Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2019 | Aug. 21, 2019 | |
Document And Entity Information [Abstract] | ||
Document Transition Report | false | |
Title of 12(b) Security | Common Stock($0.01 par value) | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2019 | |
Amendment Flag | false | |
Entity File Number | 000-19807 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SNPS | |
Entity Registrant Name | SYNOPSYS, INC. | |
Entity Address, Address Line One | 690 EAST MIDDLEFIELD ROAD | |
Entity Address, City or Town | MOUNTAIN VIEW | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94043 | |
City Area Code | 650 | |
Local Phone Number | 584-5000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Central Index Key | 0000883241 | |
Current Fiscal Year End Date | --10-31 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 150,286,586 | |
Entity Tax Identification Number | 56-1546236 | |
Security Exchange Name | NASDAQ |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 686,780 | $ 723,115 |
Accounts receivable, net | 457,390 | 554,217 |
Inventories | 155,108 | 122,407 |
Income taxes receivable and prepaid taxes | 29,751 | 76,525 |
Prepaid and other current assets | 288,616 | 67,533 |
Total current assets | 1,617,645 | 1,543,797 |
Property and equipment, net | 372,566 | 309,310 |
Goodwill | 3,143,056 | 3,143,249 |
Intangible assets, net | 283,305 | 360,404 |
Long-term prepaid taxes | 13,973 | 138,312 |
Deferred income taxes | 339,354 | 404,166 |
Other long-term assets | 383,509 | 246,736 |
Total assets | 6,153,408 | 6,145,974 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 471,629 | 578,326 |
Accrued income taxes | 3,175 | 27,458 |
Deferred revenue | 1,138,993 | 1,152,862 |
Short-term debt | 16,653 | 343,769 |
Total current liabilities | 1,630,450 | 2,102,415 |
Long-term accrued income taxes | 27,847 | 50,590 |
Long-term deferred revenue | 91,229 | 116,859 |
Long-term debt | 125,285 | 125,535 |
Other long-term liabilities | 338,928 | 265,560 |
Total liabilities | 2,213,739 | 2,660,959 |
Stockholders’ equity: | ||
Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding | 0 | 0 |
Common stock, $0.01 par value: 400,000 shares authorized; 150,373 and 149,265 shares outstanding, respectively | 1,504 | 1,493 |
Capital in excess of par value | 1,597,629 | 1,644,830 |
Retained earnings | 3,003,430 | 2,543,688 |
Treasury stock, at cost: 6,888 and 7,996 shares, respectively | (572,104) | (597,682) |
Accumulated other comprehensive income (loss) | (96,653) | (113,177) |
Total Synopsys stockholders’ equity | 3,933,806 | 3,479,152 |
Non-controlling interest | 5,863 | 5,863 |
Total stockholders’ equity | 3,939,669 | 3,485,015 |
Total liabilities and stockholders’ equity | $ 6,153,408 | $ 6,145,974 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2019 | Oct. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized (in shares) | 2,000,000 | 2,000,000 |
Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common Stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common Stock, shares outstanding (in shares) | 150,373,000 | 149,265,000 |
Treasury stock, shares (in shares) | 6,888,000 | 7,996,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Revenue: | ||||
Total revenue | $ 852,970 | $ 779,714 | $ 2,509,613 | $ 2,325,976 |
Cost of revenue: | ||||
Amortization of intangible assets | 13,603 | 20,154 | 45,927 | 59,612 |
Total cost of revenue | 186,632 | 185,381 | 570,203 | 545,316 |
Gross margin | 666,338 | 594,333 | 1,939,410 | 1,780,660 |
Operating expenses: | ||||
Research and development | 284,804 | 277,402 | 846,429 | 793,947 |
Sales and marketing | 157,109 | 157,953 | 471,720 | 455,653 |
General and administrative | 67,382 | 84,336 | 165,794 | 199,517 |
Amortization of intangible assets | 10,111 | 10,651 | 31,211 | 30,926 |
Restructuring | 19,338 | 23 | 33,746 | 1,917 |
Total operating expenses | 538,744 | 530,365 | 1,548,900 | 1,481,960 |
Operating income | 127,594 | 63,968 | 390,510 | 298,700 |
Other income (expense), net | 5,317 | 7,925 | 23,373 | 12,595 |
Income before income taxes | 132,911 | 71,893 | 413,883 | 311,295 |
Provision (benefit) for income taxes | 32,982 | (7,516) | 42,230 | 133,105 |
Net income | $ 99,929 | $ 79,409 | $ 371,653 | $ 178,190 |
Net income per share: | ||||
Basic (in USD per share) | $ 0.67 | $ 0.53 | $ 2.48 | $ 1.20 |
Diluted (in USD per share) | $ 0.65 | $ 0.52 | $ 2.42 | $ 1.16 |
Shares used in computing per share amounts: | ||||
Basic (shares) | 150,123 | 148,490 | 149,708 | 148,760 |
Diluted (shares) | 154,600 | 152,614 | 153,859 | 153,118 |
Time-based products | ||||
Revenue: | ||||
Total revenue | $ 537,569 | $ 570,053 | $ 1,649,590 | $ 1,697,756 |
Cost of revenue: | ||||
Cost of revenue | 113,533 | 115,437 | 346,163 | 335,030 |
Upfront products | ||||
Revenue: | ||||
Total revenue | 177,552 | 99,579 | 451,466 | 291,143 |
Maintenance and service | ||||
Revenue: | ||||
Total revenue | 137,849 | 110,082 | 408,557 | 337,077 |
Cost of revenue: | ||||
Cost of revenue | $ 59,496 | $ 49,790 | $ 178,113 | $ 150,674 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 99,929 | $ 79,409 | $ 371,653 | $ 178,190 |
Other comprehensive income: | ||||
Change in foreign currency translation adjustment | (2,123) | (18,231) | (67) | (8,273) |
Cash flow hedges: | ||||
Deferred gains (losses), net of tax of $(464) and $(2,178), for the three and nine months ended July 31, 2019, respectively, and of $2,518 and $1,363 for each of the same periods in fiscal 2018, respectively. | (1,070) | (12,371) | 4,844 | (7,891) |
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $(702) and $(2,988), for the three and nine months ended July 31, 2019 respectively, and of $247 and $2,767 for each of the same periods in fiscal 2018, respectively. | 3,260 | (1,662) | 11,747 | (12,510) |
Other comprehensive income (loss), net of tax effects | 67 | (32,264) | 16,524 | (28,674) |
Comprehensive income | $ 99,996 | $ 47,145 | $ 388,177 | $ 149,516 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Deferred gains (losses), tax | $ (464) | $ 2,518 | $ (2,178) | $ 1,363 |
Reclassification adjustment on deferred (gains) losses included in net income, tax | $ (702) | $ 247 | $ (2,988) | $ 2,767 |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Stockholders' Equity Statement - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Synopsys Stockholders’ Equity | Non-controlling Interest | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Cumulative effect adjustment | Accounting Standards Update 2018-02 | $ (293) | $ (293) | $ (293) | ||||||
Balance (in shares) at Oct. 31, 2017 | 150,445 | ||||||||
Beginning balance at Oct. 31, 2017 | 3,279,724 | $ 1,505 | $ 1,622,429 | 2,143,873 | $ (426,208) | $ (65,979) | 3,275,620 | $ 4,104 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 178,190 | 178,190 | |||||||
Other comprehensive income (loss), net of tax effects | $ (28,674) | (28,674) | (28,674) | ||||||
Purchases of treasury stock (in shares) | (4,411) | 4,412 | |||||||
Purchases of treasury stock, value | $ (387,000) | $ 44 | (44) | 387,000 | (387,000) | ||||
Equity forward contract | $ (13,000) | (13,000) | (13,000) | ||||||
Common stock Issued, net of shares withheld for employee taxes (in shares) | 2,527 | 2,523 | |||||||
Common stock issued, net of shares withheld for employee taxes | $ 31,597 | $ 25 | (119,879) | (25,224) | 176,675 | 31,597 | |||
Stock-based compensation | 101,699 | 101,699 | 101,699 | ||||||
Non-controlling interest in an equity investment | 1,759 | 0 | 1,759 | ||||||
Balance (in shares) at Jul. 31, 2018 | 148,556 | ||||||||
Ending balance at Jul. 31, 2018 | 3,164,002 | $ 1,486 | 1,591,293 | 2,296,546 | (636,533) | (94,653) | 3,158,139 | 5,863 | |
Balance (in shares) at Apr. 30, 2018 | 148,961 | ||||||||
Beginning balance at Apr. 30, 2018 | 3,260,397 | $ 1,490 | 1,678,921 | 2,223,287 | (585,016) | (62,389) | 3,256,293 | 4,104 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 79,409 | 79,409 | 79,409 | ||||||
Other comprehensive income (loss), net of tax effects | $ (32,264) | (32,264) | (32,264) | ||||||
Purchases of treasury stock (in shares) | (1,509) | 1,509 | |||||||
Purchases of treasury stock, value | $ (132,000) | $ 15 | (15) | 132,000 | (132,000) | ||||
Equity forward contract | $ (33,000) | (33,000) | (33,000) | ||||||
Common stock Issued, net of shares withheld for employee taxes (in shares) | 1,107 | 1,104 | |||||||
Common stock issued, net of shares withheld for employee taxes | $ (17,236) | $ 11 | (91,580) | (6,150) | 80,483 | (17,236) | |||
Stock-based compensation | 36,937 | 36,937 | 36,937 | ||||||
Non-controlling interest in an equity investment | 1,759 | 0 | 1,759 | ||||||
Balance (in shares) at Jul. 31, 2018 | 148,556 | ||||||||
Ending balance at Jul. 31, 2018 | 3,164,002 | $ 1,486 | 1,591,293 | 2,296,546 | (636,533) | (94,653) | 3,158,139 | 5,863 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Cumulative effect adjustment | Accounting Standards Update 2014-09 | [1] | 257,594 | 257,594 | 257,594 | |||||
Cumulative effect adjustment | Accounting Standards Update 2016-16 | [2] | (130,544) | (130,544) | (130,544) | |||||
Balance (in shares) at Oct. 31, 2018 | 149,265 | ||||||||
Beginning balance at Oct. 31, 2018 | 3,485,015 | $ 1,493 | 1,644,830 | 2,543,688 | (597,682) | (113,177) | 3,479,152 | 5,863 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 371,653 | 371,653 | 371,653 | ||||||
Other comprehensive income (loss), net of tax effects | $ 16,524 | 16,524 | 16,524 | ||||||
Purchases of treasury stock (in shares) | (1,901) | 1,901 | |||||||
Purchases of treasury stock, value | $ (209,185) | $ 19 | (19) | 209,185 | (209,185) | ||||
Equity forward contract | $ (20,000) | (20,000) | (20,000) | ||||||
Common stock Issued, net of shares withheld for employee taxes (in shares) | 3,009 | 3,009 | |||||||
Common stock issued, net of shares withheld for employee taxes | $ 54,991 | $ 30 | (140,841) | (38,961) | 234,763 | 54,991 | |||
Stock-based compensation | 113,621 | 113,621 | 113,621 | ||||||
Balance (in shares) at Jul. 31, 2019 | 150,373 | ||||||||
Ending balance at Jul. 31, 2019 | 3,939,669 | $ 1,504 | 1,597,629 | 3,003,430 | (572,104) | (96,653) | 3,933,806 | 5,863 | |
Balance (in shares) at Apr. 30, 2019 | 149,982 | ||||||||
Beginning balance at Apr. 30, 2019 | 3,915,435 | $ 1,500 | 1,659,484 | 2,912,811 | (567,503) | (96,720) | 3,909,572 | 5,863 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 99,929 | 99,929 | 99,929 | ||||||
Other comprehensive income (loss), net of tax effects | $ 67 | 67 | 67 | ||||||
Purchases of treasury stock (in shares) | (775) | 775 | |||||||
Purchases of treasury stock, value | $ (100,000) | $ 8 | (8) | 100,000 | (100,000) | ||||
Common stock Issued, net of shares withheld for employee taxes (in shares) | 1,166 | 1,166 | |||||||
Common stock issued, net of shares withheld for employee taxes | $ (15,209) | $ 12 | (101,310) | (9,310) | 95,399 | (15,209) | |||
Stock-based compensation | 39,447 | 39,447 | 39,447 | ||||||
Balance (in shares) at Jul. 31, 2019 | 150,373 | ||||||||
Ending balance at Jul. 31, 2019 | $ 3,939,669 | $ 1,504 | $ 1,597,629 | $ 3,003,430 | $ (572,104) | $ (96,653) | $ 3,933,806 | $ 5,863 | |
[1] | See Note 2. Summary of Significant Accounting Policies for additional information on the retained earnings adjustment due to adoption of Accounting Standards Codification (ASC) 606 and ASC 340. | ||||||||
[2] | See Note 14. Taxes for additional information on the retained earnings adjustment due to adoption of Accounting Standard Update (ASU) 2016-16. |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Cash flow from operating activities: | ||
Net income (loss) | $ 371,653 | $ 178,190 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization and depreciation | 152,133 | 150,245 |
Amortization of capitalized costs to obtain revenue contracts | 46,230 | 0 |
Stock compensation | 114,826 | 102,540 |
Allowance for doubtful accounts | 8,950 | 3,368 |
(Gain) loss on sale of property and investments | (4,052) | (93) |
Deferred income taxes | (9,664) | 5,509 |
Net changes in operating assets and liabilities, net of acquired assets and liabilities: | ||
Accounts receivable | 89,370 | (41,695) |
Inventories | (39,431) | (48,440) |
Prepaid and other current assets | (38,224) | (9,766) |
Other long-term assets | (114,344) | (31,652) |
Accounts payable and accrued liabilities | (45,200) | (56,491) |
Income taxes | (6,963) | (35,014) |
Deferred revenue | 53,980 | 76,780 |
Net cash provided by operating activities | 579,264 | 293,481 |
Cash flows from investing activities: | ||
Proceeds from sales and maturities of short-term investments | 0 | 12,449 |
Proceeds from Sale and Maturity of Other Investments | 6,361 | 494 |
Proceeds from Sale of Property, Plant, and Equipment | 0 | 1,662 |
Payments to Acquire Other Investments | 0 | 645 |
Purchases of property and equipment | (122,358) | (70,469) |
Cash paid for acquisitions and intangible assets, net of cash acquired | 0 | (646,687) |
Capitalization of software development costs | (2,245) | (2,714) |
Net cash used in investing activities | (118,242) | (705,910) |
Cash flows from financing activities: | ||
Proceeds from credit facilities | 192,897 | 615,000 |
Repayment of debt | (520,312) | (137,500) |
Issuances of common stock | 107,354 | 72,722 |
Payments for taxes related to net share settlement of equity awards | (52,309) | (42,636) |
Purchase of equity forward contract | (20,000) | (33,000) |
Purchases of treasury stock | (209,185) | (367,000) |
Other | (762) | 1,759 |
Net cash (used in) provided by financing activities | (502,317) | 109,345 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,975 | (3,826) |
Net change in cash, cash equivalents and restricted cash | (36,320) | (306,910) |
Cash, cash equivalents and restricted cash, beginning of period | 725,001 | 1,050,075 |
Cash, cash equivalents and restricted cash, end of period | $ 688,681 | $ 743,165 |
Description of Business
Description of Business | 9 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Synopsys, Inc. (Synopsys or the Company) provides products and services used by designers across the entire silicon to software spectrum, from engineers creating advanced semiconductors to software developers seeking to ensure the security and quality of their code. The Company is a global leader in supplying the electronic design automation (EDA) software that engineers use to design and test integrated circuits (ICs), also known as chips. The Company also offers semiconductor intellectual property (IP) products, which are pre-designed circuits that engineers use as components of larger chip designs rather than designing those circuits themselves. The Company provides software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them. To complement these offerings, the Company provides technical services and support to help its customers develop advanced chips and electronic systems. These products and services are part of the Company’s Semiconductor & System Design segment. The Company is also a leading provider of software tools and services that improve the security and quality of software code in a wide variety of industries, including electronics, financial services, media, automotive, medicine, energy and industrials. These tools and services are part of the Company’s Software Integrity segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present its unaudited condensed consolidated balance sheets, results of operations, comprehensive income, stockholders' equity and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in Synopsys’ Annual Report on Form 10-K for the fiscal year ended October 31, 2018 as filed with the SEC on December 17, 2018. Use of Estimates. To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and may result in material effects on the Company’s operating results and financial position. Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany accounts and transactions have been eliminated. Fiscal Year End. The Company’s fiscal year generally ends on the Saturday nearest to October 31 and consists of 52 weeks, with the exception that every five or six years, the Company has a 53-week year. When a 53-week year occurs, the Company includes the additional week in the first quarter to realign fiscal quarters with calendar quarters. Fiscal 2019 is a 52-week year and will end on November 2, 2019. Fiscal 2018 was a 53-week year and ended on November 3, 2018. The results of operations for the first nine months of fiscal 2019 and 2018 included 39 weeks and 40 weeks, respectively, and ended on August 3, 2019 and August 4, 2018, respectively. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end. Segment Reporting. Effective in fiscal 2019, the Company realigned its business to evaluate the results of its Software Integrity business separately from Synopsys’ traditional electronic design automation (EDA) and semiconductor IP business. The Chief Operating Decision Makers (CODMs) now regularly review disaggregated information for the following two reportable segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and associated services, and (2) Software Integrity, which includes security and quality solutions for software development across many industries. Synopsys' CODMs are its two co- Chief Executive Officers. Historical segment disclosures have been recast to retrospectively reflect the change from one to two reportable segments. Goodwill. Effective in the first quarter of fiscal 2019, with the change in the Company’s reportable segments, the Company has determined there are now two reporting units, requiring goodwill to be allocated to the two reporting units using a relative fair value method. Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired by the Company. The carrying amount of goodwill at each reporting unit is tested for impairment annually as of October 31, or more frequently if facts and circumstances warrant a review. As a result of changes to the Company's segment reporting, the Company conducted a quantitative impairment test for each of its reporting units and concluded that there was no impairment. The Company performs either a qualitative or quantitative analysis when testing a reporting unit’s goodwill for impairment. A qualitative goodwill impairment test is performed when the fair value of a reporting unit historically has significantly exceeded the carrying value of its net assets and based on current operations is expected to continue to do so. Otherwise, the Company is required to conduct a quantitative impairment test for each reporting unit and estimates the fair value of each reporting unit using a combination of a discounted cash flow analysis and a market approach based on market multiples. The discount rate used in an income approach is based on the Company's weighted-average cost of capital and may be adjusted for the relevant risks pertaining to projecting future cash flows. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment charge is recorded for the difference. Refer to Note 3. Goodwill and Intangible Assets for a discussion of the change in reporting units as related to the realignment of the Company’s segments. Revenue Recognition. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC 606), "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in “Revenue Recognition (ASC 605).” The new guidance creates a single, principle-based model for revenue recognition that is intended to expand and improve companies' revenue disclosures. For revenue recognition policies under ASC 605, refer to Note 2 - Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended October 31, 2018. ASC 606 requires a company to recognize revenue when goods are transferred or services are provided to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. ASC 606 also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments to ASC 606, including amendments that deferred the initially proposed adoption date and clarified accounting for licenses of intellectual property and identifying performance obligations. The Company adopted ASC 606 at the beginning of fiscal 2019 using the modified retrospective transition method. Under this method, periods prior to the adoption date are not adjusted and continue to be reported under the revenue accounting literature in effect during those periods. The Company evaluated contracts that were in effect at the beginning of fiscal 2019 as if they had been accounted for under ASC 606 from the contract inception and summarized the most significant adoption impacts as follows: • Revenue for certain ongoing contracts that was previously deferred would have been recognized in the periods prior to adoption under ASC 606. Therefore, upon adoption, the Company recorded the following adjustments to the beginning balances to reflect the amount of revenue that will no longer be recognized in future periods for such contracts: an increase to retained earnings of $265.1 million , a decrease to unbilled receivables of $27.4 million , an increase to contract assets of $126.9 million , and a decrease in deferred revenue of $165.6 million . • The Company capitalized $73.8 million of incremental costs for obtaining contracts with customers at the adoption date with a corresponding adjustment to retained earnings and is amortizing these costs over the contract term. • The Company recorded an increase in its opening deferred tax liability of $81.4 million , with a corresponding adjustment to retained earnings, to record the tax effect of the above adjustments. The impacts of adopting ASC 606 on the Company's unaudited condensed consolidated financial statements for the nine months ended July 31, 2019 are summarized in the tables below. Balance Sheet Accounts The following table summarizes the effects of adopting ASC 606 on certain account balances of the unaudited condensed consolidated balance sheet that were impacted as of July 31, 2019 : As reported under ASC 606 Adjustments Adjusted balance under ASC 605 (in thousands) Receivables, net $ 457,390 $ 64,122 $ 521,512 Prepaid and other current assets 288,616 (205,822 ) 82,794 Deferred income taxes 339,354 76,891 416,245 Other long-term assets 383,509 (94,626 ) 288,883 Accounts payable and other accrued liabilities 471,629 (10,413 ) 461,216 Deferred revenue 1,138,993 132,450 1,271,443 Long-term deferred revenue 91,229 41,585 132,814 Other long-term liabilities (1) 338,928 (16,671 ) 322,257 Retained earnings 3,003,430 (306,386 ) 2,697,044 (1) Includes long-term deferred tax liabilities. Statements of Operations The following table summarizes the effects of adopting ASC 606 on the unaudited condensed consolidated statements of operations for the three and nine months ended July 31, 2019 : Three Months Ended Nine Months Ended As reported under ASC 606 Adjustments Adjusted under ASC 605 As reported under ASC 606 Adjustments Adjusted under ASC 605 (in thousands, except per share amounts) Revenue: Time-based products $ 537,569 $ 55,604 $ 593,173 $ 1,649,590 $ 158,222 $ 1,807,812 Upfront products 177,552 (73,267 ) 104,285 451,466 (151,110 ) 300,356 Maintenance and service 137,849 (26,914 ) 110,935 408,557 (57,707 ) 350,850 Total revenue 852,970 (44,577 ) 808,393 2,509,613 (50,595 ) 2,459,018 Cost of Revenue: Products 113,533 — 113,533 346,163 — 346,163 Maintenance and service 59,496 — 59,496 178,113 — 178,113 Amortization of intangible assets 13,603 — 13,603 45,927 — 45,927 Total cost of revenue 186,632 — 186,632 570,203 — 570,203 Gross margin 666,338 (44,577 ) 621,761 1,939,410 (50,595 ) 1,888,815 Operating expenses: Research and development 284,804 — 284,804 846,429 — 846,429 Sales and marketing 157,109 (2,731 ) 154,378 471,720 10,395 482,115 General and administrative 67,382 — 67,382 165,794 — 165,794 Amortization of intangible assets 10,111 — 10,111 31,211 — 31,211 Restructuring 19,338 — 19,338 33,746 — 33,746 Total operating expenses 538,744 (2,731 ) 536,013 1,548,900 10,395 1,559,295 Operating income 127,594 (41,846 ) 85,748 390,510 (60,990 ) 329,520 Other income (expense), net 5,317 — 5,317 23,373 — 23,373 Income before provision for income taxes 132,911 (41,846 ) 91,065 413,883 (60,990 ) 352,893 Provision (benefit) for income taxes 32,982 (9,127 ) 23,855 42,230 (12,198 ) 30,032 Net income $ 99,929 $ (32,719 ) $ 67,210 $ 371,653 $ (48,792 ) $ 322,861 Net income per share: Basic $ 0.67 $ (0.22 ) $ 0.45 $ 2.48 $ (0.32 ) $ 2.16 Diluted $ 0.65 $ (0.22 ) $ 0.43 $ 2.42 $ (0.32 ) $ 2.10 Shares used in computing per share amounts: Basic 150,123 150,123 149,708 149,708 Diluted 154,600 154,600 153,859 153,859 Statements of Cash Flows Adoption of ASC 606 had no impact to cash from or used in operating, financing, or investing activities on the unaudited condensed consolidated cash flows statements. Revenue Policy The core principle of ASC 606 is to recognize revenue for the transfer of services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The principle is achieved through the following five-step approach: • Identification of the contract, or contracts, with the customer • Identification of the performance obligation in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company generates revenue from the sale of products that include software licenses and, to a lesser extent, hardware products, maintenance and services. The various types are set forth below. Electronic Design Automation Software license revenue consists of fees associated with the licensing of the Company's software primarily through Technology Subscription License (TSL) contracts. TSLs are time-based licenses for a finite term and generally provide the customer with limited rights to receive, or to exchange certain quantities of licensed software for, unspecified future technology. The majority of the Company's arrangements are TSLs due to the nature of its business and customer requirements. In addition to the licenses, the arrangements also include: post-contract customer support, which includes providing frequent updates and upgrades to maintain the utility of the software due to rapid changes in technology; other intertwined services such as multiple copies of the tools; assisting the Company's customers in applying the Company's technology in the customers' development environment; and rights to remix licenses for other licenses. Payments are generally received in equal or near equal installments over the term of the arrangement. Under ASC 605, these arrangements were qualified to be recognized ratably over the contract terms. Under ASC 606, the Company has concluded that its software licenses in TSL contracts are not distinct from its obligation to provide unspecified software updates to the licensed software throughout the license term. Such updates represent inputs to a single, combined performance obligation, commencing upon the later of the arrangement effective date or transfer of the software license. Remix rights are not an additional promised good or service in the contract, and where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same pattern of transfer to the customer over the duration of the subscription term. IP & System Integration The Company generally licenses IP under nonexclusive license agreements that provide usage rights for specific applications. Additionally, for certain IP license agreements, royalties are collected as customers sell their own products that incorporate the Company’s IP. Under ASC 605, the Company recognized revenue either upfront if certain criteria in ASC 605 were met, or over the contractual period for IP licensing and support arrangements if such arrangements were combined with other TSL arrangements. Under ASC 606, these arrangements generally have two distinct performance obligations that consist of transferring the licensed IP and the support service. Support services consist of a stand-ready obligation to provide technical support and software updates over the support term. Revenue allocated to the IP license is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support services is recognized ratably over the support term. Royalties are recognized as revenue is earned, generally when the customer sells its products that incorporate the Company’s IP. Software Integrity Products Software Integrity product arrangements provide customers the right to software licenses, software updates and technical support. Under the term of these arrangements, the customer expects to receive integral updates to the software licenses that protect the customer’s software from potential security vulnerabilities. The licenses and software updates together serve to fulfill the Company’s commitment to the customer, as they represent inputs to a single, combined performance obligation that commences upon the later of the arrangement effective date or transfer of the software license. Software updates are part of the contract with the customer, and such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer . Hardware The Company generally has two performance obligations in arrangements involving the sale of hardware products. The first performance obligation is to transfer the hardware product, which includes embedded software integral to the functionality of the hardware product. The second performance obligation is to provide maintenance on the hardware and its embedded software, including rights to technical support, hardware repairs and software updates that are all provided over the same term and have the same time-based pattern of transfer to the customer. The portion of the transaction price allocated to the hardware product is generally recognized as revenue at a point in time when the hardware is delivered to the customer. The Company has concluded that control generally transfers upon delivery because the customer has title to the hardware, physical possession of the hardware, and a present obligation to pay for the hardware. The portion of the transaction price allocated to maintenance is recognized as revenue that is ratable over the maintenance term. The adoption of ASC 606 did not change the timing of revenue recognition for hardware products and related services. Professional Services Our arrangements often include service elements (other than maintenance and support services). These services include training, design assistance, and consulting. Services performed on a time and materials basis are recognized over time, as the customer simultaneously receives and consumes the benefit provided. Certain arrangements also include the customization or modification of licensed IP. Revenue from these contracts is recognized over time as the services are performed, when the development is specific to the customer’s needs and Synopsys has enforceable rights to payment for performance completed. Performance is generally measured using costs incurred or hours expended to measure progress. The Company has a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances, specification and testing requirement changes, and changes in customer delivery priorities. Payments for services are generally due upon milestones in the contract or upon consumption of the hourly resources. Flexible Spending Accounts Some customers enter into a non-cancelable Flexible Spending Account arrangement (FSA) whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of Synopsys products or services. These arrangements do not meet the definition of a revenue contract until the customer executes a separate order to identify the required products and services that they are purchasing. The combination of the FSA arrangement and the subsequent order creates enforceable rights and obligations, thus meeting the definition of a revenue contract. Each separate order under the agreement is treated as an individual contract under the new standard and accounted for based on the respective performance obligations included within the FSA arrangements. Disaggregated Revenue The following table shows the percentage of revenue by product groups: Three Months Ended July 31, Nine Months Ended July 31, 2019 2018 2019 2018 EDA 57 % 64 % 59 % 63 % IP & System Integration 33 % 27 % 31 % 28 % Software Integrity Products & Services 10 % 9 % 10 % 9 % Other — % — % — % — % Total 100 % 100 % 100 % 100 % Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment . The Company has concluded that (1) its EDA software licenses in TSL contracts are not distinct from its obligation to provide unspecified software updates to the licensed software throughout the license term, because those promises represent inputs to a single, combined performance obligation, and (2) where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support, because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer. In reaching this conclusion, the Company considered the nature of the obligation to customers which is to provide an ongoing right to use the most up to date and relevant software. As EDA customers operate in a rapidly changing and competitive environment, satisfying the obligation requires providing critical updates to the existing software products, including ongoing iterative interaction with customers to make the software relevant to customers’ ability to meet the time to go to market with advanced products. Similarly, the Company also concluded that in its Software Integrity business, the licenses and maintenance updates serve together to fulfill the Company’s commitment to the customer as both work together to provide the functionality to the customer and represent a combined performance obligation because the updates are essential to the software’s central utility, which is to identify security vulnerabilities and other threats. Judgment is also required to determine the standalone selling price (SSP) for each distinct performance obligation. For non-software performance obligations (IP, Hardware, and services), SSP is established based on observable prices of products and services sold separately. SSP for license (and related updates and support) in a contract with multiple performance obligations is determined by applying a residual approach whereby all other non-software performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSP, using observable prices, with any residual amount of the transaction price allocated to the license because the Company does not sell the license separately, and the pricing is highly variable. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables (billed or unbilled), contract assets, or contract liabilities (deferred revenue) on the Company’s unaudited condensed consolidated balance sheet. The Company records a contract asset when revenue is recognized prior to the right to invoice, or deferred revenue when revenue is recognized subsequent to invoicing. For time-based software agreements, customers are generally invoiced in equal, quarterly amounts, although some customers prefer to be invoiced in single or annual amounts. The Company records an unbilled receivable when revenue is recognized and it has an unconditional right to invoice and receive payment. The contract assets indicated below are presented as prepaid and other current assets in the unaudited condensed consolidated balance sheet. The contract assets are transferred to receivables when the rights to invoice and receive payment become unconditional. Contract balances are as follows: As of July 31, 2019 As of October 31, 2018 as adjusted (in thousands) Contract assets $ 205,822 $ 126,897 Unbilled receivables 38,965 36,699 Deferred revenue 1,230,222 1,104,110 During the three and nine months ended July 31, 2019 , the Company recognized $470.6 million and $1,432.1 million , respectively, of revenue that were included in the deferred revenue balance at the beginning of the period, as adjusted for the adoption of ASC 606. Contracted but unsatisfied or partially unsatisfied performance obligations were approximately $4.3 billion as of July 31, 2019 , which includes $463.5 million in non-cancellable FSA commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. The Company has elected to exclude future sales-based royalty payments from the remaining performance obligations. The contracted unsatisfied performance obligations, excluding non-cancellable FSA, expected to be recognized over the next 12 months is approximately 56% , with the remainder recognized thereafter. During the three and nine month periods ended July 31, 2019 , the Company recognized $17.5 million and $64.8 million , respectively, from performance obligations satisfied from sales based royalties earned during the periods. Costs of Obtaining a Contract with Customer The incremental costs of obtaining a contract with a customer, which consist primarily of direct sales commissions earned upon execution of the contract, are required to be capitalized under ASC 340-40 and amortized over the estimated period of which the benefit is expected to be received. As direct sales commissions paid for renewals are commensurate with the amounts paid for initial contracts, the deferred incremental costs will be recognized over the contract term. Total capitalized direct commission costs as of July 31, 2019 were $94.6 million and are included in other assets in the Company’s unaudited condensed consolidated balance sheet. Amortization of these assets was $17.8 million and $46.2 million during the three and nine months ended July 31, 2019 , respectively, and are included in sales and marketing expense in the Company’s unaudited condensed consolidated statements of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Following the realignment of the Company’s operating segments during the first quarter of fiscal 2019, as described in Note 12. Segment Disclosure, the Company has two reporting units and has assigned assets and liabilities to each of the reporting units based on each unit's operating activities. Previously, the Company operated as a single reporting segment and reporting unit. Goodwill was reallocated to the reporting units using a relative fair value method and assessed for impairment. No impairment of goodwill was identified for any periods presented. In-process research and development (IPR&D) as of July 31, 2019 consisted of acquired projects that, if completed, will be reclassified to core/developed technology upon completion, or if abandoned, will be written off. Intangible assets as of July 31, 2019 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 773,147 $ 642,185 $ 130,962 Customer relationships 358,667 232,784 125,883 Contract rights intangible 184,321 180,349 3,972 Trademarks and trade names 42,929 24,803 18,126 In-process research and development (IPR&D) 1,200 — 1,200 Capitalized software development costs 38,063 34,901 3,162 Total $ 1,398,327 $ 1,115,022 $ 283,305 Intangible assets as of October 31, 2018 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 773,147 $ 598,956 $ 174,191 Customer relationships 358,524 204,382 154,142 Contract rights intangible 183,953 177,191 6,762 Trademarks and trade names 42,929 21,944 20,985 In-process research and development (IPR&D) 1,200 — 1,200 Capitalized software development costs 35,818 32,694 3,124 Total $ 1,395,571 $ 1,035,167 $ 360,404 Amortization expense related to intangible assets consisted of the following: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Core/developed technology $ 12,825 $ 18,692 $ 43,229 $ 55,745 Customer relationships 9,303 9,584 28,261 27,803 Contract rights intangible 808 1,357 2,790 3,619 Trademarks and trade names 778 1,172 2,858 3,371 Capitalized software development costs(1) 700 894 2,207 2,710 Total $ 24,414 $ 31,699 $ 79,345 $ 93,248 (1) Amortization of capitalized software development costs is included in cost of products revenue in the unaudited condensed consolidated statements of operations. The following table presents the estimated future amortization of the existing intangible assets as of July 31, 2019 : Fiscal Year (in thousands) Remainder of fiscal 2019 $ 23,821 2020 79,195 2021 56,409 2022 44,014 2023 29,219 2024 and thereafter 49,447 IPR&D 1,200 Total $ 283,305 |
Financial Assets and Liabilitie
Financial Assets and Liabilities | 9 Months Ended |
Jul. 31, 2019 | |
Financial Assets And Liabilities [Abstract] | |
Financial Assets and Liabilities | Financial Assets and Liabilities Cash equivalents. The Company classifies time deposits and other investments with original maturities less than three months as cash equivalents. As of July 31, 2019 , the balances of the Company's cash equivalents are: Cost Gross Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ 130,437 $ — $ — $ — $ 130,437 Total: $ 130,437 $ — $ — $ — $ 130,437 (1) See Note 5. Fair Value Measures for further discussion on fair values of cash equivalents. As of October 31, 2018 , the balances of the Company's cash equivalents are: Cost Gross Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ 165,296 $ — $ — $ — $ 165,296 Total: $ 165,296 $ — $ — $ — $ 165,296 (1) See Note 5. Fair Value Measures for further discussion on fair values of cash equivalents. Restricted Cash. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash.” The Company adopted the standard in the first quarter of fiscal 2019 and applied it retrospectively for the periods presented. As required by ASU 2016-18, the Company included amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. All restricted cash is primarily associated with office leases and has no material impact on the Company’s unaudited condensed consolidated statement of cash flows. The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the unaudited condensed consolidated balance sheets: As of July 31, 2019 As of October 31, 2018 (in thousands) Cash and cash equivalents $ 686,780 $ 723,115 Restricted cash included in Prepaid expenses and other current assets 1,171 1,164 Restricted cash included in Other long-term assets 730 722 Total cash, cash equivalents and restricted cash $ 688,681 $ 725,001 Non-marketable equity securities. The Company’s strategic investment portfolio consists of non-marketable equity securities in privately-held companies. The securities accounted for under cost method investments are reported at cost net of impairment losses. Securities accounted for under equity method investments are recorded at cost plus the proportional share of the issuers’ income or loss, which is recorded in the Company’s other income (expense), net. The cost basis of securities sold is based on the specific identification method. Refer to Note 5. Fair Value Measures. Derivatives. The Company recognizes derivative instruments as either assets or liabilities in the unaudited condensed consolidated balance sheets at fair value and provides qualitative and quantitative disclosures about such derivatives. The Company operates internationally and is exposed to potentially adverse movements in foreign currency exchange rates. The Company enters into hedges in the form of foreign currency forward contracts to reduce its exposure to foreign currency rate changes on non-functional currency denominated forecasted transactions and balance sheet positions including: (1) certain assets and liabilities, (2) shipments forecasted to occur within approximately one month , (3) future billings and revenue on previously shipped orders, and (4) certain future intercompany invoices denominated in foreign currencies. The duration of forward contracts ranges from approximately one month to 22 months , the majority of which are short-term. The Company does not use foreign currency forward contracts for speculative or trading purposes. The Company enters into foreign exchange forward contracts with high credit quality financial institutions that are rated ‘A’ or above and to date has not experienced nonperformance by counterparties. Further, the Company anticipates continued performance by all counterparties to such agreements. The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or accrued liabilities in the unaudited condensed consolidated balance sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. Cash Flow Hedging Activities Certain foreign exchange forward contracts are designated and qualify as cash flow hedges. These contracts have durations of approximately 22 months or less. Certain forward contracts are rolled over periodically to capture the full length of exposure to the Company’s foreign currency risk, which can be up to three years . To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. The effective portion of gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of other comprehensive income (OCI) in stockholders’ equity and reclassified into revenue or operating expenses, as appropriate, at the time the hedged transactions affect earnings. The Company expects a majority of the hedge balance in OCI to be reclassified to the statements of operations within the next 12 months . Hedging effectiveness is evaluated monthly using spot rates, with any gain or loss caused by hedging ineffectiveness recorded in other income (expense), net. The premium/discount component of the forward contracts is recorded to other income (expense), net, and is not included in evaluating hedging effectiveness. Non-designated Hedging Activities The Company’s foreign exchange forward contracts that are used to hedge non-functional currency denominated balance sheet assets and liabilities are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the underlying assets and liabilities, which are also recorded in other income (expense), net. The duration of the forward contracts for hedging the Company’s balance sheet exposure is approximately one month . The Company also has certain foreign exchange forward contracts for hedging certain international revenues and expenses that are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the foreign currency in operating income. The duration of these forward contracts is usually less than one year . The overall goal of the Company’s hedging program is to minimize the impact of currency fluctuations on its net income over its fiscal year. The effect of the changes in the fair values of non-designated forward contracts is summarized as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Gain (loss) recorded in other income (expense), net $ 1,179 $ 1,567 $ 4,314 $ 1,244 The notional amounts in the table below for derivative instruments provide one measure of the transaction volume outstanding: As of July 31, 2019 As of October 31, 2018 (in thousands) Total gross notional amount $ 779,127 $ 1,135,549 Net fair value $ (565 ) $ (18,120 ) The notional amounts for derivative instruments do not represent the amount of the Company’s exposure to market gain or loss. The Company’s exposure to market gain or loss will vary over time as a function of currency exchange rates. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments. The following table represents the unaudited condensed consolidated balance sheet location and amount of derivative instrument fair values segregated between designated and non-designated hedge instruments: Fair values of derivative instruments designated as hedging instruments Fair values of derivative instruments not designated as hedging instruments (in thousands) As of July 31, 2019 Other current assets $ 6,487 $ 77 Accrued liabilities $ 7,020 $ 109 As of October 31, 2018 Other current assets $ 4,771 $ 131 Accrued liabilities $ 22,890 $ 132 The following table represents the unaudited condensed consolidated statement of operations location and amount of gains and losses on derivative instrument fair values for designated hedge instruments, net of tax: 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) Three months ended Foreign exchange contracts Revenue $ (994 ) Revenue $ 685 Foreign exchange contracts Operating expenses (76 ) Operating expenses (3,945 ) Total $ (1,070 ) $ (3,260 ) Three months ended Foreign exchange contracts Revenue $ 1,422 Revenue $ (308 ) Foreign exchange contracts Operating expenses (13,793 ) Operating expenses 1,970 Total $ (12,371 ) $ 1,662 Nine months ended Foreign exchange contracts Revenue $ (253 ) Revenue $ 1,048 Foreign exchange contracts Operating expenses 5,097 Operating expenses (12,795 ) Total $ 4,844 $ (11,747 ) Nine months ended Foreign exchange contracts Revenue $ (542 ) Revenue $ 1,190 Foreign exchange contracts Operating expenses (7,349 ) Operating expenses 11,320 Total $ (7,891 ) $ 12,510 The following table represents the ineffective portions and portions excluded from effectiveness testing of the hedge gains (losses) for derivative instruments designated as hedging instruments, which are recorded in other income (expense), net: Foreign exchange contracts Amount of gain (loss) recognized in statement of operations on derivatives (ineffective portion)(1) Amount of gain (loss) recognized in statement of operations on derivatives (excluded from effectiveness testing)(2) (in thousands) For the three months ended July 31, 2019 $ 232 $ 1,077 For the three months ended July 31, 2018 $ (132 ) $ 782 For the nine months ended July 31, 2019 $ 148 $ 358 For the nine months ended July 31, 2018 $ 389 $ 2,488 (1) The ineffective portion includes forecast inaccuracies. (2) The portion excluded from effectiveness testing includes the discount earned or premium paid for the contracts. |
Fair Value Measures
Fair Value Measures | 9 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | Fair Value Measures Accounting standards require an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Accounting standards also establish a fair value hierarchy based on the independence of the source and objective evidence of the inputs used. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement: Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical instruments in active markets; Level 2 —Observable inputs other than quoted prices included in Level 1 for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3 —Unobservable inputs to the valuation derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable. On a recurring basis, the Company measures the fair value of certain of its assets and liabilities, which include cash equivalents, non-qualified deferred compensation plan assets, and foreign currency derivative contracts. The Company’s cash equivalents are classified within Level 1 or Level 2 because they are valued using quoted market prices in an active market or alternative independent pricing sources and models utilizing market observable inputs. The Company’s non-qualified deferred compensation plan assets consist of money market and mutual funds invested in domestic and international marketable securities that are directly observable in active markets and are therefore classified within Level 1. The Company’s foreign currency derivative contracts are classified within Level 2 because these contracts are not actively traded and the valuation inputs are based on quoted prices and market observable data of similar instruments. The Company’s borrowings under its credit and term loan facilities are classified within Level 2 because these borrowings are not actively traded and have a variable interest rate structure based upon market rates currently available to the Company for debt with similar terms and maturities. Refer to Note 7. Credit Facility for more information on these borrowings. Assets and Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below as of July 31, 2019 : 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 $ 130,437 $ 130,437 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 6,564 — 6,564 — Other long-term assets: Deferred compensation plan assets 248,510 248,510 — — Total assets $ 385,511 $ 378,947 $ 6,564 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 7,129 $ — $ 7,129 $ — Other long-term liabilities: Deferred compensation plan liabilities 248,510 248,510 — — Total liabilities $ 255,639 $ 248,510 $ 7,129 $ — Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2018 : 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 $ 165,296 $ 165,296 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 4,902 — 4,902 — Other long-term assets: Deferred compensation plan assets 212,165 212,165 — — Total assets $ 382,363 $ 377,461 $ 4,902 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 23,022 $ — $ 23,022 $ — Other long-term liabilities: Deferred compensation plan liabilities 212,165 212,165 — — Total liabilities $ 235,187 $ 212,165 $ 23,022 $ — Assets/Liabilities Measured at Fair Value on a Non-Recurring Basis Non-Marketable Equity Securities Equity investments in privately-held companies, also called non-marketable equity securities, are accounted for using either the cost or equity method of accounting. The non-marketable equity securities are measured and recorded at fair value when an event or circumstance which impacts the fair value of these securities indicates an other-than-temporary decline in value has occurred. In such events, these equity investments would be classified within Level 3 as they are valued using significant unobservable inputs or data in an inactive market, and the valuation requires management judgment due to the absence of market price and inherent lack of liquidity. The Company monitors these investments and generally uses the income approach to assess impairments based primarily on the financial conditions of these companies. The Company did not recognize any impairment during the three and nine months ended July 31, 2019 |
Liabilities and Restructuring C
Liabilities and Restructuring Charges | 9 Months Ended |
Jul. 31, 2019 | |
Liabilities and Restructuring Charges [Abstract] | |
Liabilities and Restructuring Charges | Liabilities and Restructuring Charges In the second quarter of fiscal 2019, the Company initiated restructuring plans for involuntary and voluntary employee termination and facility closure actions as part of a business reorganization to better position the Company for future growth by reallocating resources to priority areas, and to a lesser extent, eliminating operational redundancy. The total charges under the 2019 restructuring plans are expected to be $43 million to $65 million and consist primarily of severance, termination, and retirement benefits under the 2019 Voluntary Retirement Program (VRP). The actual total charges depend, in part, on the number of eligible employees accepting offers of the VRP. The 2019 restructuring plans are anticipated to be completed by the second quarter of fiscal 2020. During the three and nine months ended July 31, 2019 , the Company incurred restructuring charges of approximately $19.3 million and $33.7 million , respectively, for involuntary employee termination actions and the VRP. These charges consist primarily of severance, termination, and retirement benefits. As of July 31, 2019 , $20.8 million remained outstanding and was recorded in accounts payable and accrued liabilities in the unaudited condensed consolidated balance sheets. During the nine months ended July 31, 2018 , the Company incurred restructuring charges of approximately $1.9 million as part of a business realignment. Total charges under this realignment were expected to be $8 million to $10 million consisting of severance and benefits. The outstanding balance as of July 31, 2019 was immaterial. As of October 31, 2018, $8.1 million remained outstanding and was recorded in accounts payable and accrued liabilities in the consolidated balance sheets. Accounts payable and accrued liabilities consist of: As of July 31, 2019 As of October 31, 2018 (in thousands) Payroll and related benefits $ 391,593 $ 413,307 Other accrued liabilities 65,190 79,973 Accounts payable 14,846 85,046 Total $ 471,629 $ 578,326 Other long-term liabilities consist of: As of July 31, 2019 As of October 31, 2018 (in thousands) Deferred compensation liability $ 248,510 $ 212,165 Other long-term liabilities 90,418 53,395 Total $ 338,928 $ 265,560 |
Credit Facility
Credit Facility | 9 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility In July 2018, the Company entered into a 220.0 million RMB (approximately $33.0 million ) credit agreement with a lender in China to support its facilities expansion. Borrowings bear interest at a floating rate based on the Chinese Central Bank rate plus 10% of such rate. As of July 31, 2019 , the Company had $18.4 million outstanding under the agreement. On November 28, 2016, the Company entered into an amended and restated credit agreement with several lenders (the Credit Agreement) providing for (i) a $650.0 million senior unsecured revolving credit facility (the Revolver) and (ii) a $150.0 million senior unsecured term loan facility (the Term Loan). The Credit Agreement amended and restated the Company’s previous credit agreement dated May 19, 2015 (the 2015 agreement), in order to increase the size of the revolving credit facility from $500.0 million to $650.0 million , to provide a new $150.0 million senior unsecured term loan facility, and to extend the termination date of the revolving credit facility from May 19, 2020 to November 28, 2021. Subject to obtaining additional commitments from lenders, the principal amount of the loans provided under the Credit Agreement may be increased by the Company by up to an additional $150.0 million . The Credit Agreement contains financial covenants requiring the Company to operate within a maximum leverage ratio and a minimum interest coverage ratio, as well as other non-financial covenants. As of July 31, 2019 , the Company was in compliance with all financial covenants. As of July 31, 2019 , the Company had $123.5 million outstanding balance, net of debt issuance costs, under the Term Loan, of which $106.9 million was classified as long-term liabilities. Outstanding principal payments under the Term Loan are due as follows: Fiscal year (in thousands) Remainder of fiscal 2019 $ 3,750 2020 17,813 2021 27,187 2022 75,000 Total $ 123,750 As of October 31, 2018 , the Company had $133.8 million outstanding balance, net of debt issuance costs, under the Term Loan, of which $120.0 million was classified as long-term liabilities, and $330.0 million outstanding balance under the Revolver. There was no outstanding balance of the Revolver as of July 31, 2019 . The Company expects its borrowings under the Revolver will fluctuate from quarter to quarter. Borrowings bear interest at a floating rate based on a margin over the Company’s choice of market observable base rates as defined in the Credit Agreement. As of July 31, 2019 , borrowings under the Term Loan bore interest at LIBOR +1.125% and the applicable interest rate for the Revolver was LIBOR +1.000% . In addition, commitment fees are payable on the Revolver at rates between 0.125% and 0.200% per year based on the Company’s leverage ratio on the daily amount of the revolving commitment. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jul. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Components of accumulated other comprehensive income (loss), on an after-tax basis where applicable, were as follows: As of July 31, 2019 As of October 31, 2018 (in thousands) Cumulative currency translation adjustments $ (89,355 ) $ (89,289 ) Unrealized gain (loss) on derivative instruments, net of taxes (7,298 ) (23,888 ) Total accumulated other comprehensive income (loss) $ (96,653 ) $ (113,177 ) The effect of amounts reclassified out of each component of accumulated other comprehensive income (loss) (AOCI) into net income was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Reclassifications from AOCI to unaudited condensed consolidated statement of operations: Gain (loss) on cash flow hedges, net of taxes Revenues $ 685 $ (308 ) $ 1,048 $ 1,190 Operating expenses (3,945 ) 1,970 (12,795 ) 11,320 Total reclassifications into net income $ (3,260 ) $ 1,662 $ (11,747 ) $ 12,510 |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Jul. 31, 2019 | |
Stock Repurchase Program [Abstract] | |
Stock Repurchase Program | Stock Repurchase Program The Company’s Board of Directors (the Board) previously approved a stock repurchase program pursuant to which the Company was authorized to purchase up to $500.0 million of its common stock, and has periodically replenished the stock repurchase program to such amount. The Board replenished the stock repurchase program up to $500.0 million on June 14, 2019. The program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or terminated at any time by the Company's Chief Financial Officer or the Board. The Company repurchases shares to offset dilution caused by ongoing stock issuances from existing equity plans for equity compensation awards and issuances related to acquisitions, and when management believes it is a good use of cash. Repurchases are transacted in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), and may be made through any means including, but not limited to, open market purchases, plans executed under Rule 10b5-1(c) of the Exchange Act and structured transactions. As of July 31, 2019 , $500.0 million remained available for further repurchases under the program. In February 2019, the Company entered into an accelerated share repurchase agreement (the February 2019 ASR) to repurchase an aggregate of $100.0 million of the Company’s common stock. Pursuant to the February 2019 ASR, the Company made a prepayment of $100.0 million and received initial share deliveries valued at $80.0 million . The remaining balance of $20.0 million was settled in May 2019. Total shares repurchased under the February 2019 ASR were approximately 0.9 million shares, at an average purchase price of $114.01 per share. In June 2019, the Company entered into an accelerated share repurchase agreement (the June 2019 ASR) to repurchase an aggregate of $100.0 million of the Company’s common stock. Pursuant to the June 2019 ASR, the Company made a prepayment of $100.0 million and received initial share deliveries valued at $80.0 million . The remaining balance of $20.0 million was settled in August 2019. Total shares repurchased under the June 2019 ASR were approximately 0.8 million shares, at an average purchase price of $130.23 per share. Stock repurchase activities are as follows: Three Months Ended Nine Months Ended 2019 (1) 2018 2019 (1)(2) 2018 (in thousands) Total shares repurchased(3)(4) 775 1,509 1,901 4,411 Total cost of the repurchased shares (4) $ 100,000 $ 132,000 $ 209,185 $ 387,000 Reissuance of treasury stock 1,166 1,107 3,009 2,527 (1) Does not include the 90,202 shares or $20.0 million equity forward contract from the June 2019 ASR settled in August 2019. (2) The third quarter of fiscal 2019 includes the settlement of the 97,601 shares or $20.0 million equity forward contract from the February 2019 ASR settled in May 2019. (3) The first quarter of fiscal 2018 includes the settlement of the $20.0 million equity forward contract related to the Company's accelerated share repurchase agreement entered into in September 2017. (4) The Company also repurchased 0.4 million shares at an average price of $82.61 per share, for an aggregate purchase price of $35.0 million during the second quarter of fiscal 2018. |
Stock Compensation
Stock Compensation | 9 Months Ended |
Jul. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation | Stock Compensation The compensation cost recognized in the unaudited condensed consolidated statements of operations for the Company’s stock compensation arrangements was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Cost of products $ 4,493 $ 3,820 $ 12,684 $ 10,663 Cost of maintenance and service 1,694 1,442 4,675 3,979 Research and development expense 19,383 18,412 55,802 48,958 Sales and marketing expense 7,360 7,317 21,790 20,813 General and administrative expense 6,523 6,261 19,876 18,127 Stock compensation expense before taxes 39,453 37,252 114,827 102,540 Income tax benefit (6,593 ) (7,111 ) (19,188 ) (19,574 ) Stock compensation expense after taxes $ 32,860 $ 30,141 $ 95,639 $ 82,966 As of July 31, 2019 , there was $298.1 million of unamortized share-based compensation expense relating to options and restricted stock units and awards, which is expected to be amortized over a weighted-average period of approximately 2.4 years . The intrinsic values of equity awards exercised during the periods are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Intrinsic value of awards exercised $ 37,436 $ 19,283 $ 96,014 $ 50,075 |
Net Income per Share
Net Income per Share | 9 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share The Company computes basic net income per share by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share reflects the dilution from potential common shares outstanding, such as stock options and unvested restricted stock units and awards, during the period using the treasury stock method. The table below reconciles the weighted-average common shares used to calculate basic net income per share with the weighted-average common shares used to calculate diluted net income per share: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands, except per share amounts) Numerator: Net income $ 99,929 $ 79,409 $ 371,653 $ 178,190 Denominator: Weighted-average common shares for basic net income per share 150,123 148,490 149,708 148,760 Dilutive effect of potential common shares from equity-based compensation 4,477 4,124 4,151 4,358 Weighted-average common shares for diluted net income per share 154,600 152,614 153,859 153,118 Net income per share: Basic $ 0.67 $ 0.53 $ 2.48 $ 1.20 Diluted $ 0.65 $ 0.52 $ 2.42 $ 1.16 Anti-dilutive employee stock-based awards excluded(1) 152 1,063 798 774 (1) These employee stock-based awards 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. |
Segment Disclosure
Segment Disclosure | 9 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Disclosure | Segment Disclosure Certain disclosures are required for operating segments, products and services, geographic areas of operation and major customers. Segment reporting is based upon the “management approach,” i.e., how management organizes the Company’s operating segments for which separate financial information is (1) available and (2) evaluated regularly by the Chief Operating Decision Makers (CODMs) in deciding how to allocate resources and in assessing performance. Synopsys’ CODMs are its two co-Chief Executive Officers. In prior periods, the Company operated in a single segment. Effective in fiscal 2019, the Company realigned its business to evaluate the results of its Software Integrity business separately from the Company’s traditional EDA and semiconductor IP business. The CODMs now regularly review disaggregated information for the following two reportable segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and associated services, and (2) Software Integrity, which includes security and quality solutions for software development across many industries. The Company’s historical results have been recast to retrospectively reflect the change from one to two reportable segments. As a result of the change in reporting structure, financial information provided to and used by the CODMs to assist in making operational decisions, allocating resources, and assessing performance reflects consolidated financial information as well as revenue, adjusted operating income, and adjusted operating margin information for the Semiconductor & System Design and Software Integrity segments, accompanied by disaggregated information relating to revenues by geographic region. Information by reportable segment was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Total Segments: Revenues $ 852,970 $ 779,714 $ 2,509,613 $ 2,325,976 Adjusted operating income 216,581 167,847 627,369 553,909 Adjusted operating margin 25 % 22 % 25 % 24 % Semiconductor & System Design: Revenues $ 769,411 $ 708,413 $ 2,260,372 $ 2,122,780 Adjusted operating income 207,773 169,798 604,497 564,656 Adjusted operating margin 27 % 24 % 27 % 27 % Software Integrity: Revenues $ 83,559 $ 71,301 $ 249,241 $ 203,196 Adjusted operating income 8,808 (1,951 ) 22,872 (10,747 ) Adjusted operating margin 11 % (3 )% 9 % (5 )% Certain operating expenses are not allocated to the segments and are managed at a consolidated level. The unallocated expenses managed at a consolidated level, including amortization of intangible assets, stock compensation and other operating expenses, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to the Company's consolidated operating income: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Total segment adjusted operating income $ 216,581 $ 167,847 $ 627,369 $ 553,909 Reconciling items: Amortization of intangible expense (23,714 ) (30,805 ) (77,138 ) (90,538 ) Stock-based compensation expense (39,453 ) (37,252 ) (114,827 ) (102,540 ) Other (25,820 ) (35,822 ) (44,894 ) (62,131 ) Total operating income $ 127,594 $ 63,968 $ 390,510 $ 298,700 The CODMs do not use total assets by segment to evaluate segment performance or allocate resources. As a result, total assets by segment are not required to be disclosed. Revenue by Geography The CODMs consider where individual “seats” or licenses to the Company’s products are located in allocating revenue to particular geographic areas. Revenue is defined as revenues from external customers. Revenues related to operations in the United States and other geographic areas were: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Revenue: United States $ 407,408 $ 365,414 $ 1,231,951 $ 1,126,624 Europe 90,074 90,657 257,502 273,136 Japan 65,709 71,981 203,486 210,805 Asia-Pacific and Other 289,779 251,662 816,675 715,411 Consolidated $ 852,970 $ 779,714 $ 2,509,613 $ 2,325,976 Geographic revenue data for multi-region, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and the Company’s methodology. For the three and nine months ended July 31, 2019 and 2018 , one customer, including its subsidiaries, through multiple agreements accounted for greater than 10% of the Company's total revenues. |
Other Income (Expense), net
Other Income (Expense), net | 9 Months Ended |
Jul. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Other Income (Expense), net | Other Income (Expense), net The following table presents the components of other income (expense), net: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Interest income $ 1,789 $ 1,096 $ 5,280 $ 3,659 Interest expense (2,214 ) (4,558 ) (10,608 ) (11,281 ) Gain (loss) on assets related to executive deferred compensation plan assets 4,686 8,397 25,201 14,592 Foreign currency exchange gain (loss) 696 1,627 2,999 1,725 Other, net 360 1,363 501 3,900 Total $ 5,317 $ 7,925 $ 23,373 $ 12,595 |
Taxes
Taxes | 9 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Taxes | Taxes Effective Tax Rate The Company estimates its annual effective tax rate at the end of each fiscal quarter. The effective tax rate takes into account the Company's estimations of annual pre-tax income, the geographic mix of pre-tax income and interpretations of tax laws and possible outcomes of audits. The following table presents the provision (benefit) for income taxes and the effective tax rates: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Income before income taxes $ 132,911 $ 71,893 $ 413,883 $ 311,295 Provision (benefit) for income taxes $ 32,982 $ (7,516 ) $ 42,230 $ 133,105 Effective tax rate 24.8 % (10.5 )% 10.2 % 42.8 % The Tax Cuts and Jobs Act (Tax Act), enacted on December 22, 2017, lowered the statutory federal corporate income tax rate from 35% to 21% effective on January 1, 2018. Beginning in the Company's fiscal 2019, the annual statutory federal corporate tax rate is 21% . The Tax Act includes certain new tax provisions listed below which apply to the Company beginning in fiscal 2019. • 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 the first quarter of 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. In the first, second and third quarters of fiscal 2019, the U.S. Treasury Department issued proposed regulations that could impact the calculation of taxes related to these provisions. While the Company continues to evaluate the potential impact on its estimated annual tax rate, certain regulations have not been finalized and are subject to change. On July 27, 2015, the United States Tax Court (Tax Court) issued an opinion ( Altera Corp. et al. v. Commissioner ) regarding the treatment of stock-based compensation expense in intercompany cost-sharing arrangements. In view of the Tax Court opinion, the Company amended its cost-sharing arrangement effective February 1, 2016 to exclude stock-based compensation expense on a prospective basis and reflected the corresponding benefits in its income tax expense for fiscal years 2016, 2017 and 2018. On July 24, 2018, the United States Court of Appeals for the Ninth Circuit (Ninth Circuit) reversed the decision of the Tax Court, and then subsequently withdrew its decision on August 7, 2018. A rehearing of the case was held on October 16, 2018 and on June 7, 2019, the Ninth Circuit overturned the July 27, 2015 Tax Court decision. In the third quarter of 2019, as a result of the Ninth Circuit decision, the Company recorded a tax expense of $18.3 million related to fiscal years 2016, 2017 and 2018. The Company's intercompany cost-sharing arrangement was terminated at the end of fiscal 2018 as part of a tax restructuring. The Company’s effective tax rate for the nine months ended July 31, 2019 is lower than the statutory federal corporate tax rate of 21.0% primarily due to U.S. federal and California research credits, foreign-derived intangible income deduction, excess tax benefits from stock-based compensation, and a decrease in unrecognized foreign tax benefits, partially offset by state taxes, the effect of non-deductible stock-based compensation, higher taxes on certain foreign earnings, and the impact of the Altera Ninth Circuit decision. The Company's effective tax rate increased in the three months ended July 31, 2019 as compared to the same period in fiscal 2018, primarily due to the impact of the Altera Ninth Circuit decision. The Company's effective tax rate in the three months ended July 31, 2018 was lower primarily due to excess stock benefits. The Company's effective tax rate decreased in the nine months ended July 31, 2019 , as compared to the same period in fiscal 2018, primarily due to accounting for the effects of the Tax Act in fiscal 2018. The timing of the resolution of income tax examinations is highly uncertain, as are the amounts and timing of various tax payments that are part of the settlement process. This could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. The Company believes that in the coming 12 months, it is reasonably possible that either certain audits will conclude or the statute of limitations on certain state and foreign income and withholding taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax positions, the range of the estimated potential decrease in underlying unrecognized tax benefits is between $0 and $6 million . In addition, a settlement or changes in guidance could result in changes to the Company's valuation allowance. Intra-Entity Transfers of Assets In October 2016, the FASB issued ASU 2016-16, "Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory.” This ASU requires the immediate recognition of current and deferred income tax effects of intra-entity transfers of assets other than inventory. This ASU was adopted on the first day of fiscal 2019. As a result of the adoption, the Company recorded a decrease of approximately $130.5 million in retained earnings as of the beginning of the period of adoption, with a corresponding decrease in prepaid taxes related to the unamortized tax expense attributed to intra-entity transfers of assets other than inventory previously deferred. The Company will recognize the income tax consequences of new intra-entity transfers of assets other than inventory in the consolidated statement of income in the period when the transaction takes place. Non-U.S. Examinations In July 2017, the Hungarian Tax Authority (HTA) issued a final assessment against the Company’s Hungarian subsidiary (Synopsys Hungary) for fiscal years 2011 through 2013. The HTA has applied withholding taxes on certain payments made to affiliates, resulting in an aggregate tax assessment of approximately $25.0 million and interest and penalties of $11.0 million (at current exchange rates). On August 2, 2017, Synopsys Hungary filed a claim contesting the final assessment with the Hungarian Administrative Court. In the first quarter of fiscal 2018, Synopsys Hungary paid the assessments, penalties and interest as required by law and recorded these amounts as prepaid taxes on its balance sheet, while continuing its challenge to the assessment through the Hungarian Administrative Court. On April 30, 2019, the Hungarian Administrative Court ("Court") ruled against Synopsys Hungary. The Court's opinion was received on May 16, 2019 and the Company filed an appeal with the Hungarian Supreme Court on July 5, 2019. In the second quarter of 2019, as a result of the Court's decision, the Company recorded a tax expense due to an unrecognized tax benefit of $17.4 million , which is net of estimated U.S. foreign tax credits for the tax assessments. In the fourth quarter of 2018, the Company made significant changes to its international tax structure by transferring intangible assets between certain foreign subsidiaries, including its Hungarian subsidiary. In the first quarter of fiscal 2019, the Company received a ruling from the Hungarian authorities, which provided guidance on determining the tax associated with the gain recognized on the transfer, resulting in a benefit of $22.8 million recognized in the first quarter of fiscal 2019. The Company recorded an additional benefit of $10.3 million in the second quarter of fiscal 2019 upon the filing of its fiscal 2018 Hungarian return. The Company is undergoing an audit by the HTA for fiscal years 2014 through 2018. No material assessments have been proposed in these examinations. In the first quarter of fiscal 2019, the Company reached final settlement with Taiwanese tax authorities for fiscal year 2017 and recognized $5.5 million in previously unrecognized tax benefits. The Company is also under examination by the tax authorities in certain other jurisdictions. No material assessments have been proposed in these examinations. |
Contingencies
Contingencies | 9 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Legal Proceedings The Company is subject to routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of its business. The ultimate outcome of any litigation is often uncertain and unfavorable outcomes could have a negative impact on the Company’s results of operations and financial condition. The Company regularly reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount is estimable, the Company accrues a liability for the estimated loss. Legal proceedings are inherently uncertain and as circumstances change, it is possible that the amount of any accrued liability may increase, decrease, or be eliminated. The Company has determined that, except as set forth below, no disclosure of estimated loss is required for a claim against the Company because: (1) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (2) a reasonably possible loss or range of loss cannot be estimated; or (3) such estimate is immaterial. In March 2017, Siemens PLM Software (Siemens) acquired Mentor. On June 29, 2018, the Company, Siemens and Mentor settled all outstanding patent litigation between the Company and Mentor for a $65.0 million payment made from the Company to Mentor. The settlement included mutual seven -year patent cross-licenses between the Company and Siemens, and between the Company and Mentor. The Company and Mentor also amended an existing interoperability agreement to collaborate on a wide range of EDA products for the benefit of their mutual customers. The amendment includes a one-time termination charge between $0.0 and $25.0 million , payable to Mentor under certain conditions. As of July 31, 2019, there has been no change to the status of the contingent charges. Tax Matters The Company undergoes examination from time to time by U.S. and foreign authorities for non-income based taxes, such as sales, use and value-added taxes, and is currently under examination by tax authorities in certain jurisdictions. If the potential loss from such examinations is considered probable and the amount or the range of loss could be estimated, the Company would accrue a liability for the estimated expense. In addition to the foregoing, the Company is, from time to time, party to various other claims and legal proceedings in the ordinary course of its business, including with tax and other governmental authorities. For a description of certain of these other matters, refer to Note 14. Taxes. |
Effect of New Accounting Pronou
Effect of New Accounting Pronouncements | 9 Months Ended |
Jul. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Effect of New Accounting Pronouncements | Effect of New Accounting PronouncementsIn February 2016, the FASB issued ASU 2016-2, "Leases (Topic 842)," which supersedes the lease requirements in "Leases (Topic 840)." This ASU requires a lessee to recognize a right-of-use asset and a lease payment liability for most leases in the consolidated balance sheets. This ASU also makes minor changes to lessor accounting and aligns with the new revenue recognition guidance. This ASU will be effective for fiscal 2020, including interim periods within that reporting period, and earlier adoption is permitted. The Company is currently evaluating its lease portfolio and the impact of adoption is expected to be material to the consolidated balance sheets. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates. To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and may result in material effects on the Company’s operating results and financial position. |
Principles of Consolidation | Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany accounts and transactions have been eliminated. |
Fiscal Year End | Fiscal Year End. The Company’s fiscal year generally ends on the Saturday nearest to October 31 and consists of 52 weeks, with the exception that every five or six years, the Company has a 53-week year. When a 53-week year occurs, the Company includes the additional week in the first quarter to realign fiscal quarters with calendar quarters. Fiscal 2019 is a 52-week year and will end on November 2, 2019. Fiscal 2018 was a 53-week year and ended on November 3, 2018. The results of operations for the first nine months of fiscal 2019 and 2018 included 39 weeks and 40 weeks, respectively, and ended on August 3, 2019 and August 4, 2018, respectively. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end. |
Segment Reporting | Segment Reporting. Effective in fiscal 2019, the Company realigned its business to evaluate the results of its Software Integrity business separately from Synopsys’ traditional electronic design automation (EDA) and semiconductor IP business. The Chief Operating Decision Makers (CODMs) now regularly review disaggregated information for the following two reportable segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and associated services, and (2) Software Integrity, which includes security and quality solutions for software development across many industries. Synopsys' CODMs are its two co- Chief Executive Officers. Historical segment disclosures have been recast to retrospectively reflect the change from one to two reportable segments. |
Goodwill | Goodwill. Effective in the first quarter of fiscal 2019, with the change in the Company’s reportable segments, the Company has determined there are now two reporting units, requiring goodwill to be allocated to the two reporting units using a relative fair value method. Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired by the Company. The carrying amount of goodwill at each reporting unit is tested for impairment annually as of October 31, or more frequently if facts and circumstances warrant a review. As a result of changes to the Company's segment reporting, the Company conducted a quantitative impairment test for each of its reporting units and concluded that there was no impairment. The Company performs either a qualitative or quantitative analysis when testing a reporting unit’s goodwill for impairment. A qualitative goodwill impairment test is performed when the fair value of a reporting unit historically has significantly exceeded the carrying value of its net assets and based on current operations is expected to continue to do so. Otherwise, the Company is required to conduct a quantitative impairment test for each reporting unit and estimates the fair value of each reporting unit using a combination of a discounted cash flow analysis and a market approach based on market multiples. The discount rate used in an income approach is based on the Company's weighted-average cost of capital and may be adjusted for the relevant risks pertaining to projecting future cash flows. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment charge is recorded for the difference. Refer to Note 3. Goodwill and Intangible Assets for a discussion of the change in reporting units as related to the realignment of the Company’s segments. |
Revenue Recognition | Revenue Recognition. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC 606), "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in “Revenue Recognition (ASC 605).” The new guidance creates a single, principle-based model for revenue recognition that is intended to expand and improve companies' revenue disclosures. For revenue recognition policies under ASC 605, refer to Note 2 - Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended October 31, 2018. ASC 606 requires a company to recognize revenue when goods are transferred or services are provided to customers in an amount that reflects the consideration to which the company expects to be entitled to in exchange for those goods or services. ASC 606 also requires disclosures enabling users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has issued several amendments to ASC 606, including amendments that deferred the initially proposed adoption date and clarified accounting for licenses of intellectual property and identifying performance obligations. The Company adopted ASC 606 at the beginning of fiscal 2019 using the modified retrospective transition method. Under this method, periods prior to the adoption date are not adjusted and continue to be reported under the revenue accounting literature in effect during those periods. The Company evaluated contracts that were in effect at the beginning of fiscal 2019 as if they had been accounted for under ASC 606 from the contract inception and summarized the most significant adoption impacts as follows: • Revenue for certain ongoing contracts that was previously deferred would have been recognized in the periods prior to adoption under ASC 606. Therefore, upon adoption, the Company recorded the following adjustments to the beginning balances to reflect the amount of revenue that will no longer be recognized in future periods for such contracts: an increase to retained earnings of $265.1 million , a decrease to unbilled receivables of $27.4 million , an increase to contract assets of $126.9 million , and a decrease in deferred revenue of $165.6 million . • The Company capitalized $73.8 million of incremental costs for obtaining contracts with customers at the adoption date with a corresponding adjustment to retained earnings and is amortizing these costs over the contract term. • The Company recorded an increase in its opening deferred tax liability of $81.4 million , with a corresponding adjustment to retained earnings, to record the tax effect of the above adjustments. The impacts of adopting ASC 606 on the Company's unaudited condensed consolidated financial statements for the nine months ended July 31, 2019 are summarized in the tables below. Balance Sheet Accounts The following table summarizes the effects of adopting ASC 606 on certain account balances of the unaudited condensed consolidated balance sheet that were impacted as of July 31, 2019 : As reported under ASC 606 Adjustments Adjusted balance under ASC 605 (in thousands) Receivables, net $ 457,390 $ 64,122 $ 521,512 Prepaid and other current assets 288,616 (205,822 ) 82,794 Deferred income taxes 339,354 76,891 416,245 Other long-term assets 383,509 (94,626 ) 288,883 Accounts payable and other accrued liabilities 471,629 (10,413 ) 461,216 Deferred revenue 1,138,993 132,450 1,271,443 Long-term deferred revenue 91,229 41,585 132,814 Other long-term liabilities (1) 338,928 (16,671 ) 322,257 Retained earnings 3,003,430 (306,386 ) 2,697,044 (1) Includes long-term deferred tax liabilities. Statements of Operations The following table summarizes the effects of adopting ASC 606 on the unaudited condensed consolidated statements of operations for the three and nine months ended July 31, 2019 : Three Months Ended Nine Months Ended As reported under ASC 606 Adjustments Adjusted under ASC 605 As reported under ASC 606 Adjustments Adjusted under ASC 605 (in thousands, except per share amounts) Revenue: Time-based products $ 537,569 $ 55,604 $ 593,173 $ 1,649,590 $ 158,222 $ 1,807,812 Upfront products 177,552 (73,267 ) 104,285 451,466 (151,110 ) 300,356 Maintenance and service 137,849 (26,914 ) 110,935 408,557 (57,707 ) 350,850 Total revenue 852,970 (44,577 ) 808,393 2,509,613 (50,595 ) 2,459,018 Cost of Revenue: Products 113,533 — 113,533 346,163 — 346,163 Maintenance and service 59,496 — 59,496 178,113 — 178,113 Amortization of intangible assets 13,603 — 13,603 45,927 — 45,927 Total cost of revenue 186,632 — 186,632 570,203 — 570,203 Gross margin 666,338 (44,577 ) 621,761 1,939,410 (50,595 ) 1,888,815 Operating expenses: Research and development 284,804 — 284,804 846,429 — 846,429 Sales and marketing 157,109 (2,731 ) 154,378 471,720 10,395 482,115 General and administrative 67,382 — 67,382 165,794 — 165,794 Amortization of intangible assets 10,111 — 10,111 31,211 — 31,211 Restructuring 19,338 — 19,338 33,746 — 33,746 Total operating expenses 538,744 (2,731 ) 536,013 1,548,900 10,395 1,559,295 Operating income 127,594 (41,846 ) 85,748 390,510 (60,990 ) 329,520 Other income (expense), net 5,317 — 5,317 23,373 — 23,373 Income before provision for income taxes 132,911 (41,846 ) 91,065 413,883 (60,990 ) 352,893 Provision (benefit) for income taxes 32,982 (9,127 ) 23,855 42,230 (12,198 ) 30,032 Net income $ 99,929 $ (32,719 ) $ 67,210 $ 371,653 $ (48,792 ) $ 322,861 Net income per share: Basic $ 0.67 $ (0.22 ) $ 0.45 $ 2.48 $ (0.32 ) $ 2.16 Diluted $ 0.65 $ (0.22 ) $ 0.43 $ 2.42 $ (0.32 ) $ 2.10 Shares used in computing per share amounts: Basic 150,123 150,123 149,708 149,708 Diluted 154,600 154,600 153,859 153,859 Statements of Cash Flows Adoption of ASC 606 had no impact to cash from or used in operating, financing, or investing activities on the unaudited condensed consolidated cash flows statements. Revenue Policy The core principle of ASC 606 is to recognize revenue for the transfer of services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The principle is achieved through the following five-step approach: • Identification of the contract, or contracts, with the customer • Identification of the performance obligation in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services The Company generates revenue from the sale of products that include software licenses and, to a lesser extent, hardware products, maintenance and services. The various types are set forth below. Electronic Design Automation Software license revenue consists of fees associated with the licensing of the Company's software primarily through Technology Subscription License (TSL) contracts. TSLs are time-based licenses for a finite term and generally provide the customer with limited rights to receive, or to exchange certain quantities of licensed software for, unspecified future technology. The majority of the Company's arrangements are TSLs due to the nature of its business and customer requirements. In addition to the licenses, the arrangements also include: post-contract customer support, which includes providing frequent updates and upgrades to maintain the utility of the software due to rapid changes in technology; other intertwined services such as multiple copies of the tools; assisting the Company's customers in applying the Company's technology in the customers' development environment; and rights to remix licenses for other licenses. Payments are generally received in equal or near equal installments over the term of the arrangement. Under ASC 605, these arrangements were qualified to be recognized ratably over the contract terms. Under ASC 606, the Company has concluded that its software licenses in TSL contracts are not distinct from its obligation to provide unspecified software updates to the licensed software throughout the license term. Such updates represent inputs to a single, combined performance obligation, commencing upon the later of the arrangement effective date or transfer of the software license. Remix rights are not an additional promised good or service in the contract, and where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same pattern of transfer to the customer over the duration of the subscription term. IP & System Integration The Company generally licenses IP under nonexclusive license agreements that provide usage rights for specific applications. Additionally, for certain IP license agreements, royalties are collected as customers sell their own products that incorporate the Company’s IP. Under ASC 605, the Company recognized revenue either upfront if certain criteria in ASC 605 were met, or over the contractual period for IP licensing and support arrangements if such arrangements were combined with other TSL arrangements. Under ASC 606, these arrangements generally have two distinct performance obligations that consist of transferring the licensed IP and the support service. Support services consist of a stand-ready obligation to provide technical support and software updates over the support term. Revenue allocated to the IP license is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support services is recognized ratably over the support term. Royalties are recognized as revenue is earned, generally when the customer sells its products that incorporate the Company’s IP. Software Integrity Products Software Integrity product arrangements provide customers the right to software licenses, software updates and technical support. Under the term of these arrangements, the customer expects to receive integral updates to the software licenses that protect the customer’s software from potential security vulnerabilities. The licenses and software updates together serve to fulfill the Company’s commitment to the customer, as they represent inputs to a single, combined performance obligation that commences upon the later of the arrangement effective date or transfer of the software license. Software updates are part of the contract with the customer, and such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer . Hardware The Company generally has two performance obligations in arrangements involving the sale of hardware products. The first performance obligation is to transfer the hardware product, which includes embedded software integral to the functionality of the hardware product. The second performance obligation is to provide maintenance on the hardware and its embedded software, including rights to technical support, hardware repairs and software updates that are all provided over the same term and have the same time-based pattern of transfer to the customer. The portion of the transaction price allocated to the hardware product is generally recognized as revenue at a point in time when the hardware is delivered to the customer. The Company has concluded that control generally transfers upon delivery because the customer has title to the hardware, physical possession of the hardware, and a present obligation to pay for the hardware. The portion of the transaction price allocated to maintenance is recognized as revenue that is ratable over the maintenance term. The adoption of ASC 606 did not change the timing of revenue recognition for hardware products and related services. Professional Services Our arrangements often include service elements (other than maintenance and support services). These services include training, design assistance, and consulting. Services performed on a time and materials basis are recognized over time, as the customer simultaneously receives and consumes the benefit provided. Certain arrangements also include the customization or modification of licensed IP. Revenue from these contracts is recognized over time as the services are performed, when the development is specific to the customer’s needs and Synopsys has enforceable rights to payment for performance completed. Performance is generally measured using costs incurred or hours expended to measure progress. The Company has a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances, specification and testing requirement changes, and changes in customer delivery priorities. Payments for services are generally due upon milestones in the contract or upon consumption of the hourly resources. Flexible Spending Accounts Some customers enter into a non-cancelable Flexible Spending Account arrangement (FSA) whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of Synopsys products or services. These arrangements do not meet the definition of a revenue contract until the customer executes a separate order to identify the required products and services that they are purchasing. The combination of the FSA arrangement and the subsequent order creates enforceable rights and obligations, thus meeting the definition of a revenue contract. Each separate order under the agreement is treated as an individual contract under the new standard and accounted for based on the respective performance obligations included within the FSA arrangements. Disaggregated Revenue The following table shows the percentage of revenue by product groups: Three Months Ended July 31, Nine Months Ended July 31, 2019 2018 2019 2018 EDA 57 % 64 % 59 % 63 % IP & System Integration 33 % 27 % 31 % 28 % Software Integrity Products & Services 10 % 9 % 10 % 9 % Other — % — % — % — % Total 100 % 100 % 100 % 100 % Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether services and products are considered distinct performance obligations that should be accounted for separately versus together requires significant judgment . The Company has concluded that (1) its EDA software licenses in TSL contracts are not distinct from its obligation to provide unspecified software updates to the licensed software throughout the license term, because those promises represent inputs to a single, combined performance obligation, and (2) where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support, because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer. In reaching this conclusion, the Company considered the nature of the obligation to customers which is to provide an ongoing right to use the most up to date and relevant software. As EDA customers operate in a rapidly changing and competitive environment, satisfying the obligation requires providing critical updates to the existing software products, including ongoing iterative interaction with customers to make the software relevant to customers’ ability to meet the time to go to market with advanced products. Similarly, the Company also concluded that in its Software Integrity business, the licenses and maintenance updates serve together to fulfill the Company’s commitment to the customer as both work together to provide the functionality to the customer and represent a combined performance obligation because the updates are essential to the software’s central utility, which is to identify security vulnerabilities and other threats. Judgment is also required to determine the standalone selling price (SSP) for each distinct performance obligation. For non-software performance obligations (IP, Hardware, and services), SSP is established based on observable prices of products and services sold separately. SSP for license (and related updates and support) in a contract with multiple performance obligations is determined by applying a residual approach whereby all other non-software performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSP, using observable prices, with any residual amount of the transaction price allocated to the license because the Company does not sell the license separately, and the pricing is highly variable. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables (billed or unbilled), contract assets, or contract liabilities (deferred revenue) on the Company’s unaudited condensed consolidated balance sheet. The Company records a contract asset when revenue is recognized prior to the right to invoice, or deferred revenue when revenue is recognized subsequent to invoicing. For time-based software agreements, customers are generally invoiced in equal, quarterly amounts, although some customers prefer to be invoiced in single or annual amounts. The Company records an unbilled receivable when revenue is recognized and it has an unconditional right to invoice and receive payment. The contract assets indicated below are presented as prepaid and other current assets in the unaudited condensed consolidated balance sheet. The contract assets are transferred to receivables when the rights to invoice and receive payment become unconditional. Contract balances are as follows: As of July 31, 2019 As of October 31, 2018 as adjusted (in thousands) Contract assets $ 205,822 $ 126,897 Unbilled receivables 38,965 36,699 Deferred revenue 1,230,222 1,104,110 During the three and nine months ended July 31, 2019 , the Company recognized $470.6 million and $1,432.1 million , respectively, of revenue that were included in the deferred revenue balance at the beginning of the period, as adjusted for the adoption of ASC 606. Contracted but unsatisfied or partially unsatisfied performance obligations were approximately $4.3 billion as of July 31, 2019 , which includes $463.5 million in non-cancellable FSA commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. The Company has elected to exclude future sales-based royalty payments from the remaining performance obligations. The contracted unsatisfied performance obligations, excluding non-cancellable FSA, expected to be recognized over the next 12 months is approximately 56% , with the remainder recognized thereafter. During the three and nine month periods ended July 31, 2019 , the Company recognized $17.5 million and $64.8 million , respectively, from performance obligations satisfied from sales based royalties earned during the periods. Costs of Obtaining a Contract with Customer The incremental costs of obtaining a contract with a customer, which consist primarily of direct sales commissions earned upon execution of the contract, are required to be capitalized under ASC 340-40 and amortized over the estimated period of which the benefit is expected to be received. As direct sales commissions paid for renewals are commensurate with the amounts paid for initial contracts, the deferred incremental costs will be recognized over the contract term. Total capitalized direct commission costs as of July 31, 2019 were $94.6 million and are included in other assets in the Company’s unaudited condensed consolidated balance sheet. Amortization of these assets was $17.8 million and $46.2 million during the three and nine months ended July 31, 2019 , respectively, and are included in sales and marketing expense in the Company’s unaudited condensed consolidated statements of operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Topic 606 Impact | The following table summarizes the effects of adopting ASC 606 on certain account balances of the unaudited condensed consolidated balance sheet that were impacted as of July 31, 2019 : As reported under ASC 606 Adjustments Adjusted balance under ASC 605 (in thousands) Receivables, net $ 457,390 $ 64,122 $ 521,512 Prepaid and other current assets 288,616 (205,822 ) 82,794 Deferred income taxes 339,354 76,891 416,245 Other long-term assets 383,509 (94,626 ) 288,883 Accounts payable and other accrued liabilities 471,629 (10,413 ) 461,216 Deferred revenue 1,138,993 132,450 1,271,443 Long-term deferred revenue 91,229 41,585 132,814 Other long-term liabilities (1) 338,928 (16,671 ) 322,257 Retained earnings 3,003,430 (306,386 ) 2,697,044 (1) Includes long-term deferred tax liabilities. The following table summarizes the effects of adopting ASC 606 on the unaudited condensed consolidated statements of operations for the three and nine months ended July 31, 2019 : Three Months Ended Nine Months Ended As reported under ASC 606 Adjustments Adjusted under ASC 605 As reported under ASC 606 Adjustments Adjusted under ASC 605 (in thousands, except per share amounts) Revenue: Time-based products $ 537,569 $ 55,604 $ 593,173 $ 1,649,590 $ 158,222 $ 1,807,812 Upfront products 177,552 (73,267 ) 104,285 451,466 (151,110 ) 300,356 Maintenance and service 137,849 (26,914 ) 110,935 408,557 (57,707 ) 350,850 Total revenue 852,970 (44,577 ) 808,393 2,509,613 (50,595 ) 2,459,018 Cost of Revenue: Products 113,533 — 113,533 346,163 — 346,163 Maintenance and service 59,496 — 59,496 178,113 — 178,113 Amortization of intangible assets 13,603 — 13,603 45,927 — 45,927 Total cost of revenue 186,632 — 186,632 570,203 — 570,203 Gross margin 666,338 (44,577 ) 621,761 1,939,410 (50,595 ) 1,888,815 Operating expenses: Research and development 284,804 — 284,804 846,429 — 846,429 Sales and marketing 157,109 (2,731 ) 154,378 471,720 10,395 482,115 General and administrative 67,382 — 67,382 165,794 — 165,794 Amortization of intangible assets 10,111 — 10,111 31,211 — 31,211 Restructuring 19,338 — 19,338 33,746 — 33,746 Total operating expenses 538,744 (2,731 ) 536,013 1,548,900 10,395 1,559,295 Operating income 127,594 (41,846 ) 85,748 390,510 (60,990 ) 329,520 Other income (expense), net 5,317 — 5,317 23,373 — 23,373 Income before provision for income taxes 132,911 (41,846 ) 91,065 413,883 (60,990 ) 352,893 Provision (benefit) for income taxes 32,982 (9,127 ) 23,855 42,230 (12,198 ) 30,032 Net income $ 99,929 $ (32,719 ) $ 67,210 $ 371,653 $ (48,792 ) $ 322,861 Net income per share: Basic $ 0.67 $ (0.22 ) $ 0.45 $ 2.48 $ (0.32 ) $ 2.16 Diluted $ 0.65 $ (0.22 ) $ 0.43 $ 2.42 $ (0.32 ) $ 2.10 Shares used in computing per share amounts: Basic 150,123 150,123 149,708 149,708 Diluted 154,600 154,600 153,859 153,859 |
Schedule of Disaggregation of Revenue | The following table shows the percentage of revenue by product groups: Three Months Ended July 31, Nine Months Ended July 31, 2019 2018 2019 2018 EDA 57 % 64 % 59 % 63 % IP & System Integration 33 % 27 % 31 % 28 % Software Integrity Products & Services 10 % 9 % 10 % 9 % Other — % — % — % — % Total 100 % 100 % 100 % 100 % |
Schedule of Contract Assets and Liabilities | Contract balances are as follows: As of July 31, 2019 As of October 31, 2018 as adjusted (in thousands) Contract assets $ 205,822 $ 126,897 Unbilled receivables 38,965 36,699 Deferred revenue 1,230,222 1,104,110 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | Intangible assets as of July 31, 2019 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 773,147 $ 642,185 $ 130,962 Customer relationships 358,667 232,784 125,883 Contract rights intangible 184,321 180,349 3,972 Trademarks and trade names 42,929 24,803 18,126 In-process research and development (IPR&D) 1,200 — 1,200 Capitalized software development costs 38,063 34,901 3,162 Total $ 1,398,327 $ 1,115,022 $ 283,305 Intangible assets as of October 31, 2018 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 773,147 $ 598,956 $ 174,191 Customer relationships 358,524 204,382 154,142 Contract rights intangible 183,953 177,191 6,762 Trademarks and trade names 42,929 21,944 20,985 In-process research and development (IPR&D) 1,200 — 1,200 Capitalized software development costs 35,818 32,694 3,124 Total $ 1,395,571 $ 1,035,167 $ 360,404 |
Amortization Expense Related to Intangible Assets | Amortization expense related to intangible assets consisted of the following: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Core/developed technology $ 12,825 $ 18,692 $ 43,229 $ 55,745 Customer relationships 9,303 9,584 28,261 27,803 Contract rights intangible 808 1,357 2,790 3,619 Trademarks and trade names 778 1,172 2,858 3,371 Capitalized software development costs(1) 700 894 2,207 2,710 Total $ 24,414 $ 31,699 $ 79,345 $ 93,248 (1) Amortization of capitalized software development costs is included in cost of products revenue in the unaudited condensed consolidated statements of operations. |
Estimated Future Amortization of Intangible Assets | The following table presents the estimated future amortization of the existing intangible assets as of July 31, 2019 : Fiscal Year (in thousands) Remainder of fiscal 2019 $ 23,821 2020 79,195 2021 56,409 2022 44,014 2023 29,219 2024 and thereafter 49,447 IPR&D 1,200 Total $ 283,305 |
Financial Assets and Liabilit_2
Financial Assets and Liabilities (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Financial Assets And Liabilities [Abstract] | |
Summary of Available-for-Sale Securities | As of July 31, 2019 , the balances of the Company's cash equivalents are: Cost Gross Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ 130,437 $ — $ — $ — $ 130,437 Total: $ 130,437 $ — $ — $ — $ 130,437 (1) See Note 5. Fair Value Measures for further discussion on fair values of cash equivalents. As of October 31, 2018 , the balances of the Company's cash equivalents are: Cost Gross Gross Gross Estimated (in thousands) Cash equivalents: Money market funds $ 165,296 $ — $ — $ — $ 165,296 Total: $ 165,296 $ — $ — $ — $ 165,296 (1) See Note 5. Fair Value Measures for further discussion on fair values of cash equivalents. |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the unaudited condensed consolidated balance sheets: As of July 31, 2019 As of October 31, 2018 (in thousands) Cash and cash equivalents $ 686,780 $ 723,115 Restricted cash included in Prepaid expenses and other current assets 1,171 1,164 Restricted cash included in Other long-term assets 730 722 Total cash, cash equivalents and restricted cash $ 688,681 $ 725,001 |
Effects on Changes in Fair Values of Non-Designated Forward Contracts | The effect of the changes in the fair values of non-designated forward contracts is summarized as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Gain (loss) recorded in other income (expense), net $ 1,179 $ 1,567 $ 4,314 $ 1,244 |
Notional Amounts of Derivative Instruments | The notional amounts in the table below for derivative instruments provide one measure of the transaction volume outstanding: As of July 31, 2019 As of October 31, 2018 (in thousands) Total gross notional amount $ 779,127 $ 1,135,549 Net fair value $ (565 ) $ (18,120 ) |
Fair Values of Derivative Instrument Designated and Non-Designated as Hedging Instruments in Balance Sheet | The following table represents the unaudited condensed consolidated balance sheet location and amount of derivative instrument fair values segregated between designated and non-designated hedge instruments: Fair values of derivative instruments designated as hedging instruments Fair values of derivative instruments not designated as hedging instruments (in thousands) As of July 31, 2019 Other current assets $ 6,487 $ 77 Accrued liabilities $ 7,020 $ 109 As of October 31, 2018 Other current assets $ 4,771 $ 131 Accrued liabilities $ 22,890 $ 132 |
Income Statement Location and Amount of Gains and Losses on Derivative Instrument Fair Values for Designated Hedge Instruments, Net of Tax | The following table represents the unaudited condensed consolidated statement of operations location and amount of gains and losses on derivative instrument fair values for designated hedge instruments, net of tax: 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) Three months ended Foreign exchange contracts Revenue $ (994 ) Revenue $ 685 Foreign exchange contracts Operating expenses (76 ) Operating expenses (3,945 ) Total $ (1,070 ) $ (3,260 ) Three months ended Foreign exchange contracts Revenue $ 1,422 Revenue $ (308 ) Foreign exchange contracts Operating expenses (13,793 ) Operating expenses 1,970 Total $ (12,371 ) $ 1,662 Nine months ended Foreign exchange contracts Revenue $ (253 ) Revenue $ 1,048 Foreign exchange contracts Operating expenses 5,097 Operating expenses (12,795 ) Total $ 4,844 $ (11,747 ) Nine months ended Foreign exchange contracts Revenue $ (542 ) Revenue $ 1,190 Foreign exchange contracts Operating expenses (7,349 ) Operating expenses 11,320 Total $ (7,891 ) $ 12,510 |
Ineffective Portion and Portion Excluded from Effectiveness Testing of Derivative Hedge Gains (Losses) | The following table represents the ineffective portions and portions excluded from effectiveness testing of the hedge gains (losses) for derivative instruments designated as hedging instruments, which are recorded in other income (expense), net: Foreign exchange contracts Amount of gain (loss) recognized in statement of operations on derivatives (ineffective portion)(1) Amount of gain (loss) recognized in statement of operations on derivatives (excluded from effectiveness testing)(2) (in thousands) For the three months ended July 31, 2019 $ 232 $ 1,077 For the three months ended July 31, 2018 $ (132 ) $ 782 For the nine months ended July 31, 2019 $ 148 $ 358 For the nine months ended July 31, 2018 $ 389 $ 2,488 (1) The ineffective portion includes forecast inaccuracies. (2) The portion excluded from effectiveness testing includes the discount earned or premium paid for the contracts. |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized below as of July 31, 2019 : 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 $ 130,437 $ 130,437 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 6,564 — 6,564 — Other long-term assets: Deferred compensation plan assets 248,510 248,510 — — Total assets $ 385,511 $ 378,947 $ 6,564 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 7,129 $ — $ 7,129 $ — Other long-term liabilities: Deferred compensation plan liabilities 248,510 248,510 — — Total liabilities $ 255,639 $ 248,510 $ 7,129 $ — Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2018 : 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 $ 165,296 $ 165,296 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 4,902 — 4,902 — Other long-term assets: Deferred compensation plan assets 212,165 212,165 — — Total assets $ 382,363 $ 377,461 $ 4,902 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 23,022 $ — $ 23,022 $ — Other long-term liabilities: Deferred compensation plan liabilities 212,165 212,165 — — Total liabilities $ 235,187 $ 212,165 $ 23,022 $ — |
Liabilities and Restructuring_2
Liabilities and Restructuring Charges (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Liabilities and Restructuring Charges [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consist of: As of July 31, 2019 As of October 31, 2018 (in thousands) Payroll and related benefits $ 391,593 $ 413,307 Other accrued liabilities 65,190 79,973 Accounts payable 14,846 85,046 Total $ 471,629 $ 578,326 |
Other Long-Term Liabilities | Other long-term liabilities consist of: As of July 31, 2019 As of October 31, 2018 (in thousands) Deferred compensation liability $ 248,510 $ 212,165 Other long-term liabilities 90,418 53,395 Total $ 338,928 $ 265,560 |
Credit Facility (Tables)
Credit Facility (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Term Loan | Outstanding principal payments under the Term Loan are due as follows: Fiscal year (in thousands) Remainder of fiscal 2019 $ 3,750 2020 17,813 2021 27,187 2022 75,000 Total $ 123,750 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | Components of accumulated other comprehensive income (loss), on an after-tax basis where applicable, were as follows: As of July 31, 2019 As of October 31, 2018 (in thousands) Cumulative currency translation adjustments $ (89,355 ) $ (89,289 ) Unrealized gain (loss) on derivative instruments, net of taxes (7,298 ) (23,888 ) Total accumulated other comprehensive income (loss) $ (96,653 ) $ (113,177 ) |
Effect of Amounts Reclassified out of Each Component of Accumulated Other Comprehensive Income (Loss) into Net Income | The effect of amounts reclassified out of each component of accumulated other comprehensive income (loss) (AOCI) into net income was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Reclassifications from AOCI to unaudited condensed consolidated statement of operations: Gain (loss) on cash flow hedges, net of taxes Revenues $ 685 $ (308 ) $ 1,048 $ 1,190 Operating expenses (3,945 ) 1,970 (12,795 ) 11,320 Total reclassifications into net income $ (3,260 ) $ 1,662 $ (11,747 ) $ 12,510 |
Stock Repurchase Program (Table
Stock Repurchase Program (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Stock Repurchase Program [Abstract] | |
Stock Repurchase And Reissuance Activities | Stock repurchase activities are as follows: Three Months Ended Nine Months Ended 2019 (1) 2018 2019 (1)(2) 2018 (in thousands) Total shares repurchased(3)(4) 775 1,509 1,901 4,411 Total cost of the repurchased shares (4) $ 100,000 $ 132,000 $ 209,185 $ 387,000 Reissuance of treasury stock 1,166 1,107 3,009 2,527 (1) Does not include the 90,202 shares or $20.0 million equity forward contract from the June 2019 ASR settled in August 2019. (2) The third quarter of fiscal 2019 includes the settlement of the 97,601 shares or $20.0 million equity forward contract from the February 2019 ASR settled in May 2019. (3) The first quarter of fiscal 2018 includes the settlement of the $20.0 million equity forward contract related to the Company's accelerated share repurchase agreement entered into in September 2017. (4) The Company also repurchased 0.4 million shares at an average price of $82.61 per share, for an aggregate purchase price of $35.0 million during the second quarter of fiscal 2018. |
Stock Compensation (Tables)
Stock Compensation (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Compensation Arrangements | The compensation cost recognized in the unaudited condensed consolidated statements of operations for the Company’s stock compensation arrangements was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Cost of products $ 4,493 $ 3,820 $ 12,684 $ 10,663 Cost of maintenance and service 1,694 1,442 4,675 3,979 Research and development expense 19,383 18,412 55,802 48,958 Sales and marketing expense 7,360 7,317 21,790 20,813 General and administrative expense 6,523 6,261 19,876 18,127 Stock compensation expense before taxes 39,453 37,252 114,827 102,540 Income tax benefit (6,593 ) (7,111 ) (19,188 ) (19,574 ) Stock compensation expense after taxes $ 32,860 $ 30,141 $ 95,639 $ 82,966 |
Schedule of Intrinsic Value of Equity Awards Exercised | The intrinsic values of equity awards exercised during the periods are as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Intrinsic value of awards exercised $ 37,436 $ 19,283 $ 96,014 $ 50,075 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted-Average Common Shares Used to Calculate Net Income Per Share | The table below reconciles the weighted-average common shares used to calculate basic net income per share with the weighted-average common shares used to calculate diluted net income per share: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands, except per share amounts) Numerator: Net income $ 99,929 $ 79,409 $ 371,653 $ 178,190 Denominator: Weighted-average common shares for basic net income per share 150,123 148,490 149,708 148,760 Dilutive effect of potential common shares from equity-based compensation 4,477 4,124 4,151 4,358 Weighted-average common shares for diluted net income per share 154,600 152,614 153,859 153,118 Net income per share: Basic $ 0.67 $ 0.53 $ 2.48 $ 1.20 Diluted $ 0.65 $ 0.52 $ 2.42 $ 1.16 Anti-dilutive employee stock-based awards excluded(1) 152 1,063 798 774 (1) These employee stock-based awards 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. |
Segment Disclosure (Tables)
Segment Disclosure (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Information by reportable segment was as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Total Segments: Revenues $ 852,970 $ 779,714 $ 2,509,613 $ 2,325,976 Adjusted operating income 216,581 167,847 627,369 553,909 Adjusted operating margin 25 % 22 % 25 % 24 % Semiconductor & System Design: Revenues $ 769,411 $ 708,413 $ 2,260,372 $ 2,122,780 Adjusted operating income 207,773 169,798 604,497 564,656 Adjusted operating margin 27 % 24 % 27 % 27 % Software Integrity: Revenues $ 83,559 $ 71,301 $ 249,241 $ 203,196 Adjusted operating income 8,808 (1,951 ) 22,872 (10,747 ) Adjusted operating margin 11 % (3 )% 9 % (5 )% |
Reconciliation of Operating Income From Segment Consolidation | The unallocated expenses managed at a consolidated level, including amortization of intangible assets, stock compensation and other operating expenses, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to the Company's consolidated operating income: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Total segment adjusted operating income $ 216,581 $ 167,847 $ 627,369 $ 553,909 Reconciling items: Amortization of intangible expense (23,714 ) (30,805 ) (77,138 ) (90,538 ) Stock-based compensation expense (39,453 ) (37,252 ) (114,827 ) (102,540 ) Other (25,820 ) (35,822 ) (44,894 ) (62,131 ) Total operating income $ 127,594 $ 63,968 $ 390,510 $ 298,700 |
Revenues Related to Operations by Geographic Areas | Revenues related to operations in the United States and other geographic areas were: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Revenue: United States $ 407,408 $ 365,414 $ 1,231,951 $ 1,126,624 Europe 90,074 90,657 257,502 273,136 Japan 65,709 71,981 203,486 210,805 Asia-Pacific and Other 289,779 251,662 816,675 715,411 Consolidated $ 852,970 $ 779,714 $ 2,509,613 $ 2,325,976 |
Other Income (Expense), net (Ta
Other Income (Expense), net (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Components of Other Income (Expense), Net | The following table presents the components of other income (expense), net: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Interest income $ 1,789 $ 1,096 $ 5,280 $ 3,659 Interest expense (2,214 ) (4,558 ) (10,608 ) (11,281 ) Gain (loss) on assets related to executive deferred compensation plan assets 4,686 8,397 25,201 14,592 Foreign currency exchange gain (loss) 696 1,627 2,999 1,725 Other, net 360 1,363 501 3,900 Total $ 5,317 $ 7,925 $ 23,373 $ 12,595 |
Taxes (Tables)
Taxes (Tables) | 9 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes and Effective Tax Rates | The following table presents the provision (benefit) for income taxes and the effective tax rates: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (in thousands) Income before income taxes $ 132,911 $ 71,893 $ 413,883 $ 311,295 Provision (benefit) for income taxes $ 32,982 $ (7,516 ) $ 42,230 $ 133,105 Effective tax rate 24.8 % (10.5 )% 10.2 % 42.8 % |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Oct. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained earnings | $ 3,003,430 | $ 3,003,430 | $ 2,543,688 | |
Decrease to unbilled receivables | (38,965) | (38,965) | (36,699) | |
Contract assets | 205,822 | 205,822 | 126,897 | |
Decrease in deferred revenue | (1,230,222) | (1,230,222) | (1,104,110) | |
Capitalized incremental costs to obtain contracts | 94,600 | 94,600 | ||
Revenue recognized | 470,600 | 1,432,100 | ||
Unsatisfied or partly unsatisfied performance obligations | 4,300,000 | 4,300,000 | ||
Non-cancellable FSA commitments | $ 463,500 | $ 463,500 | ||
Performance obligations recognized over next 12 months | 56.00% | 56.00% | ||
Amortization of capitalized costs to obtain revenue contracts | $ 17,800 | $ 46,230 | $ 0 | |
Adjustments | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained earnings | (306,386) | (306,386) | 265,100 | |
Decrease to unbilled receivables | 27,400 | |||
Contract assets | 126,900 | |||
Decrease in deferred revenue | 165,600 | |||
Capitalized incremental costs to obtain contracts | 73,800 | |||
Deferred tax liabilities | $ 81,400 | |||
Sales Based Royalties | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue recognized | $ 17,500 | $ 64,800 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Topic 606 Impact Balance Sheet (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable, net | $ 457,390 | $ 554,217 |
Prepaid and other current assets | 288,616 | 67,533 |
Deferred income taxes | 339,354 | 404,166 |
Other long-term assets | 383,509 | 246,736 |
Accounts payable and accrued liabilities | 471,629 | 578,326 |
Deferred revenue | 1,138,993 | 1,152,862 |
Long-term deferred revenue | 91,229 | 116,859 |
Other long-term liabilities | 338,928 | 265,560 |
Retained earnings | 3,003,430 | 2,543,688 |
Adjusted balance under ASC 605 | ||
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable, net | 521,512 | |
Prepaid and other current assets | 82,794 | |
Deferred income taxes | 416,245 | |
Other long-term assets | 288,883 | |
Accounts payable and accrued liabilities | 461,216 | |
Deferred revenue | 1,271,443 | |
Long-term deferred revenue | 132,814 | |
Other long-term liabilities | 322,257 | |
Retained earnings | 2,697,044 | |
Accounting Standards Update 2014-09 | Adjustments | ||
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable, net | 64,122 | |
Prepaid and other current assets | (205,822) | |
Deferred income taxes | 76,891 | |
Other long-term assets | (94,626) | |
Accounts payable and accrued liabilities | (10,413) | |
Deferred revenue | 132,450 | |
Long-term deferred revenue | 41,585 | |
Other long-term liabilities | (16,671) | |
Retained earnings | $ (306,386) | $ 265,100 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Topic 606 Impact Income Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 852,970 | $ 779,714 | $ 2,509,613 | $ 2,325,976 |
Amortization of intangible assets | 13,603 | 20,154 | 45,927 | 59,612 |
Total cost of revenue | 186,632 | 185,381 | 570,203 | 545,316 |
Gross margin | 666,338 | 594,333 | 1,939,410 | 1,780,660 |
Research and development | 284,804 | 277,402 | 846,429 | 793,947 |
Sales and marketing | 157,109 | 157,953 | 471,720 | 455,653 |
General and administrative | 67,382 | 84,336 | 165,794 | 199,517 |
Amortization of intangible assets | 10,111 | 10,651 | 31,211 | 30,926 |
Restructuring | 19,338 | 23 | 33,746 | 1,917 |
Total operating expenses | 538,744 | 530,365 | 1,548,900 | 1,481,960 |
Operating income | 127,594 | 63,968 | 390,510 | 298,700 |
Other income (expense), net | 5,317 | 7,925 | 23,373 | 12,595 |
Income before income taxes | 132,911 | 71,893 | 413,883 | 311,295 |
Provision (benefit) for income taxes | 32,982 | (7,516) | 42,230 | 133,105 |
Net income | $ 99,929 | $ 79,409 | $ 371,653 | $ 178,190 |
Basic (in USD per share) | $ 0.67 | $ 0.53 | $ 2.48 | $ 1.20 |
Diluted (in USD per share) | $ 0.65 | $ 0.52 | $ 2.42 | $ 1.16 |
Basic (shares) | 150,123 | 148,490 | 149,708 | 148,760 |
Diluted (shares) | 154,600 | 152,614 | 153,859 | 153,118 |
Time-based products | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 537,569 | $ 570,053 | $ 1,649,590 | $ 1,697,756 |
Cost of revenue | 113,533 | 115,437 | 346,163 | 335,030 |
Upfront products | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 177,552 | 99,579 | 451,466 | 291,143 |
Maintenance and service | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 137,849 | 110,082 | 408,557 | 337,077 |
Cost of revenue | 59,496 | $ 49,790 | 178,113 | $ 150,674 |
Adjustments | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | (44,577) | (50,595) | ||
Amortization of intangible assets | 0 | 0 | ||
Total cost of revenue | 0 | 0 | ||
Gross margin | (44,577) | (50,595) | ||
Research and development | 0 | 0 | ||
Sales and marketing | (2,731) | 10,395 | ||
General and administrative | 0 | 0 | ||
Amortization of intangible assets | 0 | 0 | ||
Restructuring | 0 | 0 | ||
Total operating expenses | (2,731) | 10,395 | ||
Operating income | (41,846) | (60,990) | ||
Other income (expense), net | 0 | 0 | ||
Income before income taxes | (41,846) | (60,990) | ||
Provision (benefit) for income taxes | (9,127) | (12,198) | ||
Net income | $ (32,719) | $ (48,792) | ||
Basic (in USD per share) | $ (0.22) | $ (0.32) | ||
Diluted (in USD per share) | $ (0.22) | $ (0.32) | ||
Adjustments | Accounting Standards Update 2014-09 | Time-based products | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 55,604 | $ 158,222 | ||
Cost of revenue | 0 | 0 | ||
Adjustments | Accounting Standards Update 2014-09 | Upfront products | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | (73,267) | (151,110) | ||
Adjustments | Accounting Standards Update 2014-09 | Maintenance and service | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | (26,914) | (57,707) | ||
Cost of revenue | 0 | 0 | ||
Adjusted balance under ASC 605 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 808,393 | 2,459,018 | ||
Amortization of intangible assets | 13,603 | 45,927 | ||
Total cost of revenue | 186,632 | 570,203 | ||
Gross margin | 621,761 | 1,888,815 | ||
Research and development | 284,804 | 846,429 | ||
Sales and marketing | 154,378 | 482,115 | ||
General and administrative | 67,382 | 165,794 | ||
Amortization of intangible assets | 10,111 | 31,211 | ||
Restructuring | 19,338 | 33,746 | ||
Total operating expenses | 536,013 | 1,559,295 | ||
Operating income | 85,748 | 329,520 | ||
Other income (expense), net | 5,317 | 23,373 | ||
Income before income taxes | 91,065 | 352,893 | ||
Provision (benefit) for income taxes | 23,855 | 30,032 | ||
Net income | $ 67,210 | $ 322,861 | ||
Basic (in USD per share) | $ 0.45 | $ 2.16 | ||
Diluted (in USD per share) | $ 0.43 | $ 2.10 | ||
Basic (shares) | 150,123 | 149,708 | ||
Diluted (shares) | 154,600 | 153,859 | ||
Adjusted balance under ASC 605 | Time-based products | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | $ 593,173 | $ 1,807,812 | ||
Cost of revenue | 113,533 | 346,163 | ||
Adjusted balance under ASC 605 | Upfront products | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 104,285 | 300,356 | ||
Adjusted balance under ASC 605 | Maintenance and service | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Total revenue | 110,935 | 350,850 | ||
Cost of revenue | $ 59,496 | $ 178,113 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 100.00% | 100.00% | 100.00% | 100.00% |
EDA | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 57.00% | 64.00% | 59.00% | 63.00% |
IP & System Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 33.00% | 27.00% | 31.00% | 28.00% |
Software Integrity Products & Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 10.00% | 9.00% | 10.00% | 9.00% |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 0.00% | 0.00% | 0.00% | 0.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Accounting Policies [Abstract] | ||
Contract assets | $ 205,822 | $ 126,897 |
Unbilled receivables | 38,965 | 36,699 |
Deferred revenue | $ 1,230,222 | $ 1,104,110 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 1,398,327 | $ 1,395,571 |
Accumulated Amortization | 1,115,022 | 1,035,167 |
Net Assets | 283,305 | 360,404 |
Core/developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 773,147 | 773,147 |
Accumulated Amortization | 642,185 | 598,956 |
Net Assets | 130,962 | 174,191 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 358,667 | 358,524 |
Accumulated Amortization | 232,784 | 204,382 |
Net Assets | 125,883 | 154,142 |
Contract rights intangible | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 184,321 | 183,953 |
Accumulated Amortization | 180,349 | 177,191 |
Net Assets | 3,972 | 6,762 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 42,929 | 42,929 |
Accumulated Amortization | 24,803 | 21,944 |
Net Assets | 18,126 | 20,985 |
In Process Research and Development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 1,200 | 1,200 |
Accumulated Amortization | 0 | 0 |
Net Assets | 1,200 | 1,200 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 38,063 | 35,818 |
Accumulated Amortization | 34,901 | 32,694 |
Net Assets | $ 3,162 | $ 3,124 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Finite Lived Intangible Assets Amortization Expense [Line Items] | ||||
Amortization expense of intangible assets | $ 24,414 | $ 31,699 | $ 79,345 | $ 93,248 |
Core/developed technology | ||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | ||||
Amortization expense of intangible assets | 12,825 | 18,692 | 43,229 | 55,745 |
Customer relationships | ||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | ||||
Amortization expense of intangible assets | 9,303 | 9,584 | 28,261 | 27,803 |
Contract rights intangible | ||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | ||||
Amortization expense of intangible assets | 808 | 1,357 | 2,790 | 3,619 |
Trademarks and trade names | ||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | ||||
Amortization expense of intangible assets | 778 | 1,172 | 2,858 | 3,371 |
Capitalized software development costs | ||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | ||||
Amortization expense of intangible assets | $ 700 | $ 894 | $ 2,207 | $ 2,710 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated Future Amortization of Intangible Assets (Detail) $ in Thousands | Jul. 31, 2019USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of fiscal 2019 | $ 23,821 |
2020 | 79,195 |
2021 | 56,409 |
2022 | 44,014 |
2023 | 29,219 |
2024 and thereafter | 49,447 |
IPR&D | 1,200 |
Total | $ 283,305 |
Financial Assets and Liabilit_3
Financial Assets and Liabilities - Short-term investments (Details) - Cash equivalents - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities, cost | $ 130,437 | $ 165,296 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses less than 12 months | 0 | 0 |
Gross unrealized losses 12 months or longer | 0 | 0 |
Estimated fair value | 130,437 | 165,296 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities, cost | 130,437 | 165,296 |
Gross unrealized gains | 0 | 0 |
Gross unrealized losses less than 12 months | 0 | 0 |
Gross unrealized losses 12 months or longer | 0 | 0 |
Estimated fair value | $ 130,437 | $ 165,296 |
Financial Assets and Liabilit_4
Financial Assets and Liabilities - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Oct. 31, 2017 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 686,780 | $ 723,115 | ||
Total cash, cash equivalents and restricted cash | 688,681 | 725,001 | $ 743,165 | $ 1,050,075 |
Restricted cash included in Prepaid expenses and other current assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash | 1,171 | 1,164 | ||
Restricted cash included in Other long-term assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash | $ 730 | $ 722 |
Financial Assets and Liabilit_5
Financial Assets and Liabilities - Additional Information (Details) | 9 Months Ended |
Jul. 31, 2019 | |
Financial Assets and Liabilities [Line Items] | |
Shipments period using hedges (in months) | 1 month |
Period for hedge balance in OCI to be reclassified to statement of operations (in months) | 12 months |
Non-Designated Hedging Instrument | |
Financial Assets and Liabilities [Line Items] | |
Forward contracts terms (in months) | 1 month |
Foreign currency derivative contracts | Minimum | |
Financial Assets and Liabilities [Line Items] | |
Derivative maturity period | 1 month |
Foreign currency derivative contracts | Maximum | |
Financial Assets and Liabilities [Line Items] | |
Derivative maturity period | 22 months |
Foreign currency derivative contracts | Cash Flow Hedging | Maximum | |
Financial Assets and Liabilities [Line Items] | |
Derivative maturity period | 3 years |
Foreign Exchange Forward | Cash Flow Hedging | Maximum | |
Financial Assets and Liabilities [Line Items] | |
Derivative maturity period | 22 months |
Foreign Exchange Contracts | Maximum | |
Financial Assets and Liabilities [Line Items] | |
Duration of foreign exchange forward contracts | 1 year |
Financial Assets and Liabilit_6
Financial Assets and Liabilities - Effects on Changes in Fair Values of Non-Designated Forward Contracts (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Financial Assets And Liabilities [Abstract] | ||||
Gain (loss) recorded in other income (expense), net | $ 1,179 | $ 1,567 | $ 4,314 | $ 1,244 |
Financial Assets and Liabilit_7
Financial Assets and Liabilities - Notional Amounts of Derivative Instruments (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Financial Assets And Liabilities [Abstract] | ||
Total gross notional amount | $ 779,127 | $ 1,135,549 |
Net fair value | $ (565) | $ (18,120) |
Financial Assets and Liabilit_8
Financial Assets and Liabilities - Fair Values of Derivative Instrument Designated and Non-Designated as Hedging Instruments in Unaudited Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Designated As Hedging Instrument | Other current assets | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, assets | $ 6,487 | $ 4,771 |
Designated As Hedging Instrument | Accrued liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, liabilities | 7,020 | 22,890 |
Non-Designated Hedging Instrument | Other current assets | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, assets | 77 | 131 |
Non-Designated Hedging Instrument | Accrued liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, liabilities | $ 109 | $ 132 |
Financial Assets and Liabilit_9
Financial Assets and Liabilities - Unaudited Condensed Consolidated Statement of Operations Location and Amount of Gains and Losses on Derivative Instrument Fair Values for Designated Hedge Instruments, Net of Tax (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Financial Assets and Liabilities [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | $ (1,070) | $ (12,371) | $ 4,844 | $ (7,891) |
Amount of gain (loss) reclassified from OCI (effective portion) | (3,260) | 1,662 | (11,747) | 12,510 |
Foreign Exchange Contracts | Revenues | ||||
Financial Assets and Liabilities [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | (994) | 1,422 | (253) | (542) |
Amount of gain (loss) reclassified from OCI (effective portion) | 685 | (308) | 1,048 | 1,190 |
Foreign Exchange Contracts | Operating expenses | ||||
Financial Assets and Liabilities [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | (76) | (13,793) | 5,097 | (7,349) |
Amount of gain (loss) reclassified from OCI (effective portion) | $ (3,945) | $ 1,970 | $ (12,795) | $ 11,320 |
Financial Assets and Liabili_10
Financial Assets and Liabilities - Ineffective Portion and Portion Excluded from Effectiveness Testing of Derivative Hedge Gains (Losses) (Detail) - Foreign Exchange Contracts - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Financial Assets and Liabilities [Line Items] | ||||
Amount of gain (loss) recognized in statement of operations on derivatives (ineffective portion) | $ 232 | $ (132) | $ 148 | $ 389 |
Amount of gain (loss) recognized in statement of operations on derivatives (excluded from effectiveness testing) | $ 1,077 | $ 782 | $ 358 | $ 2,488 |
Fair Value Measures - Assets an
Fair Value Measures - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 385,511 | $ 382,363 |
Total liabilities | 255,639 | 235,187 |
Foreign currency derivative contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Prepaid and other current assets | 6,564 | 4,902 |
Accounts payable and accrued liabilities | 7,129 | 23,022 |
Deferred compensation plan liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term liabilities | 248,510 | 212,165 |
Deferred compensation plan assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term assets | 248,510 | 212,165 |
Money market funds | Cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 130,437 | 165,296 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 378,947 | 377,461 |
Total liabilities | 248,510 | 212,165 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Foreign currency derivative contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Prepaid and other current assets | 0 | 0 |
Accounts payable and accrued liabilities | 0 | 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Deferred compensation plan liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term liabilities | 248,510 | 212,165 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Deferred compensation plan assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term assets | 248,510 | 212,165 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | Cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 130,437 | 165,296 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 6,564 | 4,902 |
Total liabilities | 7,129 | 23,022 |
Significant Other Observable Inputs (Level 2) | Foreign currency derivative contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Prepaid and other current assets | 6,564 | 4,902 |
Accounts payable and accrued liabilities | 7,129 | 23,022 |
Significant Other Observable Inputs (Level 2) | Deferred compensation plan liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Deferred compensation plan assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term assets | 0 | 0 |
Significant Other Observable Inputs (Level 2) | Money market funds | Cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Foreign currency derivative contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Prepaid and other current assets | 0 | 0 |
Accounts payable and accrued liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Deferred compensation plan liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Deferred compensation plan assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term assets | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Money market funds | Cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Fair Value Measures - Additiona
Fair Value Measures - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||||
Write-down of long-term investments | $ 0 | $ 0 | $ 0 | $ 0 |
Liabilities and Restructuring_3
Liabilities and Restructuring Charges - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Oct. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | $ 19,338 | $ 23 | $ 33,746 | $ 1,917 | |
Employee Severance and Benefits | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring | 19,300 | 33,700 | 1,900 | ||
Employee related restructuring liabilities | 20,800 | 20,800 | $ 8,100 | ||
Minimum | Employee Severance and Benefits | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | 43,000 | 8,000 | 43,000 | 8,000 | |
Maximum | Employee Severance and Benefits | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and Related Cost, Expected Cost | $ 65,000 | $ 10,000 | $ 65,000 | $ 10,000 |
Liabilities and Restructuring_4
Liabilities and Restructuring Charges - Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Payables and Accruals [Abstract] | ||
Payroll and related benefits | $ 391,593 | $ 413,307 |
Other accrued liabilities | 65,190 | 79,973 |
Accounts payable | 14,846 | 85,046 |
Total | $ 471,629 | $ 578,326 |
Liabilities and Restructuring_5
Liabilities and Restructuring Charges - Components of Other Long Term Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Liabilities, Other than Long-term Debt, Noncurrent [Abstract] | ||
Deferred compensation liability | $ 248,510 | $ 212,165 |
Other long-term liabilities | 90,418 | 53,395 |
Total | $ 338,928 | $ 265,560 |
Credit Facility - Additional In
Credit Facility - Additional Information (Detail) ¥ in Millions | Nov. 28, 2016USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Oct. 31, 2018USD ($) | Jul. 31, 2018CNY (¥) | May 19, 2015USD ($) |
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 125,285,000 | $ 125,535,000 | |||||
Proceeds from credit facilities | 192,897,000 | $ 615,000,000 | |||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Remaining borrowing capacity | 0 | ||||||
The Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Remaining borrowing capacity | $ 18,400,000 | ||||||
Foreign Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility maximum borrowing capacity | $ 33,000,000 | $ 33,000,000 | ¥ 220 | ||||
Foreign Line of Credit | Chinese Central Bank Rate | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings, interest rate | 10.00% | ||||||
Unsecured Debt | The Credit Agreement | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility maximum borrowing capacity | $ 650,000,000 | $ 500,000,000 | |||||
Additional borrowings from credit facility | 150,000,000 | ||||||
Current portion of line of credit | 330,000,000 | ||||||
Unsecured Debt | The Credit Agreement | Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fees percentage | 0.125% | ||||||
Unsecured Debt | The Credit Agreement | Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fees percentage | 0.20% | ||||||
Unsecured Debt | The Credit Agreement | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings, interest rate | 1.00% | ||||||
Unsecured Debt | The Credit Agreement | Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Senior unsecured term loan facility, face amount | $ 150,000,000 | ||||||
Long-term Debt | $ 123,500,000 | 133,800,000 | |||||
Long-term debt | $ 106,900,000 | $ 120,000,000 | |||||
Unsecured Debt | The Credit Agreement | Term Loan | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings, interest rate | 1.125% |
Credit Facility - Schedule of M
Credit Facility - Schedule of Maturities of Term Loan (Details) - Term Loan - Unsecured Debt - The Credit Agreement $ in Thousands | Jul. 31, 2019USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of fiscal 2019 | $ 3,750 |
2020 | 17,813 |
2021 | 27,187 |
2022 | 75,000 |
Total | $ 123,750 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | Jul. 31, 2019 | Oct. 31, 2018 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Cumulative currency translation adjustments | $ (89,355) | $ (89,289) |
Unrealized gain (loss) on derivative instruments, net of taxes | (7,298) | (23,888) |
Total accumulated other comprehensive income (loss) | $ (96,653) | $ (113,177) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Effect of Amounts Reclassified out of Each Component of Accumulated Other Comprehensive Income (Loss) into Net Income (Detail) - Reclassification out of accumulated other comprehensive income (loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications into net income | $ (3,260) | $ 1,662 | $ (11,747) | $ 12,510 |
Revenues | Gain (loss) on cash flow hedges, net of taxes | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications into net income | 685 | (308) | 1,048 | 1,190 |
Operating expenses | Gain (loss) on cash flow hedges, net of taxes | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications into net income | $ (3,945) | $ 1,970 | $ (12,795) | $ 11,320 |
Stock Repurchase Program - Addi
Stock Repurchase Program - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | |||||||||
Aug. 31, 2019 | Jun. 30, 2019 | May 31, 2019 | Feb. 28, 2019 | Aug. 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | May 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Jun. 14, 2019 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Stock repurchase program authorized amount | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||||||||||
Remaining amount available for further repurchases | $ 500,000,000 | $ 500,000,000 | |||||||||||
Purchases of treasury stock (in shares) | 775,000 | 1,509,000 | 1,901,000 | 4,411,000 | |||||||||
Accelerated Share Repurchase Program February 2019 ASR | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Stock repurchase program authorized amount | $ 100,000,000 | ||||||||||||
Prepayment to repurchase stock | 100,000,000 | ||||||||||||
Initial share delivery | $ 80,000,000 | ||||||||||||
Stock repurchase program, prepayment during prior period, derivative settlement | $ 20,000,000 | ||||||||||||
Purchases of treasury stock (in shares) | 97,601 | 900,000 | |||||||||||
Shares repurchased average price per share (in USD per share) | $ 114.01 | ||||||||||||
Accelerated Share Repurchase Program June 2019 ASR | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Stock repurchase program authorized amount | $ 100,000,000 | ||||||||||||
Prepayment to repurchase stock | 100,000,000 | ||||||||||||
Initial share delivery | $ 80,000,000 | ||||||||||||
Accelerated Share Repurchase Program September 2017 | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Stock repurchase program, prepayment during prior period, derivative settlement | $ 20,000,000 | ||||||||||||
Open Market Share Repurchase | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Purchases of treasury stock (in shares) | 400,000 | ||||||||||||
Shares repurchased average price per share (in USD per share) | $ 82.61 | ||||||||||||
Shares repurchased during period | $ 35,000,000 | ||||||||||||
Subsequent Event | Accelerated Share Repurchase Program June 2019 ASR | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Stock repurchase program, prepayment during prior period, derivative settlement | $ 20,000,000 | ||||||||||||
Purchases of treasury stock (in shares) | 90,202 | 800,000 | |||||||||||
Shares repurchased average price per share (in USD per share) | $ 130.23 |
Stock Repurchase Program - Stoc
Stock Repurchase Program - Stock Repurchase Activities (Detail) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Stock Repurchase Program [Abstract] | ||||
Purchases of treasury stock (in shares) | 775 | 1,509 | 1,901 | 4,411 |
Aggregate purchased shares | $ 100,000 | $ 132,000 | $ 209,185 | $ 387,000 |
Reissuance of treasury stock | 1,166 | 1,107 | 3,009 | 2,527 |
Stock Compensation - Stock Comp
Stock Compensation - Stock Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock compensation expense before taxes | $ 39,453 | $ 37,252 | $ 114,827 | $ 102,540 |
Income tax benefit | (6,593) | (7,111) | (19,188) | (19,574) |
Stock compensation expense after taxes | 32,860 | 30,141 | 95,639 | 82,966 |
Cost of products | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock compensation expense before taxes | 4,493 | 3,820 | 12,684 | 10,663 |
Cost of maintenance and service | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock compensation expense before taxes | 1,694 | 1,442 | 4,675 | 3,979 |
Research and development expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock compensation expense before taxes | 19,383 | 18,412 | 55,802 | 48,958 |
Sales and marketing expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock compensation expense before taxes | 7,360 | 7,317 | 21,790 | 20,813 |
General and administrative expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock compensation expense before taxes | $ 6,523 | $ 6,261 | $ 19,876 | $ 18,127 |
Stock Compensation - Additional
Stock Compensation - Additional Information (Detail) $ in Millions | 3 Months Ended |
Jul. 31, 2019USD ($) | |
New Accounting Pronouncement, Early Adoption [Line Items] | |
Unamortized share-based compensation expense | $ 298.1 |
Weighted-average period of total compensation costs to be recognized in years | 2 years 4 months 24 days |
Stock Compensation - Schedule o
Stock Compensation - Schedule of Intrinsic Value of Equity Awards Exercised (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Stock Compensation [Abstract] | ||||
Intrinsic value of awards exercised | $ 37,436 | $ 19,283 | $ 96,014 | $ 50,075 |
Net Income per Share - Reconcil
Net Income per Share - Reconciliation of Weighted Average Common Shares Used to Calculate Basic Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Numerator: | ||||
Net income (loss) | $ 99,929 | $ 79,409 | $ 371,653 | $ 178,190 |
Denominator: | ||||
Weighted-average common shares for basic net income per share (shares) | 150,123 | 148,490 | 149,708 | 148,760 |
Dilutive effect of potential common shares from equity-based compensation (shares) | 4,477 | 4,124 | 4,151 | 4,358 |
Weighted-average common shares for diluted net income per share (shares) | 154,600 | 152,614 | 153,859 | 153,118 |
Net income per share: | ||||
Basic (in USD per share) | $ 0.67 | $ 0.53 | $ 2.48 | $ 1.20 |
Diluted (in USD per share) | $ 0.65 | $ 0.52 | $ 2.42 | $ 1.16 |
Anti-dilutive employee stock-based awards excluded (shares) | 152 | 1,063 | 798 | 774 |
Segment Disclosure - Additional
Segment Disclosure - Additional information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2019Customer | Jul. 31, 2018Customer | Jul. 31, 2019SegmentCustomer | Jul. 31, 2018Customer | Oct. 31, 2018Segment | |
Segment Reporting Information [Line Items] | |||||
Number of reportable operating segment | Segment | 2 | 1 | |||
Customer concentration risk | Sales revenue | |||||
Segment Reporting Information [Line Items] | |||||
Number of major customers | Customer | 1 | 1 | 1 | 1 |
Segment Disclosure - Revenues R
Segment Disclosure - Revenues Related to Operations by Geographic Areas (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 852,970 | $ 779,714 | $ 2,509,613 | $ 2,325,976 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 407,408 | 365,414 | 1,231,951 | 1,126,624 |
Europe | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 90,074 | 90,657 | 257,502 | 273,136 |
Japan | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 65,709 | 71,981 | 203,486 | 210,805 |
Asia-Pacific and Other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 289,779 | $ 251,662 | $ 816,675 | $ 715,411 |
Segment Disclosure - Schedule o
Segment Disclosure - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 852,970 | $ 779,714 | $ 2,509,613 | $ 2,325,976 |
Adjusted operating income | 127,594 | 63,968 | 390,510 | 298,700 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted operating income | $ 216,581 | $ 167,847 | $ 627,369 | $ 553,909 |
Adjusted operating margin | 25.00% | 22.00% | 25.00% | 24.00% |
Operating Segments | Semiconductor & System Design: | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 769,411 | $ 708,413 | $ 2,260,372 | $ 2,122,780 |
Adjusted operating income | $ 207,773 | $ 169,798 | $ 604,497 | $ 564,656 |
Adjusted operating margin | 27.00% | 24.00% | 27.00% | 27.00% |
Operating Segments | Adjusted operating margin | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 83,559 | $ 71,301 | $ 249,241 | $ 203,196 |
Adjusted operating income | $ 8,808 | $ (1,951) | $ 22,872 | $ (10,747) |
Adjusted operating margin | 11.00% | (3.00%) | 9.00% | (5.00%) |
Segment Disclosure - Schedule_2
Segment Disclosure - Schedule of Segment Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Segment Reporting Information [Line Items] | ||||
Operating income | $ 127,594 | $ 63,968 | $ 390,510 | $ 298,700 |
Amortization of intangible expense | (24,414) | (31,699) | (79,345) | (93,248) |
Stock-based compensation expense | (39,453) | (37,252) | (114,827) | (102,540) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 216,581 | 167,847 | 627,369 | 553,909 |
Reconciling items: | ||||
Segment Reporting Information [Line Items] | ||||
Amortization of intangible expense | 23,714 | 30,805 | 77,138 | 90,538 |
Stock-based compensation expense | 39,453 | 37,252 | 114,827 | 102,540 |
Other | $ (25,820) | $ (35,822) | $ (44,894) | $ (62,131) |
Other Income (Expense), net - C
Other Income (Expense), net - Components of Other Income (Expense), Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Other Income (Expense) | ||||
Interest income | $ 1,789 | $ 1,096 | $ 5,280 | $ 3,659 |
Interest expense | (2,214) | (4,558) | (10,608) | (11,281) |
Gain (loss) on assets related to executive deferred compensation plan assets | 4,686 | 8,397 | 25,201 | 14,592 |
Foreign currency exchange gain (loss) | 696 | 1,627 | 2,999 | 1,725 |
Other, net | 360 | 1,363 | 501 | 3,900 |
Total | $ 5,317 | $ 7,925 | $ 23,373 | $ 12,595 |
Taxes - Provision for Income Ta
Taxes - Provision for Income Taxes and Effective Tax Rates (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 132,911 | $ 71,893 | $ 413,883 | $ 311,295 |
Provision (benefit) for income taxes | $ 32,982 | $ (7,516) | $ 42,230 | $ 133,105 |
Effective tax rate | 24.80% | (10.50%) | 10.20% | 42.80% |
Taxes - Additional Information
Taxes - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jul. 31, 2017 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Nov. 01, 2018 | Oct. 31, 2018 | |
Taxes [Line Items] | |||||||||
Income tax expense, income tax examination related to prior tax years | $ 18,300,000 | ||||||||
Statutory federal income tax rate | 21.00% | ||||||||
Deferred income taxes | 339,354,000 | $ 339,354,000 | $ 404,166,000 | ||||||
Provision (benefit) for income taxes | 32,982,000 | $ (7,516,000) | 42,230,000 | $ 133,105,000 | |||||
Unrecognized tax benefits | $ 17,400,000 | ||||||||
Minimum | |||||||||
Taxes [Line Items] | |||||||||
Estimated potential decrease in underlying unrecognized tax benefits | 0 | 0 | |||||||
Maximum | |||||||||
Taxes [Line Items] | |||||||||
Estimated potential decrease in underlying unrecognized tax benefits | $ 6,000,000 | $ 6,000,000 | |||||||
Retained Earnings | Accounting Standards Update 2016-16 | |||||||||
Taxes [Line Items] | |||||||||
Cumulative effect adjustment | $ 130,500,000 | ||||||||
Foreign Tax Authority | Hungarian Tax Authority | |||||||||
Taxes [Line Items] | |||||||||
Unrecognized tax benefits from settlement with tax authorities | $ 10,300,000 | $ 22,800,000 | |||||||
Synopsys Hungary | Foreign Tax Authority | Tax Year 2011 - Tax Year 2013 | Hungarian Tax Authority | |||||||||
Taxes [Line Items] | |||||||||
Aggregate tax assessment | $ 25,000,000 | ||||||||
Estimate of additional penalties and interest | $ 11,000,000 | ||||||||
snps_FiscalYear2017 | TAIWAN, PROVINCE OF CHINA | |||||||||
Taxes [Line Items] | |||||||||
Unrecognized tax benefits from settlement with tax authorities | $ 5,500,000 |
Contingencies (Details)
Contingencies (Details) | Jun. 29, 2018USD ($) |
Loss Contingencies [Line Items] | |
Patent cross-license | 7 years |
Mentor Patent Litigation | |
Loss Contingencies [Line Items] | |
Payments for legal settlements | $ 65,000,000 |
Minimum | Mentor Patent Litigation | |
Loss Contingencies [Line Items] | |
Potential one-time termination charge | 0 |
Maximum | Mentor Patent Litigation | |
Loss Contingencies [Line Items] | |
Potential one-time termination charge | $ 25,000,000 |