nearest to October 31. Fiscal 2024 was a 53-week year ending on November 2, 2024. Fiscal 2023 and 2022 were 52-week years and ended on October 28, 2023 and October 29, 2022, respectively. For presentation purposes, the consolidated financial statements and accompanying notes refer to the closest calendar month end. We have changed our fiscal year end from the Saturday nearest to October 31 and consisting of 52 or 53 fiscal weeks to a fiscal year end of October 31 each year. The fiscal year change becomes effective with our fiscal 2025, which began on November 3, 2024. Our fiscal quarters will end on January 31, April 30, July 31 and October 31 of each year.

The consolidated financial statements include our accounts and the accounts of our wholly and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates. To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates and could have a material impact on our operating results and financial position.

Software Integrity Divestiture. On May 5, 2024, we entered into an Equity Purchase Agreement, by and between Synopsys and Sapphire Software Buyer, Inc., an entity controlled by funds affiliated with Clearlake Capital Group, L.P. and Francisco Partners (together, the Sponsors). On September 30, 2024, we completed the previously announced sale of our Software Integrity business to entities controlled by funds affiliated with the Sponsors (the Software Integrity Divestiture). We previously determined that the Software Integrity Divestiture met the criteria to be disclosed as discontinued operations in the second quarter of fiscal 2024 as it represented a significant strategic shift that had a major effect on our operations and financial results. The results of the Software Integrity business, including the gain on divestiture, are presented as discontinued operations in the consolidated statements of income, and as such, have been excluded from both continuing operations and segment results for all periods presented. Further, we reclassified the assets and liabilities of the Software Integrity business as assets and liabilities of discontinued operations in the consolidated balance sheets as of October 31, 2023. The consolidated statements of cash flows are presented on a consolidated basis for both continuing operations and discontinuing operations. We did not allocate any general corporate overhead to the Software Integrity business. Unless otherwise noted, reference within these Notes to Consolidated Financial Statements relates to continuing

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operations. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in this Annual Report.

Segment Reporting. As a result of the Software Integrity Divestiture, we changed our reportable segment from the three reportable segments to the following two reportable segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, system integration products and services, digital, custom and FPGA 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. Our Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO) reviews disaggregated segment information, assess performance against our key growth strategies and allocates resources. See Note 20. Segment Disclosure of the Notes to Consolidated Financial Statements in this Annual Report*.* Prior period segment results and related disclosures have been reclassified to conform to the current period segment presentation.

Cash Equivalents and Short-term Investments**.** We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Our investments in debt securities with remaining maturities greater than three months at the date of purchase are designated as available-for-sale securities as we may convert these investments into cash at any time to fund general operations, and included in short-term investments in the consolidated balance sheets. Our debt securities generally have an effective maturity term of less than three years and are carried at fair value, with unrealized gains and losses included in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). For available-for-sale debt securities in an unrealized loss position, we evaluate whether a current expected credit loss exists based on available information relevant to the credit rating of the security, current economic conditions and reasonable and supportable forecasts. The allowance for credit loss is recorded in interest and other income (expense), net, in the consolidated statements of income, not to exceed the amount of the unrealized loss. Any excess unrealized loss other than the credit loss is recognized in accumulated other comprehensive income or loss in the stockholders' equity section of the consolidated balance sheets. The cost of securities sold is based on the specific identification method and realized gains and losses are included in interest and other income (expense), net. See Note 9. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements in this Annual Report.

Investments in Equity Securities. We hold equity securities in privately held companies for the promotion of business and strategic objectives. We account for these investments using either the measurement alternative approach when the fair value of the investment is not readily determinable and we do not have the ability to exercise significant influence, or the equity method of accounting when it is determined that we have the ability to exercise significant influence. Investments accounted for using the measurement alternative approach are initially recorded at cost and adjusted for changes in fair value from observable transactions. For investments accounted for using the equity method of accounting, we record our proportionate share of the investee’s income or loss to interest and other income (expense), net, in our consolidated statements of income. These investments are subject to a periodic impairment review, and are included in other long-term assets in the consolidated balance sheets.

Accounts Receivable, Net. The balances consist of billed accounts receivable and current portion of unbilled accounts receivable. Trade accounts receivables are recorded at the invoiced amount and do not bear interest.

Allowance for Credit Losses. We maintain an allowance for credit losses for expected uncollectible accounts receivable and contract assets, which is recorded as an offset to accounts receivable or contract assets and provisions for credit losses are recorded in general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses is based on a review of customer accounts and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. The following table presents the changes in the allowance for credit losses:

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Fiscal Year			Balance at Beginning of Period						Provisions						Write-offs/Adjustments						Balance at End of Period
			(in thousands)
2024			$	50,366					$	19,286					$	(5,609)					$	64,043
2023			$	38,586					$	18,345					$	(6,565)					$	50,366
2022			$	27,034					$	11,486					$	66					$	38,586

Inventories. Inventories are computed at standard costs which approximate actual costs, on a first-in, first-out basis and valued at the lower of cost or net realizable value. Inventories primarily include components and finished goods for complex emulation and prototyping hardware systems. The valuation process includes a review of the forecasts based upon future demand and market conditions. Inventory provisions are recorded when the costs are determined to be in excess of anticipated demand or considered obsolete. Inventory provisions are impacted by market and economic conditions, technology changes, new product introductions and changes in strategic direction, and require estimates that may include uncertain elements.

Fair Values of Financial Instruments. Our cash equivalents, short-term investments and foreign currency contracts are carried at fair value. The fair value of our accounts receivable and accounts payable approximates the carrying amount due to their short duration. Non-marketable equity securities are accounted for using either the measurement alternative or equity method of accounting. We perform periodic impairment analysis on these non-marketable equity securities. The carrying amount of the short-term and long-term debt approximates the estimated fair value. See Note 10. Fair Value Measurements of the Notes to Consolidated Financial Statements in this Annual Report.

Foreign Currency Contracts. We operate internationally and are exposed to potentially adverse movements in currency exchange rates. We enter into hedges in the form of foreign currency forward contracts to reduce our exposure to foreign currency rate changes on non-functional currency denominated forecasted transactions and balance sheet positions. The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or accrued liabilities in the consolidated balance sheets.

The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. See Note 9. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements in this Annual Report.

Concentration of Credit Risk. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash equivalents, short-term investments, foreign currency contracts, and trade accounts receivable. We maintain cash equivalents primarily in highly rated taxable and tax-exempt money market funds located in the U.S. and in various overseas locations. Our short-term investments include a variety of financial instruments, such as corporate debt and municipal securities, U.S. Treasury and Government agency securities. By policy, we limit the amount of credit exposure with any one issue, issuer and type of instrument.

We sell our products worldwide primarily to customers in the global electronics market. We perform on-going credit evaluations of our customers’ financial condition and do not require collateral. We establish reserves for potential credit losses and such losses have been within management’s expectations and have not been material in any year presented.

Income Taxes. We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized

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upon ultimate settlement. An uncertain tax position is considered effectively settled on completion of an examination by a taxing authority if certain other conditions are satisfied.

Property and Equipment. Property and equipment is recorded at cost less accumulated depreciation. Assets, excluding land, are depreciated using the straight-line method over their estimated useful lives. Depreciation expenses were $162.9 million, $141.4 million and $103.9 million in fiscal 2024, 2023 and 2022, respectively. Repair and maintenance costs are expensed as incurred and such costs were $89.4 million, $74.4 million and $65.2 million in fiscal 2024, 2023 and 2022, respectively.

The useful lives of depreciable assets are as follows:

			Useful Life in Years
Computer and other equipment			3 - 8
Buildings			30
Furniture and fixtures			5
Leasehold improvements			Shorter of the lease term or the estimated useful life

Leases**.** We determine if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. A contract is or contains a lease when we have the right to control the use of an identified asset for a period of time. The commencement date of the lease is the date that the lessor makes an underlying asset available for use by the lessee. On the commencement date, leases are evaluated for classification and assets and liabilities are recognized based on the present value of lease payments over the lease term.

The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The right of use (ROU) asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments and any lease incentives. Variable lease payments, consisting primarily of reimbursement of costs incurred by lessors for common area maintenance, real estate taxes and insurance, are not included in the lease liability and are recognized as they are incurred.

As most of our leases do not provide an implicit rate, we use the incremental borrowing rate at lease commencement to measure ROU assets and lease liabilities. We use a benchmark senior unsecured yield curve for debt instruments over the similar term, and consider specific credit quality, market conditions, tenor of lease arrangements, and quality of collateral to determine the incremental borrowing rate.

Operating lease expense is generally recognized on a straight-line basis over the lease term. We have elected the practical expedient to account for the lease and non-lease components as a single lease component for the majority of our asset classes. For leases with an initial term of one year or less, we have elected not to record the ROU asset or liability.

Business Combinations. We allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their acquisition-date fair values with the exception of contract assets and contract liabilities (deferred revenue) which are recognized and measured on the acquisition date in accordance with our “Revenue Recognition” policy. The excess of the fair value of purchase consideration over the fair value of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. We include the results of operations of the businesses that are acquired from the acquisition date.

Goodwill. Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired by us. All goodwill acquired in a business combination is assigned to one or more reporting units as of acquisition date. We have two reportable segments, and reporting units are determined to be the same as reportable segments. The carrying amount of goodwill at each reporting unit is tested for impairment annually on the first day of the fourth fiscal quarter, or more frequently if facts and circumstances warrant a review. We perform either a qualitative or quantitative assessment for goodwill impairment test. When a quantitative goodwill impairment assessment is performed, we use an income approach based on discounted cash

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flow analysis, a market approach based on market multiples, or a combination of both. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment loss is recorded for the difference.

Intangible Assets. Intangible assets consist of acquired technology, certain contract rights, customer relationships, trademarks and trade names, and capitalized software. These intangible assets are acquired through business combinations, direct purchases, or internally developed capitalized software. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from one to thirteen years.

We review the carrying values of long-lived assets including intangible assets whenever events or changes in circumstances indicate that the carrying value may not be fully recoverable. Recoverability of long-lived assets is measured by comparing the carrying value of such asset group to the future undiscounted cash flows that asset group is expected to generate. If the undiscounted future cash flow is less than the carrying amount of the asset group, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the asset group.

Redeemable Non-controlling Interest. Non-controlling interest that is not solely redeemable within our control is reported as temporary equity in our consolidated balance sheets. The carrying value of the redeemable non-controlling interest equals the redemption value at the end of each reporting period, after giving effect to the change from the net income (loss) attributable to the redeemable non-controlling interest. We remeasure the redemption value of the non-controlling interest on a quarterly basis and changes in the estimated redemption value are recognized through retained earnings and may also impact the net income or loss attributable to common stockholders of Synopsys if the redemption value falls below a stated threshold. See Note 5. Business Combinations of the Notes to Consolidated Financial Statements in this Annual Report for more information regarding the redeemable non-controlling interests.

Revenue Recognition. We recognize revenue for the transfer of services or products to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those services or products. The principle is achieved through the following five-step approach:

• Identification of the contract, or contracts, with the customer

• Identification of the performance obligation in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, we satisfy a performance obligation

Nature of Products and Services

We generate revenue from the licensing of our EDA software and IP blocks, as well as sale of hardware products, and maintenance and services. The various types are set forth below.

Electronic Design Automation

Software license revenue consists of fees associated with the licensing of our software primarily through Technology Subscription License (TSL) contracts. TSLs are time-based licenses for a finite term and generally provide the customer with limited rights to receive, or to exchange certain quantities of licensed software for, unspecified future technology. The majority of our arrangements are TSLs due to the nature of our business and customer requirements. In addition to the licenses, the arrangements also include: post-contract customer support, which includes providing frequent updates and upgrades to maintain the utility of the software due to rapid changes in technology; other intertwined services such as multiple copies of the tools; assisting our customers in applying our technology in the customers' development environment; and rights to remix licenses for other licenses. Payments are generally received in equal or near equal installments over the term of the arrangement. We have concluded that our software licenses in TSL contracts are not distinct from our obligation to provide unspecified software updates to the licensed software throughout the license term. Such updates represent inputs to a single, combined performance obligation, commencing upon the later of the arrangement effective date or transfer of control to the software license. Remix rights are not an additional promised good or service in the contract, and where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of

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the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same pattern of transfer to the customer over the duration of the subscription term.

Design IP Products

We generally license IP under nonexclusive license agreements that provide usage rights for specific applications. Additionally, for certain IP license agreements, royalties are collected as customers sell their own products that incorporate our IP. These arrangements generally have two distinct performance obligations that consist of transferring the licensed IP and the post contract support service. Support services consist of a stand-ready obligation to provide technical support and software updates over the support term. Revenue allocated to the IP license is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support services is recognized ratably over the support term. Royalties are recognized as revenue is earned, generally when the customer sells its products that incorporate our IP.

Hardware

We generally have two performance obligations in arrangements involving the sale of hardware products. The first performance obligation is to transfer the hardware product, which includes embedded software integral to the functionality of the hardware product. The second performance obligation is to provide maintenance on the hardware and our embedded software, including rights to technical support, hardware repairs and software updates that are all provided over the same term and have the same time-based pattern of transfer to the customer. The portion of the transaction price allocated to the hardware product is recognized as revenue at a point in time when control of the hardware is transferred to the customer. We have concluded that control generally transfers upon shipment because the customer has the ability to direct the use of the asset and an obligation to pay for the hardware. The portion of the transaction price allocated to maintenance is recognized as revenue that is ratable over the maintenance term.

Professional Services

Our arrangements often include service elements other than maintenance and support services. These services include training, design assistance, and consulting. These services are generally performed on a time and materials basis, and are recognized over time, as the customer simultaneously receives and consumes the benefit provided. Certain arrangements also include the customization or modification of licensed IP. Revenue from these contracts is recognized over time as the services are performed, when the development is specific to the customer’s needs and we have enforceable rights to payment for performance completed. Inputs such as costs incurred and hours expended are used in order to measure progress of performance. We have a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances, specification and testing requirement changes, and changes in customer delivery priorities. Payments for services are generally due upon milestones in the contract or upon consumption of the hourly resources.

Flexible Spending Accounts

Our customers frequently enter into non-cancelable Flexible Spending Account arrangements (FSA) whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of our products or services. These arrangements do not meet the definition of a revenue contract until the customer executes a separate order (pulldown request) to identify the required products and services that they are purchasing. The combination of the FSA arrangement and the subsequent order creates enforceable rights and obligations, thus meeting the definition of a revenue contract. Each separate order under the agreement is treated as an individual contract and accounted for based on the respective performance obligations included within the pulldown requests.

Significant Judgments

Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment. We have concluded that (1) our EDA software licenses in TSL contracts are not distinct from our obligation to provide unspecified software updates to the

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licensed software throughout the license term, because those promises represent inputs to a single, combined performance obligation, and (2) where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support, because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer. In reaching this conclusion, we considered the nature of the obligation to customers, which is to provide an ongoing right to use the most up to date and relevant software. As EDA customers operate in a rapidly changing and competitive environment, satisfying the obligation requires providing critical updates to the existing software products, including ongoing iterative interaction with customers to make the software relevant to customers’ ability to meet the time to go to market with advanced products.

Our contracts with customers can involve hundreds of products and various license rights. Customers often negotiate a broad portfolio of solutions, and favorable terms along with future purchase options to manage their overall costs. Determining whether the purchase options are considered distinct performance obligations that should be accounted for separately as material rights versus combined together may require significant judgment.

Judgment is also required to determine the standalone selling price (SSP) for each distinct performance obligation. For non-software performance obligations (IP, Hardware, and services), SSP is established based on observable prices of products and services sold separately. SSP for license (and related updates and support) in a contract with multiple performance obligations is determined by applying a residual approach whereby all other non-software performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSP, using observable prices, with any residual amount of the transaction price allocated to the license because we do not sell the license separately, and the pricing is highly variable.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing customers, and these timing differences result in receivables (billed or unbilled), contract assets, or contract liabilities (deferred revenue) in our consolidated balance sheets. We record a contract asset when revenue is recognized prior to the right to invoice, or deferred revenue when revenue is recognized subsequent to invoicing. For time-based software agreements, customers are generally invoiced in equal, quarterly amounts, although some customers prefer to be invoiced in single or annual amounts. We record an unbilled receivable when revenue is recognized and we have an unconditional right to invoice and receive payment.

Warranties and Indemnities

Warranties. We generally warrant our products to be free from defects in media and to substantially conform to material specifications for a period of 90 days for our software products and for up to six months for our hardware products.

Indemnities. In addition to such warranties, in certain cases, we provide our customers with limited indemnification with respect to claims that their use of our software products infringes on patents, copyrights, trademarks or trade secrets. We are unable to estimate the potential impact of these commitments on the future results of operations.

Net Income Per Share. We compute basic net income per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the dilution from potential common shares outstanding such as stock options and unvested restricted stock units and awards during the period using the treasury stock method. See Note 17. Net Income Per Share of the Notes to Consolidated Financial Statements in this Annual Report*.*

Foreign Currency Translation. The functional currency of the majority of our active foreign subsidiaries is the foreign subsidiary’s local currency. Assets and liabilities that are not denominated in the functional currency are remeasured into the functional currency with any related gains or losses recorded in earnings. We translate assets and liabilities of our non-U.S. dollar functional currency foreign operations into the U.S. dollar reporting currency at exchange rates in effect at the balance sheet date. We translate income and expense items of such foreign operations into the U.S. dollar reporting currency at average exchange rates for the period. Accumulated translation adjustments are reported in stockholders’ equity, as a component of accumulated other comprehensive income (loss).

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Recent Accounting Pronouncements Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which applies to all equity securities measured at fair value that are subject to contractual sale restrictions. This change prohibits entities from taking into account contractual restrictions on the sale of equity securities when estimating fair value and introduces required disclosures for such transactions. The ASU will be effective for us beginning the fiscal year 2025 and will be applied prospectively. Any future impact from the adoption of this ASU will depend on the facts and circumstances of future transactions.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The ASU will be effective for our annual reports beginning in fiscal 2025, and interim period reports beginning in fiscal 2026. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. The ASU will be effective for us beginning in fiscal 2026 and will be applied on a prospective basis. Early adoption is permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. The ASU is effective for our annual reports beginning in fiscal 2028, and interim period reports beginning in fiscal 2029 either on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and disclosures.

Note 3. Discontinued Operations

On September 30, 2024, we completed the sale of Software Integrity business to entities controlled by funds affiliated with Clearlake Capital Group, L.P. and Francisco Partners. The aggregate consideration for the sale was $1.65 billion, comprised of (i) cash of $1.48 billion received upon closing; (ii) $121.5 million reflecting the present value of $125 million deferred consideration receivable in equal installments over five fiscal quarters beginning on January 17, 2025, subject to acceleration at our option prior to the closing of our pending acquisition of ANSYS Inc. (Ansys); (iii) $22.2 million reflecting fair value of contingent consideration of up to $475 million receivable upon the Sponsors achieving a specified rate of return in the event of one or more potential liquidity transactions; and (iv) additional consideration receivable of $27.1 million as a result of net working capital adjustments. The fair value of the contingent consideration receivable was estimated using an option pricing model to derive the likelihood of achieving the performance-based metrics. The valuation methodology includes assumptions and judgments regarding volatility, discount rates, and the expected timing of payments. As of October 31, 2024, the deferred consideration receivable and the contingent consideration receivables were recorded within the prepaid and other current assets in the consolidated balance sheets. As a result of the Software Integrity Divestiture, we derecognized net assets of $720.5 million and incurred transaction costs of $61.7 million, resulting in a pre-tax gain of $868.8 million within income from discontinued operations in the consolidated statements of income, subject to certain post-closing adjustments that are expected to be finalized in the first quarter of fiscal 2025.

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The financial results of the Software Integrity business are presented as income from discontinued operations, net of income taxes in our consolidated statements of income. The financial results for fiscal 2024 include the period from the beginning of year through the date of sale. The following table presents the major components of financial results of our Software Integrity business for the periods presented:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Revenue			$	468,720					$	524,605					$	465,828
Cost of revenue			153,081						191,350						165,684
Operating expenses			265,029						337,235						286,820
Interest and other income (expense), net			2,003						292						(1,262)
Income (loss) from discontinued operations			52,613						(3,688)						12,062
Gain on Software Integrity Divestiture			868,830						—						—
Income (loss) from discontinued operations before income taxes			921,443						(3,688)						12,062
Income tax provision (benefit)			99,773						(6,531)						(2,307)
Income from discontinued operations, net of income taxes			$	821,670					$	2,843					$	14,369

The following table represents the aggregated carrying amounts of classes of assets and liabilities that are classified as discontinued operations in the consolidated balance sheets for the periods presented:

									As of October 31, 2023
									(in thousands)
Assets:
Cash and cash equivalents									$	4,947
Accounts receivable, net									90,307
Prepaid and other current assets									19,400
Total current assets of discontinued operations									$	114,654
Property and equipment, net									$	7,424
Operating lease right-of use assets, net									8,906
Goodwill									724,271
Intangible assets, net									134,617
Deferred income taxes									7,388
Other long-term assets									26,153
Total long-term assets of discontinued operations									$	908,759
Liabilities:
Accounts payable and accrued liabilities									$	63,847
Operating lease liabilities									5,858
Deferred revenue									216,539
Total current liabilities of discontinued operations									$	286,244
Long-term operating lease liabilities									$	4,349
Long-term deferred revenue									24,301
Other long-term liabilities									4,607
Total long-term liabilities of discontinued operations									$	33,257

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The following table presents significant non-cash items and capital expenditures of discontinued operations for the periods presented:

			Year Ended October 31,
			2024						2023						2022
			( in thousands)
Amortization and depreciation			$	16,317					$	51,971					$	44,173
Reduction of operating lease right-of-use assets			$	2,162					$	5,120					$	4,898
Amortization of capitalized costs to obtain revenue contracts			$	25,051					$	30,071					$	23,090
Stock-based compensation			$	34,381					$	50,198					$	37,280
Deferred income taxes			$	(31,679)					$	(3,136)					$	(599)
Purchases of property and equipment			$	1,487					$	3,232					$	3,610

Note 4. Pending Acquisition of Ansys

On January 15, 2024, we entered into an Agreement and Plan of Merger (the Merger Agreement) to acquire all of the outstanding shares of Ansys, a provider of broad engineering simulation and analysis software and services, in a cash-and-stock transaction (the Ansys Merger) that values Ansys at approximately $35.0 billion, based on the closing price of Synopsys common stock on December 21, 2023.

Under the terms of the Merger Agreement, at the effective time of the Ansys Merger (the Effective Time), each share of Ansys common stock issued and outstanding immediately prior to the Effective Time (with certain exceptions set forth in the Merger Agreement) will be converted into the right to receive 0.3450 (the Exchange Ratio) of a share of Synopsys common stock and $197.00 in cash, without interest. The Merger Agreement also provides for Synopsys’ assumption of certain outstanding Ansys options and other unvested Ansys equity awards held by continuing Ansys employees. If the stock consideration to be issued by Synopsys in connection with the Ansys Merger exceeds 19.9999% of the shares of Synopsys common stock issued and outstanding immediately prior to the Effective Time, the Exchange Ratio will be reduced to the minimum extent necessary to ensure that the aggregate number of shares of Synopsys common stock to be issued in connection with the Ansys Merger does not exceed such threshold, and the cash consideration will be correspondingly increased to offset such adjustment.

The Ansys Merger was approved by the holders of a majority of the outstanding shares of Ansys common stock on May 22, 2024 and is anticipated to close in the first half of calendar year 2025. The Ansys Merger is subject to the satisfaction or waiver of customary closing conditions, including, among other things, the clearance of the Ansys Merger under certain antitrust and foreign investment regimes, and the continued effectiveness of the registration statement on Form S-4 (File No. 333-277912) filed by us on March 14, 2024 and declared effective by the SEC on April 17, 2024. Following the determination that it was a necessary step towards obtaining governmental approval of and successfully closing the Ansys Merger, on September 3, 2024, we signed a definitive agreement for the sale of our Optical Solutions Group (OSG) to Keysight Technologies, Inc. (Keysight) (such sale, the Optical Solutions Divestiture). The Optical Solutions Divestiture is subject to customary closing conditions, including review by regulatory authorities, and the successful closing of the Ansys Merger. As such, the assets and liabilities of OSG have not been classified as assets held for sale in the consolidated balance sheets.

We and Ansys each have termination rights under the Merger Agreement. A fee of $1.5 billion may be payable by us to Ansys, or a fee of $950.0 million may be payable by Ansys to us, upon termination of the Merger Agreement under specified circumstances, each as more fully described in the Merger Agreement.

In connection with the execution of the Merger Agreement, we entered into a commitment letter on January 15, 2024 (the Bridge Commitment Letter) with certain financial institutions that committed to provide, subject to the satisfaction of customary closing conditions, a senior unsecured bridge facility (the Bridge Commitment). On October 3, 2024, we reduced the Bridge Commitment by $1.1 billion to $10.6 billion following the closing of the Software Integrity Divestiture. The Bridge Commitment currently provides for an aggregate principal amount of up to $10.6 billion. On February 13, 2024, we entered into a term loan facility credit agreement (the Term Loan Agreement), which provides us with the ability to borrow up to $4.3 billion at the closing of the Ansys Merger, subject to the satisfaction of customary closing conditions for similar facilities, for the purpose of financing a portion of the

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cash consideration to be paid in the Ansys Merger and paying related fees and expenses in connection with the Ansys Merger and the other transactions contemplated by the Merger Agreement. See Note 11. Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in this Annual Report for more information on the Bridge Commitment and the Term Loan Agreement.

Note 5. Business Combinations

Fiscal 2024

During fiscal 2024, we completed several acquisitions for an aggregate purchase consideration of $159.3 million, net of cash acquired. The aggregate purchase consideration was preliminary and allocated as follows: $78.9 million to identifiable intangible assets, $96.1 million to goodwill, and $15.7 million to net tangible liabilities. The acquired identifiable intangible assets were valued using the income approach and are being amortized over their respective useful lives ranging from 3 to 13 years. The goodwill recognized from these acquisitions, of which $61.8 million was attributable to the Design Automation reporting unit, and $34.3 million was attributable to the Design IP reporting unit, was not deductible for income tax purposes.

We have included the financial results of the fiscal 2024 acquisitions in our consolidated financial statements from their respective acquisition date. We do not consider these acquisitions to be material, individually or in the aggregate, to our consolidated financial statements.

Fiscal 2023

During fiscal 2023, we completed several acquisitions for an aggregate purchase consideration of $295.4 million, net of cash acquired. We do not consider these acquisitions to be material, individually or in the aggregate, to our consolidated financial statements. The total purchase consideration was allocated as follows: $95.8 million to identifiable intangible assets, $229.4 million to goodwill, and $29.8 million to net tangible liabilities. The goodwill recognized from these acquisitions was assigned to the Design Automation reporting unit, of which $5.7 million was deductible for income tax purposes.

Fiscal 2022

OpenLight Photonics, Inc.

During the second quarter of fiscal 2022, we acquired a 75% equity interest in OpenLight Photonics, Inc. (OpenLight) for cash consideration of $90.0 million. The remaining 25% equity interest in OpenLight is held by Juniper Networks, Inc. (the Minority Investor) from their contribution of IP and certain tangible assets.

The agreement with the Minority Investor contains redemption features whereby the interest held by the Minority Investor is redeemable either (i) at the option of the Minority Investor on or after the third anniversary of the acquisition or sooner in certain circumstances or (ii) at our option beginning on the third anniversary of the acquisition. This option is exercisable at the greater of fair value at the time of redemption or $30.0 million and was valued at $10.1 million, resulting in a total consideration of $100.1 million.

The purchase price was allocated as follows: $94.0 million to identifiable intangible assets and $46.7 million to goodwill, which were attributable to the Design Automation reporting unit. There was no tax-deductible goodwill related to the acquisition. During fiscal 2024, we assessed long-lived assets for impairment and wrote off the remaining unamortized intangible assets balance of $53.5 million due to impairment. See Note 7. Goodwill and Intangible Assets of the Notes to Consolidated Financial Statements in this Annual Report.

During fiscal 2024, our ownership interest in OpenLight was reduced to 71% as a result of the recognition of non-controlling interest upon issuance of OpenLight stock.

During fiscal 2024, 2023 and 2022, OpenLight incurred a net loss of $91.7 million, $40.9 million and $19.4 million, respectively, of which $22.0 million, $10.0 million and $4.9 million, respectively, was attributable to redeemable non-controlling interest. As of October 31, 2024 and 2023, the carrying value of the redeemable non-controlling interest was recorded at its estimated fair value of $30.0 million and $31.0 million, respectively, in the consolidated balance sheets.

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NTT Security AppSec Solutions Inc.

On June 22, 2022, we completed the acquisition of all outstanding shares of NTT Security AppSec Solutions Inc. (which operated under the name WhiteHat Security, or WhiteHat), a provider of dynamic application security testing solutions, from NTT Security Corporation for an aggregate purchase price of $310.0 million, net of cash acquired. With this acquisition, we broadened our product offering in the application security testing market.

The aggregate purchase consideration was allocated as follows: $97.5 million to identifiable intangible assets, $252.9 million to goodwill, and $40.4 million to net tangible liabilities. The goodwill was not deductible for tax purposes. The assets and liabilities attributed to WhiteHat were related to the Software Integrity business and reclassified as discontinued operations as of October 31, 2023 in our consolidated balance sheets.

Other Fiscal 2022 Acquisitions

During fiscal 2022, we completed two other acquisitions for aggregate purchase consideration of $31.8 million, net of cash acquired. The purchase price was allocated as follows: $12.7 million to identifiable intangible assets, $3.1 million to net tangible liabilities, and $22.2 million to goodwill, which were attributable to the Design Automation reporting unit. There was no tax-deductible goodwill related to the acquisitions.

Preliminary Fair Value Estimates

For all acquisitions completed in fiscal 2024, the purchase price was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary estimated fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of acquisition. These estimates and assumptions are subject to change as additional information becomes available during the respective measurement period, which is not expected to exceed 12 months from applicable acquisition date. The primary areas of those preliminary estimates relate to certain tangible assets and liabilities, identifiable intangible assets, and income taxes.

Transaction Costs

Transaction costs from continuing operations were $172.6 million, mainly in connection with the pending Ansys Merger, $13.8 million and $9.4 million during fiscal 2024, 2023 and 2022, respectively. These costs mainly consisted of professional fees and administrative costs for closed and pending acquisitions and were expensed as incurred in our consolidated statements of income.

Note 6. Revenue

Disaggregated Revenue

The following table shows the percentage of revenue by product groups:

			Year Ended October 31,
			2024						2023						2022
EDA			66.4		%				69.2		%				69.2		%
Design IP			31.1		%				29.0		%				28.5		%
Other			2.5		%				1.8		%				2.3		%
Total			100.0		%				100.0		%				100.0		%

Contract Balances

The contract assets indicated below are presented as prepaid and other current assets in the consolidated balance sheets. The contract assets are transferred to receivables when the rights to invoice and receive payment become unconditional. Unbilled receivables are presented as accounts receivable, net, in the consolidated balance sheets.

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Contract balances are as follows:

			As of October 31,
			2024						2023
			(in thousands)
Contract assets, net			$	757,075					$	375,904
Unbilled receivables			$	44,166					$	60,016
Deferred revenue			$	1,732,568					$	1,710,288

During fiscal 2024, we recognized revenue of $1.5 billion, that was included in the deferred revenue balance as of October 31, 2023, including previously unfulfilled contracts that have expired and are no longer subject to an implied promise to provide future services. During fiscal 2023, we recognized revenue of $1.5 billion, that was included in the deferred revenue balance as of October 31, 2022, including previously unfulfilled contracts that have expired and are no longer subject to an implied promise to provide future services.

Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) were approximately $8.1 billion as of October 31, 2024, which includes $1.2 billion in non-cancellable Flexible Spending Account (FSA) commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 41% of the backlog as of October 31, 2024, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder to be recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years. The backlog was approximately $8.1 billion as of October 31, 2023, which included $1.4 billion in non-cancellable FSA commitments from customers.

During fiscal 2024 and 2023, we recognized $104.4 million and $99.3 million, respectively, from performance obligations satisfied from sales-based royalties earned during the periods.

Costs of Obtaining a Contract with Customer

The incremental costs of obtaining a contract with a customer, which consist primarily of direct sales commission earned upon execution of the contract, were capitalized in compliance with authoritative guidance, and amortized over the estimated period of which the benefit is expected to be received. As direct sales commission paid for renewals are commensurate with the amounts paid for initial contracts, the deferred incremental costs will be recognized over the contract term.

Capitalized commission costs, net of accumulated amortization, as of October 31, 2024 and 2023 were $72.8 million and $67.2 million, respectively. The balances are included in other long-term assets in our consolidated balance sheets. Amortization of these assets were $48.5 million, $52.1 million and $49.9 million during fiscal 2024, 2023 and 2022, respectively, and are included in sales and marketing expense in our consolidated statements of income.

Note 7. Goodwill and Intangible Assets

Goodwill

As a result of the Software Integrity Divestiture effective in the second quarter of fiscal 2024, we have two reporting segments, and reporting units are determined to be the same as reportable segments. The change has no impact on the composition of remaining two reporting units, therefore, no impairment indicator was identified upon the change. We performed the required annual goodwill assessment in the fourth quarter of fiscal 2024, and concluded the goodwill was not impaired. There was no goodwill impairment in fiscal 2024, 2023 and 2022.

Goodwill activity by reportable segment consists of the following:

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			Design Automation						Design IP												Total
			(in thousands)
Balance at October 31, 2022			$	2,176,337					$	944,734											$	3,121,071
Additions			229,351						—												229,351
Effect of foreign currency translation			(5,006)						649												(4,357)
Balance at October 31, 2023			2,400,682						945,383												3,346,065
Additions			61,803						34,339												96,142
Adjustments			170						—												170
Effect of foreign currency translation			6,602						(129)												6,473
Balance at October 31, 2024			$	2,469,257					$	979,593											$	3,448,850

Intangible Assets

During the fourth quarter of fiscal 2024, we assessed long-lived assets for impairment and recorded an impairment charge of $53.5 million related to acquired intangible assets. The impairment charge was triggered by a decline in estimated fair value resulting from the reductions in the expected future cash flows associated with our core/developed technology intangible assets related to our OpenLight business. There were no other impairment charges for long-lived assets in fiscal 2024, 2023 and 2022.

Intangible assets as of October 31, 2024 consists of the following:

			Gross Carrying Amount						Accumulated Amortization and Impairment						Net Amount
			(in thousands)
Core/developed technology			$	904,347					$	777,518					$	126,829
Customer relationships			314,140						247,025						67,115
Contract rights intangible			176,382						175,170						1,212
Trademarks and trade names			12,925						12,917						8
Total			$	1,407,794					$	1,212,630					$	195,164

Intangible assets as of October 31, 2023 consists of the following:

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			Gross Carrying Amount						Accumulated Amortization						Net Amount
			(in thousands)
Core/developed technology			$	842,448					$	672,480					$	169,968
Customer relationships			296,883						231,557						65,326
Contract rights intangible			175,747						171,487						4,260
Trademarks and trade names			12,925						12,902						23
Capitalized software development costs			50,795						50,795						—
Total			$	1,378,798					$	1,139,221					$	239,577

Amortization expense related to acquired intangible assets, including the impairment charge, consists of the following:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Core/developed technology			$	104,797					$	42,892					$	42,582
Customer relationships			15,550						9,288						11,389
Contract rights intangible			3,872						2,389						2,307
Trademarks and trade names			15						7						33
Capitalized software development costs(1)			—						4,770						2,672
Total			$	124,234					$	59,346					$	58,983

*(1)*Amortization of capitalized software development costs is included in cost of products revenue in the consolidated statements of income.

The following table presents the estimated future amortization of acquired intangible assets as of October 31, 2024:

Fiscal Year			(in thousands)
2025			$	46,436
2026			36,112
2027			31,165
2028			25,572
2029			23,038
2030 and thereafter			32,841
Total			$	195,164

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Note 8. Balance Sheet Components

			As of October 31,
			2024						2023
			(in thousands)
Accounts receivable, net:
Accounts receivable			$	941,312					$	835,327
Unbilled accounts receivable			44,166						60,016
Total accounts receivable			985,478						895,343
Less: allowance for credit losses			(51,008)						(38,683)
Total			$	934,470					$	856,660
Property and equipment, net:
Computer and other equipment			$	1,011,712					$	973,540
Buildings			103,779						135,255
Furniture and fixtures			87,524						83,649
Land			18,219						21,598
Leasehold improvements			271,753						259,241
			1,492,987						1,473,283
Less: accumulated depreciation (1)			(929,981)						(923,446)
Total			$	563,006					$	549,837
Other long-term assets:
Deferred compensation plan assets			$	386,757					$	297,180
Capitalized commission, net			72,801						67,240
Other			124,142						80,400
Total			$	583,700					$	444,820
Accounts payable and accrued liabilities:
Payroll and related benefits			$	624,823					$	531,848
Accrued income taxes			147,115						226,762
Other accrued liabilities			184,321						146,696
Accounts payable			207,333						154,608
Total			$	1,163,592					$	1,059,914
Other long-term liabilities:
Deferred compensation plan liabilities			$	386,757					$	297,180
Other			82,981						84,351
Total			$	469,738					$	381,531

*(1)*Accumulated depreciation includes write-offs due to retirement of fully depreciated fixed assets.

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Note 9. Financial Assets and Liabilities

Cash Equivalents and Short-term Investments

As of October 31, 2024, the balances of our cash equivalents and short-term investments are as follows:

			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses Less Than 12 Continuous Months						Gross Unrealized Losses 12 Continuous Months or Longer						Estimated Fair Value**(1)**
			(in thousands)
Cash equivalents:
Money market funds			$	869,972					$	—					$	—					$	—					$	869,972
U.S. Treasury, agency & T-bills			7,984						1						—						—						7,985
Total:			$	877,956					$	1					$	—					$	—					$	877,957
Short-term investments:
U.S. Treasury, agency & T-bills			$	19,411					$	44					$	(6)					$	—					$	19,449
Corporate debt securities			105,024						349						(115)						(2)						105,256
Asset-backed securities			29,061						130						(7)						(20)						29,164
Total:			$	153,496					$	523					$	(128)					$	(22)					$	153,869

*(1)*See Note 10. Fair Value Measurements for further discussion on fair values.

Our short-term investment portfolio includes both corporate and government debt securities that have a maximum maturity of three years. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. Most of our unrealized losses are due to changes in market interest rates, and bond yields. We believe that we have the ability to realize the full value of all of these investments upon maturity. As of October 31, 2024, our investments that were in a continuous loss position of 12 months or more, as well as the unrealized losses on those investments, were immaterial.

The contractual maturities of our available-for-sale debt securities as of October 31, 2024 are as follows:

			Amortized Cost						Fair Value
			(in thousands)
Less than 1 year			$	57,022					$	57,156
1-5 years			92,217						92,449
5-10 years			2,518						2,531
>10 years			1,739						1,733
Total			$	153,496					$	153,869

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As of October 31, 2023, the balances of our cash equivalents and short-term investments are as follows:

			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses Less Than 12 Continuous Months						Gross Unrealized Losses 12 Continuous Months or Longer						Estimated Fair Value**(1)**
			(in thousands)
Cash equivalents:
Money market funds			$	10,129					$	—					$	—					$	—					$	10,129
U.S. Treasury, agency & T-bills			2,994						—						—						—						$	2,994
Total:			$	13,123					$	—					$	—					$	—					$	13,123
Short-term investments:
U.S. Treasury, agency & T-bills			$	15,752					$	—					$	(61)					$	(2)					$	15,689
Municipal bonds			515						—						—						(16)						499
Corporate debt securities			103,213						13						(455)						(396)						102,375
Asset-backed securities			33,245						21						(93)						(97)						33,076
Total:			$	152,725					$	34					$	(609)					$	(511)					$	151,639

*(1)*See Note 10. Fair Value Measurements for further discussion on fair values.

Restricted cash

We include amounts generally described as restricted cash in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown in the consolidated statements of cash flows. Restricted cash is primarily associated with office leases and employee loan programs.

The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the consolidated balance sheets and the consolidated statements of cash flows:

			As of October 31,
			2024						2023
			(in thousands)
Cash and cash equivalents			$	3,896,532					$	1,433,966
Restricted cash included in prepaid and other current assets			1,529						1,549
Restricted cash included in other long-term assets			668						725
Cash, cash equivalents and restricted cash			3,898,729						1,436,240
Cash, cash equivalents and restricted cash from discontinued operations			—						4,947
Total cash, cash equivalents and restricted cash, including cash from discontinued operations			$	3,898,729					$	1,441,187

Non-marketable equity securities

Our portfolio of non-marketable equity securities consists of strategic investments in privately held companies. In November 2023, we completed the sale of strategic investments in privately-held companies. The gain recognized from the sales was $55.1 million and included in interest and other income (expense), net, in our consolidated statements of income. There were no material impairments of non-marketable equity securities in fiscal 2024, 2023, and 2022.

Derivatives

We recognize derivative instruments as either assets or liabilities in the consolidated balance sheets at fair value and provide qualitative and quantitative disclosures about such derivatives. We operate internationally and are exposed to potentially adverse movements in foreign currency exchange rates. We enter into hedges in the form of foreign currency forward contracts to reduce our exposure to foreign currency rate changes on non-functional

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currency denominated forecasted transactions and balance sheet positions including: (1) certain assets and liabilities, (2) shipments forecasted to occur within approximately one month, (3) future billings and revenue on previously shipped orders, and (4) certain future intercompany invoices denominated in foreign currencies.

The duration of forward contracts, the majority of which are short-term, ranges from approximately 2 months to 29 months at inception. We do not use foreign currency forward contracts for speculative or trading purposes. We enter into foreign exchange forward contracts with high credit quality financial institutions that are rated "A" or above and to date have not experienced nonperformance by counterparties. In addition, we mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty and anticipate continued performance by all counterparties to such agreements.

The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or accrued liabilities in the consolidated balance sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. The cash flow impact upon settlement of the derivative contracts is included in “net cash provided by operating activities” in the consolidated statements of cash flows.

Cash Flow Hedging Activities

Certain foreign exchange forward contracts are designated and qualify as cash flow hedges. These contracts have durations of approximately 29 months or less. Certain forward contracts are rolled over periodically to capture the full length of exposure to our foreign currency risk, which can be up to three years. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. The related gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of other comprehensive income (loss) (OCI) in stockholders’ equity and reclassified into revenue or operating expenses, as appropriate, at the time the hedged transactions affect earnings. We expect a majority of the hedge balance in OCI to be reclassified to the statements of income within the next 12 months.

We did not record any gains or losses related to discontinuation of cash flow hedges for fiscal years 2024, 2023 and 2022.

Non-designated Hedging Activities

Our foreign exchange forward contracts that are used to hedge non-functional currency denominated balance sheet assets and liabilities are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in interest and other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the underlying assets and liabilities, which are also recorded in interest and other income (expense), net. The duration of the forward contracts for hedging our balance sheet exposure is approximately one month.

We also have certain foreign exchange forward contracts for hedging certain international revenues and expenses that are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in interest and other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the foreign currency in operating income. The duration of these forward contracts is usually less than one year. The overall goal of our hedging program is to minimize the impact of currency fluctuations on the net income over the fiscal year.

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The effects of the non-designated derivative instruments in our consolidated statements of income are summarized as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Gains (losses) recorded in interest and other income (expense), net			$	(307)					$	(5,899)					$	(15,851)

The notional amounts in the table below for derivative instruments provide one measure of the transaction volume outstanding:

			As of October 31,
			2024						2023
			(in thousands)
Total gross notional amounts			$	1,686,341					$	1,666,758
Net fair value			$	1,819					$	(2,308)

Our exposure to the market gains or losses will vary over time as a function of currency exchange rates. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.

The following table represents the consolidated balance sheets location and amount of derivative instrument fair values segregated between designated and non-designated hedge instruments:

			Fair values of derivative instruments designated as hedging instruments						Fair values of derivative instruments not designated as hedging instruments
			(in thousands)
Balance at October 31, 2024
Other current assets			$	8,839					$	12
Accrued liabilities			$	6,918					$	114
Balance at October 31, 2023
Other current assets			$	12,962					$	491
Accrued liabilities			$	14,665					$	1,096

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The following table represents the location of the amount of gains and losses on derivative instrument fair values for designated hedge instruments, net of tax in the consolidated statements of income:

			Location of gains (losses) recognized in OCI on derivatives						Amount of gains (losses) recognized in OCI on derivatives (effective portion)						Location of gains (losses) reclassified from OCI						Amount of gains (losses) reclassified from OCI (effective portion)
			(in thousands)
Fiscal year ended October 31, 2024
Foreign exchange contracts			Revenue						$	3,940					Revenue						$	3,089
Foreign exchange contracts			Operating expenses						5,685						Operating expenses						112
Total									$	9,625											$	3,201
Fiscal year ended October 31, 2023
Foreign exchange contracts			Revenue						$	8,390					Revenue						$	(9,942)
Foreign exchange contracts			Operating expenses						16,596						Operating expenses						(15,334)
Total									$	24,986											$	(25,276)
Fiscal year ended October 31, 2022
Foreign exchange contracts			Revenue						$	(19,755)					Revenue						$	10,975
Foreign exchange contracts			Operating expenses						(59,314)						Operating expenses						(15,869)
Total									$	(79,069)											$	(4,894)

Note 10. Fair Value Measurements

ASC 820-10, Fair Value Measurements and Disclosures, defines fair value, establishes guidelines and enhances disclosure requirements for fair value measurements. The accounting guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The accounting guidance also establishes a fair value hierarchy based on the independence of the source and objective evidence of the inputs used. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical instruments in active markets;

Level 2—Observable inputs other than quoted prices for identical instruments in active markets, quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in inactive markets, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3—Unobservable inputs derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

On a recurring basis, we measure the fair value of certain assets and liabilities, which include cash equivalents, short-term investments, non-qualified deferred compensation plan assets, and foreign currency derivative contracts.

Our cash equivalents and short-term investments are classified within Level 1 or Level 2 because they are valued using quoted market prices in an active market or alternative independent pricing sources and models utilizing market observable inputs.

Our non-qualified deferred compensation plan assets consist of money market and mutual funds invested in domestic and international marketable securities that are directly observable in active markets and are therefore classified within Level 1.

Our foreign currency derivative contracts are classified within Level 2 because these contracts are not actively traded and the valuation inputs are based on quoted prices and market observable data of similar instruments.

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Our borrowings under our Credit and Term Loan facilities are classified within Level 2 because these borrowings are not actively traded and have a variable interest rate structure based upon market rates currently available to us for debt with similar terms and maturities. See Note 11. Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in this Annual Report for more information on these borrowings.

Our contingent consideration receivable, which was recorded in connection with the Software Integrity Divestiture, was classified within Level 3 because it was estimated using significant inputs that were not observable in the market. See Note 3. Discontinued Operation of the Notes to Consolidated Financial Statements in this Annual Report for additional information.

Assets/Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2024:

									Fair Value Measurement Using
Description			Total						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
			(in thousands)
Assets
Cash equivalents:
Money market funds			$	869,972					$	869,972					$	—					$	—
U.S. Treasury, agency & T-bills			7,985						—						7,985						—
Short-term investments:
U.S. Treasury, agency & T-bills			19,449						—						19,449						—
Corporate debt securities			105,256						—						105,256						—
Asset-backed securities			29,164						—						29,164						—
Prepaid and other current assets:
Foreign currency derivative contracts			8,851						—						8,851						—
Contingent consideration receivable			22,202						—						—						22,202
Other long-term assets:
Deferred compensation plan assets			386,757						386,757						—						—
Total assets			$	1,449,636					$	1,256,729					$	170,705					$	22,202
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts			$	7,032					$	—					$	7,032					$	—
Other long-term liabilities:
Deferred compensation plan liabilities			386,757						386,757						—						—
Total liabilities			$	393,789					$	386,757					$	7,032					$	—

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Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2023:

Description			Total						Fair Value Measurement Using
Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
			(in thousands)
Assets
Cash equivalents:
Money market funds			$	10,129					$	10,129					$	—					$	—
U.S. Treasury, agency & T-bills			2,994						—						2,994						—
Short-term investments:
U.S. Treasury, agency & T-bills			15,689						—						15,689						—
Municipal bonds			499						—						499						—
Corporate debt securities			102,375						—						102,375						—
Asset-backed securities			33,076						—						33,076						—
Prepaid and other current assets:
Foreign currency derivative contracts			13,453						—						13,453						—
Other long-term assets:
Deferred compensation plan assets			297,180						297,180						—						—
Total assets			$	475,395					$	307,309					$	168,086					$	—
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts			$	15,761					$	—					$	15,761					$	—
Other long-term liabilities:
Deferred compensation plan liabilities			297,180						297,180						—						—
Total liabilities			$	312,941					$	297,180					$	15,761					$	—

Assets/Liabilities Measured at Fair Value on a Non-Recurring Basis

Non-Marketable Equity Securities

Non-marketable equity securities are classified within Level 3 as they are valued using a combination of observable transaction price and unobservable inputs or data in an inactive market due to the absence of market price and inherent lack of liquidity.

Note 11. Bridge Commitment Letter, Term Loan and Revolving Credit Facilities

On January 15, 2024, we entered into the Bridge Commitment Letter with certain financial institutions that committed to provide, subject to the satisfaction of customary closing conditions, the Bridge Commitment. The Bridge Commitment currently provides for an aggregate principal amount of up to $10.6 billion. The proceeds of any borrowing under the Bridge Commitment will be used for the purpose of financing a portion of the cash consideration to be paid in the Ansys Merger and paying related fees and expenses in connection with the Ansys Merger and the other transactions contemplated by the Merger Agreement.

The commitments to provide the Bridge Commitment may be terminated in whole or reduced in part, at our discretion. In addition, the Bridge Commitment Letter provides that net cash proceeds received from certain debt and equity issuances or the sale of certain businesses and assets, including the Software Integrity Divestiture, as well as term loan commitments under certain qualifying term loan facilities, will result in mandatory commitment reductions under the Bridge Commitment. On October 3, 2024, we reduced the Bridge Commitment by $1.1 billion to $10.6 billion following the closing of the Software Integrity Divestiture.

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On February 13, 2024, we entered into the Term Loan Agreement in connection with the financing of the pending Ansys Merger. The Term Loan Agreement provides us with the ability to borrow up to $4.3 billion at the closing of the Ansys Merger, subject to the satisfaction of customary closing conditions for similar facilities, for the purpose of financing a portion of the cash consideration to be paid in the Ansys Merger and paying related fees and expenses in connection with the Ansys Merger and the other transactions contemplated by the Merger Agreement.

The Term Loan Agreement provides for two tranches of senior unsecured term loans: a $1.45 billion tranche (Tranche 1) that matures two years after funding and a $2.85 billion tranche (Tranche 2) that matures three years after funding. There was no outstanding balance under the Term Loan Agreement as of October 31, 2024.

The Term Loan Agreement contains a financial covenant requiring that Synopsys maintain a maximum consolidated leverage ratio commencing the last day of the first fiscal quarter ending on or after the completion of the Ansys Merger, as well as other non-financial covenants. Under the Term Loan Agreement, borrowings will bear interest on the principal amount outstanding at a floating rate based on, at Synopsys’ election, (i) the Adjusted Term SOFR Rate (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of Synopsys ranging from 0.875% to 1.375% (in the case of Tranche 1) or 1.000% to 1.500% (in the case of Tranche 2) or (ii) the ABR (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of Synopsys ranging from 0.000% to 0.375% (in the case of Tranche 1) or 0.000% to 0.500% (in the case of Tranche 2).

On May 14, 2024, a ticking fee began to accrue under the Term Loan Agreement in an amount equal to a rate per annum equal to 0.10% times the actual daily undrawn portion of the commitments in respect of the term loan facility. This ticking fee will accrue until the earlier of (i) termination or expiration of the commitments under the term loan facility or (ii) the funding of the commitments, at which point the accrued amount of the ticking fee will become payable.

On February 13, 2024, we entered into a Sixth Amendment Agreement (the Sixth Amendment), which amended and restated our previous revolving credit agreement, dated as of December 14, 2022 (as amended and restated, the Revolving Credit Agreement).

The Revolving Credit Agreement provides an unsecured $850.0 million committed multicurrency revolving credit facility and an unsecured uncommitted incremental revolving loan facility of up to $150.0 million. The maturity date of the revolving credit facility is December 14, 2027, which may be extended at our option.

Under the Sixth Amendment, certain amendments became effective on February 13, 2024 and certain additional amendments will become effective upon the completion of the Ansys Merger. Upon the effective date, the Sixth Amendment amended the financial covenant to allow netting of the cash proceeds of certain debt incurred to finance the Ansys Merger as well as certain other modifications set forth therein. Upon the completion of the Ansys Merger, the Sixth Amendment, among other things: (i) amends the applicable margin used to determine the interest that accrues on loans and the facility fee payable under the revolving credit facility to be based on our credit ratings, (ii) amends the financial covenant thresholds under the financial covenant in the Revolving Credit Agreement requiring us to maintain a maximum consolidated leverage ratio and (iii) amends certain conditions to borrowing, other non-financial covenants and events of default.

The Revolving Credit Agreement contains a financial covenant requiring us to maintain a maximum consolidated leverage ratio, as well as other non-financial covenants. As of October 31, 2024, we were in compliance with the financial covenant.

Interest accrues on dollar-denominated loans at a floating rate based on, at Synopsys’ election, (i) the Adjusted Term SOFR Rate (as defined in the Revolving Credit Agreement) plus an applicable margin or (ii) the ABR (as defined in the Revolving Credit Agreement) plus an applicable margin. The applicable margin for Adjusted Term SOFR Rate based loans ranges from 0.785% to 0.975%, based upon Synopsys’ consolidated leverage ratio. The applicable margin for ABR based loans is 0.000%. In addition to the interest on any outstanding loans, Synopsys is also required to pay a facility fee on the entire portion of the revolving credit facility ranging from 0.09% to 0.15% based on Synopsys’ consolidated leverage ratio on the daily amount of the revolving commitment.

Subject to the completion of the Ansys Merger, interest under the Revolving Credit Agreement will accrue on dollar-denominated loans at a floating rate based on, at Synopsys’ election, (i) the Adjusted Term SOFR Rate plus an applicable margin based on our credit ratings ranging from 0.795% to 1.200% or (ii) the ABR plus an applicable margin based on our credit ratings ranging from 0.000% to 0.200%. In addition to the interest on any outstanding

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loans, Synopsys will also be required to pay a facility fee on the entire portion of the revolving credit facility ranging from 0.080% to 0.175% based on the credit ratings of Synopsys on the daily amount of the revolving commitment.

There was no outstanding balance under the Revolving Credit Agreement as of October 31, 2024 and October 31, 2023.

In July 2018, we entered into a 12-year 220.0 million Renminbi (approximately $33.0 million) credit agreement with a lender in China to support our facilities expansion. Borrowings bear interest at a floating rate based on the 5-year Loan Prime Rate plus 0.74%. As of October 31, 2024, we had a $15.6 million outstanding balance under the agreement. The carrying amount of the short-term and long-term debt approximates the estimated fair value.

Note 12. Leases

We have operating lease arrangements for office space, data center, equipment and other corporate assets. These leases have various expiration dates through December 31, 2042, some of which include options to extend the leases for up to 10 years. Because we are not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term and associated potential option payments are excluded from lease payments.

The components of our lease expense during the period presented are as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Operating lease expense (1)			$	92,222					$	90,680					$	85,631
Variable lease expense (2)			23,835						20,395						11,379
Total lease expense			$	116,057					$	111,075					$	97,010

*(1)*Operating lease expense includes immaterial amounts of short-term leases, net of sublease income.

*(2)*Variable lease expense includes payments to lessors that are not fixed or determinable at lease commencement date. These payments primarily consist of maintenance, property taxes, insurance and variable indexed based payments.

Supplemental cash flow information during the period presented is as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Cash paid for amounts included in the measurement of operating lease liabilities(1)			$	99,905					$	88,983					$	83,858
ROU assets obtained in exchange for operating lease liabilities(2)			$	100,480					$	101,390					$	168,095

(1) Cash paid for amounts included in the measurement of operating lease liabilities included cash from discontinued operations of $5.2 million, $5.7 million and $6.3 million for the periods presented.

(2) ROU assets obtained in exchange for operating lease liabilities included ROU assets from discontinued operations of $2.2 million, $1.2 million and $1.6 million for the periods presented.

Lease term and discount rate information related to our operating leases as of the end of the period presented are as follows:

			As of October 31,
			2024						2023
Weighted-average remaining lease term (in years)			7.59						8.44
Weighted-average discount rate			2.86		%				2.5		%

The following table represents the maturities of our future lease payments due under operating leases as of October 31, 2024:

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			Lease Payments
Fiscal year			(in thousands)
2025			$	111,332
2026			112,130
2027			109,380
2028			94,005
2029			86,579
2030 and thereafter			233,161
Total future minimum lease payments			746,587
Less: Imputed interest			77,731
Total lease liabilities			$	668,856

In addition, certain facilities owned by us were leased to third parties under non-cancellable operating lease agreements. These leases have annual escalating payments and have expiration dates through March 31, 2031 in accordance with the terms and conditions of the existing agreement. The lease receipts from owned facilities, including sublease income from other facilities leased by us, due to us as of October 31, 2024, are as follows:

			Lease Receipts
			(in thousands)
Fiscal year
2025			$	24,479
2026			25,333
2027			26,452
2028			27,245
2029			28,063
2030 and thereafter			28,429
Total			$	160,001

Note 13. Contingencies

Legal Proceedings

We are subject to routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate outcome of any litigation is often uncertain and unfavorable outcomes could have a negative impact on our results of operations and financial condition. We regularly review the status of each significant matter and assess its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount is estimable, we accrue a liability for the estimated loss. Legal proceedings are inherently uncertain and as circumstances change, it is possible that the amount of any accrued liability may increase, decrease, or be eliminated.

We have determined that, except as set forth below, no disclosure of estimated loss is required for a claim against us because: (1) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (2) a reasonably possible loss or range of loss cannot be estimated; or (3) such estimate is immaterial.

Mentor Patent Litigation

Prior to the legal settlement as further described below, we were engaged in complex patent litigation with Mentor Graphics Corporation (Mentor) involving several actions in different forums. We succeeded to the litigation when we acquired Emulation & Verification Engineering S.A. on October 4, 2012.

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Legal Settlement

In March 2017, Siemens PLM Software (now Siemens Industry Software Inc. or SISW)) acquired Mentor. On June 29, 2018, we, SISW and Mentor settled all outstanding patent litigation between us and Mentor for a $65.0 million payment made from us to Mentor. As a result of the settlement, the litigation with Mentor was dismissed and the injunction entered in connection with that litigation was vacated. The settlement included mutual seven-year patent cross-licenses between us and SISW, and between us and Mentor. We and Mentor also amended an existing interoperability agreement to collaborate on a wide range of EDA products for the benefit of our mutual customers (the interoperability amendment). The interoperability amendment includes a one-time termination charge between $0.0 and $25.0 million, payable to SISW under certain conditions. Mentor no longer exists as an independent entity and is succeeded by SISW.

In June 2024, the parties extended the existing patent cross-license to December 31, 2031, and entered into a new cross-license of patents related to certain computer-aided engineering technology. The new cross-license is conditioned on the close of the Ansys Merger and expires on December 31, 2031. The interoperability amendment expires by its terms on June 29, 2025.

Tax Matters

We undergo examination from time to time by U.S. and foreign authorities for non-income based taxes, such as sales, use and value-added taxes, and are currently under examination by tax authorities in certain jurisdictions. If the potential loss from such examinations is considered probable and the amount or the range of loss could be estimated, we would accrue a liability for the estimated expense. In addition to the foregoing, we are, from time to time, party to various other claims and legal proceedings in the ordinary course of our business, including with tax and other governmental authorities. For a description of certain of these other matters, refer to Note 18. Income Taxes of the Notes to Consolidated Financial Statements in this Annual Report*.*

Note 14. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), on an after-tax basis where applicable, are as follows:

			As of October 31,
			2024						2023
			(in thousands)
Cumulative currency translation adjustments			$	(161,954)					$	(170,104)
Unrealized gains (losses) on derivative instruments, net of taxes			(18,800)						(25,224)
Unrealized gains (losses) on available-for-sale securities, net of taxes			374						(1,086)
Total			$	(180,380)					$	(196,414)

The effect of amounts reclassified out of each component of accumulated other comprehensive income (loss) into net income is as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Reclassifications:
Gains (losses) on cash flow hedges, net of taxes
Revenues			$	3,089					$	(9,942)					$	10,975
Operating expenses			112						(15,334)						(15,869)
Total			$	3,201					$	(25,276)					$	(4,894)

Amounts reclassified in fiscal 2024, 2023, and 2022 primarily consisted of gains (losses) from our cash flow hedging activities. See Note 9. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements in this Annual Report*.*

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Note 15. Stock Repurchase Program

In fiscal 2022, our Board of Directors approved a stock repurchase program (the Program) with authorization to purchase up to $1.5 billion of our common stock. As of October 31, 2024, $194.3 million remained available for future repurchases under the Program. However, in connection with the pending Ansys Merger, we have suspended the Program until we reduce our expected debt levels.

Stock repurchase activities as well as the reissuance of treasury stock for employee stock-based compensation purposes are as follows:

			Year Ended October 31,
			2024						2023 (1)						2022
			(in thousands, except per share price)
Shares repurchased			74						2,992						3,609
Average purchase price per share			608.91						$	387.92					$	314.51
Aggregate purchase price			45,000						$	1,160,724					$	1,135,000
Reissuance of treasury stock			2,133						2,670						2,922

(1) Excludes 73,903 shares and $45.0 million equity forward contract that was settled in November 2023.

Note 16. Employee Benefit Plans

Employee Stock Purchase Plan

Under our Employee Stock Purchase Plan (ESPP), participating employees are granted the right to purchase shares of common stock at a price per share that is 85% of the lesser of the fair market value of the shares at (1) the beginning of an offering period (generally, a rolling two year period) or (2) the purchase date (generally occurring at the end of each semi-annual purchase period), subject to the terms of ESPP, including a limit on the number of shares that may be purchased in a purchase period.

On April 12, 2022, our stockholders approved amendments to the ESPP to increase the number of shares of common stock authorized for issuance under the plan by 2.0 million shares. During fiscal 2024, 2023 and 2022, we issued 0.5 million, 0.6 million, and 0.7 million shares, respectively, under the ESPP at average per share prices of $315.24, $266.82 and $195.48, respectively. As of October 31, 2024, 12.9 million shares of common stock were reserved for future issuance under the ESPP.

Equity Compensation Plans

2006 Employee Equity Incentive Plan. On April 25, 2006, our stockholders approved the 2006 Employee Equity Incentive Plan (2006 Employee Plan), which provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights and other forms of equity compensation, including performance stock awards and performance cash awards, as determined by the plan administrator. The terms and conditions of each type of award are set forth in the 2006 Employee Plan and in the award agreements governing particular awards.

Restricted stock units are granted under the 2006 Employee Plan as part of our incentive compensation program. In general, restricted stock units vest over three to four years and are subject to the employee's continuing service with us. Restricted stock units granted with specific performance criteria vest to the extent performance conditions are met. Restricted stock units granted with certain market conditions vest over two to three years to the extent these market conditions are met. For each restricted stock unit granted under the 2006 Employee Plan, a share reserve ratio of 1.70 is applied for the purpose of determining the remaining number of shares reserved for future grants under the plan. Options granted under this plan generally have a contractual term of seven years and generally vest over four years.

On April 10, 2024, our stockholders amended the 2006 Employee Plan to, among other things, increase the number of shares of common stock reserved for future issuance under the plan by 3.4 million shares. As of October 31, 2024, an aggregate of 1.3 million stock options and 3.9 million restricted stock units were outstanding, and 14.5 million shares were available for future issuance under the 2006 Employee Plan.

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2017 Non-Employee Directors Equity Incentive Plans. On April 6, 2017, our stockholders approved the 2017 Non-Employee Directors Equity Incentive Plan (2017 Directors Plan). The 2017 Directors Plan provides for equity awards to non-employee directors in the form of stock options, restricted stock units, restricted stock or a combination thereof. On April 6, 2017, our stockholders approved an aggregate of 0.45 million shares of common stock reserved under the 2017 Directors Plan.

We grant restricted stock awards and options under the 2017 Directors Plan. Restricted stock awards generally vest on an annual basis and options vest over a period of three years. As of October 31, 2024, 3,751 shares of restricted stock awards were unvested and 12,792 stock options were outstanding, and a total of 365,203 shares of common stock were reserved for future issuance under the 2017 Directors Plan.

Other Assumed Stock Plans through Acquisitions. We have assumed certain outstanding stock awards of acquired companies, including restricted stock units and options. If these assumed equity awards are canceled, forfeited or expire unexercised, the underlying shares do not become available for future grant. As of October 31, 2024, 18 thousand shares of our common stock remained subject to such outstanding assumed equity awards.

Restricted Stock Units. The following table contains information concerning activities related to restricted stock units granted under the 2006 Employee Plan and assumed from acquisitions including those associated with our discontinued operations:

			Restricted Stock Units Outstanding**(1)**						Weighted Average Grant Date Fair Value						Weighted Average Remaining Contractual Life (In Years)						Aggregate Fair Value
			(in thousands, except per share amounts and years)
Balance at October 31, 2021			4,187						$	193.58					1.39
Granted(2)			2,402						$	323.46
Vested(3)			(1,589)						$	170.36											$	529,766
Forfeited			(362)						$	228.70
Balance at October 31, 2022			4,638						$	265.76					1.32
Granted(2)			2,083						$	394.34
Vested(3)			(1,839)						$	237.19											$	706,136
Forfeited			(365)						$	283.29
Balance at October 31, 2023			4,517						$	335.26					1.41
Granted(2)			1,620						$	543.69
Vested(3)			(1,778)						$	303.23											$	962,127
Forfeited			(460)						$	395.74
Balance at October 31, 2024			3,899						$	429.36					1.35

*(1)*No restricted stock units were assumed in connection with acquisitions in the last three fiscal years.

*(2)*The number of granted restricted stock units includes those granted to senior management with market-based and performance-based vesting criteria (in addition to service-based vesting criteria) (market-based RSUs) reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.

*(3)*The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

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Stock Options. The following table summarizes stock option activity and includes stock options granted under all equity plans including those associated with our discontinued operations:

						Options Outstanding
			Shares Under Stock Option (1)						Weighted- Average Exercise Price per Share						Weighted- Average Remaining Contractual Life (In Years)						Aggregate Intrinsic Value
						(in thousands, except per share amounts and years)
Balance at October 31, 2021						3,107						$	109.51					3.81						$	694,921
Granted						293						$	342.86
Exercised						(1,126)						$	86.24
Canceled/forfeited/expired						(114)						$	164.46
Balance at October 31, 2022						2,160						$	150.37					3.57						$	328,120
Granted						294						$	361.64
Exercised						(849)						$	109.83
Canceled/forfeited/expired						(90)						$	245.86
Balance at October 31, 2023						1,515						$	208.49					3.70						$	376,563
Granted						238						$	551.41
Exercised						(429)						$	141.83
Canceled/forfeited/expired						(42)						$	376.97
Balance at October 31, 2024						1,282						$	288.91					3.63						$	301,781
Vested and expected to vest as of October 31, 2024						1,282						$	288.91					3.63						$	301,781
Exercisable at October 31, 2024						810						$	197.95					2.54						$	259,550

*(1)*No stock options were assumed in connection with acquisitions in the last three fiscal years, but the balance at fiscal year-end includes certain stock options that were previously assumed in connection with acquisitions.

The aggregate intrinsic value in the preceding table represents the pre-tax intrinsic value based on stock options with an exercise price less than our closing stock price of $518.40 at the end of fiscal 2024. The pre-tax intrinsic value of options exercised and their average exercise prices including those associated with our discontinued operations are:

			Year Ended October 31,
			2024						2023						2022
			(in thousands, except per share price)
Intrinsic value			$	185,663					$	241,385					$	273,524
Average exercise price per share			$	141.83					$	109.83					$	86.24

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Restricted Stock Units and Stock Options. The following table contains additional information concerning activities related to stock options and restricted stock units that were granted under the 2006 Employee Plan and assumed from acquisitions including those associated with our discontinued operations:

			Available for Grant (1)(2)
			(in thousands)
Balance at October 31, 2021			13,751
Options granted(2)			(286)
Options canceled/forfeited/expired(2)			114
Restricted stock units granted(1)(3)			(4,083)
Restricted stock units forfeited(1)			615
Additional shares reserved			3,000
Balance at October 31, 2022			13,111
Options granted(2)			(294)
Options canceled/forfeited/expired(2)			89
Restricted stock units granted(1)(3)			(3,540)
Restricted stock units forfeited(1)			620
Additional shares reserved			3,300
Balance at October 31, 2023			13,286
Options granted(2)			(238)
Options canceled/forfeited/expired(2)			40
Restricted stock units granted(1)(3)			(2,754)
Restricted stock units forfeited(1)			782
Additional shares reserved			3,400
Balance at October 31, 2024			14,516

*(1)*Restricted stock units includes awards granted under the 2006 Employee Plan and assumed through acquisitions. The number of RSUs reflects the application of the award multiplier of 1.70 as described above.

*(2)*Options granted by us are not subject to the award multiplier ratio described above.

*(3)*The number of granted restricted stock units includes market-based RSUs reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.

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Restricted Stock Awards. The following table summarizes restricted stock award activities under the 2005 Directors Plan and 2017 Directors Plan:

			Restricted Shares						Weighted-Average Grant Date Fair Value
			(in thousands, except per share amounts)
Unvested at October 31, 2021			5						$	261.01
Granted			5						$	310.02
Vested			(5)						$	261.01
Forfeited			—						$	—
Unvested at October 31, 2022			5						$	310.02
Granted			5						$	387.79
Vested			(5)						$	310.02
Forfeited			—						$	—
Unvested at October 31, 2023			5						$	387.79
Granted			3						$	561.23
Vested			(4)						$	382.88
Forfeited			—						$	—
Unvested at October 31, 2024			4						$	541.51

Valuation and Expense of Stock-Based Compensation. We estimate the fair value of stock options and employee stock purchase rights under the ESPP on the grant date. The value of awards expected to vest is recognized as expense over the applicable service periods. We use the Black-Scholes option-pricing model to determine the fair value of stock options and employee stock purchase plan rights*.* The Black-Scholes option-pricing model incorporates various assumptions including expected volatility, expected term and interest rates. The expected volatility for both stock options and employee stock purchase rights is estimated by a combination of implied volatility for publicly traded options of our common stock with a term of six months or longer and the historical stock price volatility over the estimated expected term of such awards, which is based on historical experience.

Restricted stock units are valued based on the closing price of our common stock on the grant date. We use the straight-line attribution method to recognize stock-based compensation costs over the service period of the award except for performance-based RSUs and market-based RSUs.

We estimate the probability of achievement of applicable performance goals for performance-based RSUs in each reporting period and recognize related stock-based compensation expense using the graded-vesting method. The amount of stock-based compensation expense recognized in any period can vary based on the attainment or expected attainment of the various performance goals. If such performance goals are not ultimately met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

We estimated the fair value of market-based RSUs on the grant date using a Monte Carlo simulation model. Under the award agreements, the vesting of the market-based RSUs is contingent on achieving total stockholder return (TSR) relative to a peer index as well as revenue growth metrics. The maximum potential awards that may be earned are 187.5% of the target number of the initial awards. For market-based RSUs granted in February, May, August and December 2022, the performance period during which the achievement goals was measured is fiscal 2022 and fiscal 2023. Following the achievement of the TSR target, revenue growth metrics, and service conditions, the first tranche of the awards vested in December 2023 and the second tranche of the awards will vest in December 2024. For market-based RSUs granted in February and August 2023, the performance period during which the achievement goals will be measured is fiscal 2023, fiscal 2024 and fiscal 2025. The awards will vest in December 2025 if the TSR target, revenue growth metrics, and service conditions are achieved. For market-based RSUs granted in December 2023, the performance period during which the achievement goals will be measured is fiscal 2024, fiscal 2025 and fiscal 2026. The awards will vest in December 2026 if the TSR target, revenue growth metrics, and service conditions are achieved.

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The assumptions presented in the following table are used to estimate the fair value of stock options and employee stock purchase rights granted under our stock plans:

			Year Ended October 31,
			2024						2023						2022
Stock Options:
Expected life (in years)			4.1						4.1						4.1
Risk-free interest rate			3.62%- 4.61%						3.8% - 4.80%						1.07% - 4.42%
Volatility			32.09% -35.42%						32.74% - 36.16%						32.28%- 37.04%
Weighted average estimated fair value			$178.67						$120.33						$98.07
ESPP:
Expected life (in years)			0.5 - 2.0						0.5 - 2.0						0.5 - 2.0
Risk-free interest rate			3.88% - 5.27%						4.85% - 5.38%						0.67% - 3.44%
Volatility			31.40% - 34.39%						28.03% - 35.27%						34.51% - 38.69%
Weighted average estimated fair value			$179.10						$120.82						$102.63

The grant date fair value of the market-based RSUs and the assumptions used in the Monte Carlo simulation model to determine the grant date fair value during the periods are as follows:

			Year Ended October 31,
			2024						2023						2022
Expected life (in years)			2.89						0.90 - 2.70						1.16 - 1.69
Risk-free interest rate			4.41%						4.36% - 4.80%						1.33% - 3.46%
Volatility			34.03%						34.79% - 42.86%						33.01% - 37.80%
Grant date fair value			$600.29						$357.29 - $465.79						$280.52 - $412.20

The compensation cost recognized in the consolidated statements of income for our stock compensation arrangements is as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Cost of products			$	66,403					$	49,896					$	43,618
Cost of maintenance and service			32,189						29,572						24,146
Research and development expense			359,244						282,540						233,772
Sales and marketing expense			121,524						91,082						70,607
General and administrative expense			78,575						60,004						49,606
Stock-based compensation expense from continuing operations before taxes			657,935						513,094						421,749
Stock-based compensation expense from discontinued operations before taxes			34,381						50,198						37,280
Total stock-based compensation expense before taxes			692,316						563,292						459,029
Income tax benefit			(115,271)						(90,915)						(74,271)
Stock-based compensation expense after taxes			$	577,045					$	472,377					$	384,758

As of October 31, 2024, we had $1.3 billion of total unrecognized stock-based compensation expense relating to options, RSUs and restricted stock awards, which is expected to be recognized over a weighted average period of 2.3 years. As of October 31, 2024, we had $111.2 million of total unrecognized stock-based compensation expense relating to the ESPP, which is expected to be recognized over a period of 2.0 years.

Deferred Compensation Plan. We maintain the Synopsys Deferred Compensation Plan (Deferred Plan), which permits eligible employees to defer up to 50% of their annual cash base compensation and up to 100% of their eligible cash variable compensation. Amounts may be withdrawn from the Deferred Plan pursuant to elections made

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by the employees in accordance with the terms of the plan. Since the inception of the Deferred Plan, we have not made any matching or discretionary contributions to the Deferred Plan. There are no Deferred Plan provisions that provide for any guarantees or minimum return on investments. Undistributed amounts under the Deferred Plan are subject to the claims of our creditors.

Deferred plan assets and liabilities are as follows:

			As of October 31,
			2024						2023
			(in thousands)
Plan assets recorded in other long-term assets			$	386,757					$	297,180
Plan liabilities recorded in other long-term liabilities(1)			$	386,757					$	297,180

*(1)*Undistributed deferred compensation balances due to participants.

Income or loss from the change in fair value of the Deferred Plan assets is recorded in interest and other income (expense), net. The increase or decrease in the fair value of the undistributed Deferred Plan obligation is recorded in total cost of revenue and operating expense. The following table summarizes the impact of the Deferred Plan:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Increase (reduction) to cost of revenue and operating expense			$	85,446					$	20,196					$	(67,516)
Interest and other income (expense), net			85,446						20,196						(67,516)
Net increase (decrease) to net income			$	—					$	—					$	—

Other Retirement Plans. We sponsor various defined contribution retirement plans for our eligible U.S. and non-U.S. employees. Total contributions to these plans were $51.3 million, $50.8 million, and $44.0 million in fiscal 2024, 2023, and 2022, respectively. For employees in the United States and Canada, we match pre-tax employee contributions up to a maximum of U.S. $3,000 and Canadian $4,000, respectively, per participant per year.

Certain of our international subsidiaries sponsor defined benefit retirement plans. The unfunded projected benefit obligation for these defined benefit retirement plans as of October 31, 2024 and 2023 was immaterial and recorded in other long-term liabilities in our consolidated balance sheets.

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Note 17. Net Income Per Share

The table below reconciles the weighted average common shares used to calculate basic net income per share with the weighted average common shares used to calculate diluted net income per share:

			Year Ended October 31,
			2024						2023						2022
			(in thousands, except per share amounts)
Numerator:
Net income from continuing operations attributed to Synopsys			$	1,441,710					$	1,227,045					$	970,225
Net income from discontinued operations attributed to Synopsys			821,670						2,843						14,369
Net income attributed to Synopsys			$	2,263,380					$	1,229,888					$	984,594
Denominator:
Weighted average common shares for basic net income per share			153,138						152,146						153,002
Dilutive effect of common share equivalents from equity-based compensation			2,806						3,049						3,483
Weighted average common shares for diluted net income per share			155,944						155,195						156,485
Net income per share attributed to Synopsys - basic:
Continuing operations			$	9.41					$	8.06					$	6.34
Discontinued operations			5.37						0.02						0.10
Basic net income per share			$	14.78					$	8.08					$	6.44
Net income per share attributed to Synopsys - diluted:
Continuing operations			$	9.25					$	7.91					$	6.20
Discontinued operations			5.26						0.01						0.09
Diluted net income per share			$	14.51					$	7.92					$	6.29
Anti-dilutive employee stock-based awards excluded			229						475						281

Note 18. Income Taxes

The domestic and foreign components of our total income before provision for income taxes are as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
United States			$	1,333,132					$	1,144,410					$	1,028,829
Foreign			180,726						161,060						74,623
Total income before provision for income taxes			$	1,513,858					$	1,305,470					$	1,103,452

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The components of the provision (benefit) for income taxes are as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Current:
Federal			$	345,859					$	252,186					$	109,030
State			19,808						23,042						23,593
Foreign			110,021						22,869						43,076
			475,688						298,097						175,699
Deferred:
Federal			(312,677)						(191,249)						(38,901)
State			(39,164)						(219)						(1,067)
Foreign			(24,129)						(16,441)						3,654
			(375,970)						(207,909)						(36,314)
Provision (benefit) for income taxes			$	99,718					$	90,188					$	139,385

The provision (benefit) for income taxes differs from the taxes computed with the statutory federal income tax rate as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Statutory federal tax			$	317,912					$	274,149					$	231,723
State tax (benefit), net of federal effect			48,393						438						(2,870)
Federal tax credits			(70,119)						(60,500)						(55,708)
Tax (benefit) on foreign earnings			3,316						(17,571)						23,709
Foreign-derived intangible income deduction			(104,835)						(80,034)						(38,816)
Tax settlements			—						(23,752)						—
Stock-based compensation			(43,419)						(39,995)						(50,469)
Changes in valuation allowance			(57,371)						29,631						19,794
Other			5,841						7,822						12,022
Provision (benefit) for income taxes			$	99,718					$	90,188					$	139,385

On December 22, 2017, the Tax Cuts and Jobs Act (Tax Act) was enacted, which significantly changed prior U.S. tax law and includes numerous provisions that affect our business. Effective in our fiscal 2023 year, the Tax Act requires that research and development expenditures are capitalized and amortized instead of being deducted when incurred. Domestic research is capitalized over five years and foreign research is capitalized over fifteen years. Capitalization of research and development expenditures also results in a corresponding deferred tax benefit and decreased our effective tax rate due to increasing the foreign-derived intangible income deduction.

We have provided for foreign withholding taxes on undistributed earnings of certain of our foreign subsidiaries to the extent such earnings are no longer considered to be indefinitely reinvested in the operations of those subsidiaries. Where foreign subsidiaries are considered indefinitely reinvested, and if the tax effect of undistributed earnings and other outside basis differences were recognized, the nature of taxes expected would primarily be withholding, taxes in non-conforming states, and taxes on intermediate holding companies outside of the U.S., net of foreign tax credits where available. As of October 31, 2024, the taxes due, after allowable foreign tax credits, are not expected to be material.

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The significant components of deferred tax assets and liabilities are as follows:

			As of October 31,
			2024						2023
			(in thousands)
Net deferred tax assets:
Deferred tax assets:
Deferred revenue			$	37,849					$	37,641
Deferred compensation			73,869						69,824
Intangible and depreciable assets			65,489						94,299
Capitalized research and development costs			978,085						591,617
Stock-based compensation			74,934						64,326
Tax loss carryovers			37,787						36,804
Foreign tax credit carryovers			42,534						41,584
Research and other tax credit carryovers			107,643						178,416
Operating Lease Liabilities			108,235						118,679
Accruals and reserves			49,935						27,636
Gross deferred tax assets			1,576,360						1,260,826
Valuation allowance			(170,672)						(221,713)
Total deferred tax assets			1,405,688						1,039,113
Deferred tax liabilities:
Intangible assets			80,034						98,305
Operating lease Right-of-Use-Assets			84,512						94,068
Accruals and reserves			—						602
Undistributed earnings of foreign subsidiaries			8,800						8,900
Other			21,641						19,169
Total deferred tax liabilities			194,987						221,044
Net deferred tax assets			$	1,210,701					$	818,069

It is more likely than not that the results of future operations will be able to generate sufficient taxable income to realize the net deferred tax assets. The valuation allowance provided against our deferred tax assets as of October 31, 2024 is mainly attributable to foreign tax credits available to non-U.S. subsidiaries and the California research credits. The valuation allowance decreased by a net of $51.0 million in fiscal 2024, primarily related to anticipated utilization of California research credits.

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We have the following tax loss and credit carryforwards available to offset future income tax liabilities:

Carryforward			Amount						Expiration Date
			(in thousands)
Federal net operating loss carryforward			$	69,062					2025-2043
Federal research credit carryforward			6,214						2025-2035
Federal foreign tax credit carryforward			34,217						2034
International foreign tax credit carryforward			5,337						Indefinite
International net operating loss carryforward			51,326						2027-Indefinite
California research credit carryforward			151,380						Indefinite
Other state research credit carryforward			25,621						2027-2044
State net operating loss carryforward			138,482						2028-2045

The federal and state net operating loss carryforward is from acquired companies and the annual use of such loss is subject to significant limitations under Internal Revenue Code Section 382. Foreign tax credits may only be used to offset tax attributable to foreign source income.

The gross unrecognized tax benefits decreased by approximately $3.0 million during fiscal 2024 resulting in gross unrecognized tax benefits of $61.9 million as of October 31, 2024. A reconciliation of the beginning and ending balance of gross unrecognized tax benefits is summarized as follows:

			As of October 31,
			2024						2023
			(in thousands)
Beginning balance			$	64,880					$	71,898
Increases in unrecognized tax benefits related to prior year tax positions			1,106						211
Decreases in unrecognized tax benefits related to prior year tax positions			(8,639)						(25,678)
Increases in unrecognized tax benefits related to current year tax positions			8,036						8,029
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations			(4,380)						(249)
Increases in unrecognized tax benefits acquired			161						165
Changes in unrecognized tax benefits due to foreign currency translation			690						10,504
Ending balance			$	61,854					$	64,880

As of October 31, 2024 and 2023, approximately $61.9 million and $64.9 million, respectively, of the unrecognized tax benefits would affect our effective tax rate if recognized upon resolution of the uncertain tax positions.

Interest and penalties related to estimated obligations for tax positions taken in our tax returns are recognized as a component of income tax expense (benefit) in the consolidated statements of income and totaled approximately $(1.0) million**,** $(10.6) million and $0.8 million for fiscal years 2024, 2023 and 2022, respectively. As of October 31, 2024 and 2023, the combined amount of accrued interest and penalties related to tax positions taken on our tax returns were approximately $1.1 million and $2.1 million, respectively.

The timing of the resolution of income tax examinations, and the amounts and timing of various tax payments that are part of the settlement process, are highly uncertain. Variations in such amounts and/or timing could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. We believe that in the coming 12 months, it is reasonably possible that either certain audits and ongoing tax litigation will conclude or the statute of limitations on certain state and foreign income and withholding taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax positions, the range of the estimated potential decrease in underlying unrecognized tax benefits is between $0.0 and $12.0 million.

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We and/or our subsidiaries remain subject to tax examination in the following jurisdictions:

Jurisdiction			Year(s) Subject to Examination
United States			Fiscal years after 2020
California			Fiscal years after 2019
Ireland			Fiscal years after 2019
Japan			Fiscal years after 2019
Korea			Fiscal years after 2020
Taiwan			Fiscal years after 2022
China			Fiscal years after 2014
India			Fiscal years after 2019

In addition, we have made acquisitions with operations in several of our significant jurisdictions which may have years subject to examination different from the years indicated in the above table.

Non-U.S. Examinations

Hungarian Tax Authority

In 2017, the Hungarian Tax Authority (the HTA) assessed withholding taxes of approximately $25.0 million and interest and penalties of $11.0 million, against our Hungary subsidiary (Synopsys Hungary). Synopsys Hungary contested the assessment with the Hungarian Administrative Court (Administrative Court). In 2018, Synopsys Hungary paid the assessment. Following years of litigation, the Administrative Court issued its written decision in favor of Synopsys Hungary on May 17, 2023, and the HTA subsequently refunded Synopsys Hungary the tax, penalty and interest paid in fiscal 2018, as well as additional interest all totaling $39.1 million (including foreign currency effects). During the third quarter of fiscal 2023, we released our unrecognized tax benefit and offsetting U.S. foreign tax credits, resulting in a net benefit of $23.8 million.

We are also under examination by the tax authorities in certain other jurisdictions. No material assessments have been proposed in these examinations.

Legislative Developments

Effective our fiscal 2024, we are subject to the new 15% corporate alternative minimum tax (CAMT) enacted as part of the Inflation Reduction Act of 2022. We do not expect any impact of CAMT in fiscal 2024, due to our regular tax liability exceeding CAMT. The details of the computation will be subject to final regulations to be issued by the U.S. Department of the Treasury. We will monitor regulatory developments and will continue to evaluate the impact, if any, of the minimum tax.

The IR Act imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. The total taxable value of shares repurchased is reduced by the fair market value of any newly issued shares during the taxable year. As of October 31, 2024, this does not have any impact on our consolidated financial statements.

On June 27, 2024, California enacted SB-167, which suspends the use of California net operating loss and limits the use of California research tax credits to $5 million for our fiscal 2025-2027. On June 29, 2024, California enacted SB-175, which provides a refund mechanism effective beginning in our fiscal 2025 for the incremental tax that was paid as a result of SB-167.

The Organization for Economic Co-operation and Development (OECD) has a two-pillar solution to address tax challenges arising from digitalization of the economy. Included in this two-pillar solution is the Pillar Two Model Rules (Pillar Two) which defines a global minimum tax rules and includes a 15% minimum tax rate. Various countries have started to enact new laws related to Pillar Two, including certain new laws effective beginning in fiscal 2025. Based on our preliminary analysis, we are not expecting the impact of Pillar 2 to be material.

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Note 19. Interest and Other Income (Expense), Net

The following table presents the components of interest and other income (expense), net:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Interest income			$	67,017					$	36,674					$	8,545
Interest expense			(35,161)						(1,178)						(1,698)
Gains (losses) on assets related to deferred compensation plan			85,446						20,196						(67,516)
Gain on sale of strategic investments			55,077						—						—
Foreign currency exchange gains (losses)			6,294						(1,529)						4,694
Other, net			(20,526)						(21,932)						10,713
Total			$	158,147					$	32,231					$	(45,262)

Note 20. Segment Disclosure

Segment reporting is based upon the “management approach,” i.e., how management organizes our operating segments for which separate financial information is (1) available and (2) evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. Our CODM is our CEO.

We have two reportable segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, system integration products and services, digital, custom and FPGA 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.

The financial information provided to and used by the CODM to assist in making operational decisions, allocating resources, and assessing performance includes consolidated financial information as well as revenue, adjusted operating income, and adjusted operating margin information for the Design Automation, and Design IP segments, accompanied by disaggregated information relating to revenue by geographic region.

The Software Integrity business constituted its own reportable segment under Topic 280. In accordance with applicable accounting guidance, the results of the Software Integrity business are presented as discontinued operations in the consolidated statements of income and, as such, have been excluded from both continuing operations and segment results for all periods presented. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in this Annual Report.

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Information by reportable segment is as follows:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Total Segments:
Revenue			$	6,127,436					$	5,318,014					$	4,615,714
Adjusted operating income			2,362,059						1,928,027						1,579,899
Adjusted operating margin			39		%				36		%				34		%
Design Automation:
Revenue			$	4,221,122					$	3,775,288					$	3,300,173
Adjusted operating income			1,631,885						1,413,926						1,176,101
Adjusted operating margin			39		%				37		%				36		%
Design IP:
Revenue			$	1,906,314					$	1,542,726					$	1,315,541
Adjusted operating income			730,174						514,101						403,798
Adjusted operating margin			38		%				33		%				31		%

Certain operating expenses are not allocated to the segments and are managed at a consolidated level. The unallocated expenses managed at a consolidated level, including amortization of acquired intangible assets, stock-based compensation, changes in the fair value of deferred compensation plan, restructuring charges, and acquisition/divestiture related items, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income from continuing operations:

			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Total segment adjusted operating income			$	2,362,059					$	1,928,027					$	1,579,899
Reconciling items:
Amortization of acquired intangible assets			(124,234)						(54,576)						(56,311)
Stock-based compensation expense			(657,935)						(513,094)						(421,749)
Deferred compensation plan			(85,446)						(20,196)						67,516
Restructuring charges			—						(53,091)						(11,221)
Acquisition/divestiture related items			(138,733)						(13,831)						(9,420)
Total operating income			$	1,355,711					$	1,273,239					$	1,148,714

The CODM does not use total assets by segment to evaluate segment performance or allocate resources. As a result, total assets by segment are not disclosed.

In allocating revenue to particular geographic areas, the CODM considers where individual “seats” or licenses to our products are located. Revenue is defined as revenue from external customers. Revenue and property and equipment, net, related to operations in the United States and other geographic areas are:

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			Year Ended October 31,
			2024						2023						2022
			(in thousands)
Revenue:
United States			$	2,739,756					$	2,462,009					$	2,094,470
Europe			614,584						514,780						430,369
China			989,524						855,023						774,265
Korea			773,018						625,502						523,501
Other			1,010,554						860,700						793,109
Consolidated			$	6,127,436					$	5,318,014					$	4,615,714

			As of October 31,
			2024						2023
			(in thousands)
Property and Equipment, net:
United States			$	335,306					$	334,272
Other			227,700						215,565
Total			$	563,006					$	549,837

Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.

One customer, including its subsidiaries, accounted for 12.6%, 13.5%, and 12.8% of our consolidated revenue in fiscal 2024, 2023, and 2022, respectively. No customer accounted for over 10% of our accounts receivable as of October 31, 2024. One customer accounted for 12.1% of our accounts receivable as of October 31, 2023.

Note 21. Restructuring Charges

In the first quarter of fiscal 2023, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2023 Plan). The 2023 Plan was substantially completed in the third quarter of fiscal 2023 and total charges under the 2023 Plan consisting primarily of severance costs and facility exit costs were $77.0 million, of which $23.9 million were related to discontinued operations.

During fiscal 2024, we made payments of $3.6 million related to continuing operations and $0.5 million related to discontinued operations under the 2023 Plan. As of October 31, 2024, the payroll and related benefits liabilities of $0.8 million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $3.8 million were recorded in other long-term liabilities in the consolidated balance sheets.

During fiscal 2023, we recorded restructuring charges related to continuing operations of $53.1 million and made payments of $44.9 million under the 2023 Plan. We recorded restructuring charges related to discontinued operations of $23.9 million and made payments of $23.4 million under the 2023 Plan. As of October 31, 2023, the payroll and related benefits liabilities related to continuing operations of $3.7 million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $4.5 million were recorded in other long-term liabilities in the consolidated balance sheets. The payroll and related benefits liabilities related to discontinued operations were $0.5 million.

During fiscal 2022, we recorded restructuring charges related to continuing operations of $11.2 million and made payments of $24.1 million under the 2021 restructuring plan (the 2021 Plan) initiated in the third quarter of fiscal 2021. We recorded restructuring charges related to discontinued operations of $0.9 million and made payments of $2.2 million under the 2021 Plan. There was no outstanding balance under the 2021 Plan as of October 31, 2022.

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Supplementary Data - Selected Unaudited Quarterly Financial Data

The table below includes certain unaudited financial information for the last eight fiscal quarters.

			Quarter Ended
			January 31,						April 30,						July 31,						October 31,
			in thousands, except per share amounts
2024
Revenue			$	1,510,989					$	1,454,712					$	1,525,749					$	1,635,986
Gross margin			1,231,796						1,154,315						1,235,073						1,314,491
Income before provision for income taxes			457,454						341,530						391,995						322,879
Net income from continuing operations			434,545						296,093						422,707						260,795
Income (loss) from discontinued operations, net of income taxes			11,662						(7,004)						(17,813)						834,825
Net income			446,207						289,089						404,894						1,095,620
Net income attributed to Synopsys			449,112						292,107						408,055						1,114,106
Net income (loss) per share attributed to Synopsys - basic:
Continuing operations			$	2.87					$	1.96					$	2.78					$	1.81
Discontinued operations			0.08						(0.05)						(0.12)						5.43
Basic net income per shares(1)			$	2.95					$	1.91					$	2.66					$	7.24
Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations			$	2.82					$	1.92					$	2.73					$	1.79
Discontinued operations			0.07						(0.04)						(0.12)						5.35
Diluted net income per shares(1)			$	2.89					$	1.88					$	2.61					$	7.14
2023
Revenue			$	1,233,497					$	1,262,744					$	1,354,390					$	1,467,383
Gross margin			997,508						1,014,503						1,093,958						1,181,202
Income before provision for income taxes			279,558						296,587						325,560						403,765
Net income from continuing operations			266,775						272,640						332,511						343,356
Income (loss) from discontinued operations, net of income taxes			1,852						(2,692)						544						3,139
Net income			268,627						269,948						333,055						346,495
Net income attributed to Synopsys			271,536						272,910						336,252						349,190
Net income (loss) per share attributed to Synopsys - basic:
Continuing operations			$	1.77					$	1.81					$	2.21					$	2.28
Discontinued operations			0.01						(0.02)						—						0.02
Basic net income per shares(1)			$	1.78					$	1.79					$	2.21					$	2.30
Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations			$	1.74					$	1.78					$	2.17					$	2.23
Discontinued operations			0.01						(0.02)						—						0.03
Diluted net income per shares(1)			$	1.75					$	1.76					$	2.17					$	2.26

(1) Net income per share is computed independently. Therefore, the sum of the quarterly net income per share may not equal to the total computed for the year or any cumulative interim period.

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