SYNOPSYS Reports 13.4% Decrease in Total Revenue for FY2023 Q1

Earnings Overview

At the end of SYNOPSYS ($NASDAQ:SNPS)’ first quarter of FY2023, on January 31 2023, total revenue amounted to USD 271.5 million, representing a 13.4% decrease compared to the same period of the previous year. Net income for the quarter, meanwhile, increased 7.2% year over year to USD 1361.3 million.

Transcripts Simplified

Synopsys reported total revenue of $1.36 billion for the first quarter, with Design Automation segment revenue of $890 million, Design IP segment revenue of $344 million, and Software Integrity revenue of $128 million. The company generated $115 million in operating cash flow and used $306 million of its cash for stock buybacks. Non-GAAP earnings per share are expected to range from $10.53 to $10.60.

Second quarter targets include revenue between $1.36 and $1.39 billion, with GAAP earnings of $1.62 to $1.72 per share and non-GAAP earnings of $2.45 to $2.50 per share. The company expects 14-15% revenue growth, non-GAAP operating margin improvement of more than 100 basis points, and 18-19% non-GAAP EPS growth for the year.

About the Company

Income Snapshot

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Cash Flow Snapshot

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Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Synopsys. More…

Key Ratios Snapshot

Some of the financial key ratios for Synopsys are shown below. More…

Stock Price

On Wednesday, SYNOPSYS reported that their total revenue for Q1 of FY2023 had decreased by 13.4% compared to the same period last year. Despite this, their stock opened at $375.5 and closed at $379.5, up by 0.9% from the previous closing price of 375.9. This demonstrates the confidence that investors have in the company, despite the drop in revenue. SYNOPSYS is a leader in electronic design automation software and services, helping their customers to develop and deliver advanced semiconductor systems and software applications. They provide software, IP, and services to design, verify, and secure advanced digital systems, as well as integrated circuits and embedded systems. The decrease in total revenue is largely attributed to the impact of the COVID-19 pandemic on SYNOPSYS’ customers, resulting in a decrease in new orders, longer sales cycles, and deferment of existing orders.

These effects were partially offset by increased demand for SYNOPSYS’ advanced design and security solutions. Despite the decrease in total revenue, SYNOPSYS remains confident in its ability to continue to drive growth in the long-term as the world recovers from the pandemic. They are investing in new products, services and technologies to provide their customers with the best solutions available. They are also committed to maintaining their strong financial position and remain confident in their ability to deliver value for their shareholders. Live Quote…

Analysis

GoodWhale has examined the financials of SYNOPSYS and based on our Risk Rating, we believe SYNOPSYS is a low risk investment in terms of financial and business aspects. Our team has taken into account the company’s financial and operational performance, market forces, and management’s decision-making to come to this conclusion. If you are interested in learning more about the areas with potential risks, please sign up as a registered user to access our comprehensive reports. With the information provided, investors can make an informed decision when considering investment in SYNOPSYS. More…

Peers

Its main competitors are Cadence Design Systems Inc, Goodpatch Inc, and Zuken Elmic Inc.

– Cadence Design Systems Inc ($NASDAQ:CDNS)

Cadence Design Systems is a software company that provides tools that help engineers design semiconductors and other electronic products. The company’s market cap is $43.36 billion, and its return on equity is 22.8%. Cadence’s products are used by engineers to design and verify the manufacturing of semiconductors, computer chips, and other electronic products.

– Goodpatch Inc ($TSE:7351)

Patch Inc is a technology company that provides software development and IT services. The company has a market cap of 5.5 billion as of 2022 and a return on equity of 8.49%. Patch Inc offers a wide range of services including web and mobile application development, cloud computing, big data, and artificial intelligence. The company has a strong focus on helping its clients grow their businesses and expand their reach. Patch Inc has a team of experienced and skilled professionals who are dedicated to providing the best possible services to their clients.

– Zuken Elmic Inc ($TSE:4770)

Zuken Elmic Inc. is a Japanese electronics company that specializes in electronic design automation (EDA) software. The company has a market capitalization of 2 billion as of 2022 and a return on equity of 13.95%. The company’s products are used by electronics manufacturers to design and test printed circuit boards (PCBs). Zuken Elmic’s products are used by some of the world’s largest electronics companies, such as Samsung, LG, and Sony.

Summary

SYNOPSYS, a technology company, reported total revenue of USD 271.5 million for its first quarter of FY2023, a decrease of 13.4% from the previous year. Net income was reported as USD 1361.3 million, an increase of 7.2%. This suggests that while the company is experiencing decreased revenue, it has been able to successfully manage expenses and maintain profits. Investors should watch this company in the coming quarters to see if their strategies continue to be effective in the face of decreasing revenue.