Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2020 | Aug. 19, 2020 | |
Cover [Abstract] | ||
Document Transition Report | false | |
Title of 12(b) Security | Common Stock($0.01 par value) | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2020 | |
Amendment Flag | false | |
Entity File Number | 000-19807 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | SNPS | |
Entity Registrant Name | SYNOPSYS, INC. | |
Entity Address, Address Line One | 690 EAST MIDDLEFIELD ROAD | |
Entity Address, City or Town | MOUNTAIN VIEW | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94043 | |
City Area Code | 650 | |
Local Phone Number | 584-5000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Central Index Key | 0000883241 | |
Current Fiscal Year End Date | --10-31 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 151,761,689 | |
Entity Tax Identification Number | 56-1546236 | |
Security Exchange Name | NASDAQ |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 1,049,922 | $ 728,597 | |
Accounts receivable, net | 638,489 | 553,895 | |
Inventories, net | 159,813 | 141,518 | |
Income taxes receivable and prepaid taxes | 20,960 | 24,855 | |
Prepaid and other current assets | 316,831 | 290,052 | |
Total current assets | 2,186,015 | 1,738,917 | |
Property and equipment, net | 484,529 | 429,532 | |
Operating lease right-of-use assets, net | 472,244 | 0 | |
Goodwill | 3,356,407 | 3,171,179 | |
Intangible assets, net | 275,338 | 279,374 | |
Long-term prepaid taxes | 8,279 | 15,503 | |
Deferred income taxes | 463,894 | 390,129 | |
Other long-term assets | 416,544 | 380,526 | |
Total assets | 7,663,250 | 6,405,160 | |
Current liabilities: | |||
Accounts payable and accrued liabilities | 549,906 | 506,459 | |
Operating lease liabilities, current | 71,861 | 0 | |
Accrued income taxes | 20,653 | 15,904 | |
Deferred revenue | 1,389,609 | 1,212,476 | |
Short-term debt | 24,248 | 17,614 | |
Total current liabilities | 2,056,277 | 1,752,453 | |
Operating lease liabilities, non-current | 470,215 | 0 | |
Long-term accrued income taxes | 27,011 | 29,911 | |
Long-term deferred revenue | 111,915 | 90,102 | |
Long-term debt | 107,104 | 120,093 | |
Other long-term liabilities | 289,411 | 323,725 | |
Total liabilities | 3,061,933 | 2,316,284 | |
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; 151,758 and 150,331 shares outstanding, respectively | 1,519 | 1,503 | |
Capital in excess of par value | 1,623,586 | 1,635,455 | |
Retained earnings | 3,597,944 | 3,164,144 | |
Treasury stock, at cost: 5,503 and 6,930 shares, respectively | (554,304) | (625,642) | |
Accumulated other comprehensive income (loss) | (72,820) | (92,447) | |
Total Synopsys stockholders’ equity | 4,595,925 | 4,083,013 | |
Non-controlling interest | 5,392 | 5,863 | |
Total stockholders’ equity | 4,601,317 | 4,088,876 | |
Total liabilities and stockholders’ equity | $ 7,663,250 | $ 6,405,160 | |
[1] | Derived from audited financial statements. |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2020 | Oct. 31, 2019 |
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) | 151,758,000 | 150,331,000 |
Treasury stock, shares (in shares) | 5,503,000 | 6,930,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Revenue: | ||||
Total revenue | $ 964,134 | $ 852,970 | $ 2,659,842 | $ 2,509,613 |
Cost of revenue: | ||||
Amortization of intangible assets | 13,718 | 13,603 | 40,732 | 45,927 |
Total cost of revenue | 193,008 | 186,632 | 570,141 | 570,203 |
Gross margin | 771,126 | 666,338 | 2,089,701 | 1,939,410 |
Operating expenses: | ||||
Research and development | 322,602 | 284,804 | 939,456 | 846,429 |
Sales and marketing | 156,456 | 157,109 | 455,511 | 471,720 |
General and administrative | 73,516 | 67,382 | 204,734 | 165,794 |
Amortization of intangible assets | 9,931 | 10,111 | 29,545 | 31,211 |
Restructuring charges | (1,977) | 19,338 | 36,446 | 33,746 |
Total operating expenses | 560,528 | 538,744 | 1,665,692 | 1,548,900 |
Operating income | 210,598 | 127,594 | 424,009 | 390,510 |
Other income (expense), net | 26,256 | 5,317 | 22,584 | 23,373 |
Income before income taxes | 236,854 | 132,911 | 446,593 | 413,883 |
Provision (benefit) for income taxes | (16,057) | 32,982 | (20,299) | 42,230 |
Net income | $ 252,911 | $ 99,929 | $ 466,892 | $ 371,653 |
Net income per share: | ||||
Basic (in USD per share) | $ 1.67 | $ 0.67 | $ 3.10 | $ 2.48 |
Diluted (in USD per share) | $ 1.62 | $ 0.65 | $ 3.01 | $ 2.42 |
Shares used in computing per share amounts: | ||||
Basic (shares) | 151,352 | 150,123 | 150,731 | 149,708 |
Diluted (shares) | 155,973 | 154,600 | 155,074 | 153,859 |
Time-based products | ||||
Revenue: | ||||
Total revenue | $ 612,065 | $ 537,569 | $ 1,758,601 | $ 1,649,590 |
Cost of revenue: | ||||
Cost of revenue | 118,478 | 113,533 | 344,469 | 346,163 |
Upfront products | ||||
Revenue: | ||||
Total revenue | 210,931 | 177,552 | 491,417 | 451,466 |
Maintenance and service | ||||
Revenue: | ||||
Total revenue | 141,138 | 137,849 | 409,824 | 408,557 |
Cost of revenue: | ||||
Cost of revenue | $ 60,812 | $ 59,496 | $ 184,940 | $ 178,113 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 252,911 | $ 99,929 | $ 466,892 | $ 371,653 |
Other comprehensive income (loss): | ||||
Change in foreign currency translation adjustment | 18,102 | (2,123) | 14,099 | (67) |
Cash flow hedges: | ||||
Deferred gains (losses), net of tax of $(4,169) and $(1,823), for the three and nine months ended July 31, 2020, respectively, and of $(464) and $(2,178) for each of the same periods in fiscal 2019, respectively. | 12,399 | (1,070) | 3,965 | 4,844 |
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $(134) and $(262), for the three and nine months ended July 31, 2020, respectively, and of $(702) and $(2,988) for each of the same periods in fiscal 2019, respectively. | 709 | 3,260 | 1,563 | 11,747 |
Other comprehensive income (loss), net of tax effects | 31,210 | 67 | 19,627 | 16,524 |
Comprehensive income | $ 284,121 | $ 99,996 | $ 486,519 | $ 388,177 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Deferred gains (losses), tax | $ (4,169) | $ (464) | $ (1,823) | $ (2,178) |
Reclassification adjustment on deferred (gains) losses included in net income, tax | $ (134) | $ (702) | $ (262) | $ (2,988) |
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 2014-09 | $ 257,594 | $ 257,594 | [1] | $ 257,594 | ||||||
Cumulative effect adjustment | Accounting Standards Update 2018-02 | (130,544) | (130,544) | [2] | (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) | [3],[4] | (1,901) | |||||||
Purchases of treasury stock, value | $ (209,185) | [3],[4] | $ (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],[4] | 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) | [3] | (775) | |||||||
Purchases of treasury stock, value | $ (100,000) | [3] | $ (8) | 8 | (100,000) | (100,000) | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 1,166 | [3] | 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 | ||
Balance (in shares) at Oct. 31, 2019 | 150,331 | |||||||||
Beginning balance at Oct. 31, 2019 | 4,088,876 | [5] | $ 1,503 | 1,635,455 | 3,164,144 | (625,642) | (92,447) | 4,083,013 | 5,863 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 466,421 | 466,892 | 466,892 | (471) | ||||||
Other comprehensive income (loss), net of tax effects | $ 19,627 | 19,627 | 19,627 | |||||||
Purchases of treasury stock (in shares) | (1,380) | [6] | (1,380) | |||||||
Purchases of treasury stock, value | $ (200,000) | [6] | $ (12) | 12 | (200,000) | (200,000) | ||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 2,807 | [6] | 2,807 | |||||||
Common stock issued, net of shares withheld for employee taxes | $ 56,238 | $ 28 | (182,036) | (33,092) | 271,338 | 56,238 | ||||
Stock-based compensation | 170,155 | 170,155 | 170,155 | |||||||
Balance (in shares) at Jul. 31, 2020 | 151,758 | |||||||||
Ending balance at Jul. 31, 2020 | 4,601,317 | $ 1,519 | 1,623,586 | 3,597,944 | (554,304) | (72,820) | 4,595,925 | 5,392 | ||
Balance (in shares) at Apr. 30, 2020 | 150,908 | |||||||||
Beginning balance at Apr. 30, 2020 | 4,280,949 | $ 1,509 | 1,655,787 | 3,356,489 | (634,669) | (104,030) | 4,275,086 | 5,863 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 252,440 | 252,911 | 252,911 | (471) | ||||||
Other comprehensive income (loss), net of tax effects | $ 31,210 | 31,210 | 31,210 | |||||||
Purchases of treasury stock (in shares) | (149) | (149) | ||||||||
Purchases of treasury stock, value | $ (20,000) | (20,000) | (20,000) | |||||||
Equity forward contract | $ 20,000 | 20,000 | 20,000 | |||||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 999 | 999 | ||||||||
Common stock issued, net of shares withheld for employee taxes | $ (25,119) | $ 10 | (114,038) | (11,456) | 100,365 | (25,119) | ||||
Stock-based compensation | 61,837 | 61,837 | 61,837 | |||||||
Balance (in shares) at Jul. 31, 2020 | 151,758 | |||||||||
Ending balance at Jul. 31, 2020 | $ 4,601,317 | $ 1,519 | $ 1,623,586 | $ 3,597,944 | $ (554,304) | $ (72,820) | $ 4,595,925 | $ 5,392 | ||
[1] | See Note 2. Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019 for additional information on the retained earnings adjustment due to adoption of Accounting Standards Codification (ASC) 606 and ASC 340, “Other Assets and Deferred Costs”. | |||||||||
[2] | See Note 11. Income Taxes in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019 for additional information on the retained earnings adjustment due to adoption of Accounting Standard Update (ASU) 2016-16. | |||||||||
[3] | Does not include the 90,202 shares or $20.0 million equity forward contract from the June 2019 ASR settled in August 2019. | |||||||||
[4] | 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. | |||||||||
[5] | Derived from audited financial statements. | |||||||||
[6] | The third quarter of fiscal 2020 includes the settlement of the 148,953 shares or $20.0 million equity forward contract from the February 2020 ASR settled in May 2020. |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Cash flow from operating activities: | ||
Net income | $ 466,892 | $ 371,653 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization and depreciation | 159,156 | 152,133 |
Reduction of operating lease right-of-use assets | 62,585 | 0 |
Amortization of capitalized costs to obtain revenue contracts | 44,851 | 46,230 |
Stock-based compensation | 170,155 | 114,826 |
Allowance for doubtful accounts | 14,875 | 8,950 |
(Gain) loss on sale of property and investments | (1,994) | (4,052) |
Deferred income taxes | (74,374) | (9,664) |
Net changes in operating assets and liabilities, net of acquired assets and liabilities: | ||
Accounts receivable | (89,667) | 89,370 |
Inventories | (17,040) | (39,431) |
Prepaid and other current assets | (21,350) | (38,224) |
Other long-term assets | (77,895) | (114,344) |
Accounts payable and accrued liabilities | 43,842 | (45,200) |
Operating lease liabilities | (57,968) | 0 |
Income taxes | 6,128 | (6,963) |
Deferred revenue | 160,966 | 53,980 |
Net cash provided by operating activities | 789,162 | 579,264 |
Cash flows from investing activities: | ||
Proceeds from sales of long-term investments | 2,151 | 6,361 |
Purchases of long-term investments | (2,762) | 0 |
Purchases of property and equipment | (120,234) | (122,358) |
Cash paid for acquisitions and intangible assets, net of cash acquired | (201,045) | 0 |
Capitalization of software development costs | (3,035) | (2,245) |
Net cash used in investing activities | (324,925) | (118,242) |
Cash flows from financing activities: | ||
Proceeds from credit facilities | 276,490 | 192,897 |
Repayment of debt | (284,218) | (520,312) |
Issuances of common stock | 123,237 | 107,354 |
Payments for taxes related to net share settlement of equity awards | (66,985) | (52,309) |
Purchase of equity forward contract | 0 | (20,000) |
Purchases of treasury stock | (200,000) | (209,185) |
Other | 0 | (762) |
Net cash used in financing activities | (151,476) | (502,317) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 8,700 | 4,975 |
Net change in cash, cash equivalents and restricted cash | 321,461 | (36,320) |
Cash, cash equivalents and restricted cash, beginning of year | 730,527 | 725,001 |
Cash, cash equivalents and restricted cash, end of period | $ 1,051,988 | $ 688,681 |
Description of Business
Description of Business | 9 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Synopsys, Inc. (Synopsys or the Company) provides products and services used 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, 2020 | |
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, 2019 as filed with the SEC on December 20, 2019. 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. In addition, the Company has considered the potential impact of the COVID-19 pandemic on the business operations. Although no material impairment or other effects have been identified to date related to the COVID-19 pandemic, there is substantial uncertainty in the nature and degree of its continued effects over time. This uncertainty affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information are known. Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All significant 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 approximately every five 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 2020 and 2019 are both 52-week years. Fiscal 2020 will end on October 31, 2020. Fiscal 2019 ended on November 2, 2019. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end. Leases . In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” which supersedes the previous lease requirements in Topic 840. Topic 842 was subsequently amended by several ASUs. The new guidance requires a lessee to recognize a right-of-use (ROU) asset and a lease liability for most operating leases in the consolidated balance sheets. These ASUs also made minor changes to lessor accounting and aligns key aspects of the lessor accounting model with the new revenue recognition guidance. The new standard did not have a material impact on the unaudited condensed consolidated financial statements for arrangements in which the Company is the lessor. The Company adopted Topic 842 at the beginning of fiscal 2020 using the modified retrospective method without restatement of comparative periods. The Company elected the package of practical expedients permitted under the transition guidance, which allows the carryforward of historical assessments about (1) lease classification, (2) whether a contract is or contains a lease, and (3) which costs qualify as initial direct costs for leases that existed prior to the adoption. The Company did not elect either the use of hindsight or land easements practical expedients available in transition. The adoption of the standard did not have an impact on the Company’s beginning retained earnings, results of operations, or cash flows. The operating lease liabilities equaled the present value of the remaining Topic 840 minimum rental payments for those leases, discounted at the Company’s incremental borrowing rate as of the date of adoption. The ROU assets were measured at the amount of the related lease liabilities plus any prepaid rental payments and less any unamortized lease incentives such as tenant improvement allowances. The Company recognized ROU assets of $475 million and operating lease liabilities of $540 million on the unaudited condensed consolidated balance sheets. The Company determines if a contract is or contains a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. Lease liabilities for operating and finance leases are recognized at the lease commencement date based on the present value of future lease payments over the remaining lease terms. ROU assets are derived from the carrying amount of the related lease liability plus any prepaid lease payments, less any lease incentives such as tenant improvement allowances. The Company primarily uses its incremental borrowing rate, determined as of the lease commencement date, to measure the present value of its future lease payments, as the rate implicit in the lease is generally not readily determinable. The Company uses a benchmark senior unsecured yield curve for debt instruments and considers specific credit quality, market conditions, tenor of lease arrangements, and quality of collateral to determine the incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term of each lease. Variable payments, such as for maintenance, property taxes or insurance, are recognized on our unaudited condensed consolidated statements of operations as incurred. The Company has adopted both (1) the practical expedient to not separate lease from non-lease components and (2) the short-term lease exemption. The Company has elected the practical expedient to not separate lease from non-lease components for all classes of underlying assets and the short-term lease exemption for all classes of underlying assets except real estate leases, with terms 12 months or less. Revenue Recognition. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC 606), “Revenue from Contracts with Customers,” which the Company adopted in fiscal 2019. See Note 2. Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019 for revenue recognition policies under the new revenue guidance ASC 606. |
Revenue
Revenue | 9 Months Ended |
Jul. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregated Revenue The following table shows the percentage of revenue by product groups: Three Months Ended Nine Months Ended 2020 2019 2020 2019 EDA 55 % 57 % 58 % 59 % IP & System Integration 35 % 33 % 32 % 31 % Software Integrity Products & Services 10 % 10 % 10 % 10 % Other 0 % 0 % 0 % 0 % Total 100 % 100 % 100 % 100 % Contract Balances The contract assets indicated below are presented as prepaid and other current assets in the unaudited condensed consolidated balance sheets. The contract assets are transferred to receivables when the rights to invoice and receive payment become unconditional. Unbilled receivables are presented as accounts receivable, net, in the unaudited condensed consolidated balance sheets. Contract balances are as follows: As of July 31, 2020 October 31, 2019 (in thousands) Contract assets $ 216,516 $ 210,557 Unbilled receivables $ 53,028 $ 38,175 Deferred revenue $ 1,501,524 $ 1,302,578 During the nine months ended July 31, 2020 , the Company recognized $926.2 million of revenue that was included in the deferred revenue balance as of October 31, 2019. During the nine months ended July 31, 2019 , the Company recognized $785.1 million of revenue that was included in the deferred revenue balance as of October 31, 2018. Contracted but unsatisfied or partially unsatisfied performance obligations were approximately $4.6 billion as of July 31, 2020 , which includes $604.6 million in non-cancellable Flexible Spending Account (FSA) commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. The Company has elected to exclude future sales-based royalty payments from the remaining performance obligations. The contracted but unsatisfied or partially unsatisfied performance obligations expected to be recognized over the next 12 months are approximately 58% , with the remainder recognized thereafter. During the three and nine months ended July 31, 2020 , the Company recognized $25.9 million and $78.0 million , respectively, from performance obligations satisfied from sales-based royalties earned during the periods. During the three and nine months 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, 2020 were $92.1 million and included in other assets in the Company’s unaudited condensed consolidated balance sheets. Amortization of these assets was $16.6 million and $44.9 million during the three and nine months ended July 31, 2020 , respectively, and included in sales and marketing expense in the Company’s unaudited condensed consolidated statements of operations. Amortization of these assets was $17.8 million and $46.2 million during the three and nine months ended July 31, 2019 , respectively, and included in sales and marketing expense in the Company’s unaudited condensed consolidated statements of operations. |
Business Combinations
Business Combinations | 9 Months Ended |
Jul. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations During the nine months ended July 31, 2020 , the Company completed several acquisitions for an aggregate consideration of $238.3 million , net of cash acquired as described below: • During the second quarter of fiscal 2020, the Company completed an acquisition for an aggregate consideration of $105.7 million ; including cash consideration of $75.7 million and $30.0 million equal to the fair value of the Company’s products exchanged in connection with the acquisition. The consideration of $105.7 million was allocated to $20.6 million of identifiable intangible assets, $4.2 million of net tangible assets, and $80.9 million in goodwill, on a preliminary basis. The fair value of these intangible assets was estimated using the income method. These transactions are not considered to be material to the Company’s unaudited condensed consolidated statements of operations. The acquisition was attributable to the Semiconductor & System Design reporting segment. Concurrent to this transaction, the Company also executed a design service arrangement and recognized an asset of $10.7 million for the off-market component. The $ 10.7 million contract asset is expected to be amortized over the contractual period of the agreement of five years . • In addition to the above, the Company also completed several other acquisitions for an aggregate cash consideration of $132.6 million , net of cash acquired. The preliminary purchase allocations are $44.7 million of identifiable intangible assets and $92.4 million in goodwill, of which $12.9 million is attributable to the Software Integrity reporting segment. The fair value of these intangible assets and goodwill are estimated using the income method. The preliminary fair value estimates for the assets acquired and liabilities assumed for all acquisitions completed within 12 months from the applicable acquisition date are not yet finalized and may change as additional information becomes available during the respective measurement periods. The primary areas of those preliminary estimates relate to certain tangible assets and liabilities, identifiable intangible assets, and income taxes. The Company does not consider these acquisitions to be material, individually or in the aggregate, to the Company’s unaudited condensed consolidated statements of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The changes in the carrying amount of goodwill during the nine months ended July 31, 2020 were as follows: (in thousands) Balance at October 31, 2019 $ 3,171,179 Additions 173,341 Effect of foreign currency translation 11,887 Balance at July 31, 2020 $ 3,356,407 Intangible Assets In-process research and development (IPR&D) as of July 31, 2020 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, 2020 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 827,232 $ 692,545 $ 134,687 Customer relationships 380,817 268,574 112,243 Contract rights intangible 192,757 185,357 7,400 Trademarks and trade names 43,096 28,070 15,026 In-process research and development (IPR&D) 1,214 — 1,214 Capitalized software development costs 43,112 38,344 4,768 Total $ 1,488,228 $ 1,212,890 $ 275,338 Intangible assets as of October 31, 2019 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 791,647 $ 655,119 $ 136,528 Customer relationships 358,661 242,058 116,603 Contract rights intangible 184,304 181,124 3,180 Trademarks and trade names 42,929 25,581 17,348 In-process research and development (IPR&D) 1,200 — 1,200 Capitalized software development costs 40,077 35,562 4,515 Total $ 1,418,818 $ 1,139,444 $ 279,374 Amortization expense related to intangible assets consisted of the following: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Core/developed technology $ 12,472 $ 12,825 $ 37,515 $ 43,229 Customer relationships 8,971 9,303 26,444 28,261 Contract rights intangible 1,272 808 3,829 2,790 Trademarks and trade names 934 778 2,489 2,858 Capitalized software development costs (1) 947 700 2,782 2,207 Total $ 24,596 $ 24,414 $ 73,059 $ 79,345 (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 intangible assets as of July 31, 2020 : Fiscal year (in thousands) Remainder of fiscal 2020 $ 22,033 2021 75,568 2022 60,735 2023 44,733 2024 34,398 2025 and thereafter 36,657 IPR&D 1,214 Total $ 275,338 |
Financial Assets and Liabilitie
Financial Assets and Liabilities | 9 Months Ended |
Jul. 31, 2020 | |
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, 2020 , the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 280,417 $ — $ — $ — $ 280,417 Total: $ 280,417 $ — $ — $ — $ 280,417 (1) See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents. As of October 31, 2019 , the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 166,024 $ — $ — $ — $ 166,024 Total: $ 166,024 $ — $ — $ — $ 166,024 (1) See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents. Restricted cash. The Company includes 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 statements 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, 2020 October 31, 2019 (in thousands) Cash and cash equivalents $ 1,049,922 $ 728,597 Restricted cash included in Prepaid expenses and other current assets 1,287 1,174 Restricted cash included in Other long-term assets 779 756 Total cash, cash equivalents and restricted cash $ 1,051,988 $ 730,527 Non-marketable equity securities. The Company’s strategic investment portfolio consists of non-marketable equity securities in privately held companies. The investments that the Company have less than 20% equity interests and/or do not have the ability to exercise significant influence are accounted using the measurement alternative when the fair value of the investment is not readily determinable. Securities accounted for as 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. See Note 7. Fair Value Measures . Derivatives In the first quarter of 2020, the Company adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedge Activities, which amends the hedge accounting recognition and presentation requirements of ASC 815. Pursuant to the provisions of ASU 2017-12, the Company is not required to separately measure and report hedge ineffectiveness, which was previously recorded in Other income (expense), net in our unaudited condensed consolidated statements of operations. Also, prior to the adoption of ASU 2017-12, the forward point components of the Cash Flow hedges were excluded from assessing effectiveness of the hedging relationship and were recorded on the unaudited condensed consolidated statements of operations in other income (expense), net. Upon adoption of ASU 2017-12, the Company presents the related earning impact of the Cash Flow hedges in the same income statement section as the hedged items. Also, adoption of the guidance did not impact opening retained earnings or have a material impact on our financial statements. 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. In addition, the Company mitigates credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty and 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. The cash flow impact upon settlement of the derivative contracts will be included in “Net cash provided by operating activities” in the unaudited condensed consolidated statements of cash flows. Cash Flow Hedging Activities Certain foreign exchange forward contracts are designated and qualify as cash flow hedges. These contracts have durations of approximately 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 related gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of other comprehensive income (loss) (OCI) in stockholders’ equity and reclassified into revenue or operating expenses, as appropriate, at the time the hedged transactions affect earnings. The Company expects a majority of the hedge balance in OCI to be reclassified to the statements of operations within the next 12 months . The Company did not have any gains or losses related to discontinuation of cash flow hedges during the three and nine months ended July 31, 2020 and 2019 . Prior to adoption of ASU 2017-12, hedge effectiveness is evaluated monthly using spot rates, with any gain or loss caused by hedging ineffectiveness recorded in other income (expense), net. During the three and nine months ended July 31, 2020 and 2019 , the amounts recognized in other income (expense) for ineffectiveness and excluded component were immaterial. Upon adoption of ASU 2017-12, the Company elected to use the forward method to measure hedge effectiveness for its Japanese yen revenue and foreign currency expense cash flow hedges. The Company did not change the process for its backlog cash flow hedges and continues to measure hedging effectiveness on a monthly basis. 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 effects of the non-designated derivative instruments on the Company’s unaudited condensed consolidated statements of operations is summarized as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Gain (loss) recorded in other income (expense), net $ 2,995 $ 1,179 $ 1,891 $ 4,314 The notional amounts in the table below for derivative instruments provide one measure of the transaction volume outstanding: As of July 31, 2020 October 31, 2019 (in thousands) Total gross notional amount $ 838,981 $ 817,441 Net fair value $ 4,796 $ 3,494 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 sheets location and amount of derivative instrument fair values segregated between designated and non-designated hedge instruments: Fair values of derivative instruments designated as hedging instruments Fair values of derivative instruments not designated as hedging instruments (in thousands) Balance at July 31, 2020 Other current assets $ 7,103 $ 60 Accrued liabilities $ 2,268 $ 100 Balance at October 31, 2019 Other current assets $ 7,327 $ 53 Accrued liabilities $ 3,715 $ 171 The following table represents the unaudited condensed consolidated statements of operations location in Revenue/Deferred Revenue and Operating Expenses 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 $ 626 Revenue $ 466 Foreign exchange contracts Operating expenses 11,773 Operating expenses (1,175 ) Total $ 12,399 $ (709 ) 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 ) Nine months ended Foreign exchange contracts Revenue $ 2,836 Revenue $ 648 Foreign exchange contracts Operating expenses 1,129 Operating expenses (2,211 ) Total $ 3,965 $ (1,563 ) 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 ) |
Fair Value Measures
Fair Value Measures | 9 Months Ended |
Jul. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measures | Fair Value Measures Accounting Standards Codification (ASC) 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes guidelines and enhances disclosure requirements for fair value measurements. The accounting guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The accounting guidance also establishes a fair value hierarchy based on the independence of the source and objective evidence of the inputs used. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement: Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical instruments in active markets; Level 2 —Observable inputs other than quoted prices 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. See Note 9. Credit and Term Loan Facilities for more information on these borrowings. Assets/Liabilities Measured at Fair Value on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below as of July 31, 2020 : 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 $ 280,417 $ 280,417 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 7,163 — 7,163 — Other long-term assets: Deferred compensation plan assets 269,484 269,484 — — Total assets $ 557,064 $ 549,901 $ 7,163 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 2,368 $ — $ 2,368 $ — Other long-term liabilities: Deferred compensation plan liabilities 269,484 269,484 — — Total liabilities $ 271,852 $ 269,484 $ 2,368 $ — Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 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 $ 166,024 $ 166,024 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 7,380 — 7,380 — Other long-term assets: Deferred compensation plan assets 249,822 249,822 — — Total assets $ 423,226 $ 415,846 $ 7,380 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 3,886 $ — $ 3,886 $ — Other long-term liabilities: Deferred compensation plan liabilities 249,822 249,822 — — Total liabilities $ 253,708 $ 249,822 $ 3,886 $ — 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 alternative method 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. |
Liabilities and Restructuring C
Liabilities and Restructuring Charges | 9 Months Ended |
Jul. 31, 2020 | |
Liabilities and Restructuring Charges [Abstract] | |
Liabilities and Restructuring Charges | Liabilities and Restructuring Charges In the second quarter of fiscal 2019, the Company initiated a restructuring plan 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 plan were $84 million and consisted primarily of severance, termination, and retirement benefits under the 2019 Voluntary Retirement Program (VRP). During the three and nine months ended July 31, 2020 , the Company adjusted restructuring charges by approximately $(2.0) million and incurred restructuring charges of $36.4 million , respectively, under the 2019 restructuring plan. These charges consisted primarily of severance, termination, and retirement benefits. During the three and nine months ended July 31, 2020 , the Company made payments of $25.0 million and $55.7 million , respectively, related to the 2019 employee termination actions. As of July 31, 2020 , $3.3 million remained outstanding and was recorded in accounts payable and accrued liabilities as payroll and related benefits in the unaudited condensed consolidated balance sheets. The remaining balance will be paid in 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 consisted 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 as payroll and related benefits in the unaudited condensed consolidated balance sheets. As of October 31, 2019, $22.6 million related to the 2019 employee termination actions remained outstanding and was recorded in accounts payable and accrued liabilities as payroll and related benefits in the consolidated balance sheets. Accounts payable and accrued liabilities consist of: As of July 31, 2020 October 31, 2019 (in thousands) Payroll and related benefits $ 417,403 $ 417,157 Other accrued liabilities 95,377 69,487 Accounts payable 37,126 19,815 Total $ 549,906 $ 506,459 Other long-term liabilities consist of: As of July 31, 2020 October 31, 2019 (in thousands) Deferred compensation liability $ 269,484 $ 249,822 Other long-term liabilities 19,927 73,903 Total $ 289,411 $ 323,725 |
Credit and Term Loan Facilities
Credit and Term Loan Facilities | 9 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Credit and Term Loan Facilities | Credit and Term Loan Facilities 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, in order to increase the size of the revolving credit facility from $500.0 million to $650.0 million , provide a new $150.0 million senior unsecured term loan facility, and 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 maintain a minimum interest coverage ratio, as well as other non-financial covenants. As of July 31, 2020 , the Company was in compliance with all financial covenants. As of July 31, 2020 , the Company had $106.7 million outstanding balance, net of debt issuance costs, under the Term Loan, of which $82.5 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 2020 $ 4,688 2021 27,187 2022 75,000 Total $ 106,875 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, 2020 , the Company had $24.6 million outstanding under the agreement. As of October 31, 2019 , the Company had $119.8 million outstanding balance, net of debt issuance costs, under the Term Loan, of which $102.2 million was classified as long-term liabilities. There was no outstanding balance under the Revolver as of October 31, 2019 . There was no outstanding balance under the Revolver as of July 31, 2020 . 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, 2020 , 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. |
Leases
Leases | 9 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company has operating lease arrangements for office space, data center, equipment and other corporate assets. These leases have various expiration dates through March 31, 2032 , some of which include options to extend the leases for up to 10 years . Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term and associated potential option payments are excluded from lease payments. The components of the Company’s lease expense during the period presented are as follows: Three Months Ended July 31, Nine Months Ended July 31, 2020 2020 (in thousands) Operating lease expense $ 23,450 $ 69,932 Variable lease expense (1) 1,447 3,439 Total lease expense $ 24,897 $ 73,371 (1) Variable lease expense includes payments to lessors that are not fixed or determinable at lease commencement date. These payments primarily consist of maintenance, property taxes, insurance and variable indexed based payments. Supplemental cash flow information during the period presented is as follows: Three Months Ended July 31, Nine Months Ended July 31, 2020 2020 (in thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 18,637 $ 52,766 ROU assets obtained in exchange for operating lease liabilities $ 27,063 $ 56,846 Lease term and discount rate information related to the Company’s operating leases as of the end of the period presented are as follows: July 31, 2020 Weighted-average remaining lease term (in years) 8.84 Weighted-average discount rate 2.56 % The following represents the maturities of the Company’s future lease payments due under operating leases as of July 31, 2020 : Lease Payments Fiscal year (in thousands) Remainder of fiscal 2020 $ 18,137 2021 86,552 2022 76,714 2023 61,045 2024 56,901 Thereafter 311,341 Total future minimum lease payments 610,690 Less: Imputed interest 68,614 Total lease liabilities $ 542,076 As of July 31, 2020 , the Company has additional operating leases for facilities that have not yet commenced with future undiscounted lease payments of $57.0 million . These operating leases will commence before March 1, 2021 , with lease terms between 3.0 years and 9.0 years . As of October 31, 2019, the future minimum lease payments due under non-cancellable operating leases were as follows: Minimum Lease Payments (1) (in thousands) Fiscal year 2020 $ 79,286 2021 79,703 2022 69,477 2023 53,909 2024 48,730 Thereafter 291,494 Total $ 622,599 (1) Amounts based on Topic 840, Leases. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Jul. 31, 2020 | |
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, 2020 October 31, 2019 (in thousands) Cumulative currency translation adjustments $ (73,828 ) $ (87,929 ) Unrealized gain (loss) on derivative instruments, net of taxes 1,008 (4,518 ) Total accumulated other comprehensive income (loss) $ (72,820 ) $ (92,447 ) The effect of amounts reclassified out of each component of accumulated other comprehensive income (loss) into net income was as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Reclassifications from accumulated other comprehensive income (loss) into unaudited condensed consolidated statements of operations: Gain (loss) on cash flow hedges, net of taxes Revenues $ 466 $ 685 $ 648 $ 1,048 Operating expenses (1,175 ) (3,945 ) (2,211 ) (12,795 ) Total reclassifications into net income $ (709 ) $ (3,260 ) $ (1,563 ) $ (11,747 ) |
Stock Repurchase Program
Stock Repurchase Program | 9 Months Ended |
Jul. 31, 2020 | |
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 19, 2020. 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, 2020 , $500.0 million remained available for future repurchases under the program. In December 2019, the Company entered into an accelerated share repurchase agreement (the December 2019 ASR) to repurchase an aggregate of $100.0 million of the Company's common stock. Pursuant to the December 2019 ASR, the Company made a prepayment of $100.0 million to receive initial share deliveries of shares valued at $80.0 million . The remaining balance of $20.0 million was settled in February 2020. Total shares purchased under the December 2019 ASR were approximately 0.7 million shares, at an average purchase price of $149.75 per share. In February 2020, the Company entered into an accelerated share repurchase agreement (the February 2020 ASR) to repurchase an aggregate of $100.0 million of the Company’s common stock. Pursuant to the February 2020 ASR, the Company made a prepayment of $100.0 million to receive initial share deliveries of shares valued at $80.0 million . The remaining balance of $20.0 million was settled in May 2020. Total shares purchased under the February 2020 ASR were approximately 0.7 million shares, at an average purchase price of $140.41 per share. Stock repurchase activities as well as the reissuance of treasury stock for employee stock-based compensation purposes are as follows: Three Months Ended Nine Months Ended 2020 (3) 2019 (1) 2020 (3) 2019 (1)(2) (in thousands) Total shares repurchased 149 775 1,380 1,901 Total cost of the repurchased shares $ 20,000 $ 100,000 $ 200,000 $ 209,185 Reissuance of treasury stock 999 1,166 2,807 3,009 (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 third quarter of fiscal 2020 includes the settlement of the 148,953 shares or $20.0 million equity forward contract from the February 2020 ASR settled in May 2020. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Jul. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based 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 2020 2019 2020 2019 (in thousands) Cost of products $ 6,478 $ 4,493 $ 18,174 $ 12,684 Cost of maintenance and service 1,959 1,694 6,109 4,675 Research and development expense 31,367 19,383 86,469 55,802 Sales and marketing expense 10,863 7,360 29,483 21,790 General and administrative expense 11,170 6,523 29,920 19,876 Stock-based compensation expense before taxes 61,837 39,453 170,155 114,827 Income tax benefit (10,562 ) (6,593 ) (29,062 ) (19,188 ) Stock-based compensation expense after taxes $ 51,275 $ 32,860 $ 141,093 $ 95,639 As of July 31, 2020 , the Company had $387.5 million of total unrecognized stock-based compensation expense relating to options and restricted stock units and awards, which is expected to be recognized over a weighted-average period of 2.4 years . As of July 31, 2020 , the Company had $42.5 million of total unrecognized stock-based compensation expense relating to the ESPP, which is expected to be recognized over a period of approximately 2.0 years . The intrinsic values of equity awards exercised during the periods are as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Intrinsic value of awards exercised $ 50,087 $ 37,436 $ 152,397 $ 96,014 |
Net Income per Share
Net Income per Share | 9 Months Ended |
Jul. 31, 2020 | |
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 shareholders 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 2020 2019 2020 2019 (in thousands, except per share amounts) Numerator: Net income $ 252,911 $ 99,929 $ 466,892 $ 371,653 Denominator: Weighted average common shares for basic net income per share 151,352 150,123 150,731 149,708 Dilutive effect of common share equivalents from equity-based compensation 4,621 4,477 4,343 4,151 Weighted average common shares for diluted net income per share 155,973 154,600 155,074 153,859 Net income per share: Basic $ 1.67 $ 0.67 $ 3.10 $ 2.48 Diluted $ 1.62 $ 0.65 $ 3.01 $ 2.42 Anti-dilutive employee stock-based awards excluded (1) 3 152 610 798 (1) These stock options and unvested restricted stock units were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future. |
Segment Disclosure
Segment Disclosure | 9 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Disclosure | Segment Disclosure 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. The Company has two reportable segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and other associated revenue categories, and (2) Software Integrity, which includes a comprehensive solution for building integrity—security, quality and compliance testing—into the customers’ software development lifecycle and supply chain. The 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 revenue by geographic region. Information by reportable segment was as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Total Segments: Revenue $ 964,134 $ 852,970 $ 2,659,842 $ 2,509,613 Adjusted operating income 323,553 216,581 731,890 627,369 Adjusted operating margin 34 % 25 % 28 % 25 % Semiconductor & System Design: Revenue $ 870,734 $ 769,411 $ 2,392,542 $ 2,260,372 Adjusted operating income 308,730 207,773 697,273 604,497 Adjusted operating margin 35 % 27 % 29 % 27 % Software Integrity: Revenue $ 93,400 $ 83,559 $ 267,300 $ 249,241 Adjusted operating income 14,823 8,808 34,617 22,872 Adjusted operating margin 16 % 11 % 13 % 9 % 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 2020 2019 2020 2019 (in thousands) Total segment adjusted operating income $ 323,553 $ 216,581 $ 731,890 $ 627,369 Reconciling items: Amortization of intangible expense (23,649 ) (23,714 ) (70,277 ) (77,138 ) Stock-based compensation expense (61,837 ) (39,453 ) (170,155 ) (114,827 ) Other (27,469 ) (25,820 ) (67,449 ) (44,894 ) Total operating income $ 210,598 $ 127,594 $ 424,009 $ 390,510 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. In allocating revenue to particular geographic areas, the CODMs consider where individual “seats” or licenses to the Company’s products are located. Revenue is defined as revenue from external customers. Revenue related to operations in the United States and other geographic areas were: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Revenue: United States $ 432,692 $ 407,408 $ 1,245,570 $ 1,231,951 Europe 94,297 90,074 277,951 257,502 Korea 96,344 84,968 291,175 272,486 Japan 77,819 65,709 230,586 203,486 Asia Pacific and Other 262,982 204,811 614,560 544,188 Consolidated $ 964,134 $ 852,970 $ 2,659,842 $ 2,509,613 Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to the Company’s methodology. One customer, including its subsidiaries, accounted for greater than 10% of the Company’s total revenue for the three and nine months ended July 31, 2020 and for the three and nine months ended July 31, 2019 |
Other Income (Expense), Net
Other Income (Expense), Net | 9 Months Ended |
Jul. 31, 2020 | |
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 2020 2019 2020 2019 (in thousands) Interest income $ 780 $ 1,789 $ 3,137 $ 5,280 Interest expense (941 ) (2,214 ) (4,390 ) (10,608 ) Gain (loss) on assets related to deferred compensation plan 26,153 4,686 20,166 25,201 Foreign currency exchange gain (loss) 123 696 5,255 2,999 Other, net 141 360 (1,584 ) 501 Total $ 26,256 $ 5,317 $ 22,584 $ 23,373 |
Income Taxes
Income Taxes | 9 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income 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 2020 2019 2020 2019 (in thousands) Income before income taxes $ 236,854 $ 132,911 $ 446,593 $ 413,883 Provision (benefit) for income taxes $ (16,057 ) $ 32,982 $ (20,299 ) $ 42,230 Effective tax rate (6.8 )% 24.8 % (4.5 )% 10.2 % Beginning in the Company’s fiscal 2019, the annual statutory federal corporate tax rate is 21% . The Company’s effective tax rate for the nine months ended July 31, 2020 is lower than the statutory federal corporate tax rate of 21.0% primarily due to U.S. federal and California tax research credits, foreign-derived intangible income deduction, excess tax benefits from stock-based compensation, and the realizability of U.S. foreign tax credits, partially offset by state taxes, the effect of non-deductible stock-based compensation, and higher taxes on certain foreign earnings. 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 June 7, 2019. The Ninth Circuit subsequently 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 restructuring. During the third quarter of 2020, the U.S. Supreme Court declined to review the Ninth Circuit decision. The Company’s effective tax rate decreased in the three months ended July 31, 2020 as compared to the same period in fiscal 2019, primarily due to federal taxation of foreign earnings offset by deemed paid foreign tax credits reported on the Company's fiscal 2019 federal tax return filed during the three months ended July 31, 2020 and the impact of the Altera Ninth Circuit decision recorded in the three months ended July 31, 2019. The Company’s effective tax rate decreased in the nine months ended July 31, 2020 , as compared to the same period in fiscal 2019, primarily due to an increase in excess tax benefits from stock-based compensation and the realization of U.S. foreign tax credits. The U.S. Treasury Department has issued proposed regulations that could impact the calculation of income taxes. 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. The Company will take into account these regulations once finalized. In response to the fiscal impact of the COVID-19 pandemic, the State of California enacted legislation on June 29, 2020 that would suspend the use of certain corporate research and development tax credits for a three-year period beginning in our fiscal 2021, which could impact the Company's tax expense. The timing of the resolution of income tax examinations, and the amounts and timing of various tax payments that are part of the settlement process, are highly uncertain. Variations in such amounts and/or timing could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. The Company believes that in the coming 12 months, it is reasonably possible that either certain audits and ongoing tax litigation will conclude or the statute of limitations on certain state and foreign income and withholding taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax positions, the range of the estimated potential decrease in underlying unrecognized tax benefits is between $0 and $43 million . 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 statements of operations in the period when the transaction takes place. U.S. Examinations In the third quarter of fiscal 2020, the Company reached a final settlement with the California Franchise Tax Board for fiscal years 2015 through 2017 and recognized $19.2 million in previously unrecognized tax benefits. Non-U.S. Examinations Hungarian Tax Authority In July 2017, the Hungarian Tax Authority (the 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 . On August 2, 2017, Synopsys Hungary filed a claim contesting the final assessment with the Hungarian Administrative Court (the 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 Court. On April 30, 2019, the Court ruled against Synopsys Hungary. The Court’s opinion was received on May 16, 2019 and Synopsys Hungary 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. A Hungarian Supreme Court hearing date set for April 16, 2020 was postponed due to the COVID-19 pandemic and is now rescheduled for September 10, 2020. In the second quarter of fiscal 2020, the Company reached a final settlement with the HTA for fiscal years 2014 through 2018 and recognized a net $6.9 million in previously unrecognized tax benefits. National Taxation Bureau of Taipei In the first quarter of fiscal 2019, the Company reached final settlement with the National Taxation Bureau of Taipei 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, 2020 | |
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. Legal Settlement There have been no changes to the disclosure related to Mentor Graphics Corporation (now part of Siemens AG) since the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019 (the Annual Report). See Note 7. Commitments and Contingencies of the Annual Report for further information. 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. See Note 17. Income Taxes for a description of certain of these other matters . |
Effect of New Accounting Pronou
Effect of New Accounting Pronouncements | 9 Months Ended |
Jul. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Effect of New Accounting Pronouncements | Effect of New Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) and subsequently issued amendments to the initial guidance: ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, Topic 326). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 is effective for fiscal 2021, and earlier adoption is permitted beginning in the first quarter of fiscal 2020. The adoption of Topic 326 will not have material impact to the Company’s consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Jul. 31, 2020 | |
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. In addition, the Company has considered the potential impact of the COVID-19 pandemic on the business operations. Although no material impairment or other effects have been identified to date related to the COVID-19 pandemic, there is substantial uncertainty in the nature and degree of its continued effects over time. This uncertainty affects management’s accounting estimates and assumptions, which could result in greater variability in a variety of areas that depend on these estimates and assumptions as additional events and information are known. |
Principles of Consolidation | Principles of Consolidation. The unaudited condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. All significant 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 approximately every five 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 2020 and 2019 are both 52-week years. Fiscal 2020 will end on October 31, 2020. Fiscal 2019 ended on November 2, 2019. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end. |
Leases | Leases . In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842),” which supersedes the previous lease requirements in Topic 840. Topic 842 was subsequently amended by several ASUs. The new guidance requires a lessee to recognize a right-of-use (ROU) asset and a lease liability for most operating leases in the consolidated balance sheets. These ASUs also made minor changes to lessor accounting and aligns key aspects of the lessor accounting model with the new revenue recognition guidance. The new standard did not have a material impact on the unaudited condensed consolidated financial statements for arrangements in which the Company is the lessor. The Company adopted Topic 842 at the beginning of fiscal 2020 using the modified retrospective method without restatement of comparative periods. The Company elected the package of practical expedients permitted under the transition guidance, which allows the carryforward of historical assessments about (1) lease classification, (2) whether a contract is or contains a lease, and (3) which costs qualify as initial direct costs for leases that existed prior to the adoption. The Company did not elect either the use of hindsight or land easements practical expedients available in transition. The adoption of the standard did not have an impact on the Company’s beginning retained earnings, results of operations, or cash flows. The operating lease liabilities equaled the present value of the remaining Topic 840 minimum rental payments for those leases, discounted at the Company’s incremental borrowing rate as of the date of adoption. The ROU assets were measured at the amount of the related lease liabilities plus any prepaid rental payments and less any unamortized lease incentives such as tenant improvement allowances. The Company recognized ROU assets of $475 million and operating lease liabilities of $540 million on the unaudited condensed consolidated balance sheets. The Company determines if a contract is or contains a lease at inception. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make payments arising from the lease. Lease liabilities for operating and finance leases are recognized at the lease commencement date based on the present value of future lease payments over the remaining lease terms. ROU assets are derived from the carrying amount of the related lease liability plus any prepaid lease payments, less any lease incentives such as tenant improvement allowances. The Company primarily uses its incremental borrowing rate, determined as of the lease commencement date, to measure the present value of its future lease payments, as the rate implicit in the lease is generally not readily determinable. The Company uses a benchmark senior unsecured yield curve for debt instruments and considers specific credit quality, market conditions, tenor of lease arrangements, and quality of collateral to determine the incremental borrowing rate. Operating lease expense is recognized on a straight-line basis over the lease term of each lease. Variable payments, such as for maintenance, property taxes or insurance, are recognized on our unaudited condensed consolidated statements of operations as incurred. The Company has adopted both (1) the practical expedient to not separate lease from non-lease components and (2) the short-term lease exemption. The Company has elected the practical expedient to not separate lease from non-lease components for all classes of underlying assets and the short-term lease exemption for all classes of underlying assets except real estate leases, with terms 12 months or less. |
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 the Company adopted in fiscal 2019. See Note 2. Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019 for revenue recognition policies under the new revenue guidance ASC 606. |
Derivatives | In the first quarter of 2020, the Company adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedge Activities, which amends the hedge accounting recognition and presentation requirements of ASC 815. Pursuant to the provisions of ASU 2017-12, the Company is not required to separately measure and report hedge ineffectiveness, which was previously recorded in Other income (expense), net in our unaudited condensed consolidated statements of operations. Also, prior to the adoption of ASU 2017-12, the forward point components of the Cash Flow hedges were excluded from assessing effectiveness of the hedging |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table shows the percentage of revenue by product groups: Three Months Ended Nine Months Ended 2020 2019 2020 2019 EDA 55 % 57 % 58 % 59 % IP & System Integration 35 % 33 % 32 % 31 % Software Integrity Products & Services 10 % 10 % 10 % 10 % Other 0 % 0 % 0 % 0 % Total 100 % 100 % 100 % 100 % |
Schedule of Contract Assets and Liabilities | Contract balances are as follows: As of July 31, 2020 October 31, 2019 (in thousands) Contract assets $ 216,516 $ 210,557 Unbilled receivables $ 53,028 $ 38,175 Deferred revenue $ 1,501,524 $ 1,302,578 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill during the nine months ended July 31, 2020 were as follows: (in thousands) Balance at October 31, 2019 $ 3,171,179 Additions 173,341 Effect of foreign currency translation 11,887 Balance at July 31, 2020 $ 3,356,407 |
Summary of Intangible Assets | Intangible assets as of July 31, 2020 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 827,232 $ 692,545 $ 134,687 Customer relationships 380,817 268,574 112,243 Contract rights intangible 192,757 185,357 7,400 Trademarks and trade names 43,096 28,070 15,026 In-process research and development (IPR&D) 1,214 — 1,214 Capitalized software development costs 43,112 38,344 4,768 Total $ 1,488,228 $ 1,212,890 $ 275,338 Intangible assets as of October 31, 2019 consisted of the following: Gross Assets Accumulated Amortization Net Assets (in thousands) Core/developed technology $ 791,647 $ 655,119 $ 136,528 Customer relationships 358,661 242,058 116,603 Contract rights intangible 184,304 181,124 3,180 Trademarks and trade names 42,929 25,581 17,348 In-process research and development (IPR&D) 1,200 — 1,200 Capitalized software development costs 40,077 35,562 4,515 Total $ 1,418,818 $ 1,139,444 $ 279,374 |
Amortization Expense Related to Intangible Assets | Amortization expense related to intangible assets consisted of the following: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Core/developed technology $ 12,472 $ 12,825 $ 37,515 $ 43,229 Customer relationships 8,971 9,303 26,444 28,261 Contract rights intangible 1,272 808 3,829 2,790 Trademarks and trade names 934 778 2,489 2,858 Capitalized software development costs (1) 947 700 2,782 2,207 Total $ 24,596 $ 24,414 $ 73,059 $ 79,345 (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 intangible assets as of July 31, 2020 : Fiscal year (in thousands) Remainder of fiscal 2020 $ 22,033 2021 75,568 2022 60,735 2023 44,733 2024 34,398 2025 and thereafter 36,657 IPR&D 1,214 Total $ 275,338 |
Financial Assets and Liabilit_2
Financial Assets and Liabilities (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Financial Assets And Liabilities [Abstract] | |
Summary of Cash Equivalents | As of July 31, 2020 , the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 280,417 $ — $ — $ — $ 280,417 Total: $ 280,417 $ — $ — $ — $ 280,417 (1) See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents. As of October 31, 2019 , the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 166,024 $ — $ — $ — $ 166,024 Total: $ 166,024 $ — $ — $ — $ 166,024 (1) See Note 7. 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, 2020 October 31, 2019 (in thousands) Cash and cash equivalents $ 1,049,922 $ 728,597 Restricted cash included in Prepaid expenses and other current assets 1,287 1,174 Restricted cash included in Other long-term assets 779 756 Total cash, cash equivalents and restricted cash $ 1,051,988 $ 730,527 |
Effects on Changes in Fair Values of Non-Designated Forward Contracts | The effects of the non-designated derivative instruments on the Company’s unaudited condensed consolidated statements of operations is summarized as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Gain (loss) recorded in other income (expense), net $ 2,995 $ 1,179 $ 1,891 $ 4,314 |
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, 2020 October 31, 2019 (in thousands) Total gross notional amount $ 838,981 $ 817,441 Net fair value $ 4,796 $ 3,494 |
Fair Values of Derivative Instrument Designated and Non-Designated as Hedging Instruments in Balance Sheet | The following table represents the unaudited condensed consolidated balance sheets location and amount of derivative instrument fair values segregated between designated and non-designated hedge instruments: Fair values of derivative instruments designated as hedging instruments Fair values of derivative instruments not designated as hedging instruments (in thousands) Balance at July 31, 2020 Other current assets $ 7,103 $ 60 Accrued liabilities $ 2,268 $ 100 Balance at October 31, 2019 Other current assets $ 7,327 $ 53 Accrued liabilities $ 3,715 $ 171 |
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 statements of operations location in Revenue/Deferred Revenue and Operating Expenses 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 $ 626 Revenue $ 466 Foreign exchange contracts Operating expenses 11,773 Operating expenses (1,175 ) Total $ 12,399 $ (709 ) 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 ) Nine months ended Foreign exchange contracts Revenue $ 2,836 Revenue $ 648 Foreign exchange contracts Operating expenses 1,129 Operating expenses (2,211 ) Total $ 3,965 $ (1,563 ) 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 ) |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
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, 2020 : 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 $ 280,417 $ 280,417 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 7,163 — 7,163 — Other long-term assets: Deferred compensation plan assets 269,484 269,484 — — Total assets $ 557,064 $ 549,901 $ 7,163 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 2,368 $ — $ 2,368 $ — Other long-term liabilities: Deferred compensation plan liabilities 269,484 269,484 — — Total liabilities $ 271,852 $ 269,484 $ 2,368 $ — Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 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 $ 166,024 $ 166,024 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 7,380 — 7,380 — Other long-term assets: Deferred compensation plan assets 249,822 249,822 — — Total assets $ 423,226 $ 415,846 $ 7,380 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 3,886 $ — $ 3,886 $ — Other long-term liabilities: Deferred compensation plan liabilities 249,822 249,822 — — Total liabilities $ 253,708 $ 249,822 $ 3,886 $ — |
Liabilities and Restructuring_2
Liabilities and Restructuring Charges (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Liabilities and Restructuring Charges [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consist of: As of July 31, 2020 October 31, 2019 (in thousands) Payroll and related benefits $ 417,403 $ 417,157 Other accrued liabilities 95,377 69,487 Accounts payable 37,126 19,815 Total $ 549,906 $ 506,459 |
Other Long-Term Liabilities | Other long-term liabilities consist of: As of July 31, 2020 October 31, 2019 (in thousands) Deferred compensation liability $ 269,484 $ 249,822 Other long-term liabilities 19,927 73,903 Total $ 289,411 $ 323,725 |
Credit and Term Loan Faciliti_2
Credit and Term Loan Facilities (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
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 2020 $ 4,688 2021 27,187 2022 75,000 Total $ 106,875 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | The components of the Company’s lease expense during the period presented are as follows: Three Months Ended July 31, Nine Months Ended July 31, 2020 2020 (in thousands) Operating lease expense $ 23,450 $ 69,932 Variable lease expense (1) 1,447 3,439 Total lease expense $ 24,897 $ 73,371 (1) Variable lease expense includes payments to lessors that are not fixed or determinable at lease commencement date. These payments primarily consist of maintenance, property taxes, insurance and variable indexed based payments. Supplemental cash flow information during the period presented is as follows: Three Months Ended July 31, Nine Months Ended July 31, 2020 2020 (in thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 18,637 $ 52,766 ROU assets obtained in exchange for operating lease liabilities $ 27,063 $ 56,846 |
Lessee, Lease Term and Discount Rate | Lease term and discount rate information related to the Company’s operating leases as of the end of the period presented are as follows: July 31, 2020 Weighted-average remaining lease term (in years) 8.84 Weighted-average discount rate 2.56 % |
Lessee, Operating Lease, Liability, Maturity | The following represents the maturities of the Company’s future lease payments due under operating leases as of July 31, 2020 : Lease Payments Fiscal year (in thousands) Remainder of fiscal 2020 $ 18,137 2021 86,552 2022 76,714 2023 61,045 2024 56,901 Thereafter 311,341 Total future minimum lease payments 610,690 Less: Imputed interest 68,614 Total lease liabilities $ 542,076 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of October 31, 2019, the future minimum lease payments due under non-cancellable operating leases were as follows: Minimum Lease Payments (1) (in thousands) Fiscal year 2020 $ 79,286 2021 79,703 2022 69,477 2023 53,909 2024 48,730 Thereafter 291,494 Total $ 622,599 (1) Amounts based on Topic 840, Leases. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
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, 2020 October 31, 2019 (in thousands) Cumulative currency translation adjustments $ (73,828 ) $ (87,929 ) Unrealized gain (loss) on derivative instruments, net of taxes 1,008 (4,518 ) Total accumulated other comprehensive income (loss) $ (72,820 ) $ (92,447 ) |
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) into net income was as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Reclassifications from accumulated other comprehensive income (loss) into unaudited condensed consolidated statements of operations: Gain (loss) on cash flow hedges, net of taxes Revenues $ 466 $ 685 $ 648 $ 1,048 Operating expenses (1,175 ) (3,945 ) (2,211 ) (12,795 ) Total reclassifications into net income $ (709 ) $ (3,260 ) $ (1,563 ) $ (11,747 ) |
Stock Repurchase Program (Table
Stock Repurchase Program (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Stock Repurchase Program [Abstract] | |
Stock Repurchase And Reissuance Activities | Stock repurchase activities as well as the reissuance of treasury stock for employee stock-based compensation purposes are as follows: Three Months Ended Nine Months Ended 2020 (3) 2019 (1) 2020 (3) 2019 (1)(2) (in thousands) Total shares repurchased 149 775 1,380 1,901 Total cost of the repurchased shares $ 20,000 $ 100,000 $ 200,000 $ 209,185 Reissuance of treasury stock 999 1,166 2,807 3,009 (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 third quarter of fiscal 2020 includes the settlement of the 148,953 shares or $20.0 million equity forward contract from the February 2020 ASR settled in May 2020. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Share-based Payment Arrangement [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 2020 2019 2020 2019 (in thousands) Cost of products $ 6,478 $ 4,493 $ 18,174 $ 12,684 Cost of maintenance and service 1,959 1,694 6,109 4,675 Research and development expense 31,367 19,383 86,469 55,802 Sales and marketing expense 10,863 7,360 29,483 21,790 General and administrative expense 11,170 6,523 29,920 19,876 Stock-based compensation expense before taxes 61,837 39,453 170,155 114,827 Income tax benefit (10,562 ) (6,593 ) (29,062 ) (19,188 ) Stock-based compensation expense after taxes $ 51,275 $ 32,860 $ 141,093 $ 95,639 |
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 2020 2019 2020 2019 (in thousands) Intrinsic value of awards exercised $ 50,087 $ 37,436 $ 152,397 $ 96,014 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
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 2020 2019 2020 2019 (in thousands, except per share amounts) Numerator: Net income $ 252,911 $ 99,929 $ 466,892 $ 371,653 Denominator: Weighted average common shares for basic net income per share 151,352 150,123 150,731 149,708 Dilutive effect of common share equivalents from equity-based compensation 4,621 4,477 4,343 4,151 Weighted average common shares for diluted net income per share 155,973 154,600 155,074 153,859 Net income per share: Basic $ 1.67 $ 0.67 $ 3.10 $ 2.48 Diluted $ 1.62 $ 0.65 $ 3.01 $ 2.42 Anti-dilutive employee stock-based awards excluded (1) 3 152 610 798 (1) These stock options and unvested restricted stock units were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future. |
Segment Disclosure (Tables)
Segment Disclosure (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Information by reportable segment was as follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Total Segments: Revenue $ 964,134 $ 852,970 $ 2,659,842 $ 2,509,613 Adjusted operating income 323,553 216,581 731,890 627,369 Adjusted operating margin 34 % 25 % 28 % 25 % Semiconductor & System Design: Revenue $ 870,734 $ 769,411 $ 2,392,542 $ 2,260,372 Adjusted operating income 308,730 207,773 697,273 604,497 Adjusted operating margin 35 % 27 % 29 % 27 % Software Integrity: Revenue $ 93,400 $ 83,559 $ 267,300 $ 249,241 Adjusted operating income 14,823 8,808 34,617 22,872 Adjusted operating margin 16 % 11 % 13 % 9 % |
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 2020 2019 2020 2019 (in thousands) Total segment adjusted operating income $ 323,553 $ 216,581 $ 731,890 $ 627,369 Reconciling items: Amortization of intangible expense (23,649 ) (23,714 ) (70,277 ) (77,138 ) Stock-based compensation expense (61,837 ) (39,453 ) (170,155 ) (114,827 ) Other (27,469 ) (25,820 ) (67,449 ) (44,894 ) Total operating income $ 210,598 $ 127,594 $ 424,009 $ 390,510 |
Revenues Related to Operations by Geographic Areas | Revenue related to operations in the United States and other geographic areas were: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (in thousands) Revenue: United States $ 432,692 $ 407,408 $ 1,245,570 $ 1,231,951 Europe 94,297 90,074 277,951 257,502 Korea 96,344 84,968 291,175 272,486 Japan 77,819 65,709 230,586 203,486 Asia Pacific and Other 262,982 204,811 614,560 544,188 Consolidated $ 964,134 $ 852,970 $ 2,659,842 $ 2,509,613 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
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 2020 2019 2020 2019 (in thousands) Interest income $ 780 $ 1,789 $ 3,137 $ 5,280 Interest expense (941 ) (2,214 ) (4,390 ) (10,608 ) Gain (loss) on assets related to deferred compensation plan 26,153 4,686 20,166 25,201 Foreign currency exchange gain (loss) 123 696 5,255 2,999 Other, net 141 360 (1,584 ) 501 Total $ 26,256 $ 5,317 $ 22,584 $ 23,373 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Provision (Benefit) for Incomes 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 2020 2019 2020 2019 (in thousands) Income before income taxes $ 236,854 $ 132,911 $ 446,593 $ 413,883 Provision (benefit) for income taxes $ (16,057 ) $ 32,982 $ (20,299 ) $ 42,230 Effective tax rate (6.8 )% 24.8 % (4.5 )% 10.2 % |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Nov. 01, 2019 | Oct. 31, 2019 | [1] |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating lease right-of-use assets, net | $ 472,244 | $ 0 | ||
Operating lease, liability | $ 542,076 | |||
Accounting Standards Update 2016-02 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating lease right-of-use assets, net | $ 475,000 | |||
Operating lease, liability | $ 540,000 | |||
[1] | Derived from audited financial statements. |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
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 | 55.00% | 57.00% | 58.00% | 59.00% |
IP & System Integration | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 35.00% | 33.00% | 32.00% | 31.00% |
Software Integrity Products & Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 10.00% | 10.00% | 10.00% | 10.00% |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue percentage by product group | 0.00% | 0.00% | 0.00% | 0.00% |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 |
Accounting Policies [Abstract] | ||
Contract assets | $ 216,516 | $ 210,557 |
Unbilled receivables | 53,028 | 38,175 |
Deferred revenue | $ 1,501,524 | $ 1,302,578 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Contract with customer, liability, revenue recognized | $ 926,200 | $ 785,100 | ||
Revenue, remaining performance obligation, amount | $ 4,600,000 | 4,600,000 | ||
Revenue, remaining performance obligation, non-cancellable, amount | $ 604,600 | $ 604,600 | ||
Revenue, remaining performance obligation, excluding non-cancellable, recognized over twelve month period, percent | 58.00% | 58.00% | ||
Capitalized contract cost, net | $ 92,100 | $ 92,100 | ||
Amortization of capitalized costs to obtain revenue contracts | 16,600 | $ 17,800 | 44,851 | 46,230 |
Sales Based Royalties | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Contract with customer, liability, revenue recognized | $ 25,900 | $ 17,500 | $ 78,000 | $ 64,800 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2020 | Jul. 31, 2020 | Oct. 31, 2019 | [1] | |
Business Acquisition [Line Items] | ||||
Consideration transfered | $ 238,300 | |||
Goodwill | 3,356,407 | $ 3,171,179 | ||
Design service arrangement | $ 10,700 | |||
Design service arrangement amortization period | 5 years | |||
Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Consideration transfered | 132,600 | |||
Identifiable intangibles assets acquired | 44,700 | |||
Goodwill | 92,400 | |||
Semiconductor & System Design | ||||
Business Acquisition [Line Items] | ||||
Consideration transfered | $ 105,700 | |||
Consideration transfered, cash | 75,700 | |||
Consideration transfered, fair value of company product | 30,000 | |||
Identifiable intangibles assets acquired | 20,600 | |||
Tangibles assets acquired | 4,200 | |||
Goodwill | $ 80,900 | |||
Software Integrity | Series of Individually Immaterial Business Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 12,900 | |||
[1] | Derived from audited financial statements. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes of Goodwill (Details) $ in Thousands | 9 Months Ended | |
Jul. 31, 2020USD ($) | ||
Goodwill [Roll Forward] | ||
Goodwill | $ 3,171,179 | [1] |
Additions | 173,341 | |
Effect of foreign currency translation | 11,887 | |
Goodwill | $ 3,356,407 | |
[1] | Derived from audited financial statements. |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | $ 1,488,228 | $ 1,418,818 | |
Accumulated Amortization | 1,212,890 | 1,139,444 | |
Net Assets | 275,338 | 279,374 | [1] |
Core/developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 827,232 | 791,647 | |
Accumulated Amortization | 692,545 | 655,119 | |
Net Assets | 134,687 | 136,528 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 380,817 | 358,661 | |
Accumulated Amortization | 268,574 | 242,058 | |
Net Assets | 112,243 | 116,603 | |
Contract rights intangible | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 192,757 | 184,304 | |
Accumulated Amortization | 185,357 | 181,124 | |
Net Assets | 7,400 | 3,180 | |
Trademarks and trade names | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 43,096 | 42,929 | |
Accumulated Amortization | 28,070 | 25,581 | |
Net Assets | 15,026 | 17,348 | |
In Process Research and Development | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 1,214 | 1,200 | |
Accumulated Amortization | 0 | 0 | |
Net Assets | 1,214 | 1,200 | |
Capitalized software development costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Assets | 43,112 | 40,077 | |
Accumulated Amortization | 38,344 | 35,562 | |
Net Assets | $ 4,768 | $ 4,515 | |
[1] | Derived from audited financial statements. |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | ||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||||
Amortization expense of intangible assets | $ 24,596 | $ 24,414 | $ 73,059 | $ 79,345 | |
Core/developed technology | |||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||||
Amortization expense of intangible assets | 12,472 | 12,825 | 37,515 | 43,229 | |
Customer relationships | |||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||||
Amortization expense of intangible assets | 8,971 | 9,303 | 26,444 | 28,261 | |
Contract rights intangible | |||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||||
Amortization expense of intangible assets | 1,272 | 808 | 3,829 | 2,790 | |
Trademarks and trade names | |||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||||
Amortization expense of intangible assets | 934 | 778 | 2,489 | 2,858 | |
Capitalized software development costs | |||||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||||
Amortization expense of intangible assets | [1] | $ 947 | $ 700 | $ 2,782 | $ 2,207 |
[1] | Amortization of capitalized software development costs is included in cost of products revenue in the unaudited condensed consolidated statements of operations. |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Estimated Future Amortization of Intangible Assets (Detail) $ in Thousands | Jul. 31, 2020USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of fiscal 2020 | $ 22,033 |
2021 | 75,568 |
2022 | 60,735 |
2023 | 44,733 |
2024 | 34,398 |
2025 and thereafter | 36,657 |
IPR&D | 1,214 |
Total | $ 275,338 |
Financial Assets and Liabilit_3
Financial Assets and Liabilities - Short-term investments (Details) - Cash equivalents - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 | ||
Cash Equivalents [Line Items] | ||||
Cost | $ 280,417 | $ 166,024 | ||
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 | 280,417 | [1] | 166,024 | [2] |
Money market funds | ||||
Cash Equivalents [Line Items] | ||||
Cost | 280,417 | 166,024 | ||
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 | $ 280,417 | [1] | $ 166,024 | [2] |
[1] | See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents. | |||
[2] | See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents. |
Financial Assets and Liabilit_4
Financial Assets and Liabilities - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Oct. 31, 2018 | |
Cash and Cash Equivalents [Line Items] | |||||
Cash and cash equivalents | $ 1,049,922 | $ 728,597 | [1] | ||
Total cash, cash equivalents and restricted cash | 1,051,988 | 730,527 | $ 688,681 | $ 725,001 | |
Restricted cash included in Prepaid expenses and other current assets | |||||
Cash and Cash Equivalents [Line Items] | |||||
Restricted cash | 1,287 | 1,174 | |||
Restricted cash included in Other long-term assets | |||||
Cash and Cash Equivalents [Line Items] | |||||
Restricted cash | $ 779 | $ 756 | |||
[1] | Derived from audited financial statements. |
Financial Assets and Liabilit_5
Financial Assets and Liabilities - Additional Information (Details) | 9 Months Ended |
Jul. 31, 2020 | |
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, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Financial Assets And Liabilities [Abstract] | ||||
Gain (loss) recorded in other income (expense), net | $ 2,995 | $ 1,179 | $ 1,891 | $ 4,314 |
Financial Assets and Liabilit_7
Financial Assets and Liabilities - Notional Amounts of Derivative Instruments (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 |
Financial Assets And Liabilities [Abstract] | ||
Total gross notional amount | $ 838,981 | $ 817,441 |
Net fair value | $ 4,796 | $ 3,494 |
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, 2020 | Oct. 31, 2019 |
Designated As Hedging Instrument | Other current assets | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, assets | $ 7,103 | $ 7,327 |
Designated As Hedging Instrument | Accrued liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, liabilities | 2,268 | 3,715 |
Non-Designated Hedging Instrument | Other current assets | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, assets | 60 | 53 |
Non-Designated Hedging Instrument | Accrued liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, liabilities | $ 100 | $ 171 |
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, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Financial Assets and Liabilities [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | $ 12,399 | $ (1,070) | $ 3,965 | $ 4,844 |
Amount of gain (loss) reclassified from OCI (effective portion) | (709) | (3,260) | (1,563) | (11,747) |
Foreign Exchange Contracts | Revenues | ||||
Financial Assets and Liabilities [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | 626 | (994) | 2,836 | (253) |
Amount of gain (loss) reclassified from OCI (effective portion) | 466 | 685 | 648 | 1,048 |
Foreign Exchange Contracts | Operating expenses | ||||
Financial Assets and Liabilities [Line Items] | ||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | 11,773 | (76) | 1,129 | 5,097 |
Amount of gain (loss) reclassified from OCI (effective portion) | $ (1,175) | $ (3,945) | $ (2,211) | $ (12,795) |
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, 2020 | Oct. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 557,064 | $ 423,226 |
Total liabilities | 271,852 | 253,708 |
Foreign currency derivative contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Prepaid and other current assets | 7,163 | 7,380 |
Accounts payable and accrued liabilities | 2,368 | 3,886 |
Deferred compensation plan liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term liabilities | 269,484 | 249,822 |
Deferred compensation plan assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term assets | 269,484 | 249,822 |
Money market funds | Cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 280,417 | 166,024 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 549,901 | 415,846 |
Total liabilities | 269,484 | 249,822 |
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 | 269,484 | 249,822 |
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 | 269,484 | 249,822 |
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 | 280,417 | 166,024 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 7,163 | 7,380 |
Total liabilities | 2,368 | 3,886 |
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 | 7,163 | 7,380 |
Accounts payable and accrued liabilities | 2,368 | 3,886 |
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 |
Liabilities and Restructuring_3
Liabilities and Restructuring Charges - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ (1,977) | $ 19,338 | $ 36,446 | $ 33,746 | |
Employee Severance and Benefits | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring and related cost, expected cost | 84,000 | 84,000 | |||
Restructuring charges | 25,000 | 19,300 | 55,700 | 33,700 | |
Employee related restructuring liabilities | 3,300 | $ 20,800 | 3,300 | $ 20,800 | $ 22,600 |
Involuntary Employee Termination And VRP | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges | $ (2,000) | $ 36,400 |
Liabilities and Restructuring_4
Liabilities and Restructuring Charges - Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 | |
Payables and Accruals [Abstract] | |||
Payroll and related benefits | $ 417,403 | $ 417,157 | |
Other accrued liabilities | 95,377 | 69,487 | |
Accounts payable | 37,126 | 19,815 | |
Total | $ 549,906 | $ 506,459 | [1] |
[1] | Derived from audited financial statements. |
Liabilities and Restructuring_5
Liabilities and Restructuring Charges - Components of Other Long Term Liabilities (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 | |
Liabilities, Other than Long-term Debt, Noncurrent [Abstract] | |||
Deferred compensation liability | $ 269,484 | $ 249,822 | |
Other long-term liabilities | 19,927 | 73,903 | |
Total | $ 289,411 | $ 323,725 | [1] |
[1] | Derived from audited financial statements. |
Credit and Term Loan Faciliti_3
Credit and Term Loan Facilities - Additional Information (Detail) ¥ in Millions | Nov. 28, 2016USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2020USD ($) | Oct. 31, 2019USD ($) | Jul. 31, 2018CNY (¥) | May 19, 2015USD ($) | |
Debt Instrument [Line Items] | |||||||
Long-term debt, excluding current maturities | $ 107,104,000 | $ 120,093,000 | [1] | ||||
Foreign Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility maximum borrowing capacity | $ 33,000,000 | ¥ 220 | |||||
Long-term line of credit, noncurrent | 24,600,000 | ||||||
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 | $ 0 | 0 | |||||
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 | $ 106,700,000 | 119,800,000 | |||||
Long-term debt, excluding current maturities | $ 82,500,000 | $ 102,200,000 | |||||
Unsecured Debt | The Credit Agreement | Term Loan | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Borrowings, interest rate | 1.125% | ||||||
[1] | Derived from audited financial statements. |
Credit and Term Loan Faciliti_4
Credit and Term Loan Facilities - Schedule of Maturities of Term Loan (Details) - Term Loan - Unsecured Debt - The Credit Agreement $ in Thousands | Jul. 31, 2020USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of fiscal 2020 | $ 4,688 |
2021 | 27,187 |
2022 | 75,000 |
Total | $ 106,875 |
Leases (Details)
Leases (Details) $ in Millions | Jul. 31, 2020USD ($) |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, lease not yet commenced, liability | $ 57 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, lease not yet commenced, term of contract | 3 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, renewal term | 10 years |
Lessee, operating lease, lease not yet commenced, term of contract | 9 years |
Leases - Components Of Lease Ex
Leases - Components Of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2020 | ||
Leases [Abstract] | |||
Operating lease expense | $ 23,450 | $ 69,932 | |
Variable lease expense | [1] | 1,447 | 3,439 |
Total lease expense | $ 24,897 | $ 73,371 | |
[1] | Variable lease expense includes payments to lessors that are not fixed or determinable at lease commencement date. These payments primarily consist of maintenance, property taxes, insurance and variable indexed based payments. |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jul. 31, 2020 | Jul. 31, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 18,637 | $ 52,766 |
ROU assets obtained in exchange for operating lease liabilities | $ 27,063 | $ 56,846 |
Leases - Lease Term And Discoun
Leases - Lease Term And Discount Rate Information (Details) | Jul. 31, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term (in years) | 8 years 10 months 2 days |
Weighted-average discount rate | 2.56% |
Leases - Future Minimum Payment
Leases - Future Minimum Payments (Details) $ in Thousands | Jul. 31, 2020USD ($) |
Leases [Abstract] | |
Remainder of fiscal 2020 | $ 18,137 |
2021 | 86,552 |
2022 | 76,714 |
2023 | 61,045 |
2024 | 56,901 |
Thereafter | 311,341 |
Total future minimum lease payments | 610,690 |
Less: Imputed interest | 68,614 |
Total lease liabilities | $ 542,076 |
Leases - Non-cancellable Operat
Leases - Non-cancellable Operating Leases (Details) $ in Thousands | Oct. 31, 2019USD ($) | [1] |
Leases [Abstract] | ||
2020 | $ 79,286 | |
2021 | 79,703 | |
2022 | 69,477 | |
2023 | 53,909 | |
2024 | 48,730 | |
Thereafter | 291,494 | |
Total | $ 622,599 | |
[1] | Amounts based on Topic 840, Leases. |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | Jul. 31, 2020 | Oct. 31, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Cumulative currency translation adjustments | $ (73,828) | $ (87,929) | |
Unrealized gain (loss) on derivative instruments, net of taxes | 1,008 | (4,518) | |
Total accumulated other comprehensive income (loss) | $ (72,820) | $ (92,447) | [1] |
[1] | Derived from audited financial statements. |
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, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications into net income | $ (709) | $ (3,260) | $ (1,563) | $ (11,747) |
Revenues | Gain (loss) on cash flow hedges, net of taxes | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Reclassifications into net income | 466 | 685 | 648 | 1,048 |
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 | $ (1,175) | $ (3,945) | $ (2,211) | $ (12,795) |
Stock Repurchase Program - Addi
Stock Repurchase Program - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | |||||||||||
May 31, 2020 | Feb. 29, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | May 31, 2019 | Jul. 31, 2020 | Feb. 29, 2020 | Jul. 31, 2019 | [1] | May 31, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | [1],[3] | Jun. 19, 2020 | ||
Accelerated Share Repurchases [Line Items] | |||||||||||||||
Stock repurchase program authorized amount | $ 500 | $ 500 | $ 500 | ||||||||||||
Remaining amount available for further repurchases | $ 500 | $ 500 | |||||||||||||
Purchases of treasury stock (in shares) | 149,000 | 775,000 | 1,380,000 | [2] | 1,901,000 | ||||||||||
December 2019, ASR | |||||||||||||||
Accelerated Share Repurchases [Line Items] | |||||||||||||||
Stock repurchase program authorized amount | $ 100 | ||||||||||||||
Prepayment to repurchase stock | 100 | ||||||||||||||
Initial share delivery | $ 80 | ||||||||||||||
Stock repurchase program, prepayment during prior period, derivative settlement | $ 20 | ||||||||||||||
Purchases of treasury stock (in shares) | 700,000 | ||||||||||||||
Purchases of treasury stock | $ 149.75 | ||||||||||||||
February 2020, ASR | |||||||||||||||
Accelerated Share Repurchases [Line Items] | |||||||||||||||
Stock repurchase program authorized amount | 100 | $ 100 | |||||||||||||
Prepayment to repurchase stock | 100 | ||||||||||||||
Initial share delivery | $ 80 | $ 80 | |||||||||||||
Stock repurchase program, prepayment during prior period, derivative settlement | $ 20 | ||||||||||||||
Purchases of treasury stock (in shares) | 148,953 | 700,000 | |||||||||||||
Purchases of treasury stock | $ 140.41 | ||||||||||||||
June 2019, ASR | |||||||||||||||
Accelerated Share Repurchases [Line Items] | |||||||||||||||
Stock repurchase program, prepayment during prior period, derivative settlement | $ 20 | ||||||||||||||
Purchases of treasury stock (in shares) | 90,202 | ||||||||||||||
February 2019, ASR | |||||||||||||||
Accelerated Share Repurchases [Line Items] | |||||||||||||||
Stock repurchase program, prepayment during prior period, derivative settlement | $ 20 | ||||||||||||||
Purchases of treasury stock (in shares) | 97,601 | ||||||||||||||
[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 2020 includes the settlement of the 148,953 shares or $20.0 million equity forward contract from the February 2020 ASR settled in May 2020. | ||||||||||||||
[3] | The third quarter of fiscal 2019 includes the settlement of the 97,601 shares or $20.0 million equity forward contract from the February 2019 ASR settled in May 2019. |
Stock Repurchase Program - Stoc
Stock Repurchase Program - Stock Repurchase Activities (Detail) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jul. 31, 2020 | Jul. 31, 2019 | [1] | Jul. 31, 2020 | [2] | Jul. 31, 2019 | [1],[3] | |
Stock Repurchase Program [Abstract] | |||||||
Purchases of treasury stock (in shares) | 149 | 775 | 1,380 | 1,901 | |||
Aggregate purchased shares | $ 20,000 | $ 100,000 | $ 200,000 | $ 209,185 | |||
Reissuance of treasury stock | 999 | 1,166 | 2,807 | 3,009 | |||
[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 2020 includes the settlement of the 148,953 shares or $20.0 million equity forward contract from the February 2020 ASR settled in May 2020. | ||||||
[3] | 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. |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 3 Months Ended |
Jul. 31, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized share-based compensation expense | $ 387.5 |
Weighted-average period of total compensation costs to be recognized in years | 2 years 4 months 24 days |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized share-based compensation expense | $ 42.5 |
Weighted-average period of total compensation costs to be recognized in years | 2 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 61,837 | $ 39,453 | $ 170,155 | $ 114,827 |
Income tax benefit | (10,562) | (6,593) | (29,062) | (19,188) |
Stock-based compensation expense after taxes | 51,275 | 32,860 | 141,093 | 95,639 |
Cost of products | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 6,478 | 4,493 | 18,174 | 12,684 |
Cost of maintenance and service | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 1,959 | 1,694 | 6,109 | 4,675 |
Research and development expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 31,367 | 19,383 | 86,469 | 55,802 |
Sales and marketing expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | 10,863 | 7,360 | 29,483 | 21,790 |
General and administrative expense | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense before taxes | $ 11,170 | $ 6,523 | $ 29,920 | $ 19,876 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Intrinsic Value of Equity Awards Exercised (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Stock Compensation [Abstract] | ||||
Intrinsic value of awards exercised | $ 50,087 | $ 37,436 | $ 152,397 | $ 96,014 |
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, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | ||
Numerator: | |||||
Net income | $ 252,911 | $ 99,929 | $ 466,892 | $ 371,653 | |
Denominator: | |||||
Weighted-average common shares for basic net income per share (shares) | 151,352 | 150,123 | 150,731 | 149,708 | |
Dilutive effect of potential common shares from equity-based compensation (shares) | 4,621 | 4,477 | 4,343 | 4,151 | |
Weighted-average common shares for diluted net income per share (shares) | 155,973 | 154,600 | 155,074 | 153,859 | |
Net income per share: | |||||
Basic (in USD per share) | $ 1.67 | $ 0.67 | $ 3.10 | $ 2.48 | |
Diluted (in USD per share) | $ 1.62 | $ 0.65 | $ 3.01 | $ 2.42 | |
Anti-dilutive employee stock-based awards excluded (shares) | [1] | 3 | 152 | 610 | 798 |
[1] | These stock options and unvested restricted stock units were anti-dilutive for the respective periods and are excluded in calculating diluted net income per share. While such awards were anti-dilutive for the respective periods, they could be dilutive in the future. |
Segment Disclosure - Additional
Segment Disclosure - Additional information (Detail) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020Customer | Jul. 31, 2019Customer | Jul. 31, 2020CustomerSegment | Jul. 31, 2019Customer | |
Segment Reporting Information [Line Items] | ||||
Number of reportable operating segment | Segment | 2 | |||
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, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 964,134 | $ 852,970 | $ 2,659,842 | $ 2,509,613 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 432,692 | 407,408 | 1,245,570 | 1,231,951 |
Europe | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 94,297 | 90,074 | 277,951 | 257,502 |
Korea | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 96,344 | 84,968 | 291,175 | 272,486 |
Japan | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 77,819 | 65,709 | 230,586 | 203,486 |
Asia-Pacific and Other | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 262,982 | $ 204,811 | $ 614,560 | $ 544,188 |
Segment Disclosure - Schedule o
Segment Disclosure - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 964,134 | $ 852,970 | $ 2,659,842 | $ 2,509,613 |
Adjusted operating income | 210,598 | 127,594 | 424,009 | 390,510 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Adjusted operating income | $ 323,553 | $ 216,581 | $ 731,890 | $ 627,369 |
Adjusted operating margin | 34.00% | 25.00% | 28.00% | 25.00% |
Operating Segments | Semiconductor & System Design: | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 870,734 | $ 769,411 | $ 2,392,542 | $ 2,260,372 |
Adjusted operating income | $ 308,730 | $ 207,773 | $ 697,273 | $ 604,497 |
Adjusted operating margin | 35.00% | 27.00% | 29.00% | 27.00% |
Operating Segments | Software Integrity: | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 93,400 | $ 83,559 | $ 267,300 | $ 249,241 |
Adjusted operating income | $ 14,823 | $ 8,808 | $ 34,617 | $ 22,872 |
Adjusted operating margin | 16.00% | 11.00% | 13.00% | 9.00% |
Segment Disclosure - Schedule_2
Segment Disclosure - Schedule of Segment Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Operating income | $ 210,598 | $ 127,594 | $ 424,009 | $ 390,510 |
Amortization of intangible expense | (24,596) | (24,414) | (73,059) | (79,345) |
Stock-based compensation expense | (61,837) | (39,453) | (170,155) | (114,827) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating income | 323,553 | 216,581 | 731,890 | 627,369 |
Reconciling items: | ||||
Segment Reporting Information [Line Items] | ||||
Amortization of intangible expense | (23,649) | (23,714) | (70,277) | (77,138) |
Stock-based compensation expense | (61,837) | (39,453) | (170,155) | (114,827) |
Other | $ (27,469) | $ (25,820) | $ (67,449) | $ (44,894) |
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, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Other Income (Expense) | ||||
Interest income | $ 780 | $ 1,789 | $ 3,137 | $ 5,280 |
Interest expense | (941) | (2,214) | (4,390) | (10,608) |
Gain (loss) on assets related to deferred compensation plan | 26,153 | 4,686 | 20,166 | 25,201 |
Foreign currency exchange gain (loss) | 123 | 696 | 5,255 | 2,999 |
Other, net | 141 | 360 | (1,584) | 501 |
Total | $ 26,256 | $ 5,317 | $ 22,584 | $ 23,373 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes and Effective Tax Rates (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 236,854 | $ 132,911 | $ 446,593 | $ 413,883 |
Provision (benefit) for income taxes | $ (16,057) | $ 32,982 | $ (20,299) | $ 42,230 |
Effective tax rate | (6.80%) | 24.80% | (4.50%) | 10.20% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jul. 31, 2017 | Jul. 31, 2020 | Apr. 30, 2020 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | Nov. 01, 2018 | |
Taxes [Line Items] | |||||||||
Statutory federal income tax rate | 21.00% | ||||||||
Provision (benefit) for income taxes | $ (16,057,000) | $ 32,982,000 | $ (20,299,000) | $ 42,230,000 | |||||
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 | 43,000,000 | $ 43,000,000 | |||||||
Retained Earnings | Accounting Standards Update 2016-16 | |||||||||
Taxes [Line Items] | |||||||||
Cumulative effect adjustment | $ 130,500,000 | ||||||||
Domestic Tax Authority | Tax Year 2015 - Tax Year 2017 | California Franchise Tax Board | |||||||||
Taxes [Line Items] | |||||||||
Unrecognized tax benefits from settlement with tax authorities | $ 19,200,000 | ||||||||
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 | ||||||||
Unrecognized tax benefits | $ 17,400,000 | ||||||||
Synopsys Hungary | Foreign Tax Authority | Tax Year 2014 - Tax Year 2018 | Hungarian Tax Authority | |||||||||
Taxes [Line Items] | |||||||||
Unrecognized tax benefits from settlement with tax authorities | $ 6,900,000 | ||||||||
Fiscal Year 2016 - 2018 | |||||||||
Taxes [Line Items] | |||||||||
Provision (benefit) for income taxes | $ 18,300,000 | ||||||||
Fiscal Year 2017 | Taipei | |||||||||
Taxes [Line Items] | |||||||||
Unrecognized tax benefits from settlement with tax authorities | $ 5,500,000 |