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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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56-1546236
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(State or other jurisdiction of
incorporation or organization) |
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(I.R.S. Employer
Identification No.) |
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690 East Middlefield Road,
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Mountain View,
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California
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94043
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value
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SNPS
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Nasdaq Global Select Market
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Large accelerated filer
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ý
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Accelerated Filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page No.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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•
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our business, product and platform strategies;
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our business outlook;
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the potential impact of the COVID-19 pandemic on our business;
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the continuation of current industry trends towards customer and vendor consolidation, and the impact of such consolidation;
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prior and future acquisitions, including the expected benefits and risks of completed acquisitions;
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the impact of macroeconomic conditions and trade disruptions on our business and our customers’ businesses;
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demand for our products and our customers’ products;
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the expected realization of our backlog;
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customer license renewals;
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the completion of development of our unfinished products, or further development or integration of our existing products;
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technological trends in integrated circuit design;
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our ability to successfully compete in the markets in which we serve;
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our license mix, our business model, and variability in our revenue;
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litigation;
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our ability to protect our intellectual property;
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the impact of new and recently adopted accounting pronouncements;
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our cash, cash equivalents and cash generated from operations;
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our available-for-sale securities; and
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our future liquidity requirements.
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Item 1. Business
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Digital and custom IC design and field programmable gate array (FPGA) design, which includes software tools to design an IC;
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Verification, which includes technology to verify that an IC design behaves as intended; and
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Manufacturing, which includes products that both enable early manufacturing process development and convert IC design layouts into the masks used to manufacture the chips.
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VC SpyGlass™ family of static verification technologies including lint, CDC (clock domain crossing), RDC (reset domain crossing), Constraint Checking, Synopsys TestMAX Advisor, and low-power analysis and verification;
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VCS® functional verification solution, our comprehensive RTL and gate-level simulation technology, including Fine-Grained Parallelism (FGP);
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Verdi® automated debug system, the industry’s most comprehensive SoC debug;
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VC Formal™, our next-generation formal verification product;
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ZeBu® emulation systems, which use high-performance hardware to emulate SoC designs so that designers can accelerate verification of large complex SoCs and perform earlier verification of the SoC together with software; and
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Other principal individual verification solutions, including CustomSim™, FastSPICE and FineSim® SPICE/FastSPICE circuit simulation and analysis products, HSPICE® circuit simulator, and CustomExplorer™ Ultra mixed-signal regression and analysis environment.
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High-quality solutions for widely used wired and wireless interfaces such as USB, PCI Express, DDR, Ethernet, SATA, MIPI, HDMI, and Bluetooth Low Energy;
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Logic libraries and embedded memories, including memory compilers, non-volatile memory, standard cells, and integrated test and repair;
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Processor solutions, including configurable ARC® processor cores, software, Embedded Vision processor cores and application-specific instruction-set processor (ASIP) tools for embedded applications;
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IP subsystems for audio, sensor, and data fusion functionality that combine IP blocks, an efficient processor, and software into an integrated, pre-verified subsystem;
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Security IP solutions, including cryptographic cores and software, security subsystems, platform security and content protection IP;
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An industry-leading offering of IP for the automotive market, optimized for strict functional safety and reliability standards such as ISO 26262;
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Analog IP including data converters and audio codecs; and
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SoC infrastructure IP, datapath and building block IP, mathematical and floating-point components, Arm® AMBA® interconnect fabric and peripherals, and verification IP.
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HAPS® FPGA-based prototyping systems, which are integrated and scalable hardware-software solutions for early software development and faster time to market;
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Virtualizer™ virtual prototyping solution, which addresses the increasing development challenges associated with software-rich semiconductor and electronic products by accelerating both the development and deployment of virtual prototypes; and
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Platform Architect solution, which provides for early analysis and optimization of multi-core SoC architectures for performance and power.
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Polaris Software Integrity Platform™, which is designed to provide customers with an easy-to-use and integrated platform that enables organizations to intelligently orchestrate software testing or integrate Synopsys products and third-party tools into DevOps workflows. Introduced in April 2019 with its initial configuration, Polaris Software Integrity Platform™ will be enhanced throughout 2021 and beyond;
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Coverity® static analysis tools, which analyze software code to find crash-causing bugs, incorrect program behavior, the latest security vulnerabilities, memory leaks and other performance-degrading flaws;
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Black Duck™ software composition analysis tools, which scan binary and source code for license and compliance issues and other known security vulnerabilities stemming from incorporated third-party and open source code;
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Seeker® IAST tool, which identifies exploitable security vulnerabilities while web applications are running, thereby verifying results and eliminating false positives; and
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Defensics® fuzz testing tools, which examine security vulnerabilities in software binaries and libraries, particularly network protocols and file formats, by systematically sending invalid or unexpected inputs to the system under test.
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Name
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Age
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Position
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Aart J. de Geus
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66
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Co-Chief Executive Officer and Chairman of the Board of Directors
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Chi-Foon Chan
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71
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Co-Chief Executive Officer and President
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Sassine Ghazi
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50
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Chief Operating Officer
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Trac Pham
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51
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Chief Financial Officer
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Joseph W. Logan
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61
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Sales and Corporate Marketing Officer
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John F. Runkel, Jr.
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65
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General Counsel and Corporate Secretary
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Item 1A. Risk Factors
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Our ability to anticipate and lead critical development cycles and technological shifts, innovate rapidly and efficiently, improve our existing software and hardware products, and successfully develop or acquire such new products;
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Our ability to offer products that provide both a high level of integration into a comprehensive platform and a high level of individual product performance;
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Our ability to enhance the value of our offerings through more favorable terms such as expanded license usage, future purchase rights, price discounts and other differentiating rights, such as multiple tool copies, post-contract customer support, “re-mix” rights that allow customers to exchange the software they initially licensed for other Synopsys products, and the ability to purchase pools of technology;
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Our ability to manage an efficient supply chain to ensure availability of hardware products;
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Our ability to compete on the basis of payment terms; and
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Our ability to provide engineering and design consulting for our products.
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Ineffective or weaker legal protection of intellectual property rights;
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Uncertain economic and political conditions in countries where we do business;
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Government trade restrictions, including tariffs, export licenses, or other trade barriers, and changes to existing trade arrangements between various countries such as China;
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Difficulties in adapting to cultural differences in the conduct of business, which may include business practices in which we are prohibited from engaging by the Foreign Corrupt Practices Act or other anti-corruption laws;
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Financial risks such as longer payment cycles and difficulty in collecting accounts receivable;
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Inadequate local infrastructure that could result in business disruptions;
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Additional taxes, interest, and potential penalties, and uncertainty around changes in tax laws of various countries; and
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Other factors beyond our control such as natural disasters, terrorism, civil unrest, war, and infectious diseases and pandemics, including COVID-19.
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Changes in demand for our products-especially products, such as hardware, generating upfront revenue-due to fluctuations in demand for our customers’ products and due to constraints in our customers’ budgets for research and development and EDA products and services;
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Changes in demand for our products due to customers reducing their expenditures, whether as a cost-cutting measure or a result of their insolvency or bankruptcy, and whether due to the COVID-19 pandemic or other reasons;
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Product competition in the EDA industry, which can change rapidly due to industry or customer consolidation and technological innovation;
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Our ability to innovate and introduce new products and services or effectively integrate products and technologies that we acquire;
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Failures or delays in completing sales due to our lengthy sales cycle, which often includes a substantial customer evaluation and approval process because of the complexity of our products and services;
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Our ability to implement effective cost control measures;
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Our dependence on a relatively small number of large customers, and on such customers continuing to renew licenses and purchase additional products from us, for a large portion of our revenue;
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Changes to the amount, composition and valuation of, and any impairments to or write-offs of, our inventory;
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Changes in the mix of our products sold, as increased sales of our products with lower gross margins, such as our hardware products, may reduce our overall margins;
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Expenses related to our acquisition and integration of businesses and technology;
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Changes in tax rules, as well as changes to our effective tax rate, including the tax effects of infrequent or unusual transactions and tax audit settlements;
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Delays, increased costs or quality issues resulting from our reliance on third parties to manufacture our hardware products, which includes a sole supplier for certain hardware components;
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Natural variability in the timing of IP drawdowns, which can be difficult to predict;
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General economic and political conditions that affect the semiconductor and electronics industries, such as disruptions to international trade relationships, including tariffs, export licenses, or other trade barriers affecting our or our suppliers’ products, as well as impacts due to the COVID-19 pandemic; and
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Changes in accounting standards, which may impact the way we recognize our revenue and costs and impact our earnings.
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Cancellations or changes in levels of orders or the mix between upfront products revenue and time-based products revenue;
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Delay of one or more orders for a particular period, particularly orders generating upfront products revenue, such as hardware;
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Delay in the completion of professional services projects that require significant modification or customization and are accounted for using the percentage of completion method;
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Delay in the completion and delivery of IP products in development as to which customers have paid for early access;
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Customer contract amendments or renewals that provide discounts or defer revenue to later periods; and
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The levels of our hardware and IP revenues, which are recognized upfront and are primarily dependent upon our ability to provide the latest technology and meet customer requirements.
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Assert claims of infringement of our intellectual property;
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Defend our products from piracy;
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Protect our trade secrets or know-how; or
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Determine the enforceability, scope and validity of the propriety rights of others.
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Potential negative impact on our earnings per share;
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Failure of acquired products to achieve projected sales;
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Problems in integrating the acquired products with our products;
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Difficulties entering into new markets in which we are not experienced or where competitors may have stronger positions;
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Potential downward pressure on operating margins due to lower operating margins of acquired businesses, increased headcount costs and other expenses associated with adding and supporting new products;
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Difficulties in retaining and integrating key employees;
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Substantial reductions of our cash resources and/or the incurrence of debt;
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Failure to realize expected synergies or cost savings;
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Difficulties in integrating or expanding sales, marketing and distribution functions and administrative systems, including information technology and human resources systems;
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Dilution of our current stockholders through the issuance of common stock as part of the merger consideration;
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Difficulties in negotiating, governing and realizing value from strategic investments;
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Assumption of unknown liabilities, including tax and litigation, and the related expenses and diversion of resources;
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Disruption of ongoing business operations, including diversion of management’s attention and uncertainty for employees and customers, particularly during the post-acquisition integration process;
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Potential negative impacts on our relationships with customers, distributors and business partners;
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Exposure to new operational risks, regulations, and business customs to the extent acquired businesses are located in regions where we are not currently conducting business;
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The need to implement controls, processes and policies appropriate for a public company at acquired companies that may have lacked such controls, processes and policies;
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Negative impact on our net income resulting from acquisition or investment-related costs; and
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Requirements imposed by government regulators in connection with their review of an acquisition, including required divestitures or restrictions on the conduct of our business or the acquired business.
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Our ability to attract a new customer base, including in industries in which we have less experience;
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Our successful development of new sales and marketing strategies to meet customer requirements;
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Our ability to accurately predict, prepare for, and promptly respond to technological developments in new fields, including, in the case of our software quality testing and security tools and services, identifying new security vulnerabilities in software code and ensuring support for a growing number of programming languages;
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Our ability to compete with new and existing competitors in these new industries, many of which may have more financial resources, industry experience, brand recognition, relevant intellectual property rights, or established customer relationships than we currently do, and could include free and open source solutions that provide similar software quality testing and security tools without fees;
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Our ability to skillfully balance our investment in adjacent markets with investment in our existing products and services;
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Our ability to attract and retain employees with expertise in new fields;
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Our ability to sell and support consulting services at profitable margins; and
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Our ability to manage our revenue model in connection with hybrid sales of licensed products and consulting services.
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Increased dependence on a sole supplier for certain hardware components, which may reduce our control over product quality and pricing and may lead to delays in production and delivery of our hardware products, should our supplier fail to deliver sufficient quantities of acceptable components in a timely fashion;
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Increasingly variable revenue and less predictable revenue forecasts, due to fluctuations in hardware revenue, which is recognized upfront upon shipment, as opposed to most sales of software products for which revenue is recognized over time;
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Potential reductions in overall margins, as the gross margin for our hardware products is typically lower than those of our software products;
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Longer sales cycles, which create risks of insufficient, excess or obsolete inventory and variations in inventory valuation, which can adversely affect our operating results;
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Decreases or delays in customer purchases in favor of next-generation releases, which may lead to excess or obsolete inventory or require us to discount our older hardware products;
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Longer warranty periods than those of our software products, which may require us to replace hardware components under warranty, thus increasing our costs; and
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Potential impacts on our supply chain due to the effects of the COVID-19 pandemic.
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Item 1B. Unresolved Staff Comments
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Item 2. Properties
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Item 3. Legal Proceedings
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Item 4. Mine Safety Disclosures
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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*$100 invested on October 31, 2015 in stock or index, including reinvestment of dividends.
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Period
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Total
number
of shares
purchased (1)
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Average
price paid
per share (1)
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Total
number of
shares
purchased
as part of
publicly
announced
programs
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Maximum dollar
value of shares
that may yet be
purchased
under the
programs
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Month #1
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August 2, 2020 through September 5, 2020
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2,178
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$
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229.50
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2,178
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$
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499,500,159
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Month #2
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September 6, 2020 through October 3, 2020
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178,918
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$
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203.88
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178,918
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$
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463,022,956
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Month #3
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October 4, 2020 through October 31, 2020
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23,641
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$
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215.75
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23,641
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$
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457,922,451
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Total
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204,737
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$
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205.52
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204,737
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$
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457,922,451
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(1)
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Amounts are calculated based on the settlement date.
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Item 6. Selected Financial Data
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Fiscal Year Ended October 31,(1)
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2020
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2019
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2018
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2017
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2016
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(in thousands, except per share data)
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Revenue
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$
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3,685,281
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$
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3,360,694
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$
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3,121,058
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$
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2,724,880
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$
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2,422,532
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Income before provisions for income taxes
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638,159
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545,506
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363,543
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383,098
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329,548
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Provision (benefit) for income taxes(2)
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(25,288
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)
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13,139
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(68,975
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)
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246,535
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62,722
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Net income
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663,447
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532,367
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432,518
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136,563
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266,826
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Net income (loss) attributed to non-controlling interest
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(900
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)
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—
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—
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—
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—
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Net income attributed to Synopsys
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664,347
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532,367
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432,518
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136,563
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266,826
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Net income per share:
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Basic
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4.40
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3.55
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2.90
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0.91
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1.76
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Diluted
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4.27
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3.45
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2.82
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0.88
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1.73
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Working capital (deficit)
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409,295
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(13,536
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)
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(558,618
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)
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68,484
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|
|
1,992
|
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Total assets
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8,030,062
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6,405,160
|
|
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6,145,974
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5,396,414
|
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5,240,365
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Long-term debt
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100,823
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|
|
120,093
|
|
|
125,535
|
|
|
134,063
|
|
|
—
|
|
|||||
Stockholders’ equity
|
4,912,367
|
|
|
4,088,876
|
|
|
3,485,015
|
|
|
3,279,724
|
|
|
3,195,146
|
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(1)
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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 2018 was a 53-week year and ended on November 3, 2018. Fiscal 2020, 2019, 2017, and 2016 were 52-week years ending on October 31, 2020, November 2, 2019, October 28, 2017 and October 29, 2016, respectively.
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(2)
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Includes $13.2 million, $10.9 million, $14.7 million, $7.1 million, and $16.5 million in net tax benefits from tax settlements received in fiscal 2020, 2019, 2018, 2017, and 2016, respectively. Fiscal 2018 additionally includes a $57.8 million net benefit from tax reform and tax restructuring. Fiscal 2017 additionally includes a $166.2 million expense from our repatriation of foreign earnings. See Note 13 of Notes to Consolidated Financial Statements.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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•
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Revenues were $3.7 billion, an increase of $324.6 million or 10%, primarily due to our continued organic growth;
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•
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Total cost of revenue and operating expenses were $3.1 billion, an increase of $224.8 million or 8%, primarily due to increases in employee-related costs of $193.4 million, resulting from headcount increases through organic growth and acquisitions, partially offset by a decrease in restructuring costs of $11.1 million;
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•
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Operating income of $620.1 million, an increase of $99.9 million or 19%.
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•
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Revenue recognition;
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•
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Valuation of business combinations; and
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•
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Income taxes.
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•
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future expected cash flows from software license sales, subscriptions, support agreements, consulting contracts and acquired developed technologies and patents;
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•
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historical and expected customer attrition rates and anticipated growth in revenue from acquired customers;
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•
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the expected use of the acquired assets; and
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•
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discount rates.
|
•
|
EDA software includes digital, custom and Field Programmable Gate Array (FPGA) IC design software, verification products and obligations to provide unspecified updates and support services. EDA products and services are typically sold through 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 weighted-average term of the TSLs we entered into in fiscal 2020, 2019, and 2018 were approximately three years, respectively. Under ASC 606, 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 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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•
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IP & System Integration includes our DesignWare® IP portfolio and system-level products and services. Under ASC 606, 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.
|
•
|
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.
|
•
|
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.
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
Semiconductor & System Design Segment
|
$
|
3,327.2
|
|
|
$
|
3,026.1
|
|
|
$
|
2,840.6
|
|
|
$
|
301.1
|
|
|
10
|
%
|
|
$
|
185.5
|
|
|
7
|
%
|
Software Integrity Segment
|
358.1
|
|
|
334.6
|
|
|
280.5
|
|
|
23.5
|
|
|
7
|
%
|
|
54.1
|
|
|
19
|
%
|
|||||
Total
|
$
|
3,685.3
|
|
|
$
|
3,360.7
|
|
|
$
|
3,121.1
|
|
|
$
|
324.6
|
|
|
10
|
%
|
|
$
|
239.6
|
|
|
8
|
%
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
|
$
|
2,365.2
|
|
|
$
|
2,198.0
|
|
|
$
|
2,303.3
|
|
|
$
|
167.2
|
|
|
8
|
%
|
|
$
|
(105.3
|
)
|
|
(5
|
)%
|
Percentage of total revenue
|
64
|
%
|
|
65
|
%
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
|
$
|
735.6
|
|
|
$
|
619.8
|
|
|
$
|
357.7
|
|
|
$
|
115.8
|
|
|
19
|
%
|
|
$
|
262.1
|
|
|
73
|
%
|
Percentage of total revenue
|
20
|
%
|
|
18
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
Maintenance revenue
|
$
|
177.4
|
|
|
$
|
179.0
|
|
|
$
|
100.4
|
|
|
$
|
(1.6
|
)
|
|
(1
|
)%
|
|
$
|
78.6
|
|
|
78
|
%
|
Professional service and other revenue
|
407.1
|
|
|
363.9
|
|
|
359.6
|
|
|
43.2
|
|
|
12
|
%
|
|
4.3
|
|
|
1
|
%
|
|||||
Total
|
$
|
584.5
|
|
|
$
|
542.9
|
|
|
$
|
460.0
|
|
|
$
|
41.6
|
|
|
8
|
%
|
|
$
|
82.9
|
|
|
18
|
%
|
Percentage of total revenue
|
16
|
%
|
|
17
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
Cost of revenue
|
$
|
794.7
|
|
|
$
|
752.9
|
|
|
$
|
735.9
|
|
|
$
|
41.8
|
|
|
6
|
%
|
|
$
|
17.0
|
|
|
2
|
%
|
Operating expenses
|
2,270.5
|
|
|
2,087.5
|
|
|
2,024.9
|
|
|
183.0
|
|
|
9
|
%
|
|
62.6
|
|
|
3
|
%
|
|||||
Total
|
$
|
3,065.2
|
|
|
$
|
2,840.4
|
|
|
$
|
2,760.8
|
|
|
$
|
224.8
|
|
|
8
|
%
|
|
$
|
79.6
|
|
|
3
|
%
|
Total expenses as a percentage of total revenue
|
83
|
%
|
|
85
|
%
|
|
88
|
%
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
Cost of products revenue
|
$
|
487.3
|
|
|
$
|
459.1
|
|
|
$
|
448.4
|
|
|
$
|
28.2
|
|
|
6
|
%
|
|
$
|
10.7
|
|
|
2
|
%
|
Cost of maintenance and service revenue
|
254.9
|
|
|
234.2
|
|
|
203.5
|
|
|
20.7
|
|
|
9
|
%
|
|
30.7
|
|
|
15
|
%
|
|||||
Amortization of intangible assets
|
52.5
|
|
|
59.6
|
|
|
84.0
|
|
|
(7.1
|
)
|
|
(12
|
)%
|
|
(24.4
|
)
|
|
(29
|
)%
|
|||||
Total
|
$
|
794.7
|
|
|
$
|
752.9
|
|
|
$
|
735.9
|
|
|
$
|
41.8
|
|
|
6
|
%
|
|
$
|
17.0
|
|
|
2
|
%
|
Percentage of total revenue
|
22
|
%
|
|
22
|
%
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
|
$
|
1,279.0
|
|
|
$
|
1,136.9
|
|
|
$
|
1,084.8
|
|
|
$
|
142.1
|
|
|
12
|
%
|
|
$
|
52.1
|
|
|
5
|
%
|
Percentage of total revenue
|
35
|
%
|
|
34
|
%
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
|
$
|
632.0
|
|
|
$
|
632.9
|
|
|
$
|
623.0
|
|
|
$
|
(0.9
|
)
|
|
—
|
%
|
|
$
|
9.9
|
|
|
2
|
%
|
Percentage of total revenue
|
17
|
%
|
|
19
|
%
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
|
$
|
284.5
|
|
|
$
|
229.2
|
|
|
$
|
262.6
|
|
|
$
|
55.3
|
|
|
24
|
%
|
|
$
|
(33.4
|
)
|
|
(13
|
)%
|
Percentage of total revenue
|
8
|
%
|
|
7
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
Included in cost of revenue
|
$
|
52.5
|
|
|
$
|
59.6
|
|
|
$
|
84.0
|
|
|
$
|
(7.1
|
)
|
|
(12
|
)%
|
|
$
|
(24.4
|
)
|
|
(29
|
)%
|
Included in operating expenses
|
38.8
|
|
|
41.3
|
|
|
41.6
|
|
|
(2.5
|
)
|
|
(6
|
)%
|
|
(0.3
|
)
|
|
(1
|
)%
|
|||||
Total
|
$
|
91.3
|
|
|
$
|
100.9
|
|
|
$
|
125.6
|
|
|
$
|
(9.6
|
)
|
|
(10
|
)%
|
|
$
|
(24.7
|
)
|
|
(20
|
)%
|
Percentage of total revenue
|
2
|
%
|
|
3
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
Fiscal Year
|
Balance at Beginning of Period
|
|
Costs Incurred
|
|
Cash Payments
|
|
Balance at End of Period
|
||||||||
|
(in millions)
|
||||||||||||||
2020
|
$
|
22.6
|
|
|
$
|
36.1
|
|
|
$
|
(57.4
|
)
|
|
$
|
1.3
|
|
2019
|
$
|
8.1
|
|
|
$
|
47.2
|
|
|
$
|
(32.7
|
)
|
|
$
|
22.6
|
|
2018
|
$
|
17.5
|
|
|
$
|
12.7
|
|
|
$
|
(22.1
|
)
|
|
$
|
8.1
|
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
Interest income
|
$
|
3.6
|
|
|
$
|
6.9
|
|
|
$
|
5.3
|
|
|
$
|
(3.3
|
)
|
|
(48
|
)%
|
|
$
|
1.6
|
|
|
30
|
%
|
Interest expense
|
(5.1
|
)
|
|
(11.7
|
)
|
|
(15.6
|
)
|
|
6.6
|
|
|
(56
|
)%
|
|
3.9
|
|
|
(25
|
)%
|
|||||
Gain (loss) on assets related to executive deferred compensation plan
|
21.5
|
|
|
27.8
|
|
|
4.6
|
|
|
(6.3
|
)
|
|
(23
|
)%
|
|
23.2
|
|
|
504
|
%
|
|||||
Foreign currency exchange gain (loss)
|
5.5
|
|
|
3.6
|
|
|
3.6
|
|
|
1.9
|
|
|
53
|
%
|
|
—
|
|
|
—
|
%
|
|||||
Other, net
|
(7.5
|
)
|
|
(1.3
|
)
|
|
5.4
|
|
|
(6.2
|
)
|
|
477
|
%
|
|
(6.7
|
)
|
|
(124
|
)%
|
|||||
Total
|
$
|
18.0
|
|
|
$
|
25.3
|
|
|
$
|
3.3
|
|
|
$
|
(7.3
|
)
|
|
(29
|
)%
|
|
$
|
22.0
|
|
|
667
|
%
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||
Adjusted operating income
|
$
|
990.8
|
|
|
$
|
806.6
|
|
|
$
|
701.3
|
|
|
$
|
184.2
|
|
|
23
|
%
|
|
$
|
105.3
|
|
|
15
|
%
|
Adjusted operating margin
|
30
|
%
|
|
27
|
%
|
|
25
|
%
|
|
3
|
%
|
|
11
|
%
|
|
2
|
%
|
|
8
|
%
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||||||||
|
(dollars in millions)
|
|
|
|
|
||||||||||||||||||||
Adjusted operating income
|
$
|
40.8
|
|
|
$
|
32.2
|
|
|
$
|
(10.6
|
)
|
|
$
|
8.6
|
|
|
27
|
%
|
|
$
|
42.8
|
|
|
(404
|
)%
|
Adjusted operating margin
|
11
|
%
|
|
10
|
%
|
|
(4
|
)%
|
|
1
|
%
|
|
10
|
%
|
|
14
|
%
|
|
(350
|
)%
|
•
|
A tax on global intangible low-tax income (GILTI), which is determined annually based on our aggregate foreign subsidiaries' income in excess of certain qualified business asset investment return. In fiscal 2019, we adopted an accounting policy to account for the tax effects of GILTI in the period that it is subject to such tax.
|
•
|
A base erosion and anti-abuse tax (BEAT), which functions as a minimum tax that partially disallows deductions for certain related party transactions and certain tax credits.
|
•
|
A special tax deduction for FDII, which, in general, allows a deduction of certain intangible income earned in the U.S. and derived from foreign sources.
|
|
Year Ended October 31,
|
|
$ Change
|
|
% Change
|
|||||||||
|
2020
|
|
2019
|
|
||||||||||
|
(dollars in millions)
|
|||||||||||||
Cash and cash equivalents
|
$
|
1,235.7
|
|
|
$
|
728.6
|
|
|
$
|
507.1
|
|
|
70
|
%
|
|
Year Ended October 31,
|
|
$ Change
|
|
$ Change
|
||||||||||||||
|
2020
|
|
2019
|
|
2018
|
|
2019 to 2020
|
|
2018 to 2019
|
||||||||||
|
(dollars in millions)
|
||||||||||||||||||
Cash provided by operating activities
|
$
|
991.3
|
|
|
$
|
800.5
|
|
|
$
|
424.4
|
|
|
$
|
190.8
|
|
|
$
|
376.1
|
|
Cash used in investing activities
|
$
|
(360.4
|
)
|
|
$
|
(235.9
|
)
|
|
$
|
(743.5
|
)
|
|
$
|
(124.5
|
)
|
|
$
|
507.6
|
|
Cash provided by (used in) financing activities
|
$
|
(140.6
|
)
|
|
$
|
(561.9
|
)
|
|
$
|
5.1
|
|
|
$
|
421.3
|
|
|
$
|
(567.0
|
)
|
|
Year Ended October 31,
|
|
|
|
|
|||||||||
|
2020
|
|
2019
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in millions)
|
|
|
|
|
|||||||||
Accounts receivable, net
|
$
|
780.7
|
|
|
$
|
553.9
|
|
|
$
|
226.8
|
|
|
41
|
%
|
Fiscal year
|
(in thousands)
|
||
2021
|
$
|
27,187
|
|
2022
|
75,000
|
|
|
Total
|
$
|
102,187
|
|
|
Total
|
|
Fiscal 2021
|
|
Fiscal 2022/ Fiscal 2023
|
|
Fiscal 2024/ Fiscal 2025
|
|
Thereafter
|
|
Other
|
||||||||||||
|
(in thousands)
|
|
|
||||||||||||||||||||
Lease Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Leases(1)
|
$
|
659,559
|
|
|
$
|
87,592
|
|
|
$
|
155,057
|
|
|
$
|
125,958
|
|
|
$
|
290,952
|
|
|
$
|
—
|
|
Purchase Obligations(2)
|
420,585
|
|
|
273,101
|
|
|
147,484
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Term Loan(3)
|
102,187
|
|
|
27,187
|
|
|
75,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other Obligations(4)
|
26,778
|
|
|
26,778
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Long term accrued income taxes(5)
|
25,178
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,178
|
|
||||||
Total
|
$
|
1,234,287
|
|
|
$
|
414,658
|
|
|
$
|
377,541
|
|
|
$
|
125,958
|
|
|
$
|
290,952
|
|
|
$
|
25,178
|
|
(1)
|
See Note 8 of Notes to Consolidated Financial Statements.
|
(2)
|
Purchase obligations represent an estimate of all open purchase orders and contractual obligations in the ordinary course of business for which we have not received the goods or services as of October 31, 2020. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.
|
(3)
|
These commitments relate to the principal of the Term Loan and a credit facility as discussed in Other Commitments above.
|
(4)
|
These other obligations include fees associated with our credit facility.
|
(5)
|
Long-term accrued income taxes represent uncertain tax benefits as of October 31, 2020. Currently, a reasonably reliable estimate of timing of payments related to uncertain tax benefits in individual years beyond fiscal 2020 cannot be made due to uncertainties in timing of the commencement and settlement of potential tax audits.
|
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
|
|
Maturing in Year Ending October 31,
|
||||||||||||||||||||||
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and thereafter
|
|
Total
|
|
Fair Value
|
||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Cash & Cash equivalents
|
$
|
1,097,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,097,122
|
|
|
$
|
1,097,122
|
|
|
Approx. average interest rate
|
0.13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Short-term debt (variable rate):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Term Loan
|
$
|
27,187
|
|
|
$
|
75,000
|
|
|
—
|
|
|
—
|
|
|
|
|
$
|
102,187
|
|
|
$
|
102,187
|
|
Average interest rate
|
LIBOR +
1.125% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Credit Facility in China
|
$
|
25,823
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
25,823
|
|
|
$
|
25,823
|
|
||
Average interest rate
|
LPR + 0.74% of such rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Notional
Amount in
U.S. Dollars
|
|
Average
Contract
Rate
|
|||
|
(in thousands)
|
|
|
|||
Forward Contract Values:
|
|
|
|
|||
Japanese yen
|
$
|
472,000
|
|
|
104.706
|
|
Indian rupee
|
138,080
|
|
|
76.984
|
|
|
Euro
|
76,076
|
|
|
1.141
|
|
|
Hungarian forint
|
70,000
|
|
|
308.939
|
|
|
Canadian dollar
|
45,658
|
|
|
1.339
|
|
|
Chinese renminbi
|
43,130
|
|
|
6.725
|
|
|
Taiwanese dollar
|
38,735
|
|
|
28.751
|
|
|
British pound sterling
|
21,826
|
|
|
1.262
|
|
|
Korean won
|
21,547
|
|
|
1,183.202
|
|
|
Armenian dram
|
21,243
|
|
|
479.960
|
|
|
Israel shekel
|
20,116
|
|
|
3.369
|
|
|
Singapore dollar
|
8,277
|
|
|
1.359
|
|
|
Swiss franc
|
4,545
|
|
|
0.909
|
|
|
|
$
|
981,233
|
|
|
|
Item 8. Financial Statements and Supplementary Data
|
•
|
Obtaining an understanding of the Company’s overall tax structure and assessing the Company’s compliance with U.S. federal tax laws,
|
•
|
Evaluating U.S. federal tax law and assessing the Company’s interpretation of the tax law, and
|
•
|
Inspecting correspondence, assessments, and settlements from taxing authorities to assess the Company’s determination of its tax positions having more than a 50% likelihood to be sustained upon examination.
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,235,653
|
|
|
$
|
728,597
|
|
Accounts receivable, net
|
780,709
|
|
|
553,895
|
|
||
Inventories, net
|
192,333
|
|
|
141,518
|
|
||
Income taxes receivable and prepaid taxes
|
32,355
|
|
|
24,855
|
|
||
Prepaid and other current assets
|
308,167
|
|
|
290,052
|
|
||
Total current assets
|
2,549,217
|
|
|
1,738,917
|
|
||
Property and equipment, net
|
483,818
|
|
|
429,532
|
|
||
Operating lease right-of-use assets, net
|
465,818
|
|
|
—
|
|
||
Goodwill
|
3,365,114
|
|
|
3,171,179
|
|
||
Intangible assets, net
|
254,322
|
|
|
279,374
|
|
||
Long-term prepaid taxes
|
8,276
|
|
|
15,503
|
|
||
Deferred income taxes
|
497,546
|
|
|
390,129
|
|
||
Other long-term assets
|
405,951
|
|
|
380,526
|
|
||
Total assets
|
$
|
8,030,062
|
|
|
$
|
6,405,160
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
623,664
|
|
|
$
|
506,459
|
|
Operating lease liabilities, current
|
73,173
|
|
|
—
|
|
||
Accrued income taxes
|
27,738
|
|
|
15,904
|
|
||
Deferred revenue
|
1,388,263
|
|
|
1,212,476
|
|
||
Short-term debt
|
27,084
|
|
|
17,614
|
|
||
Total current liabilities
|
2,139,922
|
|
|
1,752,453
|
|
||
Operating lease liabilities, non-current
|
462,411
|
|
|
—
|
|
||
Long-term accrued income taxes
|
25,178
|
|
|
29,911
|
|
||
Long-term deferred revenue
|
104,850
|
|
|
90,102
|
|
||
Long-term debt
|
100,823
|
|
|
120,093
|
|
||
Other long-term liabilities
|
284,511
|
|
|
323,725
|
|
||
Total liabilities
|
3,117,695
|
|
|
2,316,284
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value: 400,000 shares authorized; 152,618 and 150,331 shares outstanding, respectively
|
1,528
|
|
|
1,503
|
|
||
Capital in excess of par value
|
1,653,166
|
|
|
1,635,455
|
|
||
Retained earnings
|
3,795,397
|
|
|
3,164,144
|
|
||
Treasury stock, at cost: 4,643 and 6,930 shares, respectively
|
(488,613
|
)
|
|
(625,642
|
)
|
||
Accumulated other comprehensive income (loss)
|
(54,074
|
)
|
|
(92,447
|
)
|
||
Total Synopsys stockholders’ equity
|
4,907,404
|
|
|
4,083,013
|
|
||
Non-controlling interest
|
4,963
|
|
|
5,863
|
|
||
Total stockholders’ equity
|
4,912,367
|
|
|
4,088,876
|
|
||
Total liabilities and stockholders’ equity
|
$
|
8,030,062
|
|
|
$
|
6,405,160
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Time-based products
|
$
|
2,365,199
|
|
|
$
|
2,197,965
|
|
|
$
|
2,303,317
|
|
Upfront products
|
735,572
|
|
|
619,791
|
|
|
357,698
|
|
|||
Maintenance and service
|
584,510
|
|
|
542,938
|
|
|
460,043
|
|
|||
Total revenue
|
3,685,281
|
|
|
3,360,694
|
|
|
3,121,058
|
|
|||
Cost of revenue:
|
|
|
|
|
|
||||||
Products
|
487,307
|
|
|
459,127
|
|
|
448,430
|
|
|||
Maintenance and service
|
254,931
|
|
|
234,196
|
|
|
203,434
|
|
|||
Amortization of intangible assets
|
52,452
|
|
|
59,623
|
|
|
84,034
|
|
|||
Total cost of revenue
|
794,690
|
|
|
752,946
|
|
|
735,898
|
|
|||
Gross margin
|
2,890,591
|
|
|
2,607,748
|
|
|
2,385,160
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
1,279,022
|
|
|
1,136,932
|
|
|
1,084,822
|
|
|||
Sales and marketing
|
632,010
|
|
|
632,890
|
|
|
622,978
|
|
|||
General and administrative
|
284,530
|
|
|
229,218
|
|
|
262,560
|
|
|||
Amortization of intangible assets
|
38,829
|
|
|
41,291
|
|
|
41,630
|
|
|||
Restructuring charges
|
36,059
|
|
|
47,186
|
|
|
12,945
|
|
|||
Total operating expenses
|
2,270,450
|
|
|
2,087,517
|
|
|
2,024,935
|
|
|||
Operating income
|
620,141
|
|
|
520,231
|
|
|
360,225
|
|
|||
Other income (expense), net
|
18,018
|
|
|
25,275
|
|
|
3,318
|
|
|||
Income before income taxes
|
638,159
|
|
|
545,506
|
|
|
363,543
|
|
|||
Provision (benefit) for income taxes
|
(25,288
|
)
|
|
13,139
|
|
|
(68,975
|
)
|
|||
Net income
|
663,447
|
|
|
532,367
|
|
|
432,518
|
|
|||
Net income (loss) attributed to non-controlling interest
|
(900
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributed to Synopsys
|
$
|
664,347
|
|
|
$
|
532,367
|
|
|
$
|
432,518
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.40
|
|
|
$
|
3.55
|
|
|
$
|
2.90
|
|
Diluted
|
$
|
4.27
|
|
|
$
|
3.45
|
|
|
$
|
2.82
|
|
Shares used in computing per share amounts:
|
|
|
|
|
|
||||||
Basic
|
151,135
|
|
|
149,872
|
|
|
149,036
|
|
|||
Diluted
|
155,706
|
|
|
154,190
|
|
|
153,393
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Net income
|
$
|
663,447
|
|
|
$
|
532,367
|
|
|
$
|
432,518
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Change in foreign currency translation adjustment
|
30,466
|
|
|
1,360
|
|
|
(18,882
|
)
|
|||
Cash flow hedges:
|
|
|
|
|
|
||||||
Deferred gains (losses), net of tax of $(3,192), $(2,009), and $4,675 for fiscal years 2020, 2019 and 2018, respectively
|
7,834
|
|
|
4,733
|
|
|
(17,428
|
)
|
|||
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $176, $(3,672), and $2,207 for fiscal years 2020, 2019 and 2018, respectively
|
73
|
|
|
14,637
|
|
|
(10,888
|
)
|
|||
Other comprehensive income (loss), net of tax effects
|
38,373
|
|
|
20,730
|
|
|
(47,198
|
)
|
|||
Comprehensive income
|
701,820
|
|
|
553,097
|
|
|
385,320
|
|
|||
Less: Net income (loss) attributed to non-controlling interest
|
(900
|
)
|
|
—
|
|
|
—
|
|
|||
Comprehensive income attributed to Synopsys
|
$
|
702,720
|
|
|
$
|
553,097
|
|
|
$
|
385,320
|
|
|
|
|
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, 2017
|
150,445
|
|
|
$
|
1,505
|
|
|
$
|
1,622,429
|
|
|
$
|
2,143,873
|
|
|
$
|
(426,208
|
)
|
|
$
|
(65,979
|
)
|
|
$
|
3,275,620
|
|
|
$
|
4,104
|
|
|
$
|
3,279,724
|
|
Net income
|
|
|
|
|
|
|
432,518
|
|
|
|
|
|
|
432,518
|
|
|
|
|
432,518
|
|
||||||||||||||
Retained earnings adjustment due to adoption of an accounting standard in reclassification of certain tax effects from accumulated other comprehensive income (loss)
|
|
|
|
|
|
|
(293
|
)
|
|
|
|
|
|
(293
|
)
|
|
|
|
(293
|
)
|
||||||||||||||
Other comprehensive income (loss), net of tax effects
|
|
|
|
|
|
|
|
|
|
|
(47,198
|
)
|
|
(47,198
|
)
|
|
|
|
(47,198
|
)
|
||||||||||||||
Purchases of treasury stock
|
(4,688
|
)
|
|
(47
|
)
|
|
47
|
|
|
|
|
(420,000
|
)
|
|
|
|
(420,000
|
)
|
|
|
|
(420,000
|
)
|
|||||||||||
Equity forward contract
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
20,000
|
|
||||||||||||||
Common stock issued, net of shares withheld for employee taxes
|
3,508
|
|
|
35
|
|
|
(136,522
|
)
|
|
(32,410
|
)
|
|
248,526
|
|
|
|
|
79,629
|
|
|
|
|
79,629
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
138,876
|
|
|
|
|
|
|
|
|
138,876
|
|
|
|
|
138,876
|
|
||||||||||||||
Non-controlling interest in an equity investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
1,759
|
|
|
1,759
|
|
|||||||||||||
Balance at October 31, 2018
|
149,265
|
|
|
$
|
1,493
|
|
|
$
|
1,644,830
|
|
|
$
|
2,543,688
|
|
|
$
|
(597,682
|
)
|
|
$
|
(113,177
|
)
|
|
$
|
3,479,152
|
|
|
$
|
5,863
|
|
|
$
|
3,485,015
|
|
Net income
|
|
|
|
|
|
|
532,367
|
|
|
|
|
|
|
532,367
|
|
|
|
|
532,367
|
|
||||||||||||||
Retained earnings adjustment due to adoption of accounting standards related to revenue
|
|
|
|
|
|
|
257,594
|
|
|
|
|
|
|
257,594
|
|
|
|
|
257,594
|
|
||||||||||||||
Retained earnings adjustment due to adoption of an accounting standard related to income taxes
|
|
|
|
|
|
|
(130,544
|
)
|
|
|
|
|
|
(130,544
|
)
|
|
|
|
(130,544
|
)
|
||||||||||||||
Other comprehensive income (loss), net of tax effects
|
|
|
|
|
|
|
|
|
|
|
20,730
|
|
|
20,730
|
|
|
|
|
20,730
|
|
||||||||||||||
Purchases of treasury stock
|
(2,732
|
)
|
|
(27
|
)
|
|
27
|
|
|
|
|
(329,185
|
)
|
|
|
|
(329,185
|
)
|
|
|
|
(329,185
|
)
|
|||||||||||
Common stock issued, net of shares withheld for employee taxes
|
3,798
|
|
|
37
|
|
|
(163,198
|
)
|
|
(38,961
|
)
|
|
301,225
|
|
|
|
|
99,103
|
|
|
|
|
99,103
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
153,796
|
|
|
|
|
|
|
|
|
153,796
|
|
|
|
|
153,796
|
|
||||||||||||||
Balance at October 31, 2019
|
150,331
|
|
|
$
|
1,503
|
|
|
$
|
1,635,455
|
|
|
$
|
3,164,144
|
|
|
$
|
(625,642
|
)
|
|
$
|
(92,447
|
)
|
|
$
|
4,083,013
|
|
|
$
|
5,863
|
|
|
$
|
4,088,876
|
|
Net income
|
|
|
|
|
|
|
664,347
|
|
|
|
|
|
|
664,347
|
|
|
(900
|
)
|
|
663,447
|
|
|||||||||||||
Other comprehensive income (loss), net of tax effects
|
|
|
|
|
|
|
|
|
|
|
38,373
|
|
|
38,373
|
|
|
|
|
38,373
|
|
||||||||||||||
Purchases of treasury stock
|
(1,585
|
)
|
|
(14
|
)
|
|
14
|
|
|
|
|
(242,078
|
)
|
|
|
|
(242,078
|
)
|
|
|
|
(242,078
|
)
|
|||||||||||
Common stock issued, net of shares withheld for employee taxes
|
3,872
|
|
|
39
|
|
|
(230,887
|
)
|
|
(33,094
|
)
|
|
379,107
|
|
|
|
|
115,165
|
|
|
|
|
115,165
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
248,584
|
|
|
|
|
|
|
|
|
248,584
|
|
|
|
|
248,584
|
|
||||||||||||||
Balance at October 31, 2020
|
152,618
|
|
|
$
|
1,528
|
|
|
$
|
1,653,166
|
|
|
$
|
3,795,397
|
|
|
$
|
(488,613
|
)
|
|
$
|
(54,074
|
)
|
|
$
|
4,907,404
|
|
|
$
|
4,963
|
|
|
$
|
4,912,367
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
Cash flow from operating activities:
|
|
|
|
|
|
||||||
Net income attributed to Synopsys
|
$
|
664,347
|
|
|
$
|
532,367
|
|
|
$
|
432,518
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Amortization and depreciation
|
209,986
|
|
|
201,676
|
|
|
209,207
|
|
|||
Reduction of operating lease right-of-use assets
|
82,895
|
|
|
—
|
|
|
—
|
|
|||
Amortization of capitalized costs to obtain revenue contracts
|
61,185
|
|
|
62,750
|
|
|
—
|
|
|||
Stock-based compensation
|
248,584
|
|
|
155,001
|
|
|
140,032
|
|
|||
Allowance for doubtful accounts
|
20,875
|
|
|
11,669
|
|
|
3,368
|
|
|||
(Gain) loss on sale of property and investments
|
(1,994
|
)
|
|
(4,052
|
)
|
|
(93
|
)
|
|||
Deferred income taxes
|
(111,526
|
)
|
|
(82,620
|
)
|
|
(210,310
|
)
|
|||
Other non-cash
|
5,419
|
|
|
(993
|
)
|
|
(851
|
)
|
|||
Net changes in operating assets and liabilities, net of acquired assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(236,806
|
)
|
|
(8,575
|
)
|
|
(95,785
|
)
|
|||
Inventories
|
(55,024
|
)
|
|
(17,396
|
)
|
|
(65,751
|
)
|
|||
Prepaid and other current assets
|
(11,298
|
)
|
|
(49,779
|
)
|
|
(12,652
|
)
|
|||
Other long-term assets
|
(83,367
|
)
|
|
(125,749
|
)
|
|
(25,815
|
)
|
|||
Accounts payable and accrued liabilities
|
113,773
|
|
|
(19,280
|
)
|
|
49,043
|
|
|||
Operating lease liabilities
|
(78,578
|
)
|
|
—
|
|
|
—
|
|
|||
Income taxes
|
14,120
|
|
|
19,777
|
|
|
(103,841
|
)
|
|||
Deferred revenue
|
148,722
|
|
|
125,717
|
|
|
105,329
|
|
|||
Net cash provided by operating activities
|
991,313
|
|
|
800,513
|
|
|
424,399
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from sales and maturities of short-term investments
|
—
|
|
|
—
|
|
|
12,449
|
|
|||
Proceeds from sales of long-term investments
|
2,151
|
|
|
6,361
|
|
|
494
|
|
|||
Purchases of long-term investments
|
(2,762
|
)
|
|
(3,245
|
)
|
|
(3,561
|
)
|
|||
Proceeds from sale of property and equipment
|
—
|
|
|
—
|
|
|
1,662
|
|
|||
Purchases of property and equipment
|
(154,717
|
)
|
|
(198,129
|
)
|
|
(98,976
|
)
|
|||
Cash paid for acquisitions and intangible assets, net of cash acquired
|
(201,045
|
)
|
|
(36,605
|
)
|
|
(652,643
|
)
|
|||
Capitalization of software development costs
|
(4,045
|
)
|
|
(4,259
|
)
|
|
(2,950
|
)
|
|||
Net cash used in investing activities
|
(360,418
|
)
|
|
(235,877
|
)
|
|
(743,525
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from credit facilities
|
276,489
|
|
|
192,897
|
|
|
620,635
|
|
|||
Repayment of debt
|
(288,879
|
)
|
|
(524,063
|
)
|
|
(295,313
|
)
|
|||
Issuances of common stock
|
197,403
|
|
|
156,364
|
|
|
123,829
|
|
|||
Payments for taxes related to net share settlement of equity awards
|
(82,225
|
)
|
|
(57,143
|
)
|
|
(45,772
|
)
|
|||
Purchases of treasury stock
|
(242,078
|
)
|
|
(329,185
|
)
|
|
(400,000
|
)
|
|||
Other
|
(1,316
|
)
|
|
(762
|
)
|
|
1,759
|
|
|||
Net cash (used in) provided by financing activities
|
(140,606
|
)
|
|
(561,892
|
)
|
|
5,138
|
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
17,154
|
|
|
2,782
|
|
|
(11,086
|
)
|
|||
Net change in cash, cash equivalents and restricted cash
|
507,443
|
|
|
5,526
|
|
|
(325,074
|
)
|
|||
Cash, cash equivalents and restricted cash, beginning of year
|
730,527
|
|
|
725,001
|
|
|
1,050,075
|
|
|||
Cash, cash equivalents and restricted cash, end of year
|
$
|
1,237,970
|
|
|
$
|
730,527
|
|
|
$
|
725,001
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for income taxes during the year:
|
$
|
70,711
|
|
|
$
|
75,744
|
|
|
$
|
252,522
|
|
Interest payments during the year:
|
$
|
5,136
|
|
|
$
|
12,363
|
|
|
$
|
15,307
|
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Accounts receivable
|
$
|
758,341
|
|
|
$
|
524,766
|
|
Unbilled accounts receivable
|
50,932
|
|
|
38,175
|
|
||
Total accounts receivable
|
809,273
|
|
|
562,941
|
|
||
Less allowance for doubtful accounts
|
(28,564
|
)
|
|
(9,046
|
)
|
||
Total accounts receivable, net
|
$
|
780,709
|
|
|
$
|
553,895
|
|
Fiscal Year
|
Balance at
Beginning
of Period
|
|
Provisions
|
|
Write-offs(1)
|
|
Balance at
End of
Period
|
||||||||
|
(in thousands)
|
||||||||||||||
2020
|
$
|
9,046
|
|
|
$
|
20,875
|
|
|
$
|
(1,357
|
)
|
|
$
|
28,564
|
|
2019
|
$
|
5,613
|
|
|
$
|
11,669
|
|
|
$
|
(8,236
|
)
|
|
$
|
9,046
|
|
2018
|
$
|
5,165
|
|
|
$
|
3,368
|
|
|
$
|
(2,920
|
)
|
|
$
|
5,613
|
|
(1)
|
Balances written off, net of recoveries.
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Computer and other equipment
|
$
|
788,105
|
|
|
$
|
678,901
|
|
Buildings
|
129,746
|
|
|
68,708
|
|
||
Furniture and fixtures
|
72,702
|
|
|
72,437
|
|
||
Land
|
19,965
|
|
|
18,849
|
|
||
Leasehold improvements
|
242,830
|
|
|
273,985
|
|
||
|
1,253,348
|
|
|
1,112,880
|
|
||
Less accumulated depreciation and amortization(1)
|
(769,530
|
)
|
|
(683,348
|
)
|
||
Total
|
$
|
483,818
|
|
|
$
|
429,532
|
|
(1)
|
Accumulated depreciation and amortization includes write-offs due to retirement of fully amortized fixed assets.
|
|
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
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Payroll and related benefits
|
$
|
492,626
|
|
|
$
|
417,157
|
|
Other accrued liabilities
|
101,035
|
|
|
69,487
|
|
||
Accounts payable
|
30,003
|
|
|
19,815
|
|
||
Total
|
$
|
623,664
|
|
|
$
|
506,459
|
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Deferred compensation liability (See Note 12)
|
$
|
269,737
|
|
|
$
|
249,822
|
|
Other long-term liabilities
|
14,774
|
|
|
73,903
|
|
||
Total
|
$
|
284,511
|
|
|
$
|
323,725
|
|
•
|
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, the Company satisfies a performance obligation
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands, except per share amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income attributed to Synopsys
|
$
|
664,347
|
|
|
$
|
532,367
|
|
|
$
|
432,518
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares for basic net income per share
|
151,135
|
|
|
149,872
|
|
|
149,036
|
|
|||
Dilutive effect of common share equivalents from equity-based compensation
|
4,571
|
|
|
4,318
|
|
|
4,357
|
|
|||
Weighted average common shares for diluted net income per share
|
155,706
|
|
|
154,190
|
|
|
153,393
|
|
|||
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.40
|
|
|
$
|
3.55
|
|
|
$
|
2.90
|
|
Diluted
|
$
|
4.27
|
|
|
$
|
3.45
|
|
|
$
|
2.82
|
|
Anti-dilutive employee stock-based awards excluded(1)
|
97
|
|
|
171
|
|
|
850
|
|
(1)
|
These stock options and unvested restricted stock units were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future.
|
|
2020
|
|
2019
|
|
2018
|
|||
EDA
|
57
|
%
|
|
59
|
%
|
|
62
|
%
|
IP & System Integration
|
33
|
%
|
|
31
|
%
|
|
29
|
%
|
Software Integrity Products & Services
|
10
|
%
|
|
10
|
%
|
|
9
|
%
|
Other(1)
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
The percentage of revenue by Other is less than 1%.
|
|
As of October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Contract assets
|
$
|
214,583
|
|
|
$
|
210,557
|
|
Unbilled receivables
|
$
|
50,932
|
|
|
$
|
38,175
|
|
Deferred revenue
|
$
|
1,493,113
|
|
|
$
|
1,302,578
|
|
•
|
During the second quarter of fiscal 2020, the Company completed an acquisition for an aggregate consideration of $105.7 million; including cash consideration of $75.7 million and the Company’s products exchanged in connection with the acquisition with a fair value of $30.0 million.
|
•
|
In addition to the above, the Company also completed several other acquisitions for an aggregate cash consideration of $132.6 million, net of cash acquired. The preliminary purchase allocations are $44.7 million of identifiable intangible assets and $92.8 million in goodwill, of which $13.3 million is attributable to the Software Integrity reporting segment. The fair value of these intangible assets and goodwill are estimated using the income method.
|
|
Semiconductor & System Design
|
|
Software Integrity
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance at October 31, 2019
|
$
|
2,758,926
|
|
|
$
|
412,253
|
|
|
$
|
3,171,179
|
|
Additions
|
160,447
|
|
|
13,285
|
|
|
173,732
|
|
|||
Adjustments
|
59
|
|
|
—
|
|
|
59
|
|
|||
Effect of foreign currency translation
|
20,080
|
|
|
64
|
|
|
20,144
|
|
|||
Balance at October 31, 2020
|
$
|
2,939,512
|
|
|
$
|
425,602
|
|
|
$
|
3,365,114
|
|
|
Semiconductor & System Design
|
|
Software Integrity
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance at October 31, 2018
|
$
|
2,730,990
|
|
|
$
|
412,259
|
|
|
$
|
3,143,249
|
|
Additions
|
23,690
|
|
|
—
|
|
|
23,690
|
|
|||
Effect of foreign currency translation
|
4,246
|
|
|
(6
|
)
|
|
4,240
|
|
|||
Balance at October 31, 2019
|
$
|
2,758,926
|
|
|
$
|
412,253
|
|
|
$
|
3,171,179
|
|
|
Gross Assets
|
|
Accumulated
Amortization
|
|
Net Assets
|
||||||
|
(in thousands)
|
||||||||||
Core/developed technology
|
$
|
827,232
|
|
|
$
|
703,009
|
|
|
$
|
124,223
|
|
Customer relationships
|
380,838
|
|
|
277,219
|
|
|
103,619
|
|
|||
Contract rights intangible
|
192,812
|
|
|
186,763
|
|
|
6,049
|
|
|||
Trademarks and trade names
|
43,096
|
|
|
28,716
|
|
|
14,380
|
|
|||
In-process research and development (IPR&D)
|
1,214
|
|
|
—
|
|
|
1,214
|
|
|||
Capitalized software development costs
|
44,122
|
|
|
39,285
|
|
|
4,837
|
|
|||
Total
|
$
|
1,489,314
|
|
|
$
|
1,234,992
|
|
|
$
|
254,322
|
|
|
Gross Assets
|
|
Accumulated
Amortization
|
|
Net Assets
|
||||||
|
(in thousands)
|
||||||||||
Core/developed technology
|
$
|
791,647
|
|
|
$
|
655,119
|
|
|
$
|
136,528
|
|
Customer relationships
|
358,661
|
|
|
242,058
|
|
|
116,603
|
|
|||
Contract rights intangible
|
184,304
|
|
|
181,124
|
|
|
3,180
|
|
|||
Trademarks and trade names
|
42,929
|
|
|
25,581
|
|
|
17,348
|
|
|||
In-process research and development (IPR&D)
|
1,200
|
|
|
—
|
|
|
1,200
|
|
|||
Capitalized software development costs
|
40,077
|
|
|
35,562
|
|
|
4,515
|
|
|||
Total
|
$
|
1,418,818
|
|
|
$
|
1,139,444
|
|
|
$
|
279,374
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Core/developed technology
|
$
|
47,890
|
|
|
$
|
56,163
|
|
|
$
|
78,820
|
|
Customer relationships
|
35,075
|
|
|
37,533
|
|
|
37,395
|
|
|||
Contract rights intangible
|
5,181
|
|
|
3,581
|
|
|
4,906
|
|
|||
Trademarks and trade names
|
3,135
|
|
|
3,637
|
|
|
4,543
|
|
|||
Capitalized software development costs(1)
|
3,723
|
|
|
2,868
|
|
|
3,599
|
|
|||
Total
|
$
|
95,004
|
|
|
$
|
103,782
|
|
|
$
|
129,263
|
|
(1)
|
Amortization of capitalized software development costs is included in cost of products revenue in the consolidated statements of operations.
|
Fiscal Year
|
(in thousands)
|
||
2021
|
$
|
76,078
|
|
2022
|
61,242
|
|
|
2023
|
44,733
|
|
|
2024
|
34,398
|
|
|
2025
|
18,295
|
|
|
2026 and thereafter
|
18,362
|
|
|
IPR&D
|
1,214
|
|
|
Total
|
$
|
254,322
|
|
|
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
|
$
|
304,127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
304,127
|
|
Total:
|
$
|
304,127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
304,127
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other long-term assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-marketable equity securities
|
$
|
13,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,200
|
|
Total:
|
$
|
13,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,200
|
|
(1)
|
See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents.
|
|
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
|
$
|
166,024
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166,024
|
|
Total:
|
$
|
166,024
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
166,024
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other long-term assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-marketable equity securities
|
$
|
10,951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,951
|
|
Total:
|
$
|
10,951
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,951
|
|
(1)
|
See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents.
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
1,235,653
|
|
|
$
|
728,597
|
|
Restricted cash included in Prepaid expenses and other current assets
|
1,523
|
|
|
1,174
|
|
||
Restricted cash included in Other long-term assets
|
794
|
|
|
756
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
1,237,970
|
|
|
$
|
730,527
|
|
|
October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Gain (loss) recorded in other income (expense), net
|
$
|
1,957
|
|
|
$
|
4,538
|
|
|
$
|
3,361
|
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Total gross notional amount
|
$
|
981,234
|
|
|
$
|
817,441
|
|
Net fair value
|
$
|
6,940
|
|
|
$
|
3,494
|
|
|
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, 2020
|
|
|
|
||||
Other current assets
|
$
|
9,182
|
|
|
$
|
138
|
|
Accrued liabilities
|
$
|
2,088
|
|
|
$
|
292
|
|
Balance at October 31, 2019
|
|
|
|
||||
Other current assets
|
$
|
7,327
|
|
|
$
|
53
|
|
Accrued liabilities
|
$
|
3,715
|
|
|
$
|
171
|
|
|
Location of gain (loss)
recognized in OCI on
derivatives
|
|
Amount of gain (loss)
recognized in
OCI on
derivatives
(effective portion)
|
|
Location of gain (loss)
reclassified
from OCI
|
|
Amount of
gain (loss)
reclassified
from OCI
(effective
portion)
|
||||
|
(in thousands)
|
||||||||||
Fiscal year ended October 31, 2020
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Revenue
|
|
$
|
3,034
|
|
|
Revenue
|
|
$
|
530
|
|
Foreign exchange contracts
|
Operating expenses
|
|
4,800
|
|
|
Operating expenses
|
|
(603
|
)
|
||
Total
|
|
|
$
|
7,834
|
|
|
|
|
$
|
(73
|
)
|
Fiscal year ended October 31, 2019
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Revenue
|
|
$
|
278
|
|
|
Revenue
|
|
$
|
1,436
|
|
Foreign exchange contracts
|
Operating expenses
|
|
4,455
|
|
|
Operating expenses
|
|
(16,073
|
)
|
||
Total
|
|
|
$
|
4,733
|
|
|
|
|
$
|
(14,637
|
)
|
Fiscal year ended October 31, 2018
|
|
|
|
|
|
|
|
||||
Foreign exchange contracts
|
Revenue
|
|
$
|
693
|
|
|
Revenue
|
|
$
|
1,103
|
|
Foreign exchange contracts
|
Operating expenses
|
|
(18,121
|
)
|
|
Operating expenses
|
|
9,785
|
|
||
Total
|
|
|
$
|
(17,428
|
)
|
|
|
|
$
|
10,888
|
|
Fiscal year
|
(in thousands)
|
||
2021
|
$
|
27,187
|
|
2022
|
75,000
|
|
|
Total
|
$
|
102,187
|
|
|
|
|
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
|
$
|
304,127
|
|
|
$
|
304,127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Prepaid and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivative contracts
|
9,320
|
|
|
—
|
|
|
9,320
|
|
|
—
|
|
||||
Other long-term assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan assets
|
269,737
|
|
|
269,737
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
583,184
|
|
|
$
|
573,864
|
|
|
$
|
9,320
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivative contracts
|
$
|
2,380
|
|
|
$
|
—
|
|
|
$
|
2,380
|
|
|
$
|
—
|
|
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan liabilities
|
269,737
|
|
|
269,737
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
$
|
272,117
|
|
|
$
|
269,737
|
|
|
$
|
2,380
|
|
|
$
|
—
|
|
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
|
$
|
166,024
|
|
|
$
|
166,024
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Prepaid and other current assets:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivative contracts
|
7,380
|
|
|
—
|
|
|
7,380
|
|
|
—
|
|
||||
Other long-term assets:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan assets
|
249,822
|
|
|
249,822
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
423,226
|
|
|
$
|
415,846
|
|
|
$
|
7,380
|
|
|
$
|
—
|
|
Liabilities
|
|
|
|
|
|
|
|
||||||||
Accounts payable and accrued liabilities:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivative contracts
|
$
|
3,886
|
|
|
$
|
—
|
|
|
$
|
3,886
|
|
|
$
|
—
|
|
Other long-term liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan liabilities
|
249,822
|
|
|
249,822
|
|
|
—
|
|
|
—
|
|
||||
Total liabilities
|
$
|
253,708
|
|
|
$
|
249,822
|
|
|
$
|
3,886
|
|
|
$
|
—
|
|
|
Year Ended October 31,
|
||
|
2020
|
||
|
(in thousands)
|
||
Operating lease expense
|
$
|
93,636
|
|
Variable lease expense (1)
|
5,147
|
|
|
Total lease expense
|
$
|
98,783
|
|
|
Year Ended October 31,
|
||
|
2020
|
||
|
(in thousands)
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
72,828
|
|
ROU assets obtained in exchange for operating lease liabilities
|
$
|
69,439
|
|
|
October 31, 2020
|
|
Weighted-average remaining lease term (in years)
|
8.62
|
|
Weighted-average discount rate
|
2.56
|
%
|
|
Lease Payments
|
||
Fiscal year
|
(in thousands)
|
||
2021
|
$
|
84,534
|
|
2022
|
79,886
|
|
|
2023
|
64,073
|
|
|
2024
|
59,751
|
|
|
2025
|
53,280
|
|
|
Thereafter
|
259,969
|
|
|
Total future minimum lease payments
|
601,493
|
|
|
Less: Imputed interest
|
65,909
|
|
|
Total lease liabilities
|
$
|
535,584
|
|
|
Minimum Lease Payments(1)
|
||
|
(in thousands)
|
||
Fiscal year
|
|
||
2020
|
$
|
79,286
|
|
2021
|
79,703
|
|
|
2022
|
69,477
|
|
|
2023
|
53,909
|
|
|
2024
|
48,730
|
|
|
Thereafter
|
291,494
|
|
|
Total
|
$
|
622,599
|
|
|
Year Ended October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Cumulative currency translation adjustments
|
$
|
(57,463
|
)
|
|
$
|
(87,929
|
)
|
Unrealized gain (loss) on derivative instruments, net of taxes
|
3,389
|
|
|
(4,518
|
)
|
||
Total accumulated other comprehensive income (loss)
|
$
|
(54,074
|
)
|
|
$
|
(92,447
|
)
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Reclassifications from accumulated other comprehensive income (loss) into consolidated statements of operations:
|
|
|
|
|
|
||||||
Gain (loss) on cash flow hedges, net of taxes
|
|
|
|
|
|
||||||
Revenues
|
$
|
530
|
|
|
$
|
1,436
|
|
|
$
|
1,103
|
|
Operating expenses
|
(603
|
)
|
|
(16,073
|
)
|
|
9,785
|
|
|||
Total reclassifications into net income
|
$
|
(73
|
)
|
|
$
|
(14,637
|
)
|
|
$
|
10,888
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands, except per share price)
|
||||||||||
Shares repurchased(1)
|
1,585
|
|
|
2,732
|
|
|
4,688
|
|
|||
Average purchase price per share(1)
|
$
|
152.76
|
|
|
$
|
120.49
|
|
|
$
|
89.59
|
|
Aggregate purchase price(1)
|
$
|
242,078
|
|
|
$
|
329,185
|
|
|
$
|
420,000
|
|
Reissuance of treasury stock
|
3,872
|
|
|
3,798
|
|
|
3,508
|
|
(1)
|
The first quarter of fiscal 2018 includes the settlement of the $20.0 million equity forward contract related to the September 2017 ASR.
|
|
Restricted
Stock Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Weighted
Average
Remaining
Contractual
Life (In Years)
|
|
Aggregate
Fair
Value
|
|||||
|
(in thousands, except per share and life amounts)
|
|||||||||||
Balance at October 31, 2017
|
3,843
|
|
|
$
|
57.26
|
|
|
1.54
|
|
|
||
Granted(2)
|
1,679
|
|
|
$
|
89.35
|
|
|
|
|
|
||
Vested(1)
|
(1,495
|
)
|
|
$
|
52.55
|
|
|
|
|
$
|
136,417
|
|
Forfeited
|
(258
|
)
|
|
$
|
67.04
|
|
|
|
|
|
||
Balance at October 31, 2018
|
3,769
|
|
|
$
|
72.75
|
|
|
1.46
|
|
|
||
Granted
|
1,844
|
|
|
$
|
119.27
|
|
|
|
|
|
||
Vested(1)
|
(1,508
|
)
|
|
$
|
65.97
|
|
|
|
|
$
|
176,659
|
|
Forfeited
|
(248
|
)
|
|
$
|
79.49
|
|
|
|
|
|
||
Balance at October 31, 2019
|
3,857
|
|
|
$
|
97.21
|
|
|
1.56
|
|
|
||
Granted
|
2,041
|
|
|
$
|
168.15
|
|
|
|
|
|
||
Vested(1)
|
(1,480
|
)
|
|
$
|
88.70
|
|
|
|
|
$
|
261,563
|
|
Forfeited
|
(288
|
)
|
|
$
|
104.67
|
|
|
|
|
|
||
Balance at October 31, 2020
|
4,130
|
|
|
$
|
134.80
|
|
|
1.47
|
|
|
(1)
|
The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.
|
(2)
|
The Company assumed unvested restricted stock units from acquisitions including Black Duck.
|
|
Available for
Grant(3)
|
|
Options(2)
|
||||||||||||
|
Options
Outstanding
|
|
Weighted-
Average Exercise
Price per Share
|
|
Weighted-
Average
Remaining
Contractual
Life (In Years)
|
|
Aggregate
Intrinsic
Value
|
||||||||
|
(in thousands, except per share and life amounts)
|
||||||||||||||
Balance at October 31, 2017
|
12,583
|
|
|
6,530
|
|
|
$
|
46.83
|
|
|
4.60
|
|
$
|
263,555
|
|
Options granted
|
(1,134
|
)
|
|
1,134
|
|
|
$
|
89.52
|
|
|
|
|
|
||
Options assumed(2)
|
|
|
141
|
|
|
$
|
18.66
|
|
|
|
|
|
|||
Options exercised
|
|
|
(1,336
|
)
|
|
$
|
38.18
|
|
|
|
|
|
|||
Options canceled/forfeited/expired
|
157
|
|
|
(178
|
)
|
|
$
|
51.82
|
|
|
|
|
|
||
Restricted stock units granted(1)
|
(2,541
|
)
|
|
|
|
|
|
|
|
|
|||||
Restricted stock units forfeited(1)
|
374
|
|
|
|
|
|
|
|
|
|
|||||
Additional shares reserved
|
3,000
|
|
|
|
|
|
|
|
|
|
|||||
Balance at October 31, 2018
|
12,439
|
|
|
6,291
|
|
|
$
|
55.63
|
|
|
4.39
|
|
$
|
214,432
|
|
Options granted
|
(799
|
)
|
|
799
|
|
|
$
|
113.17
|
|
|
|
|
|
||
Options exercised
|
|
|
(1,615
|
)
|
|
$
|
44.29
|
|
|
|
|
|
|||
Options canceled/forfeited/expired
|
129
|
|
|
(185
|
)
|
|
$
|
58.02
|
|
|
|
|
|
||
Restricted stock units granted(1)
|
(3,134
|
)
|
|
|
|
|
|
|
|
|
|||||
Restricted stock units forfeited(1)
|
373
|
|
|
|
|
|
|
|
|
|
|||||
Additional shares reserved
|
3,200
|
|
|
|
|
|
|
|
|
|
|||||
Balance at October 31, 2019
|
12,208
|
|
|
5,290
|
|
|
$
|
65.57
|
|
|
4.08
|
|
$
|
373,112
|
|
Options granted
|
(694
|
)
|
|
700
|
|
|
$
|
143.44
|
|
|
|
|
|
||
Options exercised
|
|
|
(1,891
|
)
|
|
$
|
51.76
|
|
|
|
|
|
|||
Options canceled/forfeited/expired
|
102
|
|
|
(106
|
)
|
|
$
|
84.14
|
|
|
|
|
|
||
Restricted stock units granted(1)
|
(3,469
|
)
|
|
|
|
|
|
|
|
|
|||||
Restricted stock units forfeited(1)
|
482
|
|
|
|
|
|
|
|
|
|
|||||
Additional shares reserved
|
3,500
|
|
|
|
|
|
|
|
|
|
|||||
Balance at October 31, 2020
|
12,129
|
|
|
3,993
|
|
|
$
|
85.26
|
|
|
4.10
|
|
$
|
513,845
|
|
Exercisable at October 31, 2020
|
|
|
2,311
|
|
|
$
|
65.36
|
|
|
3.23
|
|
$
|
343,230
|
|
(1)
|
These amounts do not reflect the actual number of restricted stock units granted or forfeited but rather the effect on the total remaining shares available for future grants after the application of the share reserve ratio. For more information about the share reserve ratio, please see Restricted Stock Units above.
|
(2)
|
The Company assumed options outstanding under various plans through acquisitions.
|
(3)
|
Excluding shares reserved for future issuance under the 2017 Directors Plan.
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands, except per share price)
|
||||||||||
Intrinsic value
|
$
|
218,640
|
|
|
$
|
110,815
|
|
|
$
|
71,840
|
|
Average exercise price per share
|
$
|
51.76
|
|
|
$
|
44.29
|
|
|
$
|
38.18
|
|
|
Restricted
Shares
|
|
Weighted-Average
Grant Date Fair Value
|
|||
|
(in thousands, except per share)
|
|||||
Unvested at October 31, 2017
|
38
|
|
|
$
|
59.89
|
|
Granted
|
15
|
|
|
$
|
82.96
|
|
Vested
|
(32
|
)
|
|
$
|
62.09
|
|
Forfeited
|
(1
|
)
|
|
$
|
48.27
|
|
Unvested at October 31, 2018
|
20
|
|
|
$
|
73.95
|
|
Granted
|
11
|
|
|
$
|
116.43
|
|
Vested
|
(20
|
)
|
|
$
|
73.95
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Unvested at October 31, 2019
|
11
|
|
|
$
|
116.43
|
|
Granted
|
9
|
|
|
$
|
140.97
|
|
Vested
|
(11
|
)
|
|
$
|
116.43
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Unvested at October 31, 2020
|
9
|
|
|
$
|
140.97
|
|
|
Year Ended October 31,
|
||||
|
2020
|
|
2019
|
|
2018
|
Stock Options
|
|
|
|
|
|
Expected life (in years)
|
4.1
|
|
4.1
|
|
4.1
|
Risk-free interest rate
|
0.26% - 1.71%
|
|
1.28% - 2.73%
|
|
2.10% - 2.95%
|
Volatility
|
23.05% - 32.80%
|
|
23.16% - 24.76%
|
|
20.22% - 21.04%
|
Weighted average estimated fair value
|
$33.02
|
|
$22.86
|
|
$23.55
|
ESPP
|
|
|
|
|
|
Expected life (in years)
|
0.5 - 2.0
|
|
0.5 - 2.0
|
|
0.5 - 2.0
|
Risk-free interest rate
|
0.09% - 1.24%
|
|
1.54% - 2.60%
|
|
1.80% - 2.73%
|
Volatility
|
25.59% - 43.06%
|
|
23.73% - 27.86%
|
|
19.99% - 21.54%
|
Weighted average estimated fair value
|
$47.69
|
|
$35.18
|
|
$23.34
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Cost of products
|
$
|
27,193
|
|
|
$
|
17,193
|
|
|
$
|
14,648
|
|
Cost of maintenance and service
|
9,327
|
|
|
6,385
|
|
|
5,467
|
|
|||
Research and development expense
|
125,814
|
|
|
75,853
|
|
|
67,355
|
|
|||
Sales and marketing expense
|
43,205
|
|
|
28,834
|
|
|
28,069
|
|
|||
General and administrative expense
|
43,045
|
|
|
26,736
|
|
|
24,493
|
|
|||
Stock-based compensation expense before taxes
|
248,584
|
|
|
155,001
|
|
|
140,032
|
|
|||
Income tax benefit
|
(39,077
|
)
|
|
(26,226
|
)
|
|
(26,578
|
)
|
|||
Stock-based compensation expense after taxes
|
$
|
209,507
|
|
|
$
|
128,775
|
|
|
$
|
113,454
|
|
|
As of October 31, 2020
|
|
As of October 31, 2019
|
||||
|
(in thousands)
|
||||||
Plan assets recorded in other long-term assets
|
$
|
269,737
|
|
|
$
|
249,822
|
|
Plan liabilities recorded in other long-term liabilities(1)
|
$
|
269,737
|
|
|
$
|
249,822
|
|
(1)
|
Undistributed deferred compensation balances due to participants.
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Increase (reduction) to cost of revenue and operating expense
|
$
|
21,469
|
|
|
$
|
27,759
|
|
|
$
|
4,636
|
|
Other income (expense), net
|
21,469
|
|
|
27,759
|
|
|
4,636
|
|
|||
Net increase (decrease) to net income
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
United States
|
$
|
544,391
|
|
|
$
|
487,430
|
|
|
$
|
(18,029
|
)
|
Foreign
|
93,768
|
|
|
58,076
|
|
|
381,572
|
|
|||
Total income (loss) before provision for income taxes
|
$
|
638,159
|
|
|
$
|
545,506
|
|
|
$
|
363,543
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
29,272
|
|
|
$
|
22,821
|
|
|
$
|
(1,120
|
)
|
State
|
1,863
|
|
|
11,846
|
|
|
2,025
|
|
|||
Foreign
|
55,103
|
|
|
61,092
|
|
|
140,430
|
|
|||
|
86,238
|
|
|
95,759
|
|
|
141,335
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(84,739
|
)
|
|
(41,219
|
)
|
|
(139,547
|
)
|
|||
State
|
(20,233
|
)
|
|
(7,227
|
)
|
|
(25,661
|
)
|
|||
Foreign
|
(6,554
|
)
|
|
(34,174
|
)
|
|
(45,102
|
)
|
|||
|
(111,526
|
)
|
|
(82,620
|
)
|
|
(210,310
|
)
|
|||
Provision (benefit) for income taxes
|
$
|
(25,288
|
)
|
|
$
|
13,139
|
|
|
$
|
(68,975
|
)
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Statutory federal tax
|
$
|
133,979
|
|
|
$
|
114,557
|
|
|
$
|
85,142
|
|
State tax (benefit), net of federal effect
|
(29,096
|
)
|
|
6,529
|
|
|
(32,351
|
)
|
|||
Tax credits
|
(39,206
|
)
|
|
(34,485
|
)
|
|
(35,142
|
)
|
|||
Tax on foreign earnings
|
(3,980
|
)
|
|
23,467
|
|
|
(104,252
|
)
|
|||
Foreign-derived intangible income deduction
|
(24,282
|
)
|
|
(26,615
|
)
|
|
—
|
|
|||
Tax settlements
|
(13,167
|
)
|
|
(10,953
|
)
|
|
(14,691
|
)
|
|||
Stock-based compensation
|
(50,047
|
)
|
|
(25,356
|
)
|
|
(19,293
|
)
|
|||
Changes in valuation allowance
|
(614
|
)
|
|
(42,144
|
)
|
|
78,192
|
|
|||
Integration of acquired technologies
|
—
|
|
|
—
|
|
|
27,927
|
|
|||
Undistributed earnings of foreign subsidiaries
|
—
|
|
|
6,341
|
|
|
(974
|
)
|
|||
Impact of tax restructuring
|
—
|
|
|
—
|
|
|
(171,979
|
)
|
|||
Impact of Tax Act rate change
|
—
|
|
|
—
|
|
|
51,075
|
|
|||
Transition tax
|
—
|
|
|
—
|
|
|
63,107
|
|
|||
Other
|
1,125
|
|
|
1,798
|
|
|
4,264
|
|
|||
Provision (benefit) for income taxes
|
$
|
(25,288
|
)
|
|
$
|
13,139
|
|
|
$
|
(68,975
|
)
|
•
|
A tax on global intangible low-tax income (GILTI), which is determined annually based on the Company's aggregate foreign subsidiaries' income in excess of certain qualified business asset investment return. In fiscal 2019, the Company adopted an accounting policy to account for the tax effects of GILTI in the period that it is subject to such tax.
|
•
|
A base erosion and anti-abuse tax (BEAT), which functions as a minimum tax that partially disallows deductions for certain related party transactions and certain tax credits.
|
•
|
A special tax deduction for foreign-derived intangible income (FDII), which, in general, allows a deduction of certain intangible income earned in the U.S. and derived from foreign sources.
|
|
October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Net deferred tax assets:
|
|
|
|
||||
Deferred tax assets:
|
|
|
|
||||
Deferred revenue
|
2,367
|
|
|
—
|
|
||
Deferred compensation
|
55,172
|
|
|
56,483
|
|
||
Intangible and depreciable assets
|
115,097
|
|
|
160,072
|
|
||
Capitalized research and development costs
|
118,857
|
|
|
48,804
|
|
||
Stock-based compensation
|
28,478
|
|
|
20,372
|
|
||
Tax loss carryovers
|
35,571
|
|
|
40,068
|
|
||
Foreign tax credit carryovers
|
18,645
|
|
|
20,187
|
|
||
Research and other tax credit carryovers
|
320,317
|
|
|
278,382
|
|
||
Operating Lease Liabilities
|
101,386
|
|
|
—
|
|
||
Gross deferred tax assets
|
795,890
|
|
|
624,368
|
|
||
Valuation allowance
|
(158,895
|
)
|
|
(157,343
|
)
|
||
Total deferred tax assets
|
636,995
|
|
|
467,025
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Intangible assets
|
45,915
|
|
|
58,697
|
|
||
Operating lease Right-of-Use-Assets
|
84,716
|
|
|
—
|
|
||
Accruals and reserves
|
7,780
|
|
|
4,450
|
|
||
Deferred revenue
|
—
|
|
|
6,611
|
|
||
Undistributed earnings of foreign subsidiaries
|
3,063
|
|
|
6,864
|
|
||
Other
|
372
|
|
|
1,762
|
|
||
Total deferred tax liabilities
|
141,846
|
|
|
78,384
|
|
||
Net deferred tax assets
|
$
|
495,149
|
|
|
$
|
388,641
|
|
Carryforward
|
Amount
|
|
Expiration
Date
|
||
|
(in thousands)
|
|
|
||
Federal net operating loss carryforward
|
$
|
41,757
|
|
|
2021-2037
|
Federal research credit carryforward
|
176,616
|
|
|
2021-2040
|
|
Federal foreign tax credit carryforward
|
1,921
|
|
|
2021-2029
|
|
International foreign tax credit carryforward
|
15,681
|
|
|
Indefinite
|
|
International net operating loss carryforward
|
81,069
|
|
|
2021-Indefinite
|
|
California research credit carryforward
|
173,600
|
|
|
Indefinite
|
|
Other state research credit carryforward
|
15,486
|
|
|
2024-2035
|
|
State net operating loss carryforward
|
70,251
|
|
|
2027-2039
|
|
As of October 31, 2020
|
|
As of October 31, 2019
|
||||
|
(in thousands)
|
||||||
Beginning balance
|
$
|
116,212
|
|
|
$
|
131,019
|
|
Increases in unrecognized tax benefits related to prior year tax positions
|
5,390
|
|
|
41,346
|
|
||
Decreases in unrecognized tax benefits related to prior year tax positions
|
(43,783
|
)
|
|
(71,092
|
)
|
||
Increases in unrecognized tax benefits related to current year tax positions
|
9,226
|
|
|
16,927
|
|
||
Decreases in unrecognized tax benefits related to settlements with taxing authorities
|
(1,411
|
)
|
|
(1,624
|
)
|
||
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations
|
(2,472
|
)
|
|
(964
|
)
|
||
Increases in unrecognized tax benefits acquired
|
778
|
|
|
—
|
|
||
Changes in unrecognized tax benefits due to foreign currency translation
|
(791
|
)
|
|
600
|
|
||
Ending balance
|
$
|
83,149
|
|
|
$
|
116,212
|
|
|
|
Jurisdiction
|
Year(s) Subject to Examination
|
United States
|
Fiscal 2019 and 2020
|
California
|
Fiscal years after 2017
|
Hungary
|
Fiscal years after 2018
|
Ireland
|
Fiscal years after 2016
|
Japan and Taiwan
|
Fiscal years after 2015
|
Korea
|
Fiscal years after 2016
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Interest income
|
$
|
3,561
|
|
|
$
|
6,859
|
|
|
$
|
5,323
|
|
Interest expense
|
(5,140
|
)
|
|
(11,659
|
)
|
|
(15,607
|
)
|
|||
Gain (loss) on assets related to deferred compensation plan
|
21,469
|
|
|
27,759
|
|
|
4,636
|
|
|||
Foreign currency exchange gain (loss)
|
5,544
|
|
|
3,588
|
|
|
3,557
|
|
|||
Other, net
|
(7,416
|
)
|
|
(1,272
|
)
|
|
5,409
|
|
|||
Total
|
$
|
18,018
|
|
|
$
|
25,275
|
|
|
$
|
3,318
|
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Total Segments:
|
|
|
|
|
|
||||||
Revenue
|
$
|
3,685,281
|
|
|
$
|
3,360,694
|
|
|
$
|
3,121,058
|
|
Adjusted operating income
|
1,031,630
|
|
|
838,821
|
|
|
690,681
|
|
|||
Adjusted operating margin
|
28
|
%
|
|
25
|
%
|
|
22
|
%
|
|||
Semiconductor & System Design:
|
|
|
|
|
|
||||||
Revenue
|
$
|
3,327,211
|
|
|
$
|
3,026,097
|
|
|
$
|
2,840,589
|
|
Adjusted operating income
|
990,837
|
|
|
806,618
|
|
|
701,283
|
|
|||
Adjusted operating margin
|
30
|
%
|
|
27
|
%
|
|
25
|
%
|
|||
Software Integrity:
|
|
|
|
|
|
||||||
Revenue
|
$
|
358,070
|
|
|
$
|
334,597
|
|
|
$
|
280,469
|
|
Adjusted operating income
|
40,793
|
|
|
32,203
|
|
|
(10,602
|
)
|
|||
Adjusted operating margin
|
11
|
%
|
|
10
|
%
|
|
(4
|
)%
|
|
Year Ended October 31,
|
||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||
|
(in thousands)
|
||||||||||
Total segment adjusted operating income
|
$
|
1,031,630
|
|
|
$
|
838,821
|
|
|
$
|
690,681
|
|
Reconciling items:
|
|
|
|
|
|
||||||
Amortization of intangible expense
|
(91,281
|
)
|
|
(100,914
|
)
|
|
(125,664
|
)
|
|||
Stock-based compensation expense
|
(248,584
|
)
|
|
(155,001
|
)
|
|
(140,032
|
)
|
|||
Other
|
(71,624
|
)
|
|
(62,675
|
)
|
|
(64,760
|
)
|
|||
Total operating income
|
$
|
620,141
|
|
|
$
|
520,231
|
|
|
$
|
360,225
|
|
|
As of October 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(in thousands)
|
||||||
Property and Equipment, net:
|
|
|
|
||||
United States
|
$
|
311,350
|
|
|
$
|
293,725
|
|
Other countries
|
172,468
|
|
|
135,807
|
|
||
Total
|
$
|
483,818
|
|
|
$
|
429,532
|
|
|
Quarter Ended
|
||||||||||||||
|
January 31,
|
|
April 30,
|
|
July 31,
|
|
October 31,
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
2020
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
834,381
|
|
|
$
|
861,327
|
|
|
$
|
964,134
|
|
|
$
|
1,025,439
|
|
Gross margin
|
641,513
|
|
|
677,062
|
|
|
771,126
|
|
|
800,890
|
|
||||
Income before provision for income taxes
|
99,573
|
|
|
110,166
|
|
|
236,383
|
|
|
192,037
|
|
||||
Net income attributed to Synopsys
|
104,061
|
|
|
109,920
|
|
|
252,911
|
|
|
197,455
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.69
|
|
|
$
|
0.73
|
|
|
$
|
1.67
|
|
|
$
|
1.30
|
|
Diluted(1)
|
0.67
|
|
|
0.71
|
|
|
1.62
|
|
|
1.26
|
|
||||
2019
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
820,401
|
|
|
$
|
836,242
|
|
|
$
|
852,970
|
|
|
$
|
851,081
|
|
Gross margin
|
627,509
|
|
|
645,563
|
|
|
666,338
|
|
|
668,338
|
|
||||
Income before provision for income taxes
|
147,055
|
|
|
133,917
|
|
|
132,911
|
|
|
131,623
|
|
||||
Net income attributed to Synopsys
|
153,514
|
|
|
118,210
|
|
|
99,929
|
|
|
160,714
|
|
||||
Net income per share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.03
|
|
|
$
|
0.79
|
|
|
$
|
0.67
|
|
|
$
|
1.07
|
|
Diluted(1)
|
1.01
|
|
|
0.77
|
|
|
0.65
|
|
|
1.04
|
|
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A. Controls and Procedures
|
(a)
|
Evaluation of Disclosure Controls and Procedures. As of October 31, 2020, 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 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 October 31, 2020, 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)
|
Management’s Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for Synopsys.
|
(c)
|
Changes in Internal Control Over Financial Reporting. On November 3, 2019, Synopsys implemented new and modified existing internal controls for the adoption of the new lease accounting standard, ASC 842. There were no additional changes in Synopsys’ internal control over financial reporting during the fiscal quarter ended October 31, 2020 that have materially affected, or are reasonably likely to materially affect, Synopsys’ internal control over financial reporting.
|
Item 9B. Other Information
|
Item 10. Directors, Executive Officers and Corporate Governance
|
Item 11. Executive Compensation
|
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13. Certain Relationships and Related Transactions and Director Independence
|
Item 14. Principal Accountant Fees and Services
|
Item 15. Exhibits and Financial Statement Schedules
|
(a)
|
The following documents are filed as part of this Form 10-K:
|
(1)
|
Financial Statements
|
(2)
|
Financial Statement Schedules
|
(3)
|
Exhibits
|
(b)
|
Exhibits
|
Exhibit Number
|
Exhibit Description
|
|
Incorporated By Reference
|
|
Filed or
Furnished
Herewith
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
||||
3.1
|
|
10-Q
|
|
000-19807
|
|
3.1
|
|
9/15/2003
|
|
|
|
3.2
|
|
|
|
|
|
|
|
|
|
X
|
|
4.1
|
Specimen Common Stock Certificate
|
|
S-1
|
|
33-45138
|
|
4.3
|
|
2/24/1992
(effective date)
|
|
|
4.2
|
|
|
|
|
|
|
|
|
|
X
|
Exhibit Number
|
Exhibit Description
|
|
Incorporated By Reference
|
|
Filed or
Furnished
Herewith
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
||||
10.1
|
|
8-K
|
|
000-19807
|
|
10.1
|
|
11/30/2016
|
|
|
|
10.2
|
|
10-K
|
|
000-19807
|
|
10.19
|
|
12/16/2011
|
|
|
|
10.2(i)†
|
|
10-K
|
|
000-19807
|
|
10.10(i)
|
|
12/20/2012
|
|
|
|
10.2(ii)
|
|
10-Q
|
|
000-19807
|
|
10.10(ii)
|
|
3/4/2013
|
|
|
|
10.2(iii)
|
|
10-Q
|
|
000-19807
|
|
10.10(iii)
|
|
5/22/2015
|
|
|
|
10.3*
|
|
8-K
|
|
000-19807
|
|
10.4
|
|
4/15/2020
|
|
|
|
10.4*
|
|
8-K
|
|
000-19807
|
|
10.5
|
|
4/6/2018
|
|
|
|
10.5*
|
|
8-K
|
|
000-19807
|
|
10.6
|
|
4/6/2018
|
|
|
|
10.6*
|
|
8-K
|
|
000-19807
|
|
10.7
|
|
4/15/2020
|
|
|
|
10.7*
|
|
8-K
|
|
000-19807
|
|
10.8
|
|
4/10/2017
|
|
|
|
10.8*
|
|
10-K
|
|
000-19807
|
|
10.9
|
|
12/14/2017
|
|
|
Exhibit Number
|
Exhibit Description
|
|
Incorporated By Reference
|
|
Filed or
Furnished
Herewith
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
||||
10.9*
|
|
10-K
|
|
000-19807
|
|
10.10
|
|
12/14/2017
|
|
|
|
10.10*
|
|
10-Q
|
|
000-19807
|
|
10.5
|
|
6/10/2004
|
|
|
|
10.11*
|
|
10-Q
|
|
000-19807
|
|
10.23
|
|
3/9/2009
|
|
|
|
10.12
|
|
8-K
|
|
000-19807
|
|
99.2
|
|
7/14/2011
|
|
|
|
10.13*
|
Director’s and Officer’s Insurance and Company Reimbursement Policy
|
|
S-1
|
|
33-45138
|
|
10.2
|
|
2/24/1992
(effective date)
|
|
|
10.14*
|
|
8-K
|
|
000-19807
|
|
10.16
|
|
12/21/2016
|
|
|
|
10.15*
|
|
8-K
|
|
000-19807
|
|
10.17
|
|
12/21/2016
|
|
|
|
10.16*
|
|
8-K
|
|
000-19807
|
|
10.18
|
|
12/21/2016
|
|
|
|
10.17*
|
|
8-K
|
|
000-19807
|
|
10.19
|
|
12/21/2016
|
|
|
|
10.18*
|
|
10-K
|
|
000-19807
|
|
10.46
|
|
12/22/2008
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
|
X
|
|
24.1
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
X
|
|
31.3
|
|
|
|
|
|
|
|
|
|
X
|
Exhibit Number
|
Exhibit Description
|
|
Incorporated By Reference
|
|
Filed or
Furnished
Herewith
|
||||||
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
||||
32.1
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
Inline XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SYNOPSYS, INC.
|
|
|
|
|
|
Date: December 14, 2020
|
|
By:
|
|
/s/ Trac Pham
|
|
|
|
|
Trac Pham
Chief Financial Officer
(Principal Financial Officer)
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/S/ AART J. DE GEUS
|
|
Co-Chief Executive Officer (Co-Principal Executive Officer) and Chairman of the Board of Directors
|
|
December 14, 2020
|
Aart J. de Geus
|
|
|
|
|
|
|
|
|
|
/S/ CHI-FOON CHAN
|
|
Co-Chief Executive Officer (Co-Principal Executive Officer), President and Director
|
|
December 14, 2020
|
Chi-Foon Chan
|
|
|
|
|
|
|
|
|
|
/S/ TRAC PHAM
|
|
Chief Financial Officer (Principal Financial Officer)
|
|
December 14, 2020
|
Trac Pham
|
|
|
|
|
|
|
|
|
|
/S/ SUDHINDRA KANKANWADI
|
|
SVP, Chief Accounting Officer (Principal Accounting Officer)
|
|
December 14, 2020
|
Sudhindra Kankanwadi
|
|
|
|
|
|
|
|
|
|
/S/ JANICE D. CHAFFIN
|
|
Director
|
|
December 14, 2020
|
Janice D. Chaffin
|
|
|
|
|
|
|
|
|
|
/S/ BRUCE R. CHIZEN
|
|
Director
|
|
December 14, 2020
|
Bruce R. Chizen
|
|
|
|
|
|
|
|
|
|
/S/ MERCEDES JOHNSON
|
|
Director
|
|
December 14, 2020
|
Mercedes Johnson
|
|
|
|
|
|
|
|
|
|
/S/ CHRYSOSTOMOS L. NIKIAS
|
|
Director
|
|
December 14, 2020
|
Chrysostomos L. Nikias
|
|
|
|
|
|
|
|
|
|
/s/ JEANNINE SARGENT
|
|
Director
|
|
December 14, 2020
|
Jeannine Sargent
|
|
|
|
|
|
|
|
|
|
/S/ JOHN G. SCHWARZ
|
|
Director
|
|
December 14, 2020
|
John G. Schwarz
|
|
|
|
|
|
|
|
|
|
/S/ ROY VALLEE
|
|
Director
|
|
December 14, 2020
|
Roy Vallee
|
|
|
|
|
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/S/ STEVEN C. WALSKE
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Director
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December 14, 2020
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Steven C. Walske
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400,000,000 shares of common stock, par value of $0.01 per share; and
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2,000,000 shares of preferred stock, par value of $0.01 per share.
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prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who are directors and also officers and (b) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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on or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by
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any merger or consolidation involving the corporation and the interested stockholder;
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any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
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subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; and
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the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
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Name
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Jurisdiction of
Incorporation
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Synopsys International Limited
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Ireland
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SNPS Ireland New Limited
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Ireland
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Synopsys USIE Holdings LLC
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Delaware
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Synopsys International Services, Inc.
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Delaware
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Black Duck Software, Inc.
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Delaware
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Synopsys Taiwan Co., Ltd.
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Taiwan
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Nihon Synopsys G.K.
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Japan
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Synopsys Emulation and Verification S.A.S.
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France
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Synopsys (India) Private Limited
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India
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Synopsys Netherlands B.V.
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Netherlands
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Synopsys Korea, Inc.
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Korea
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Synopsys Technologies Company Limited
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China
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Synopsys Technologies Holding LLC
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Delaware
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1.
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I have reviewed this Annual Report on Form 10-K of Synopsys, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: December 14, 2020
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/s/ Aart J. de Geus
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Aart J. de Geus
Co-Chief Executive Officer and Chairman
(Co-Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of Synopsys, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: December 14, 2020
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/s/ Chi-Foon Chan
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Chi-Foon Chan
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Co-Chief Executive Officer and President
(Co-Principal Executive Officer)
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1.
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I have reviewed this Annual Report on Form 10-K of Synopsys, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: December 14, 2020
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/s/ Trac Pham
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Trac Pham
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Chief Financial Officer
(Principal Financial Officer)
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/s/ Aart J. de Geus
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Aart J. de Geus
Co-Chief Executive Officer and Chairman
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/s/ Chi-Foon Chan
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Chi-Foon Chan
Co-Chief Executive Officer and President
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/s/ Trac Pham
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Trac Pham
Chief Financial Officer
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