filings.toolsSynopsys 10-Q 2022-01-31
Filed 2022-02-18. 7 sections, 240K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED JANUARY 31, 2022
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 000-19807
SYNOPSYS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 56-1546236 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
690 EAST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CA 94043
(Address of principal executive offices, including zip code)
(650) 584-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock (par value of $0.01 per share) | SNPS | Nasdaq Global Select Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ý | Accelerated Filer | ☐ | |||||||||||||||||
| Non-accelerated filer | ¨ | Smaller reporting company | ☐ | |||||||||||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý
As of February 16, 2022, there were 153,098,717 shares of the registrant’s common stock outstanding.
SYNOPSYS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED JANUARY 31, 2022
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value amounts)
| January 31, 2022 | October 31, 2021* | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,124,299 | $ | 1,432,840 | |||||||
| Short-term investments | 147,748 | 147,949 | |||||||||
| Total cash, cash equivalents and short-term investments | 1,272,047 | 1,580,789 | |||||||||
| Accounts receivable, net | 1,038,749 | 568,501 | |||||||||
| Inventories, net | 212,919 | 229,023 | |||||||||
| Prepaid and other current assets | 423,782 | 430,028 | |||||||||
| Total current assets | 2,947,497 | 2,808,341 | |||||||||
| Property and equipment, net | 477,521 | 472,398 | |||||||||
| Operating lease right-of-use assets, net | 481,526 | 493,251 | |||||||||
| Goodwill | 3,592,788 | 3,575,785 | |||||||||
| Intangible assets, net | 260,810 | 279,132 | |||||||||
| Deferred income taxes | 628,879 | 612,655 | |||||||||
| Other long-term assets | 512,325 | 510,698 | |||||||||
| Total assets | $ | 8,901,346 | $ | 8,752,260 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued liabilities | $ | 540,733 | $ | 741,191 | |||||||
| Operating lease liabilities, current | 78,748 | 79,678 | |||||||||
| Deferred revenue | 1,852,175 | 1,517,623 | |||||||||
| Short-term debt | — | 74,992 | |||||||||
| Total current liabilities | 2,471,656 | 2,413,484 | |||||||||
| Operating lease liabilities, non-current | 477,487 | 487,003 | |||||||||
| Long-term deferred revenue | 157,465 | 136,303 | |||||||||
| Long-term debt | 24,370 | 25,094 | |||||||||
| Other long-term liabilities | 380,135 | 391,433 | |||||||||
| Total liabilities | 3,511,113 | 3,453,317 | |||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding | — | — | |||||||||
| Common stock, $0.01 par value: 400,000 shares authorized; 153,256 and 153,062 shares outstanding, respectively | 1,533 | 1,531 | |||||||||
| Capital in excess of par value | 1,430,226 | 1,576,363 | |||||||||
| Retained earnings | 4,863,400 | 4,549,713 | |||||||||
| Treasury stock, at cost: 4,005 and 4,198 shares, respectively | (856,929) | (782,866) | |||||||||
| Accumulated other comprehensive income (loss) | (51,457) | (49,604) | |||||||||
| Total Synopsys stockholders’ equity | 5,386,773 | 5,295,137 | |||||||||
| Non-controlling interest | 3,460 | 3,806 | |||||||||
| Total stockholders’ equity | 5,390,233 | 5,298,943 | |||||||||
| Total liabilities and stockholders’ equity | $ | 8,901,346 | $ | 8,752,260 |
*Derived from audited financial statements.
See accompanying notes to unaudited condensed consolidated financial statements.
SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
| Three Months Ended January 31, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Time-based products | $ | 707,483 | $ | 631,290 | |||||||||||||||||||
| Upfront products | 368,274 | 174,381 | |||||||||||||||||||||
| Maintenance and service | 194,498 | 164,650 | |||||||||||||||||||||
| Total revenue | 1,270,255 | 970,321 | |||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Products | 165,399 | 127,347 | |||||||||||||||||||||
| Maintenance and service | 78,225 | 68,766 | |||||||||||||||||||||
| Amortization of intangible assets | 13,360 | 11,886 | |||||||||||||||||||||
| Total cost of revenue | 256,984 | 207,999 | |||||||||||||||||||||
| Gross margin | 1,013,271 | 762,322 | |||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Research and development | 383,971 | 357,468 | |||||||||||||||||||||
| Sales and marketing | 180,510 | 170,628 | |||||||||||||||||||||
| General and administrative | 81,008 | 77,488 | |||||||||||||||||||||
| Amortization of intangible assets | 9,000 | 8,390 | |||||||||||||||||||||
| Restructuring charges | 11,746 | — | |||||||||||||||||||||
| Total operating expenses | 666,235 | 613,974 | |||||||||||||||||||||
| Operating income | 347,036 | 148,348 | |||||||||||||||||||||
| Other income (expense), net | (19,793) | 28,756 | |||||||||||||||||||||
| Income before income taxes | 327,243 | 177,104 | |||||||||||||||||||||
| Provision for income taxes | 13,902 | 15,076 | |||||||||||||||||||||
| Net income | $ | 313,341 | $ | 162,028 | |||||||||||||||||||
| Net income (loss) attributed to non-controlling interest | (346) | (317) | |||||||||||||||||||||
| Net income attributed to Synopsys | $ | 313,687 | $ | 162,345 | |||||||||||||||||||
| Net income per share attributed to Synopsys: | |||||||||||||||||||||||
| Basic | $ | 2.05 | $ | 1.06 | |||||||||||||||||||
| Diluted | $ | 1.99 | $ | 1.03 | |||||||||||||||||||
| Shares used in computing per share amounts: | |||||||||||||||||||||||
| Basic | 153,218 | 152,498 | |||||||||||||||||||||
| Diluted | 157,273 | 157,277 |
See accompanying notes to unaudited condensed consolidated financial statements.
SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | -
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Quarterly Report on Form 10-Q includes forward-looking statements, which involve risks, uncertainties and other factors that could cause our actual results, time frames or achievements to differ materially from those expressed or implied in our forward-looking statements. Readers are urged to carefully review and consider the various disclosures regarding these risks and uncertainties made in this Quarterly Report on Form 10-Q, including those identified below in Part II, Item 1A. Risk Factors, and in other documents we file from time to time with the Securities and Exchange Commission (SEC). Forward-looking statements include any statements that are not statements of historical fact and include, but are not limited to, statements concerning strategies related to our products and technology; business outlook, opportunities and strategies; customer demand and market expansion; our planned product releases and capabilities; industry growth rates; software trends; planned acquisitions and buybacks; the expected impact of U.S. and foreign government actions on our financial results; the continued impact and duration of the COVID-19 pandemic; and regulatory changes in the United States and other regions in which we operate. Forward-looking statements may be identified by words including, but not limited to, “may,” “will,” “could,” “would,” “can,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project,” “continue,” “forecast,” "likely," "potential," "seek," or the negatives of such terms and similar expressions. The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. All subsequent written or oral forward-looking statements attributable to Synopsys or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.
The following summary of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes thereto contained in Part I, Item 1 of this report and with our audited consolidated financial statements and the related notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021, as filed with the SEC on December 13, 2021.
Overview
Business Summary
Synopsys, Inc. provides products and services used across the entire Silicon to Software spectrum, from engineers creating advanced semiconductors to product teams developing advanced electronic systems to software developers seeking to ensure the security and quality of their code. We are a global leader in supplying the electronic design automation (EDA) software that engineers use to design and test integrated circuits (ICs), also known as chips. We also offer semiconductor intellectual property (IP) products, which are pre-designed circuits that engineers use as components of larger chip designs rather than designing those circuits themselves. We provide software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them. To complement these offerings, we provide technical services and support to help our customers develop advanced chips and electronic systems. These products and services are part of our Semiconductor & System Design segment.
We are also a leading provider of software tools and services that improve the security, quality and compliance of software in a wide variety of industries, including electronics, financial services, automotive, medicine, energy and industrials. These tools and services are part of our Software Integrity segment.
Our EDA and IP customers are generally semiconductor and electronics systems companies. Our solutions help these companies overcome the challenges of developing increasingly advanced electronics products while also helping them reduce their design and manufacturing costs. While our products are an important part of our customers’ development process, our sales could be affected based on their research and development budgets, and our customers’ spending decisions may be affected by their business outlook and willingness to invest in new and increasingly complex chip designs.
Our Software Integrity business delivers products and services that enable software developers to test their code—while it is being written—for known security vulnerabilities and quality defects, as well as testing for open source security vulnerabilities and license compliance. Our Software Integrity customers are software developers across many industries, including, but also well beyond, the semiconductor and systems industries. Our Software Integrity products and services form a platform that helps our customers build security into the software development lifecycle and across the entire cyber supply chain.
We have consistently grown our revenue since 2005, despite periods of global economic uncertainty. We achieved these results because of our solid execution, leading technologies and strong customer relationships, and because we generally recognize our revenue for software licenses over the arrangement period, which typically approximates three years. See Note 2 of the Notes to Consolidated Financial Statements in our Annual Report for a discussion on our revenue recognition policy*.* The revenue we recognize in a particular period generally results from selling efforts in prior periods rather than the current period. As a result, decreases as well as increases in customer spending do not immediately affect our revenues in a significant way.
Our growth strategy is based on maintaining and building on our leadership in our EDA products, expanding and proliferating our IP offerings, driving growth in the software security and quality market and continuing to expand our product portfolio and our total addressable market. Our revenue growth from period to period is expected to vary based on the mix of our time-based and upfront products. Based on our leading technologies, customer relationships, business model, diligent expense management, and acquisition strategy, we believe that we will continue to execute our strategies successfully.
COVID-19 Pandemic
While the COVID-19 pandemic has changed the physical working environment of the majority of our workforce to working from home, it otherwise caused only minor disruptions to our business operations with a limited impact on our operating results thus far. Given the unpredictable nature of the COVID-19 pandemic’s impact on the global economy, our historical results may not be an indication of future performance.
The extent to which the COVID-19 pandemic impacts our business operations in future periods will depend on multiple uncertain factors, including the duration and scope of the pandemic, its overall negative impact on the global economy generally and the semiconductor and electronics industries specifically, continued responses by governments and businesses to COVID-19, and acceptance and effectiveness of vaccines. We have not identified trends that we expect will materially impact our future operating results at this time. As we generally recognize our revenue for software licenses over the arrangement period, any potential impact related to COVID-19 may be delayed. We have not observed any changes in the design activity of customers, but we previously experienced a slowdown in customer commitments in our Software Integrity segment. We have not received any significant requests from our customers to either delay payments or modify arrangements due to COVID-19. However, this situation could change in future periods and the extent that these requests may impact our business is uncertain. We have also experienced minor disruptions in our hardware supply chain, which we have been able to address with minimal impact to our business operations to date.
We will continue to consider the potential impact of the COVID-19 pandemic on our business operations. Although no material impairment or other effects have been identified to date related to the COVID-19 pandemic, there is substantial uncertainty in the nature and degree of its continued effects over time. That uncertainty could affect management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information become known.
See Part II, Item 1A, Risk Factors for further discussion of the possible impact of the COVID-19 pandemic on our business, operations and financial condition.
Business Segments
Semiconductor & System Design. This segment includes our advanced silicon design, verification products and services and semiconductor IP portfolio, which encompasses products and services that serve companies primarily in the semiconductor and electronics industries. EDA includes digital, custom and field programmable gate array (FPGA) IC design software, verification products and manufacturing software products. Designers use these products to automate the highly complex IC design process and to reduce defects that could lead to expensive design or manufacturing re-spins or suboptimal end products. For IP, we are a leading provider of high-quality, silicon-proven IP solutions for system-on-chips (SoCs). This includes IP that has been optimized to address specific application requirements for the mobile, automotive, digital home, internet of things and cloud computing markets, enabling designers to quickly develop SoCs in these areas.
Software Integrity. This segment includes a broad portfolio of products and services to intelligently address software risks across the customer’s portfolio and at all stages of the application lifecycle. The testing tools, services, and programs enable our customers to manage open source license compliance and detect, prioritize, and remediate security vulnerabilities and defects across their entire software development lifecycle. Our offerings include security and quality testing products, managed services, programs and professional services, and training.
Fiscal Year End
Our fiscal year ends on the Saturday nearest to October 31 and consists of 52 weeks, with the exception that approximately every five years, we have a 53-week year. When a 53-week year occurs, we include the additional week in the first quarter to realign fiscal quarters with calendar quarters. Fiscal 2022 and 2021 are 52-week years ending on October 29, 2022 and October 30, 2021, respectively.
Our results of operations for the three months of fiscal 2022 and 2021 ended on January 29, 2022 and January 30, 2021, respectively. For presentation purposes, this Form 10-Q refers to the closest calendar month end.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial results under Results of Operations below are based on our unaudited condensed consolidated financial statements, which we have prepared in accordance with U.S. GAAP. In preparing these financial statements, we make assumptions, judgments and estimates that can affect the reported amounts of assets, liabilities, revenues and expenses and net income. On an ongoing basis, we evaluate our estimates based on historical experience and various other assumptions we believe are reasonable under the circumstances. Our actual results may differ from these estimates. See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for further information on our significant accounting policies.
The accounting policies that most frequently require us to make assumptions, judgments and estimates, and therefore are critical to understanding our results of operations, are:
-
Revenue recognition;
-
Valuation of business combinations; and
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Income taxes.
See Critical Accounting Policies and Estimates in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021 for further information.
Results of Operations
Financial Performance Summary
In the first quarter of fiscal 2022 compared to the same period of fiscal 2021, our financial performance reflected the following:
-
Revenues were $1,270.3 million, an increase of $299.9 million or 31%, primarily due to higher revenue resulting from growth across all product groups and geographies.
-
Total cost of revenue and operating expenses were $923.2 million, an increase of $101.2 million or 12%, primarily due to increases of $75.6 million in employee-related costs resulting from headcount increases through organic growth and acquisitions and $11.7 million in restructuring charges.
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Operating income was $347.0 million, an increase of $198.7 million or 134% as revenue growth exceeded the growth of costs and expenses.
Revenue
Our revenues are generated from two business segments: the Semiconductor & System Design segment and the Software Integrity segment. See Note 16 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information about our reportable segments and revenue by geographic regions.
Further disaggregation of the revenues into various products and services within these two segments is summarized as follows:
Semiconductor & System Design Segment
This segment is comprised of the following:
- EDA software includes digital, custom and FPGA IC design software, verification products and obligations to provide unspecified updates and support services. EDA products and services are typically sold through Time-based Subscription License (TSL) arrangements that grant customers the
right to access and use all of the licensed products at the outset of an arrangement and software updates are generally made available throughout the entire term of the arrangement. The duration of our TSL contracts is generally 3 years, though it may vary for specific arrangements. We have concluded that the software licenses in TSL contracts are not distinct from the obligation to provide unspecified software updates to the licensed software throughout the license term, because the multiple software licenses and support represent inputs to a single, combined offering, and timely, relevant software updates are integral to maintaining the utility of the software licenses. We recognize revenue for the combined performance obligation under TSL contracts ratably over the term of the license.
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IP & System Integration includes our DesignWare® IP portfolio and system-level products and services. These arrangements generally have two performance obligations which consist of transferring of the licensed IP and providing related support, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. Revenue allocated to the IP licenses 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 is recognized over the support term. Royalties are recognized as revenue in the quarter in which the applicable customer sells its products that incorporate our IP. Payments for IP contracts are generally received upon delivery of the IP. Revenue related to the customization of certain IP is recognized as “Professional Services.”
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In the case of arrangements involving the sale of hardware products, we generally have two performance obligations. The first performance obligation is to transfer the hardware product, which includes software integral to the functionality of the hardware product. The second performance obligation is to provide maintenance on the hardware and its embedded software, which includes 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 generally recognized as revenue at the time of shipment because the customer obtains control of the product at that point in time. We have concluded that control generally transfers at that point in time 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 the maintenance obligation is recognized as revenue ratably over the maintenance term.
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Revenue from Professional Service contracts is recognized over time, generally using costs incurred or hours expended to measure progress. We have a history of reasonably 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 and specification and testing requirement changes.
Software Integrity Segment
- We sell Software Integrity products in arrangements that provide customers the right to software licenses, maintenance updates and technical support. Over the term of these arrangements, the customer expects us to provide integral maintenance updates to the software licenses, which help customers protect their own software from new critical quality defects and potential security vulnerabilities. The licenses and maintenance updates serve together to fulfill our commitment to the customer as both work together to provide functionality to the customer and represent a combined performance obligation. We recognize revenue for the combined performance obligation over the term of the arrangement.
Our customer arrangements can involve multiple products and various license rights, and our customers negotiate with us over many aspects of these arrangements. For example, they generally 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. No single factor typically drives our customers’ buying decisions, and we compete on all fronts to serve customers in highly competitive markets. Customers generally negotiate the total value of the arrangement rather than just unit pricing or volumes.
Total Revenue
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| Semiconductor & System Design Segment | $ | 1,162.7 | $ | 878.3 | $ | 284.4 | 32 | % | |||||||||||||||
| Software Integrity Segment | 107.6 | 92.0 | 15.6 | 17 | % | ||||||||||||||||||
| Total | $ | 1,270.3 | $ | 970.3 | $ | 300.0 | 31 | % | |||||||||||||||
Our revenues are subject to fluctuations, primarily due to customer requirements including the timing and value of contract renewals. For example, we experience fluctuations in our revenues due to factors such as the timing of IP product sales, consulting projects, Flexible Spending Account (FSA) drawdowns, royalties, and hardware sales. As revenues from IP products sales and hardware sales are recognized upfront, customer demand and timing requirements for such IP products and hardware could result in increased variability of our total revenues.
Contracted but unsatisfied or partially unsatisfied performance obligations as of January 31, 2022 was $6.9 billion. For more information regarding our revenue as of January 31, 2022, including our contract balances as of such date, see Note 3 of Notes to Unaudited Condensed Consolidated Financial Statements.
The increase in total revenues for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to the continued organic growth of our business in all product groups and geographies.
For a discussion of revenue by geographic areas, see Note 16 of Notes to Unaudited Condensed Consolidated Financial Statements.
Time-Based Products Revenue
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | $ | 707.5 | $ | 631.3 | $ | 76.2 | 12 | % | |||||||||||||||
| Percentage of total revenue | 56 | % | 65 | % | |||||||||||||||||||
The increase in time-based products revenue for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily attributable to an increase in TSL license revenue and higher renewals from arrangements booked in prior periods.
Upfront Products Revenue
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | $ | 368.3 | $ | 174.4 | $ | 193.9 | 111 | % | |||||||||||||||
| Percentage of total revenue | 29 | % | 18 | % | |||||||||||||||||||
Changes in upfront products revenue are generally attributable to normal fluctuations in the extent and timing of customer requirements, which can drive the amount of upfront orders and revenue in any particular period.
The increase in upfront products revenue for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to an increase in the sale of IP products and hardware products driven by higher demand from customers.
Upfront products revenue as a percentage of total revenue will likely fluctuate based on the timing of IP products and hardware sales. Such fluctuations will continue to be impacted by the timing of shipments or FSA drawdowns due to customer requirements.
Maintenance and Service Revenue
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| Maintenance revenue | $ | 65.5 | $ | 54.2 | $ | 11.3 | 21 | % | |||||||||||||||
| Professional services and other revenue | 129.0 | 110.5 | 18.5 | 17 | % | ||||||||||||||||||
| Total | $ | 194.5 | $ | 164.7 | $ | 29.8 | 18 | % | |||||||||||||||
| Percentage of total revenue | 15 | % | 17 | % | |||||||||||||||||||
The increase in maintenance revenue for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to an increase in the volume of hardware and IP arrangements that include maintenance.
The increase in professional services and other revenue for the three and three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to an increase in the volume of IP consulting projects.
Cost of Revenue
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| Cost of products revenue | $ | 165.4 | $ | 127.3 | $ | 38.1 | 30 | % | |||||||||||||||
| Cost of maintenance and service revenue | 78.2 | 68.8 | 9.4 | 14 | % | ||||||||||||||||||
| Amortization of intangible assets | 13.4 | 11.9 | 1.5 | 13 | % | ||||||||||||||||||
| Total | $ | 257.0 | $ | 208.0 | $ | 49.0 | 24 | % | |||||||||||||||
| Percentage of total revenue | 20 | % | 21 | % | |||||||||||||||||||
We divide cost of revenue into three categories: cost of products revenue, cost of maintenance and service revenue, and amortization of intangible assets. We segregate expenses directly associated with consulting and training services from cost of products revenue associated with internal functions providing license delivery and post-customer contract support services. We then allocate group costs between cost of products revenue and cost of maintenance and service revenue based on products and maintenance and service revenue reported.
Cost of products revenue. Cost of products revenue includes costs related to products sold and software licensed, hardware related direct costs, allocated operating costs related to product support and distribution costs, royalties paid to third-party vendors, and the amortization of capitalized software development costs.
Cost of maintenance and service revenue. Cost of maintenance and service revenue includes costs to deliver our maintenance and consulting services, such as hotline and on-site support, production services and documentation of maintenance updates.
Amortization of intangible assets. Amortization of intangible assets included within cost of revenue consists of the amortization of core/developed technology and certain contract rights intangible.
The increase in cost of revenue for the three months ended January 31, 2022 compared to the same period in fiscal 2021, was primarily due to increases of $32.5 million in hardware related costs and $18.2 million in personnel-related costs as a result of headcount increases from hiring and acquisitions. These increases were partially offset by lower deferred compensation expenses of $4.3 million.
Changes in other cost of revenue categories for the above-mentioned periods were not individually material.
Operating Expenses
Research and Development
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | $ | 384.0 | $ | 357.5 | $ | 26.5 | 7 | % | |||||||||||||||
| Percentage of total revenue | 30 | % | 37 | % | |||||||||||||||||||
The increase in research and development expenses for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to higher personnel-related costs of $41.0 million from headcount increases from hiring and acquisitions as we continue to expand and enhance our product portfolio, increases of $6.1 million in consultant and contractor costs, $3.6 million in depreciation expenses, and $2.7 million in facility expenses. These increases were partially offset by lower deferred compensation expenses of $30.7 million.
Changes in other research and development expense categories for the above-mentioned periods were not individually material.
Sales and Marketing
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | $ | 180.5 | $ | 170.6 | $ | 9.9 | 6 | % | |||||||||||||||
| Percentage of total revenue | 14 | % | 18 | % | |||||||||||||||||||
The increase in sales and marketing expenses for the three ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to an increase of $15.9 million in personnel-related costs due to headcount increases from hiring and higher sales commissions, partially offset by lower deferred compensation expenses of $9.5 million.
Changes in other sales and marketing expense categories for the above-mentioned periods were not individually material.
General and Administrative
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | $ | 81.0 | $ | 77.5 | $ | 3.5 | 5 | % | |||||||||||||||
| Percentage of total revenue | 6 | % | 8 | % | |||||||||||||||||||
The increase in general and administrative expenses for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to increases of $7.4 million in maintenance and depreciation expenses and $6.8 million in professional service costs. These increases were partially offset by lower deferred compensation expenses of $6.0 million.
Changes in other general and administrative expense categories for the above-mentioned periods were not individually material.
Amortization of Intangible Assets
Amortization of intangible assets included within operating expenses consists of the amortization of trademarks, trade names and customer relationships related to acquisitions completed in prior years.
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | 9.0 | 8.4 | 0.6 | 7 | % | ||||||||||||||||||
| Percentage of total revenue | 1 | % | 1 | % | |||||||||||||||||||
The increase in amortization of intangible assets for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to amortization expenses related to acquired intangible assets partially offset by certain intangible assets becoming fully amortized during the three months ended January 31, 2022.
Restructuring Charges
In the third quarter of fiscal 2021, our management approved, committed and initiated a restructuring plan (the 2021 Plan) as part of a business reorganization. Total charges under the Plan were $45.2 million and consisted primarily of severance, retirement benefits under the 2021 Voluntary Retirement Program (2021 VRP), and lease abandonment costs. The 2021 Plan and VRP were completed in the first quarter of fiscal 2022.
See Note 9 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Other Income (Expense), Net
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| Interest income | $ | 0.9 | $ | 0.3 | $ | 0.6 | 200 | % | |||||||||||||||
| Interest expense | (0.5) | (0.7) | 0.2 | (29) | % | ||||||||||||||||||
| Gain (loss) on assets related to executive deferred compensation plan | (19.6) | 30.9 | (50.5) | (163) | % | ||||||||||||||||||
| Foreign currency exchange gain (loss) | (1.0) | (0.3) | (0.7) | 233 | % | ||||||||||||||||||
| Other, net | 0.4 | (1.4) | 1.8 | (129) | % | ||||||||||||||||||
| Total | $ | (19.8) | $ | 28.8 | $ | (48.6) | (169) | % | |||||||||||||||
The decrease in other income (expense) for the three months ended January 31, 2022 as compared to the same period in fiscal 2021 was primarily due to the decrease in the fair value of our executive deferred compensation plan assets.
Segment Operating Results
We do not allocate certain operating expenses managed at a consolidated level to our reportable segments. These unallocated expenses consist primarily of stock-based compensation expense, amortization of intangible assets, restructuring, and acquisition-related costs. See Note 16 of Notes to Unaudited Condensed Consolidated Financial Statements for more information.
Semiconductor & System Design Segment
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| Adjusted operating income | $ | 447.4 | $ | 278.9 | $ | 168.5 | 60 | % | |||||||||||||||
| Adjusted operating margin | 38 | % | 32 | % | 6 | % | 19 | % | |||||||||||||||
The increase in adjusted operating income for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to an increase in revenue from arrangements booked in prior periods.
Software Integrity Segment
| January 31, | |||||||||||||||||||||||
| 2022 | 2021 | Change | % Change | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| Adjusted operating income | $ | 12.0 | $ | 7.9 | $ | 4.1 | 52 | % | |||||||||||||||
| Adjusted operating margin | 11 | % | 9 | % | 2 | % | 22 | % | |||||||||||||||
The increase in the adjusted operating income for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to an increase in revenue from arrangements booked in prior periods.
Income Taxes
Our effective tax rate decreased in the three months ended January 31, 2022 as compared to the same period in fiscal 2021, primarily due to excess tax benefit from stock-based compensation.
See Note 18 of Notes to Unaudited Condensed Consolidated Financial Statements for further discussion.
Liquidity and Capital Resources
Our principal sources of liquidity are funds generated from our business operations and funds that may be drawn down under our revolving credit and term loan facilities.
As of January 31, 2022, we held $1,272.0 million in cash, cash equivalents and short-term investments. Our cash equivalents consisted primarily of taxable money market mutual funds, time deposits and highly liquid investments with maturities of three months or less. Our short-term investments include U.S. government and municipal obligations, investment-grade available-for-sale debt and asset backed securities. We believe that the overall credit quality of our portfolio is strong, with our global excess cash, and our cash equivalents, invested in banks and securities with a weighted-average credit rating exceeding AA.
As of January 31, 2022, approximately $792.9 million of our cash and cash equivalents were domiciled in various foreign jurisdictions. We have provided for foreign withholding taxes on the 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.
We believe that our existing cash, cash equivalents and short-term investments and sources of liquidity will be sufficient to satisfy our cash requirements and capital return program over the next 12 months and beyond. Our future cash requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, and the timing and extent of our spending to support our research and development efforts. We also may invest in or acquire businesses, applications or technologies, or may further expand our board-authorized stock repurchase program, which may require the use of significant cash resources and/or additional financing.
During the three months ended January 31, 2022, there were no significant changes to our material cash requirements, including contractual and other obligations, as presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021.
The following sections discuss changes in our unaudited condensed statements of cash flows and other commitments of our liquidity and capital resources during the three months ended January 31, 2022.
Cash Flows
| Three Months Ended January 31, | |||||||||||||||||
| 2022 | 2021 | $ Change | |||||||||||||||
| (dollars in millions) | |||||||||||||||||
| Cash provided by operating activities | $ | 155.7 | $ | 174.0 | $ | (18.3) | |||||||||||
| Cash used in investing activities | (68.0) | (103.5) | 35.5 | ||||||||||||||
| Cash used in financing activities | (394.6) | (293.1) | (101.5) |
Cash Provided by Operating Activities
We expect cash from our operating activities to fluctuate as a result of a number of factors, including the timing of our billings and collections, our operating results, and the timing and amount of tax and other liability payments. Cash provided by our operations is dependent primarily upon the payment terms of our license agreements. We generally receive cash from upfront arrangements much sooner than from time-based products revenue, in which the license fee is typically paid either quarterly or annually over the term of the license.
The decrease in cash provided by operating activities for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to timing of customer billings and higher disbursements for operations, including vendor and tax payments, partially offset by higher net income.
Cash Used in Investing Activities
The decrease in cash used in investing activities for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to lower cash paid for acquisitions of $54.7 million, partially offset by higher purchases of property and equipment of $14.0 million.
Cash Used in Financing Activities
The increase in cash used in financing activities for the three months ended January 31, 2022 compared to the same period in fiscal 2021 was primarily due to higher debt repayments of $70.2 million and higher income taxes paid for net share settlements of $47.2 million.
Credit and Term Loan Facilities
On November 28, 2016, we entered into an amended and restated credit agreement with several lenders (as amended and restated, the Credit Agreement) providing for (i) a $650.0 million senior unsecured revolving credit facility (the Revolver) and (ii) a $150.0 million senior unsecured term loan facility (the Term Loan). On January 22, 2021, the Credit Agreement was amended (Credit Agreement) to extend the termination date of the existing $650 million senior unsecured revolving credit facility from November 28, 2021 to January 22, 2024, which may be further extended at our option. Further, the Credit Agreement was also amended to provide an uncommitted incremental loan facility of up to $150.0 million in the aggregate principal amount. Our outstanding term loan borrowings under the previous credit agreement carried over under the Credit Agreement. The outstanding term loans under the Credit Agreement continued to amortize in quarterly installments with the balance repaid in full on November 26, 2021. There was no outstanding balance under the Revolver and the Term Loan as of January 31, 2022.
In July 2018, we entered into a 12-year 220.0 million RMB (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 January 31, 2022, we had $24.3 million outstanding under the agreement.
See Note 10 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Share Repurchase Program
In December 2021, our Board approved a stock repurchase program with authorization to purchase up to $1.0 billion of our common stock.
In December 2021, we entered into an accelerated share repurchase agreement (the December 2021 ASR) to repurchase an aggregate of $200.0 million of our common stock. Pursuant to the December 2021 ASR, we made a prepayment of $200.0 million to receive initial deliveries of shares valued at $160.0 million. The remaining balance
of $40.0 million was settled in February 2022. Total shares purchased under the December 2021 ASR were approximately 0.6 million shares, at an average purchase price of $331.09 per share.
During the three months ended January 31, 2022, we also repurchased on the open market approximately 0.2 million shares of our common stock at an average price of $331.37 per share for an aggregate purchase price of $50.0 million.
As of January 31, 2022, $750.0 million remained available for future repurchases under the program. The pace of our repurchase activity will depend on factors such as our working capital needs, our cash requirements for acquisitions, our debt repayment obligations, our stock price, and economic and market conditions.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
See Other Commitments — Credit and Term Loan Facilities, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, regarding borrowings under our senior unsecured revolving credit facility.
As of January 31, 2022, our exposure to market risk has not changed materially since October 31, 2021. For more information on financial market risks related to changes in interest rates and foreign currency rates, reference is made to Item 7A. Quantitative and Qualitative Disclosures About Market Risk contained in Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2021, filed with the SEC on December 13, 2021.
Item 4. Controls and Procedures
(a)Evaluation of Disclosure Controls and Procedures. As of January 31, 2022, Synopsys carried out an evaluation under the supervision and with the participation of Synopsys’ management, including the Co-Chief Executive Officers and Chief Financial Officer, of the effectiveness of the design and operation of Synopsys’ disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)). There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives. Our Co-Chief Executive Officers and Chief Financial Officer have concluded that, as of January 31, 2022, Synopsys’ disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports Synopsys files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required, and that such information is accumulated and communicated to Synopsys’ management, including the Co-Chief Executive Officers and Chief Financial Officer, to allow timely decisions regarding its required disclosure.
(b)Changes in Internal Control over Financial Reporting. There were no changes in Synopsys’ internal control over financial reporting during the fiscal quarter ended January 31, 2022 that have materially affected, or are reasonably likely to materially affect, Synopsys’ internal control over financial reporting.
PART II. OTHER INFORMATION
| Item 1. 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. Regardless of outcome, litigation can have an adverse impact on Synopsys because of the defense costs, diversion of management resources and other factors.
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.
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 Hungarian subsidiary (Synopsys Hungary). Synopsys Hungary contested the assessment with the Hungarian Administrative Court (Administrative Court). As required under Hungarian law, Synopsys Hungary paid the assessment and recorded a tax expense due to an unrecognized tax benefit of $17.4 million, which is net of estimated U.S. foreign tax credits. The Administrative Court found against Synopsys Hungary, and we appealed to the Hungarian Supreme Court. During 2021, the Hungarian Supreme Court heard our appeal and remanded the case to the Administrative Court for further proceedings. The Administrative Court once again ruled against Synopsys Hungary and we filed another appeal with the Hungarian Supreme Court. The Hungarian Supreme Court heard our appeal on January 27, 2022, vacated the lower court's decision and remanded the case back to the Administrative Court for further proceedings. We expect to receive the Hungarian Supreme Court's written decision in the second quarter of fiscal 2022.
For further discussion of the Hungary audit, see Note 18 of Notes to Unaudited Condensed Consolidated Financial Statements under the heading “Non-U.S. Examinations.”
Item 1A. Risk Factors
A description of the risk factors associated with our business is set forth below. The risks and uncertainties described below could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report. Investors should carefully consider these risks and uncertainties before investing in our common stock.
COVID-19 Pandemic Risks
The COVID-19 pandemic could have a material adverse effect on our business, operations and financial condition.
The COVID-19 pandemic has caused minor disruptions to our business operations to date and could have a material adverse effect on our business, operations and financial condition in the future. For example, we have previously experienced limited hardware supply chain and logistical challenges as well as a slowdown in customer commitments in our Software Integrity segment. In response to the COVID-19 pandemic, governments and businesses have taken unprecedented actions to contain the virus, including requiring social distancing, implementing travel restrictions, instituting shelter-in-place orders and various other restrictions on non-essential businesses. These restrictions have significantly curtailed global economic activity and have caused substantial volatility and disruption in global financial markets. We transitioned most of our employees in affected regions to work remotely in order to comply with applicable restrictions and government requirements, and implemented travel restrictions and other changes to our business operations. We are continuing to transition employees back into offices in select jurisdictions in conformity with local guidelines and regulations. Each office must follow physical distancing guidelines and affirmative health measures in compliance with applicable local, state and national requirements. Although we have been able to navigate workplace restrictions and limitations with minimal disruptions to our business operations to date, we may further modify our business practices and real estate needs in response to the risks and negative impacts caused by the continuing COVID-19 pandemic, but we cannot be certain that these measures will continue to be successful.
The extent to which the COVID-19 pandemic impacts our business operations in future periods will depend on multiple uncertain factors, including the duration and scope of the pandemic, its overall negative impact on the global economy and, in some cases, the regional and national economies of areas experiencing localized surges in COVID-19 cases, continued responses by governments and businesses to COVID-19 and its variants, acceptance and effectiveness of vaccines, the ability to secure timely payment from customers, the ability to accurately estimate customer demand, reduced willingness of current and potential customers to purchase our products and services due to their own business and market uncertainties, the ability of our business partners and third-party providers to fulfill their responsibilities and commitments, the ability to secure adequate and timely supply of equipment and materials from suppliers for our hardware products, and the ability to develop and deliver our products. While our operations have experienced minor disruptions to date in connection with localized surges in cases, a continued and sustained increase in the amount of COVID-19 cases, or the emergence of additional variants, in countries or regions where we have operations could have a material adverse effect on our or our customers' businesses, operations and financial conditions. In addition, continued weak economic conditions may result in impairment in value of our tangible and intangible assets. The impact of the COVID-19 pandemic may also have the effect of heightening many of the other risks and uncertainties described in this “Risk Factors” section.
Industry Risks
Uncertainty in the global economy, and its potential impact on the semiconductor and electronics industries in particular, may negatively affect our business, operating results and financial condition.
Uncertainty caused by the recent challenging global economic conditions, including due to the effects of the continuing COVID-19 pandemic, could lead some of our customers to postpone their decision-making, decrease their spending and/or delay their payments to us. Such caution by customers could, among other things, limit our ability to maintain or increase our sales or recognize revenue from committed contracts. Outside of a slowdown in customer commitments in our Software Integrity segment, we have not seen evidence of impacts on customer orders from the COVID-19 pandemic to date.
We cannot predict the stability of the economy as a whole or the industries in which we operate. Economic conditions could deteriorate in the future, and, in particular, the semiconductor and electronics industries could fail to grow, including as the result of the effects of, among other things, the COVID-19 pandemic, a sustained global
semiconductor shortage, inflation, supply chain disruptions or delays, and any disruption of international trade relationships such as tariffs, export licenses or other government trade restrictions. Furthermore, China’s stated policy of becoming a global leader in the semiconductor industry may lead to increased competition and further disruption of international trade relationships, including, but not limited to, additional government trade restrictions. For more on risks related to government trade restrictions such as the United States government’s “Entity List,” see “Business Operations Risks–The global nature of our operations exposes us to increased risks and compliance obligations that may adversely affect our business.”
Adverse economic conditions affect demand for devices that our products help create, such as the ICs incorporated in personal computers, smartphones and automobiles, and servers. Longer-term reduced demand for these or other products could result in reduced demand for design solutions and significant decreases in our average selling prices and product sales over time. Future downturns could also adversely affect our business. In addition, if our customers or distributors build elevated inventory levels, we could experience a decrease in short-term and/or long-term demand for our products. If any of these events or disruptions were to occur, the bookings for our products and services could be adversely affected along with our business, operating results and financial condition. Further, the negative impact of these events or disruptions may be deferred due to our business model. Similarly, in the event of future improvements in economic conditions for our customers, the positive impact on our revenues and financial results may be deferred due to our business model.
Further economic instability could also adversely affect the banking and financial services industry and result in credit downgrades of the banks we rely on for foreign currency forward contracts, credit and banking transactions, and deposit services, or cause them to default on their obligations. Additionally, the banking and financial services industries are subject to complex laws and heavily regulated. There is uncertainty regarding how proposed, contemplated or future changes to the laws, policies and regulations governing our industry, the banking and financial services industry and the economy could affect our business, including rising interest rates. A deterioration of conditions in worldwide credit markets could limit our ability to obtain external financing to fund our operations and capital expenditures. In addition, difficult economic conditions may also result in a higher rate of losses on our accounts receivable due to credit defaults. Any of the foregoing could cause adverse effects on our business, operating results and financial condition, and could cause our stock price t
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Item 6. Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SYNOPSYS, INC. | ||||||||
| Date: February 18, 2022 | By: | /s/ TRAC PHAM | ||||||
| Trac Pham Chief Financial Officer (Principal Financial Officer) |