Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 31, 2021 | Feb. 17, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-19807 | |
Entity Registrant Name | SYNOPSYS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 56-1546236 | |
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 | |
Title of 12(b) Security | Common Stock($0.01 par value) | |
Trading Symbol | SNPS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 152,373,162 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000883241 | |
Current Fiscal Year End Date | --10-31 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,023,074 | $ 1,235,653 |
Accounts receivable, net | 789,320 | 780,709 |
Inventories, net | 230,907 | 192,333 |
Income taxes receivable and prepaid taxes | 25,190 | 32,355 |
Prepaid and other current assets | 329,233 | 308,167 |
Total current assets | 2,397,724 | 2,549,217 |
Property and equipment, net | 486,604 | 483,818 |
Operating lease right-of-use assets, net | 462,136 | 465,818 |
Goodwill | 3,433,003 | 3,365,114 |
Intangible assets, net | 254,375 | 254,322 |
Long-term prepaid taxes | 8,285 | 8,276 |
Deferred income taxes | 522,871 | 497,546 |
Other long-term assets | 447,840 | 405,951 |
Total assets | 8,012,838 | 8,030,062 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 422,928 | 623,664 |
Operating lease liabilities, current | 72,769 | 73,173 |
Accrued income taxes | 32,227 | 27,738 |
Deferred revenue | 1,546,038 | 1,388,263 |
Short-term debt | 97,421 | 27,084 |
Total current liabilities | 2,171,383 | 2,139,922 |
Operating lease liabilities, non-current | 459,880 | 462,411 |
Long-term accrued income taxes | 25,184 | 25,178 |
Long-term deferred revenue | 107,001 | 104,850 |
Long-term debt | 25,658 | 100,823 |
Other long-term liabilities | 336,834 | 284,511 |
Total liabilities | 3,125,940 | 3,117,695 |
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; 152,364 and 152,618 shares outstanding, respectively | 1,526 | 1,528 |
Capital in excess of par value | 1,589,175 | 1,653,166 |
Retained earnings | 3,954,542 | 3,795,397 |
Treasury stock, at cost: 4,897 and 4,643 shares, respectively | (628,216) | (488,613) |
Accumulated other comprehensive income (loss) | (34,775) | (54,074) |
Total Synopsys stockholders’ equity | 4,882,252 | 4,907,404 |
Non-controlling interest | 4,646 | 4,963 |
Total stockholders’ equity | 4,886,898 | 4,912,367 |
Total liabilities and stockholders’ equity | $ 8,012,838 | $ 8,030,062 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 31, 2021 | Oct. 31, 2020 |
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) | 152,364,000 | 152,618,000 |
Treasury stock, shares (in shares) | 4,897,000 | 4,643,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Revenue: | ||
Total revenue | $ 970,321 | $ 834,381 |
Cost of revenue: | ||
Amortization of intangible assets | 11,886 | 13,169 |
Total cost of revenue | 207,999 | 192,868 |
Gross margin | 762,322 | 641,513 |
Operating expenses: | ||
Research and development | 357,468 | 314,283 |
Sales and marketing | 170,628 | 152,855 |
General and administrative | 77,488 | 68,744 |
Amortization of intangible assets | 8,390 | 9,364 |
Restructuring charges | 0 | 8,751 |
Total operating expenses | 613,974 | 553,997 |
Operating income | 148,348 | 87,516 |
Other income (expense), net | 28,756 | 12,057 |
Income before income taxes | 177,104 | 99,573 |
Provision (benefit) for income taxes | 15,076 | (4,488) |
Net income | 162,028 | 104,061 |
Net income (loss) attributed to non-controlling interest | (317) | 0 |
Net income attributed to Synopsys | $ 162,345 | $ 104,061 |
Net income per share: | ||
Basic (in USD per share) | $ 1.06 | $ 0.69 |
Diluted (in USD per share) | $ 1.03 | $ 0.67 |
Shares used in computing per share amounts: | ||
Basic (shares) | 152,498 | 150,244 |
Diluted (shares) | 157,277 | 154,504 |
Time-based products | ||
Revenue: | ||
Total revenue | $ 631,290 | $ 556,439 |
Cost of revenue: | ||
Cost of revenue | 127,347 | 117,784 |
Upfront products | ||
Revenue: | ||
Total revenue | 174,381 | 150,721 |
Maintenance and service | ||
Revenue: | ||
Total revenue | 164,650 | 127,221 |
Cost of revenue: | ||
Cost of revenue | $ 68,766 | $ 61,915 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 162,345 | $ 104,061 |
Other comprehensive income (loss): | ||
Change in foreign currency translation adjustment | 17,932 | 6,962 |
Cash flow hedges: | ||
Deferred gains (losses), net of tax of $(1,405) and $(417), respectively. | 4,093 | 1,652 |
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $885 and $(97), respectively. | (2,726) | 522 |
Other comprehensive income (loss), net of tax effects | 19,299 | 9,136 |
Comprehensive income | 181,327 | 113,197 |
Less: net income (loss) attributed to non-controlling interest | (317) | 0 |
Comprehensive income attributed to Synopsys | 181,644 | 113,197 |
Net income | $ 162,028 | $ 104,061 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Deferred gains (losses), tax | $ (1,405) | $ (417) |
Reclassification adjustment on deferred (gains) losses included in net income, tax | $ 885 | $ (97) |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Stockholders' Equity Statement - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment [Member] | Common Stock | Capital in Excess of Par Value | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment [Member] | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total Synopsys Stockholders’ Equity | Total Synopsys Stockholders’ EquityCumulative Effect, Period of Adoption, Adjustment [Member] | Non-controlling Interest | ||
Balance (in shares) at Oct. 31, 2019 | 150,331 | ||||||||||||
Beginning balance at Oct. 31, 2019 | $ 4,088,876 | $ 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 | 104,061 | 104,061 | 104,061 | ||||||||||
Other comprehensive income (loss), net of tax effects | $ 9,136 | 9,136 | 9,136 | ||||||||||
Purchases of treasury stock (in shares) | (579) | (579) | |||||||||||
Purchases of treasury stock | $ (80,000) | $ (6) | 6 | (80,000) | (80,000) | ||||||||
Equity forward contract | $ (20,000) | (20,000) | (20,000) | ||||||||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 450 | 450 | |||||||||||
Common stock issued, net of shares withheld for employee taxes | $ 734 | $ 5 | (40,561) | 41,290 | 734 | ||||||||
Stock-based compensation | 51,883 | 51,883 | 51,883 | ||||||||||
Balance (in shares) at Jan. 31, 2020 | 150,202 | ||||||||||||
Ending balance at Jan. 31, 2020 | 4,154,690 | $ 1,502 | 1,626,783 | 3,268,205 | (664,352) | (83,311) | 4,148,827 | 5,863 | |||||
Balance (in shares) at Oct. 31, 2020 | 152,618 | ||||||||||||
Beginning balance at Oct. 31, 2020 | 4,912,367 | $ 1,528 | 1,653,166 | 3,795,397 | (488,613) | (54,074) | 4,907,404 | 4,963 | |||||
Beginning balance (Retained earnings adjustment due to adoption of ASC 326) at Oct. 31, 2020 | [1] | $ (3,200) | $ (3,200) | $ (3,200) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Net income | 162,028 | 162,345 | 162,345 | (317) | |||||||||
Other comprehensive income (loss), net of tax effects | $ 19,299 | 19,299 | 19,299 | ||||||||||
Purchases of treasury stock (in shares) | (837) | [2] | (837) | ||||||||||
Purchases of treasury stock | $ (202,871) | [2] | $ (8) | 8 | (202,871) | (202,871) | |||||||
Equity forward contract | $ (50,000) | (50,000) | (50,000) | ||||||||||
Common stock issued, net of shares withheld for employee taxes (in shares) | 583 | [2] | 583 | ||||||||||
Common stock issued, net of shares withheld for employee taxes | $ (34,507) | $ 6 | (97,781) | 63,268 | (34,507) | ||||||||
Stock-based compensation | 83,782 | 83,782 | 83,782 | ||||||||||
Balance (in shares) at Jan. 31, 2021 | 152,364 | ||||||||||||
Ending balance at Jan. 31, 2021 | $ 4,886,898 | $ 1,526 | $ 1,589,175 | $ 3,954,542 | $ (628,216) | $ (34,775) | $ 4,882,252 | $ 4,646 | |||||
[1] | In June 2016, the Financial Accounting Standards Board (FASB) issued ASC 326, "Measurement of Credit Losses on Financial Instruments", which replaces the incurred loss methodology with an expected loss methodology. The Company adopted the new standard at the beginning of fiscal 2021. | ||||||||||||
[2] | Does not include the $50.0 million equity forward contract, from the December 2020 ASR. |
Unaudited Condensed Consolida_7
Unaudited Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Cash flow from operating activities: | ||
Net income attributed to Synopsys | $ 162,345 | $ 104,061 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization and depreciation | 50,628 | 52,232 |
Reduction of operating lease right-of-use assets | 20,974 | 23,201 |
Amortization of capitalized costs to obtain revenue contracts | 15,008 | 13,762 |
Stock-based compensation | 83,782 | 51,883 |
Allowance for doubtful accounts | 7,477 | 4,861 |
Deferred income taxes | (20,222) | (17,694) |
Other non-cash | (3,359) | (370) |
Net changes in operating assets and liabilities, net of acquired assets and liabilities: | ||
Accounts receivable | (14,910) | (246,364) |
Inventories | (37,764) | (5,561) |
Prepaid and other current assets | (12,289) | 8,697 |
Other long-term assets | (50,385) | (27,103) |
Accounts payable and accrued liabilities | (171,137) | (132,814) |
Operating lease liabilities | (20,707) | (20,979) |
Income taxes | 12,226 | 5,039 |
Deferred revenue | 152,291 | 196,969 |
Net cash provided by operating activities | 173,958 | 9,820 |
Cash flows from investing activities: | ||
Purchases of long-term investments | 0 | (2,500) |
Purchases of property and equipment | (27,779) | (54,605) |
Cash paid for acquisitions, net of cash acquired | (74,670) | (75,388) |
Capitalization of software development costs | (1,011) | (1,065) |
Net cash used in investing activities | (103,460) | (133,558) |
Cash flows from financing activities: | ||
Proceeds from credit facilities | 0 | 196,490 |
Repayment of debt | (5,694) | (3,750) |
Issuances of common stock | 15,092 | 14,982 |
Payments for taxes related to net share settlement of equity awards | (49,591) | (14,242) |
Purchase of equity forward contract | (50,000) | (20,000) |
Purchases of treasury stock | (202,871) | (80,000) |
Net cash (used in) provided by financing activities | (293,064) | 93,480 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 10,001 | 2,013 |
Net change in cash, cash equivalents and restricted cash | (212,565) | (28,245) |
Cash, cash equivalents and restricted cash, beginning of year | 1,237,970 | 730,527 |
Cash, cash equivalents and restricted cash, end of period | $ 1,025,405 | $ 702,282 |
Description of Business
Description of Business | 3 Months Ended |
Jan. 31, 2021 | |
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, quality and compliance of software in a wide variety of industries, including electronics, financial services, automotive, medicine, energy and industrials. These tools and services are part of the Company’s Software Integrity segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jan. 31, 2021 | |
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 the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2020 as filed with the SEC on December 15, 2020. 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 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 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 2021 and 2020 are both 52-week years. Fiscal 2021 will end on October 30, 2021. Fiscal 2020 ended on October 31, 2020. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end. There have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance or potential significance to the Company as of January 31, 2021. |
Revenue
Revenue | 3 Months Ended |
Jan. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | RevenueDisaggregated Revenue The following table shows the percentage of revenue by product groups: Three Months Ended 2021 2020 EDA 55.2 % 59.0 % IP & System Integration 35.0 % 30.6 % Software Integrity Products & Services 9.5 % 10.3 % Other 0.3 % 0.1 % Total 100.0 % 100.0 % 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 January 31, 2021 October 31, 2020 (in thousands) Contract assets $ 217,699 $ 214,583 Unbilled receivables $ 49,459 $ 50,932 Deferred revenue $ 1,653,039 $ 1,493,113 During the three months ended January 31, 2021 and 2020, the Company recognized $574.0 million and $504.5 million, respectively, of revenue that was included in the deferred revenue balance at the beginning of the period. Contracted but unsatisfied or partially unsatisfied performance obligations were approximately $4.6 billion as of January 31, 2021, which includes $621.6 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. Approximately 52% of the contracted but unsatisfied or partially unsatisfied performance obligations as of January 31, 2021, excluding non-cancellable FSA, are expected to be recognized over the next 12 months, with the remainder recognized thereafter. During the three months ended January 31, 2021 and 2020, the Company recognized $26.3 million and $17.9 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 January 31, 2021 were $79.4 million and included in other assets in the Company’s unaudited condensed consolidated balance sheets. Amortization of these assets was $15.0 million and $13.8 million during the three months ended January 31, 2021 and 2020, respectively, and included in sales and marketing expense in the Company’s unaudited condensed consolidated statements of operations. |
Business Combinations
Business Combinations | 3 Months Ended |
Jan. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations During the three months ended January 31, 2021, the Company completed two acquisitions for an aggregate consideration of $77.5 million, net of cash acquired. 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. The preliminary purchase allocations are $20.3 million of identifiable intangible assets and $59.3 million in goodwill, which is attributable to the Semiconductor & System Design reporting segment. The fair value of these intangible assets and goodwill are estimated using the income method. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Jan. 31, 2021 | |
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 three months ended January 31, 2021 were as follows: (in thousands) Balance at October 31, 2020 $ 3,365,114 Additions 59,285 Effect of foreign currency translation 8,604 Balance at January 31, 2021 $ 3,433,003 Intangible Assets In-process research and development (IPR&D) as of January 31, 2021 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 January 31, 2021 consisted of the following: Gross Assets Accumulated Net Assets (in thousands) Core/developed technology $ 846,611 $ 714,026 $ 132,585 Customer relationships 381,686 285,019 96,667 Contract rights intangible 193,087 187,758 5,329 Trademarks and trade names 43,095 29,325 13,770 In-process research and development (IPR&D) 1,214 — 1,214 Capitalized software development costs 45,133 40,323 4,810 Total $ 1,510,826 $ 1,256,451 $ 254,375 Intangible assets as of October 31, 2020 consisted of the following: Gross Assets Accumulated Net Assets (in thousands) Core/developed technology $ 827,232 $ 703,009 $ 124,223 Customer relationships 380,838 277,219 103,619 Contract rights intangible 192,812 186,763 6,049 Trademarks and trade names 43,096 28,716 14,380 In-process research and development (IPR&D) 1,214 — 1,214 Capitalized software development costs 44,122 39,285 4,837 Total $ 1,489,314 $ 1,234,992 $ 254,322 Amortization expense related to intangible assets consisted of the following: Three Months Ended 2021 2020 (in thousands) Core/developed technology $ 11,016 $ 12,318 Customer relationships 7,780 8,562 Contract rights intangible 870 875 Trademarks and trade names 610 778 Capitalized software development costs (1) 1,038 901 Total $ 21,314 $ 23,434 (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 January 31, 2021: Fiscal year (in thousands) Remainder of fiscal 2021 $ 59,323 2022 65,764 2023 48,868 2024 38,407 2025 22,304 2026 and thereafter 18,495 IPR&D 1,214 Total $ 254,375 |
Financial Assets and Liabilitie
Financial Assets and Liabilities | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021, the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 166,882 $ — $ — $ — $ 166,882 Total: $ 166,882 $ — $ — $ — $ 166,882 (1) See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents. As of October 31, 2020, the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 304,127 $ — $ — $ — $ 304,127 Total: $ 304,127 $ — $ — $ — $ 304,127 (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. The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the unaudited condensed consolidated balance sheets: As of January 31, 2021 October 31, 2020 (in thousands) Cash and cash equivalents $ 1,023,074 $ 1,235,653 Restricted cash included in Prepaid expenses and other current assets 1,523 1,523 Restricted cash included in Other long-term assets 808 794 Total cash, cash equivalents and restricted cash $ 1,025,405 $ 1,237,970 Non-marketable equity securities. The Company’s strategic investment portfolio consists of non-marketable equity securities in privately held companies. When the Company does not have the ability to exercise significant influence over the investments, these securities are accounted for 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 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 months ended January 31, 2021 and 2020. 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 2021 2020 (in thousands) Gain (loss) recorded in other income (expense), net $ 1,129 $ 245 The notional amounts in the table below for derivative instruments provide one measure of the transaction volume outstanding: As of January 31, 2021 October 31, 2020 (in thousands) Total gross notional amount $ 865,642 $ 981,234 Net fair value $ 6,047 $ 6,940 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 Fair values of (in thousands) Balance at January 31, 2021 Other current assets $ 9,870 $ 23 Accrued liabilities $ 3,384 $ 463 Balance at October 31, 2020 Other current assets $ 9,182 $ 138 Accrued liabilities $ 2,088 $ 292 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) Amount of gain (loss) Location of Amount of (in thousands) Three months ended Foreign exchange contracts Revenue $ (163) Revenue $ 113 Foreign exchange contracts Operating expenses 4,256 Operating expenses 2,613 Total $ 4,093 $ 2,726 Three months ended Foreign exchange contracts Revenue $ 1,080 Revenue $ (89) Foreign exchange contracts Operating expenses 571 Operating expenses (433) Total $ 1,651 $ (522) |
Fair Value Measures
Fair Value Measures | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021: Fair Value Measurement Using Description Total Quoted Prices in Significant Other Significant (in thousands) Assets Cash equivalents: Money market funds $ 166,882 $ 166,882 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 9,893 — 9,893 — Other long-term assets: Deferred compensation plan assets 307,980 307,980 — — Total assets $ 484,755 $ 474,862 $ 9,893 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 3,847 $ — $ 3,847 $ — Other long-term liabilities: Deferred compensation plan liabilities 309,339 309,339 — — Total liabilities $ 313,186 $ 309,339 $ 3,847 $ — Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2020: Fair Value Measurement Using Description Total Quoted Prices in Significant Other Significant (in thousands) Assets Cash equivalents: Money market funds $ 304,127 $ 304,127 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 9,320 — 9,320 — Other long-term assets: Deferred compensation plan assets 269,737 269,737 — — Total assets $ 583,184 $ 573,864 $ 9,320 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 2,380 $ — $ 2,380 $ — Other long-term liabilities: Deferred compensation plan liabilities 269,737 269,737 — — Total liabilities $ 272,117 $ 269,737 $ 2,380 $ — 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 measurement alternative method or equity method of accounting. |
Liabilities and Restructuring C
Liabilities and Restructuring Charges | 3 Months Ended |
Jan. 31, 2021 | |
Liabilities and Restructuring Charges [Abstract] | |
Liabilities and Restructuring Charges | Liabilities Accounts payable and accrued liabilities consist of: As of January 31, 2021 October 31, 2020 (in thousands) Payroll and related benefits $ 311,983 $ 492,626 Other accrued liabilities 85,567 101,035 Accounts payable 25,378 30,003 Total $ 422,928 $ 623,664 Other long-term liabilities consist of: As of January 31, 2021 October 31, 2020 (in thousands) Deferred compensation liability $ 309,339 $ 269,737 Other long-term liabilities 27,495 14,774 Total $ 336,834 $ 284,511 |
Credit and Term Loan Facilities
Credit and Term Loan Facilities | 3 Months Ended |
Jan. 31, 2021 | |
Debt Disclosure [Abstract] | |
Credit and Term Loan Facilities | Credit and Term Loan Facilities On January 22, 2021, Synopsys, Inc. (“Synopsys”) entered into a Fourth Extension and Amendment Agreement (the “Fourth Amendment”), which amends and restates Synopsys’ previous credit agreement, dated as of November 28, 2016 (as amended and restated, the “Credit Agreement”). Synopsys’ outstanding borrowings under the previous credit agreement, which as of January 22, 2021 consisted of term loans in the aggregate principal amount of $97.5 million, are carried over under the Credit Agreement. The Fourth Amendment extends the termination date of the existing $650 million senior unsecured revolving credit facility from November 28, 2021 to January 22, 2024, which may be further extended in Synopsys’ option. The outstanding term loans under the Credit Agreement will continue to amortize in quarterly installments with the balance due at maturity on November 28, 2021. The Credit Agreement also provides an uncommitted incremental loan facility of up to $150 million in the aggregate principal amount. The Credit Agreement contains financial covenants requiring the Company to maintain a maximum consolidated leverage ratio and a minimum consolidated interest coverage ratio, as well as other non-financial covenants. As of January 31, 2021, the Company was in compliance with all financial covenants. As of January 31, 2021, the Company had $97.4 million outstanding balance, net of debt issuance costs, under the Term Loan. Outstanding principal payments under the Term Loan are due as follows: Fiscal year (in thousands) Remainder of fiscal 2021 $ 22,500 2022 75,000 Total $ 97,500 In July 2018, the Company entered into a 12-year 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 5 year Loan Prime Rate plus 0.74%. As of January 31, 2021, the Company had $25.7 million outstanding under the agreement. As of October 31, 2020, the Company had $102.1 million outstanding balance, net of debt issuance costs, under the Term Loan, of which $75.0 million was classified as long-term liabilities. There was no outstanding balance under the Revolver as of October 31, 2020 and January 31, 2021. 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 January 31, 2021, 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 | 3 Months Ended |
Jan. 31, 2021 | |
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 December 31, 2040, 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 January 31, 2021 2020 (in thousands) Operating lease expense (1) $ 23,626 $ 23,201 Variable lease expense (2) 1,335 942 Total lease expense $ 24,961 $ 24,143 (1) Operating lease expense includes immaterial amounts of short-term leases, net of sublease income. (2) 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 January 31, 2021 2020 (in thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 20,644 $ 16,204 ROU assets obtained in exchange for operating lease liabilities $ 15,635 $ 4,775 Lease term and discount rate information related to the Company’s operating leases as of the end of the period presented are as follows: January 31, 2021 October 31, 2020 Weighted-average remaining lease term (in years) 8.40 8.62 Weighted-average discount rate 2.55 % 2.56 % The following represents the maturities of the Company’s future lease payments due under operating leases as of January 31, 2021: Lease Payments Fiscal year (in thousands) Remainder of fiscal 2021 $ 63,327 2022 84,525 2023 68,615 2024 62,975 2025 54,961 Thereafter 261,904 Total future minimum lease payments 596,307 Less: Imputed interest 63,658 Total lease liabilities $ 532,649 As of January 31, 2021, the Company has additional operating leases for facilities that have not yet commenced with future undiscounted lease payments of $61.5 million. These operating leases may commence in March 2021, with lease terms between 5.0 years and 9.0 years. As of October 31, 2020 , t he maturities of the Company’s future lease payments due under operating leases as follows: Lease Payments (in thousands) Fiscal year 2021 $ 84,534 2022 79,886 2023 64,073 2024 59,751 2025 53,280 Thereafter 259,969 Total future minimum lease payments 601,493 Less: Imputed interest 65,909 Total lease liabilities $ 535,584 In addition, certain facilities owned by the Company were leased to third parties under non-cancellable operating lease agreements. These leases have annual escalating payments and have expiration dates through March 31, 2031 in accordance with the terms and conditions of the existing agreement. The lease payments including sublease income due to the Company as of January 31, 2021 are as follows: Lease Payments Fiscal year (in thousands) Remainder of fiscal 2021 $ 8,254 2022 15,649 2023 14,953 2024 11,179 2025 6,375 Thereafter 38,032 Total $ 94,442 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021 October 31, 2020 (in thousands) Cumulative currency translation adjustments $ (39,531) $ (57,463) Unrealized gain (loss) on derivative instruments, net of taxes 4,756 3,389 Total accumulated other comprehensive income (loss) $ (34,775) $ (54,074) The effect of amounts reclassified out of each component of accumulated other comprehensive income (loss) into net income was as follows: Three Months Ended 2021 2020 (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 $ 113 $ (89) Operating expenses 2,613 (433) Total reclassifications into net income $ 2,726 $ (522) |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021, $205.1 million remained available for future repurchases under the program. In December 2020, the Company entered into an accelerated share repurchase agreement (the December 2020 ASR) to repurchase an aggregate of $250.0 million of the Company's common stock. Pursuant to the December 2020 ASR, the Company made a prepayment of $250.0 million to receive initial deliveries of shares valued at $200.0 million. The remaining balance of $50.0 million is anticipated to be settled on or before April 9, 2021, upon completion of the repurchase. Under the terms of the December 2020 ASR, the specific number of shares that the Company will ultimately repurchase will be based on the volume-weighted average share price of the Company's common stock during the repurchase period, less a discount. Stock repurchase activities as well as the reissuance of treasury stock for employee stock-based compensation purposes are as follows: Three Months Ended 2021 (1) 2020 (in thousands) Total shares repurchased 837 579 Total cost of the repurchased shares $ 202,871 $ 80,000 Reissuance of treasury stock 583 450 (1) Does not include the $50.0 million equity forward contract, from the December 2020 ASR. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 (in thousands) Cost of products $ 9,352 $ 5,580 Cost of maintenance and service 3,335 2,032 Research and development expense 41,294 26,209 Sales and marketing expense 15,159 8,894 General and administrative expense 14,642 9,168 Stock-based compensation expense before taxes 83,782 51,883 Income tax benefit (13,279) (8,924) Stock-based compensation expense after taxes $ 70,503 $ 42,959 As of January 31, 2021, the Company had $697.2 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 2.5 years. As of January 31, 2021, the Company had $44.1 million of unrecognized stock-based compensation expense relating to its Employee Stock Purchase Plan (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 2021 2020 (in thousands) Intrinsic value of awards exercised $ 40,524 $ 24,398 |
Net Income per Share
Net Income per Share | 3 Months Ended |
Jan. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income Per ShareThe Company computes basic net income per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the dilution from potential common shares outstanding such as stock options and unvested restricted stock units and awards during the period using the treasury stock method. The table below reconciles the weighted average common shares used to calculate basic net income per share with the weighted average common shares used to calculate diluted net income per share: Three Months Ended 2021 2020 (in thousands, except per share amounts) Numerator: Net income attributed to Synopsys $ 162,345 $ 104,061 Denominator: Weighted average common shares for basic net income per share 152,498 150,244 Dilutive effect of common share equivalents from equity-based compensation 4,779 4,260 Weighted average common shares for diluted net income per share 157,277 154,504 Net income per share: Basic $ 1.06 $ 0.69 Diluted $ 1.03 $ 0.67 Anti-dilutive employee stock-based awards excluded (1) 334 414 (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 | 3 Months Ended |
Jan. 31, 2021 | |
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. The Company’s 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 2021 2020 (in thousands) Total Segments: Revenue $ 970,321 $ 834,381 Adjusted operating income 286,820 186,933 Adjusted operating margin 30 % 22 % Semiconductor & System Design: Revenue $ 878,368 $ 748,744 Adjusted operating income 278,876 178,851 Adjusted operating margin 32 % 24 % Software Integrity: Revenue $ 91,953 $ 85,637 Adjusted operating income 7,944 8,082 Adjusted operating margin 9 % 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 2021 2020 (in thousands) Total segment adjusted operating income $ 286,820 $ 186,933 Reconciling items: Amortization of intangible expense (20,276) (22,533) Stock-based compensation expense (83,782) (51,883) Other (34,414) (25,001) Total operating income $ 148,348 $ 87,516 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 2021 2020 (in thousands) Revenue: United States $ 468,701 $ 408,489 Europe 105,175 94,370 China 115,768 67,320 Korea 98,254 89,515 Other 182,423 174,687 Consolidated $ 970,321 $ 834,381 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. |
Other Income (Expense), Net
Other Income (Expense), Net | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 (in thousands) Interest income $ 310 $ 1,478 Interest expense (739) (1,603) Gain (loss) on assets related to deferred compensation plan 30,866 12,473 Foreign currency exchange gain (loss) (315) 93 Other, net (1,366) (384) Total $ 28,756 $ 12,057 |
Income Taxes
Income Taxes | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 (in thousands) Income before income taxes $ 177,104 $ 99,573 Provision (benefit) for income taxes $ 15,076 $ (4,488) Effective tax rate 8.5 % (4.5) % The Company’s effective tax rate for the three months ended January 31, 2021 is lower than the statutory federal corporate tax rate of 21.0% primarily due to U.S. federal research tax credits, foreign-derived intangible income deduction, excess tax benefits from stock-based compensation, and 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. The Company’s effective tax rate increased in the three months ended January 31, 2021 as compared to the same period in fiscal 2020, primarily due to enacted legislation in California which limits the use of California research and development tax credits commencing in fiscal 2021, partially offset by excess tax benefits from stock-based compensation. The Company's effective tax rate was lower in the three months ended January 31, 2020 primarily due to the realizability of U.S. foreign tax credits and California research and development tax credits. 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. 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. The Hungarian Supreme Court heard the Company's appeal on November 12, 2020 and issued a ruling from the bench to remand the case to the Hungarian Administrative Court for further proceedings. The Company received the Hungarian Supreme Court’s written decision in the first quarter of fiscal 2021. The first re-hearing with the Hungarian Administrative Court has been scheduled for April 27, 2021. 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. 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 | 3 Months Ended |
Jan. 31, 2021 | |
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, 2020 (the Annual Report). See Note 9. 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. For a description of certain of these other matters, refer to Note 17. Income Taxes . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jan. 31, 2021 | |
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 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 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 2021 and 2020 are both 52-week years. Fiscal 2021 will end on October 30, 2021. Fiscal 2020 ended on October 31, 2020. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 EDA 55.2 % 59.0 % IP & System Integration 35.0 % 30.6 % Software Integrity Products & Services 9.5 % 10.3 % Other 0.3 % 0.1 % Total 100.0 % 100.0 % |
Schedule of Contract Assets and Liabilities | Contract balances are as follows: As of January 31, 2021 October 31, 2020 (in thousands) Contract assets $ 217,699 $ 214,583 Unbilled receivables $ 49,459 $ 50,932 Deferred revenue $ 1,653,039 $ 1,493,113 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill during the three months ended January 31, 2021 were as follows: (in thousands) Balance at October 31, 2020 $ 3,365,114 Additions 59,285 Effect of foreign currency translation 8,604 Balance at January 31, 2021 $ 3,433,003 |
Summary of Intangible Assets | Intangible assets as of January 31, 2021 consisted of the following: Gross Assets Accumulated Net Assets (in thousands) Core/developed technology $ 846,611 $ 714,026 $ 132,585 Customer relationships 381,686 285,019 96,667 Contract rights intangible 193,087 187,758 5,329 Trademarks and trade names 43,095 29,325 13,770 In-process research and development (IPR&D) 1,214 — 1,214 Capitalized software development costs 45,133 40,323 4,810 Total $ 1,510,826 $ 1,256,451 $ 254,375 Intangible assets as of October 31, 2020 consisted of the following: Gross Assets Accumulated Net Assets (in thousands) Core/developed technology $ 827,232 $ 703,009 $ 124,223 Customer relationships 380,838 277,219 103,619 Contract rights intangible 192,812 186,763 6,049 Trademarks and trade names 43,096 28,716 14,380 In-process research and development (IPR&D) 1,214 — 1,214 Capitalized software development costs 44,122 39,285 4,837 Total $ 1,489,314 $ 1,234,992 $ 254,322 |
Amortization Expense Related to Intangible Assets | Amortization expense related to intangible assets consisted of the following: Three Months Ended 2021 2020 (in thousands) Core/developed technology $ 11,016 $ 12,318 Customer relationships 7,780 8,562 Contract rights intangible 870 875 Trademarks and trade names 610 778 Capitalized software development costs (1) 1,038 901 Total $ 21,314 $ 23,434 (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 January 31, 2021: Fiscal year (in thousands) Remainder of fiscal 2021 $ 59,323 2022 65,764 2023 48,868 2024 38,407 2025 22,304 2026 and thereafter 18,495 IPR&D 1,214 Total $ 254,375 |
Financial Assets and Liabilit_2
Financial Assets and Liabilities (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
Financial Assets And Liabilities [Abstract] | |
Summary of Cash Equivalents | As of January 31, 2021, the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 166,882 $ — $ — $ — $ 166,882 Total: $ 166,882 $ — $ — $ — $ 166,882 (1) See Note 7. Fair Value Measures for further discussion on fair values of cash equivalents. As of October 31, 2020, the balances of the Company’s cash equivalents were: Cost Gross Gross Gross Estimated (1) (in thousands) Cash equivalents: Money market funds $ 304,127 $ — $ — $ — $ 304,127 Total: $ 304,127 $ — $ — $ — $ 304,127 (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 January 31, 2021 October 31, 2020 (in thousands) Cash and cash equivalents $ 1,023,074 $ 1,235,653 Restricted cash included in Prepaid expenses and other current assets 1,523 1,523 Restricted cash included in Other long-term assets 808 794 Total cash, cash equivalents and restricted cash $ 1,025,405 $ 1,237,970 |
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 2021 2020 (in thousands) Gain (loss) recorded in other income (expense), net $ 1,129 $ 245 |
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 January 31, 2021 October 31, 2020 (in thousands) Total gross notional amount $ 865,642 $ 981,234 Net fair value $ 6,047 $ 6,940 |
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 Fair values of (in thousands) Balance at January 31, 2021 Other current assets $ 9,870 $ 23 Accrued liabilities $ 3,384 $ 463 Balance at October 31, 2020 Other current assets $ 9,182 $ 138 Accrued liabilities $ 2,088 $ 292 |
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) Amount of gain (loss) Location of Amount of (in thousands) Three months ended Foreign exchange contracts Revenue $ (163) Revenue $ 113 Foreign exchange contracts Operating expenses 4,256 Operating expenses 2,613 Total $ 4,093 $ 2,726 Three months ended Foreign exchange contracts Revenue $ 1,080 Revenue $ (89) Foreign exchange contracts Operating expenses 571 Operating expenses (433) Total $ 1,651 $ (522) |
Fair Value Measures (Tables)
Fair Value Measures (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021: Fair Value Measurement Using Description Total Quoted Prices in Significant Other Significant (in thousands) Assets Cash equivalents: Money market funds $ 166,882 $ 166,882 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 9,893 — 9,893 — Other long-term assets: Deferred compensation plan assets 307,980 307,980 — — Total assets $ 484,755 $ 474,862 $ 9,893 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 3,847 $ — $ 3,847 $ — Other long-term liabilities: Deferred compensation plan liabilities 309,339 309,339 — — Total liabilities $ 313,186 $ 309,339 $ 3,847 $ — Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2020: Fair Value Measurement Using Description Total Quoted Prices in Significant Other Significant (in thousands) Assets Cash equivalents: Money market funds $ 304,127 $ 304,127 $ — $ — Prepaid and other current assets: Foreign currency derivative contracts 9,320 — 9,320 — Other long-term assets: Deferred compensation plan assets 269,737 269,737 — — Total assets $ 583,184 $ 573,864 $ 9,320 $ — Liabilities Accounts payable and accrued liabilities: Foreign currency derivative contracts $ 2,380 $ — $ 2,380 $ — Other long-term liabilities: Deferred compensation plan liabilities 269,737 269,737 — — Total liabilities $ 272,117 $ 269,737 $ 2,380 $ — |
Liabilities and Restructuring_2
Liabilities and Restructuring Charges (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
Liabilities and Restructuring Charges [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consist of: As of January 31, 2021 October 31, 2020 (in thousands) Payroll and related benefits $ 311,983 $ 492,626 Other accrued liabilities 85,567 101,035 Accounts payable 25,378 30,003 Total $ 422,928 $ 623,664 |
Other Long-Term Liabilities | Other long-term liabilities consist of: As of January 31, 2021 October 31, 2020 (in thousands) Deferred compensation liability $ 309,339 $ 269,737 Other long-term liabilities 27,495 14,774 Total $ 336,834 $ 284,511 |
Credit and Term Loan Faciliti_2
Credit and Term Loan Facilities (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 $ 22,500 2022 75,000 Total $ 97,500 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of the Company’s lease expense during the period presented are as follows: Three Months Ended January 31, 2021 2020 (in thousands) Operating lease expense (1) $ 23,626 $ 23,201 Variable lease expense (2) 1,335 942 Total lease expense $ 24,961 $ 24,143 (1) Operating lease expense includes immaterial amounts of short-term leases, net of sublease income. (2) 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 January 31, 2021 2020 (in thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 20,644 $ 16,204 ROU assets obtained in exchange for operating lease liabilities $ 15,635 $ 4,775 |
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: January 31, 2021 October 31, 2020 Weighted-average remaining lease term (in years) 8.40 8.62 Weighted-average discount rate 2.55 % 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 January 31, 2021: Lease Payments Fiscal year (in thousands) Remainder of fiscal 2021 $ 63,327 2022 84,525 2023 68,615 2024 62,975 2025 54,961 Thereafter 261,904 Total future minimum lease payments 596,307 Less: Imputed interest 63,658 Total lease liabilities $ 532,649 As of October 31, 2020 , t he maturities of the Company’s future lease payments due under operating leases as follows: Lease Payments (in thousands) Fiscal year 2021 $ 84,534 2022 79,886 2023 64,073 2024 59,751 2025 53,280 Thereafter 259,969 Total future minimum lease payments 601,493 Less: Imputed interest 65,909 Total lease liabilities $ 535,584 |
Lessor, Operating Lease, Payment to be Received, Fiscal Year Maturity | The lease payments including sublease income due to the Company as of January 31, 2021 are as follows: Lease Payments Fiscal year (in thousands) Remainder of fiscal 2021 $ 8,254 2022 15,649 2023 14,953 2024 11,179 2025 6,375 Thereafter 38,032 Total $ 94,442 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 January 31, 2021 October 31, 2020 (in thousands) Cumulative currency translation adjustments $ (39,531) $ (57,463) Unrealized gain (loss) on derivative instruments, net of taxes 4,756 3,389 Total accumulated other comprehensive income (loss) $ (34,775) $ (54,074) |
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 2021 2020 (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 $ 113 $ (89) Operating expenses 2,613 (433) Total reclassifications into net income $ 2,726 $ (522) |
Stock Repurchase Program (Table
Stock Repurchase Program (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 (1) 2020 (in thousands) Total shares repurchased 837 579 Total cost of the repurchased shares $ 202,871 $ 80,000 Reissuance of treasury stock 583 450 (1) Does not include the $50.0 million equity forward contract, from the December 2020 ASR. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 (in thousands) Cost of products $ 9,352 $ 5,580 Cost of maintenance and service 3,335 2,032 Research and development expense 41,294 26,209 Sales and marketing expense 15,159 8,894 General and administrative expense 14,642 9,168 Stock-based compensation expense before taxes 83,782 51,883 Income tax benefit (13,279) (8,924) Stock-based compensation expense after taxes $ 70,503 $ 42,959 |
Schedule of Intrinsic Value of Equity Awards Exercised | The intrinsic values of equity awards exercised during the periods are as follows: Three Months Ended 2021 2020 (in thousands) Intrinsic value of awards exercised $ 40,524 $ 24,398 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 (in thousands, except per share amounts) Numerator: Net income attributed to Synopsys $ 162,345 $ 104,061 Denominator: Weighted average common shares for basic net income per share 152,498 150,244 Dilutive effect of common share equivalents from equity-based compensation 4,779 4,260 Weighted average common shares for diluted net income per share 157,277 154,504 Net income per share: Basic $ 1.06 $ 0.69 Diluted $ 1.03 $ 0.67 Anti-dilutive employee stock-based awards excluded (1) 334 414 (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) | 3 Months Ended |
Jan. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | Information by reportable segment was as follows: Three Months Ended 2021 2020 (in thousands) Total Segments: Revenue $ 970,321 $ 834,381 Adjusted operating income 286,820 186,933 Adjusted operating margin 30 % 22 % Semiconductor & System Design: Revenue $ 878,368 $ 748,744 Adjusted operating income 278,876 178,851 Adjusted operating margin 32 % 24 % Software Integrity: Revenue $ 91,953 $ 85,637 Adjusted operating income 7,944 8,082 Adjusted operating margin 9 % 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 2021 2020 (in thousands) Total segment adjusted operating income $ 286,820 $ 186,933 Reconciling items: Amortization of intangible expense (20,276) (22,533) Stock-based compensation expense (83,782) (51,883) Other (34,414) (25,001) Total operating income $ 148,348 $ 87,516 |
Revenues Related to Operations by Geographic Areas | Revenue related to operations in the United States and other geographic areas were: Three Months Ended 2021 2020 (in thousands) Revenue: United States $ 468,701 $ 408,489 Europe 105,175 94,370 China 115,768 67,320 Korea 98,254 89,515 Other 182,423 174,687 Consolidated $ 970,321 $ 834,381 |
Other Income (Expense), Net (Ta
Other Income (Expense), Net (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 (in thousands) Interest income $ 310 $ 1,478 Interest expense (739) (1,603) Gain (loss) on assets related to deferred compensation plan 30,866 12,473 Foreign currency exchange gain (loss) (315) 93 Other, net (1,366) (384) Total $ 28,756 $ 12,057 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Jan. 31, 2021 | |
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 2021 2020 (in thousands) Income before income taxes $ 177,104 $ 99,573 Provision (benefit) for income taxes $ 15,076 $ (4,488) Effective tax rate 8.5 % (4.5) % |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Revenue percentage by product group | 100.00% | 100.00% |
EDA | ||
Disaggregation of Revenue [Line Items] | ||
Revenue percentage by product group | 55.20% | 59.00% |
IP & System Integration | ||
Disaggregation of Revenue [Line Items] | ||
Revenue percentage by product group | 35.00% | 30.60% |
Software Integrity Products & Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue percentage by product group | 9.50% | 10.30% |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue percentage by product group | 0.30% | 0.10% |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Accounting Policies [Abstract] | ||
Contract assets | $ 217,699 | $ 214,583 |
Unbilled receivables | 49,459 | 50,932 |
Deferred revenue | $ 1,653,039 | $ 1,493,113 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Contract with customer, liability, revenue recognized | $ 574,000 | $ 504,500 |
Revenue, remaining performance obligation, amount | 4,600,000 | |
Revenue, remaining performance obligation, non-cancellable, amount | $ 621,600 | |
Revenue, remaining performance obligation, excluding non-cancellable, recognized over twelve month period, percent | 52.00% | |
Capitalized contract cost, net | $ 79,400 | |
Amortization of capitalized costs to obtain revenue contracts | 15,008 | 13,762 |
Sales Based Royalties | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Contract with customer, liability, revenue recognized | $ 26,300 | $ 17,900 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021USD ($)acquisitions | Oct. 31, 2020USD ($) | |
Business Acquisition [Line Items] | ||
Number of completed acquisitions | acquisitions | 2 | |
Consideration transfered | $ 77,500 | |
Goodwill | 3,433,003 | $ 3,365,114 |
Series of Individually Immaterial Business Acquisitions | ||
Business Acquisition [Line Items] | ||
Identifiable intangibles assets acquired | 20,300 | |
Goodwill | $ 59,300 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes of Goodwill (Details) $ in Thousands | 3 Months Ended |
Jan. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill | $ 3,365,114 |
Additions | 59,285 |
Effect of foreign currency translation | 8,604 |
Goodwill | $ 3,433,003 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | $ 1,510,826 | $ 1,489,314 |
Accumulated Amortization | 1,256,451 | 1,234,992 |
Net Assets | 254,375 | 254,322 |
Core/developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 846,611 | 827,232 |
Accumulated Amortization | 714,026 | 703,009 |
Net Assets | 132,585 | 124,223 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 381,686 | 380,838 |
Accumulated Amortization | 285,019 | 277,219 |
Net Assets | 96,667 | 103,619 |
Contract rights intangible | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 193,087 | 192,812 |
Accumulated Amortization | 187,758 | 186,763 |
Net Assets | 5,329 | 6,049 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 43,095 | 43,096 |
Accumulated Amortization | 29,325 | 28,716 |
Net Assets | 13,770 | 14,380 |
In Process Research and Development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 1,214 | 1,214 |
Accumulated Amortization | 0 | 0 |
Net Assets | 1,214 | 1,214 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Assets | 45,133 | 44,122 |
Accumulated Amortization | 40,323 | 39,285 |
Net Assets | $ 4,810 | $ 4,837 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2021 | Jan. 31, 2020 | ||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||
Amortization expense of intangible assets | $ 21,314 | $ 23,434 | |
Core/developed technology | |||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||
Amortization expense of intangible assets | 11,016 | 12,318 | |
Customer relationships | |||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||
Amortization expense of intangible assets | 7,780 | 8,562 | |
Contract rights intangible | |||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||
Amortization expense of intangible assets | 870 | 875 | |
Trademarks and trade names | |||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||
Amortization expense of intangible assets | 610 | 778 | |
Capitalized software development costs | |||
Finite Lived Intangible Assets Amortization Expense [Line Items] | |||
Amortization expense of intangible assets | [1] | $ 1,038 | $ 901 |
[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 | Jan. 31, 2021USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of fiscal 2021 | $ 59,323 |
2021 | 65,764 |
2022 | 48,868 |
2023 | 38,407 |
2024 | 22,304 |
2026 and thereafter | 18,495 |
IPR&D | 1,214 |
Total | $ 254,375 |
Financial Assets and Liabilit_3
Financial Assets and Liabilities - Short-term investments (Details) - Cash equivalents - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 | |
Cash Equivalents [Line Items] | |||
Cost | $ 166,882 | $ 304,127 | |
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 | [1] | 166,882 | 304,127 |
Money market funds | |||
Cash Equivalents [Line Items] | |||
Cost | 166,882 | 304,127 | |
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 | [1] | $ 166,882 | $ 304,127 |
[1] | 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 | Jan. 31, 2021 | Oct. 31, 2020 | Jan. 31, 2020 | Oct. 31, 2019 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 1,023,074 | $ 1,235,653 | ||
Total cash, cash equivalents and restricted cash | 1,025,405 | 1,237,970 | $ 702,282 | $ 730,527 |
Restricted cash included in Prepaid expenses and other current assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash | 1,523 | 1,523 | ||
Restricted cash included in Other long-term assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash | $ 808 | $ 794 |
Financial Assets and Liabilit_5
Financial Assets and Liabilities - Additional Information (Details) | 3 Months Ended |
Jan. 31, 2021 | |
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 | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Financial Assets And Liabilities [Abstract] | ||
Gain (loss) recorded in other income (expense), net | $ 1,129 | $ 245 |
Financial Assets and Liabilit_7
Financial Assets and Liabilities - Notional Amounts of Derivative Instruments (Detail) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Financial Assets And Liabilities [Abstract] | ||
Total gross notional amount | $ 865,642 | $ 981,234 |
Net fair value | $ 6,047 | $ 6,940 |
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 | Jan. 31, 2021 | Oct. 31, 2020 |
Designated As Hedging Instrument | Other current assets | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, assets | $ 9,870 | $ 9,182 |
Designated As Hedging Instrument | Accrued liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, liabilities | 3,384 | 2,088 |
Non-Designated Hedging Instrument | Other current assets | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, assets | 23 | 138 |
Non-Designated Hedging Instrument | Accrued liabilities | ||
Financial Assets and Liabilities [Line Items] | ||
Fair values of derivative instruments, liabilities | $ 463 | $ 292 |
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 | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Financial Assets and Liabilities [Line Items] | ||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | $ 4,093 | $ 1,651 |
Amount of gain (loss) reclassified from OCI (effective portion) | 2,726 | (522) |
Foreign Exchange Contracts | Revenues | ||
Financial Assets and Liabilities [Line Items] | ||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | (163) | 1,080 |
Amount of gain (loss) reclassified from OCI (effective portion) | 113 | (89) |
Foreign Exchange Contracts | Operating expenses | ||
Financial Assets and Liabilities [Line Items] | ||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | 4,256 | 571 |
Amount of gain (loss) reclassified from OCI (effective portion) | $ 2,613 | $ (433) |
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 | Jan. 31, 2021 | Oct. 31, 2020 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 484,755 | $ 583,184 |
Total liabilities | 313,186 | 272,117 |
Foreign currency derivative contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Prepaid and other current assets | 9,893 | 9,320 |
Accounts payable and accrued liabilities | 3,847 | 2,380 |
Deferred compensation plan liabilities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term liabilities | 309,339 | 269,737 |
Deferred compensation plan assets | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Other long-term assets | 307,980 | 269,737 |
Money market funds | Cash equivalents | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash equivalents | 166,882 | 304,127 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 474,862 | 573,864 |
Total liabilities | 309,339 | 269,737 |
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 | 309,339 | 269,737 |
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 | 307,980 | 269,737 |
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 | 166,882 | 304,127 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 9,893 | 9,320 |
Total liabilities | 3,847 | 2,380 |
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 | 9,893 | 9,320 |
Accounts payable and accrued liabilities | 3,847 | 2,380 |
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 - Components of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Payables and Accruals [Abstract] | ||
Payroll and related benefits | $ 311,983 | $ 492,626 |
Other accrued liabilities | 85,567 | 101,035 |
Accounts payable | 25,378 | 30,003 |
Total | $ 422,928 | $ 623,664 |
Liabilities and Restructuring_4
Liabilities and Restructuring Charges - Components of Other Long Term Liabilities (Detail) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Liabilities, Other than Long-term Debt, Noncurrent [Abstract] | ||
Deferred compensation liability | $ 309,339 | $ 269,737 |
Other long-term liabilities | 27,495 | 14,774 |
Total | $ 336,834 | $ 284,511 |
Credit and Term Loan Faciliti_3
Credit and Term Loan Facilities - Additional Information (Detail) $ in Thousands, ¥ in Millions | 1 Months Ended | 3 Months Ended | |||
Jul. 31, 2018USD ($) | Jan. 31, 2021USD ($) | Jan. 22, 2021USD ($) | Oct. 31, 2020USD ($) | Jul. 31, 2018CNY (¥) | |
Debt Instrument [Line Items] | |||||
Long-term debt, excluding current maturities | $ 25,658 | $ 100,823 | |||
Foreign Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 33,000 | ¥ 220 | |||
Borrowings, interest rate | 0.74% | ||||
Long-term line of credit, noncurrent | 25,700 | ||||
Fourth Amendment | Unsecured Debt | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 97,500 | ||||
Fourth Amendment | Unsecured Debt | Senior Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | 650,000 | ||||
Fourth Amendment | Unsecured Debt | Uncommitted Incremental Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Credit facility maximum borrowing capacity | $ 150,000 | ||||
The Credit Agreement | Unsecured Debt | Term Loan | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | $ 97,400 | 102,100 | |||
Long-term debt, excluding current maturities | 75,000 | ||||
The Credit Agreement | Unsecured Debt | Term Loan | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Borrowings, interest rate | 1.125% | ||||
The Credit Agreement | Unsecured Debt | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Current portion of line of credit | $ 0 | $ 0 | |||
The Credit Agreement | Unsecured Debt | Revolving Credit Facility | Minimum | |||||
Debt Instrument [Line Items] | |||||
Commitment fees percentage | 0.125% | ||||
The Credit Agreement | Unsecured Debt | Revolving Credit Facility | Maximum | |||||
Debt Instrument [Line Items] | |||||
Commitment fees percentage | 0.20% | ||||
The Credit Agreement | Unsecured Debt | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Borrowings, interest rate | 1.00% |
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 | Jan. 31, 2021USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of fiscal 2021 | $ 22,500 |
2022 | 75,000 |
Total | $ 97,500 |
Leases (Details)
Leases (Details) $ in Millions | Jan. 31, 2021USD ($) |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, lease not yet commenced, liability | $ 61.5 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, lease not yet commenced, term of contract | 5 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 | ||
Jan. 31, 2021 | Jan. 31, 2020 | ||
Leases [Abstract] | |||
Operating lease expense | [1] | $ 23,626 | $ 23,201 |
Variable lease expense | [2] | 1,335 | 942 |
Total lease expense | $ 24,961 | $ 24,143 | |
[1] | Operating lease expense includes immaterial amounts of short-term leases, net of sublease income. | ||
[2] | 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 | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 20,644 | $ 16,204 |
ROU assets obtained in exchange for operating lease liabilities | $ 15,635 | $ 4,775 |
Leases - Lease Term And Discoun
Leases - Lease Term And Discount Rate Information (Details) | Jan. 31, 2021 | Oct. 31, 2020 |
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 8 years 4 months 24 days | 8 years 7 months 13 days |
Weighted-average discount rate | 2.55% | 2.56% |
Leases - Future Minimum Payment
Leases - Future Minimum Payments (Details) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Leases [Abstract] | ||
Remainder of fiscal 2021 / 2021 | $ 63,327 | $ 84,534 |
2022 | 84,525 | 79,886 |
2023 | 68,615 | 64,073 |
2024 | 62,975 | 59,751 |
2025 | 54,961 | 53,280 |
Thereafter | 261,904 | 259,969 |
Total future minimum lease payments | 596,307 | 601,493 |
Less: Imputed interest | 63,658 | 65,909 |
Total lease liabilities | $ 532,649 | $ 535,584 |
Leases - Non-cancellable Paymen
Leases - Non-cancellable Payments (Details) $ in Thousands | Jan. 31, 2021USD ($) |
Leases [Abstract] | |
Remainder of fiscal 2021 | $ 8,254 |
2022 | 15,649 |
2023 | 14,953 |
2024 | 11,179 |
2025 | 6,375 |
Thereafter | 38,032 |
Total | $ 94,442 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | Jan. 31, 2021 | Oct. 31, 2020 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Cumulative currency translation adjustments | $ (39,531) | $ (57,463) |
Unrealized gain (loss) on derivative instruments, net of taxes | 4,756 | 3,389 |
Total accumulated other comprehensive income (loss) | $ (34,775) | $ (54,074) |
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 | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Reclassifications into net income | $ 2,726 | $ (522) |
Revenues | Gain (loss) on cash flow hedges, net of taxes | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Reclassifications into net income | 113 | (89) |
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 | $ 2,613 | $ (433) |
Stock Repurchase Program - Addi
Stock Repurchase Program - Additional Information (Detail) - USD ($) shares in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | ||||
Feb. 28, 2021 | Dec. 31, 2020 | Jan. 31, 2021 | Jan. 31, 2020 | Jun. 19, 2020 | ||
Accelerated Share Repurchases [Line Items] | ||||||
Stock repurchase program authorized amount | $ 500 | |||||
Remaining amount available for further repurchases | $ 205.1 | |||||
Purchases of treasury stock (in shares) | 837 | [1] | 579 | |||
December 2019, ASR | ||||||
Accelerated Share Repurchases [Line Items] | ||||||
Stock repurchase program authorized amount | $ 250 | |||||
Prepayment to repurchase stock | 250 | |||||
Initial share delivery | $ 200 | |||||
December 2019, ASR | Subsequent Event | ||||||
Accelerated Share Repurchases [Line Items] | ||||||
Stock repurchase program, prepayment during prior period, future derivative settlement | $ 50 | |||||
[1] | Does not include the $50.0 million equity forward contract, from the December 2020 ASR. |
Stock Repurchase Program - Stoc
Stock Repurchase Program - Stock Repurchase Activities (Detail) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Jan. 31, 2021 | [1] | Jan. 31, 2020 | |
Stock Repurchase Program [Abstract] | |||
Purchases of treasury stock (in shares) | 837 | 579 | |
Aggregate purchased shares | $ 202,871 | $ 80,000 | |
Reissuance of treasury stock | 583 | 450 | |
[1] | Does not include the $50.0 million equity forward contract, from the December 2020 ASR. |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 3 Months Ended |
Jan. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized share-based compensation expense | $ 697.2 |
Weighted-average period of total compensation costs to be recognized in years | 2 years 6 months |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized share-based compensation expense | $ 44.1 |
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 | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense before taxes | $ 83,782 | $ 51,883 |
Income tax benefit | (13,279) | (8,924) |
Stock-based compensation expense after taxes | 70,503 | 42,959 |
Cost of products | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense before taxes | 9,352 | 5,580 |
Cost of maintenance and service | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense before taxes | 3,335 | 2,032 |
Research and development expense | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense before taxes | 41,294 | 26,209 |
Sales and marketing expense | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense before taxes | 15,159 | 8,894 |
General and administrative expense | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense before taxes | $ 14,642 | $ 9,168 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Intrinsic Value of Equity Awards Exercised (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Stock Compensation [Abstract] | ||
Intrinsic value of awards exercised | $ 40,524 | $ 24,398 |
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 | ||
Jan. 31, 2021 | Jan. 31, 2020 | ||
Numerator: | |||
Net income attributed to Synopsys | $ 162,345 | $ 104,061 | |
Denominator: | |||
Weighted-average common shares for basic net income per share (shares) | 152,498 | 150,244 | |
Dilutive effect of potential common shares from equity-based compensation (shares) | 4,779 | 4,260 | |
Weighted-average common shares for diluted net income per share (shares) | 157,277 | 154,504 | |
Net income per share: | |||
Basic (in USD per share) | $ 1.06 | $ 0.69 | |
Diluted (in USD per share) | $ 1.03 | $ 0.67 | |
Anti-dilutive employee stock-based awards excluded (shares) | [1] | 334 | 414 |
[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 |
Jan. 31, 2021Segment | |
Segment Reporting [Abstract] | |
Number of reportable operating segment | 2 |
Segment Disclosure - Revenues R
Segment Disclosure - Revenues Related to Operations by Geographic Areas (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Schedule of Revenues from External Customers [Line Items] | ||
Total revenue | $ 970,321 | $ 834,381 |
United States | ||
Schedule of Revenues from External Customers [Line Items] | ||
Total revenue | 468,701 | 408,489 |
Europe | ||
Schedule of Revenues from External Customers [Line Items] | ||
Total revenue | 105,175 | 94,370 |
China | ||
Schedule of Revenues from External Customers [Line Items] | ||
Total revenue | 115,768 | 67,320 |
Korea | ||
Schedule of Revenues from External Customers [Line Items] | ||
Total revenue | 98,254 | 89,515 |
Asia-Pacific and Other | ||
Schedule of Revenues from External Customers [Line Items] | ||
Total revenue | $ 182,423 | $ 174,687 |
Segment Disclosure - Schedule o
Segment Disclosure - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 970,321 | $ 834,381 |
Adjusted operating income | 148,348 | 87,516 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Adjusted operating income | $ 286,820 | $ 186,933 |
Adjusted operating margin | 30.00% | 22.00% |
Operating Segments | Semiconductor & System Design: | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 878,368 | $ 748,744 |
Adjusted operating income | $ 278,876 | $ 178,851 |
Adjusted operating margin | 32.00% | 24.00% |
Operating Segments | Software Integrity: | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 91,953 | $ 85,637 |
Adjusted operating income | $ 7,944 | $ 8,082 |
Adjusted operating margin | 9.00% | 9.00% |
Segment Disclosure - Schedule_2
Segment Disclosure - Schedule of Segment Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Operating income | $ 148,348 | $ 87,516 |
Amortization of intangible expense | (21,314) | (23,434) |
Stock-based compensation expense | (83,782) | (51,883) |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating income | 286,820 | 186,933 |
Reconciling items: | ||
Segment Reporting Information [Line Items] | ||
Amortization of intangible expense | (20,276) | (22,533) |
Stock-based compensation expense | (83,782) | (51,883) |
Other | $ (34,414) | $ (25,001) |
Other Income (Expense), Net - C
Other Income (Expense), Net - Components of Other Income (Expense), Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Other Income (Expense) | ||
Interest income | $ 310 | $ 1,478 |
Interest expense | (739) | (1,603) |
Gain (loss) on assets related to deferred compensation plan | 30,866 | 12,473 |
Foreign currency exchange gain (loss) | (315) | 93 |
Other, net | (1,366) | (384) |
Total | $ 28,756 | $ 12,057 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes and Effective Tax Rates (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2021 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 177,104 | $ 99,573 |
Provision (benefit) for income taxes | $ 15,076 | $ (4,488) |
Effective tax rate | 8.50% | (4.50%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jul. 31, 2017 | Jan. 31, 2021 | Oct. 31, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jan. 31, 2018 | |
Taxes [Line Items] | ||||||
Statutory federal income tax rate | 21.00% | |||||
Provision (benefit) for income taxes | $ 15,076,000 | $ (4,488,000) | ||||
Minimum | ||||||
Taxes [Line Items] | ||||||
Estimated potential decrease in underlying unrecognized tax benefits | 0 | |||||
Maximum | ||||||
Taxes [Line Items] | ||||||
Estimated potential decrease in underlying unrecognized tax benefits | $ 43,000,000 | |||||
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 |