7cdd96f118197a403078da458b72faf8cefa0cf37983aaaeba194b694297ac80

| Geographical Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| United States ($M)   | **671.8**  **[0000883241-23-000005_snps-20230131.htm:21]**  | **661.4**  **[0000883241-23-000012_snps-20230430.htm:26]**  | **640.1**  **[0000883241-23-000016_snps-20230731.htm:26]**  | N/A     | **807.6**  **[0000883241-24-000013_snps-20240131.htm:23]**  | **630.8**  **[0000883241-24-000016_snps-20240430.htm:30]**  | **660.5**  **[0000883241-24-000021_snps-20240731.htm:30]**  | N/A     |
| Europe ($M)          | **135.0**  **[0000883241-23-000005_snps-20230131.htm:21]**  | **157.0**  **[0000883241-23-000012_snps-20230430.htm:26]**  | **145.6**  **[0000883241-23-000016_snps-20230731.htm:26]**  | N/A     | **159.1**  **[0000883241-24-000013_snps-20240131.htm:23]**  | **147.5**  **[0000883241-24-000016_snps-20240430.htm:30]**  | **144.6**  **[0000883241-24-000021_snps-20240731.htm:30]**  | N/A     |
| China ($M)           | **197.8**  **[0000883241-23-000005_snps-20230131.htm:21]**  | **196.4**  **[0000883241-23-000012_snps-20230430.htm:26]**  | **304.0**  **[0000883241-23-000016_snps-20230731.htm:26]**  | N/A     | **250.0**  **[0000883241-24-000013_snps-20240131.htm:23]**  | **221.8**  **[0000883241-24-000016_snps-20240430.htm:30]**  | **266.7**  **[0000883241-24-000021_snps-20240731.htm:30]**  | N/A     |
| Korea ($M)           | **145.8**  **[0000883241-23-000005_snps-20230131.htm:21]**  | **156.8**  **[0000883241-23-000012_snps-20230430.htm:26]**  | **163.9**  **[0000883241-23-000016_snps-20230731.htm:26]**  | N/A     | **184.6**  **[0000883241-24-000013_snps-20240131.htm:23]**  | **192.7**  **[0000883241-24-000016_snps-20240430.htm:30]**  | **194.8**  **[0000883241-24-000021_snps-20240731.htm:30]**  | N/A     |
| Other ($M)           | **211.0**  **[0000883241-23-000005_snps-20230131.htm:21]**  | **223.3**  **[0000883241-23-000012_snps-20230430.htm:26]**  | **233.6**  **[0000883241-23-000016_snps-20230731.htm:26]**  | N/A     | **247.9**  **[0000883241-24-000013_snps-20240131.htm:23]**  | **262.0**  **[0000883241-24-000016_snps-20240430.htm:30]**  | **259.1**  **[0000883241-24-000021_snps-20240731.htm:30]**  | N/A     |

f5db073128695bc7034ed91e8465c5fb99ce256cd3626d0cd5ee4cbdf9a03719

United States

Europe

China

Korea

Japan

Asia Pacific and Other

Other

Total Revenue

93493edc42910140d2172a8ae70533d1043a1dc35701ba4181de6e422d495a5d

Synopsys, Inc. is a global leader in electronic design automation (EDA) software, providing products and services that enable the design and testing of integrated circuits (ICs) and electronic systems **[0000883241-23-000019_snps-20231031.htm:80]**. The company offers a comprehensive portfolio of semiconductor intellectual property (IP) products, as well as software tools and services aimed at improving software security and quality **[0000883241-23-000019_snps-20231031.htm:80]**. Synopsys' business is organized into three main segments: Design Automation, Design IP, and Software Integrity, each contributing to its record revenue of $5.8 billion in fiscal 2023 **[0000883241-24-000006_snps-20240216.htm:62]** **[0000883241-24-000006_snps-20240216.htm:1]**.

1. **Design Automation** - Provides EDA solutions including digital, custom, and FPGA IC design software, verification software and hardware products, and system integration products and services **[0000883241-23-000019_snps-20231031.htm:59]** **[0000883241-24-000013_snps-20240131.htm:33]**.
2. **Design IP** - Offers a broad portfolio of pre-designed circuits used as components in larger chip designs, significantly contributing to the company's revenue **[0000883241-23-000019_snps-20231031.htm:80]**.
3. **Software Integrity** - Focuses on solutions that test software code for security vulnerabilities and quality defects, along with professional and managed services **[0000883241-23-000019_snps-20231031.htm:80]**.

0cc7afcf00ad53e4a8ea636445e33820985f0a634f3a2f01523cb064afc97e9b

| Metric [USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Design Automation** | N/A     | **889.8**  **[SNPS_3228260_12]**  | **927.6**  **[0001193125-23-147052_d503668dex991.htm:10]** **[0000883241-23-000012_snps-20230430.htm:38]**  | **1,004.2**  **[0001193125-23-214350_d411101dex991.htm:10]** **[0000883241-23-000016_snps-20230731.htm:38]**  | **953.7**  **[0001193125-23-285209_d613884dex991.htm:10]**  | **985.3**  **[0001193125-24-041524_d759623dex991.htm:9]**  | **1,050.0**  **[SNPS_3390393_4]** **[0000883241-24-000016_snps-20240430.htm:30]**  | **1,062.6**  **[0001193125-24-204450_d878807dex991.htm:11]** **[0000883241-24-000021_snps-20240731.htm:44]**  |
| **Design IP**         | N/A     | **343.7**  **[SNPS_3228260_12]**  | **335.2**  **[0001193125-23-147052_d503668dex991.htm:10]** **[0000883241-23-000012_snps-20230430.htm:38]**  | **350.2**  **[0001193125-23-214350_d411101dex991.htm:10]** **[0000883241-23-000016_snps-20230731.htm:38]**  | **513.7**  **[0001193125-23-285209_d613884dex991.htm:10]**  | **525.7**  **[0001193125-24-041524_d759623dex991.htm:9]**  | **399.8**  **[SNPS_3390393_4]** **[0000883241-24-000016_snps-20240430.htm:30]**  | **463.1**  **[0001193125-24-204450_d878807dex991.htm:11]** **[0000883241-24-000021_snps-20240731.htm:44]**  |
| **Software Integrity**| **127.1**  **[0001193125-22-295428_d425134dex991.htm:10]**  | **127.8**  **[SNPS_3228260_12]**  | **132.1**  **[0001193125-23-147052_d503668dex991.htm:10]** **[0000883241-23-000012_snps-20230430.htm:38]**  | **132.9**  **[0001193125-23-214350_d411101dex991.htm:10]** **[0000883241-23-000016_snps-20230731.htm:38]**  | **131.7**  **[0001193125-23-285209_d613884dex991.htm:10]**  | **138.2**  **[0001193125-24-041524_d759623dex991.htm:9]**  | N/A     | N/A     |
| **Total Revenue**     | **1,284.3**  **[0001193125-22-295428_d425134dex991.htm:10]**  | **1,361.0**  **[SNPS_3228260_12]**  | **1,395.0**  **[0001193125-23-147052_d503668dex991.htm:1]** **[0001193125-23-147052_d503668dex991.htm:10]**  | **1,487.3**  **[0001193125-23-214350_d411101dex991.htm:10]** **[0000883241-23-000016_snps-20230731.htm:38]**  | **1,599.1**  **[0001193125-23-285209_d613884dex991.htm:10]**  | **1,649.0**  **[0001193125-24-041524_d759623dex991.htm:1]**  | **1,455.0**  **[0001193125-24-145001_d740550dex991.htm:0]** **[0000883241-24-000016_snps-20240430.htm:30]**  | **1,525.7**  **[0000883241-24-000021_snps-20240731.htm:44]**  |

b0f4e9a652871657f899cffdfc8a4d622ef9248a7da61a2887ea55bcf1d614fc

1. Given the significant second-half weighting in your fiscal '25 revenue guidance, what specific factors give you confidence in achieving these targets, especially considering potential customer delays in hardware installations and IP pull-downs?
2. How might the recent updates from the Department of Commerce on U.S. semiconductor and EDA software export restrictions impact your fiscal '25 outlook, particularly with customers added to the entity list, and what measures are you taking to mitigate potential revenue risks?
3. Your operating margin guidance of 40% for fiscal '25 suggests higher profitability despite a slowdown in projected revenue growth; is this primarily driven by cost-cutting measures, reduced M&A activity, or other factors, and how sustainable are these margin improvements long term?
4. With an ending backlog of $8.1 billion, flat year-over-year, and considering geopolitical uncertainties and potential delays in foundry investments, how do you plan to drive revenue growth in fiscal '25 without significantly drawing down backlog, and what risks do you foresee to backlog progression?
5. Given the rapid expansion of AI and hyperscaler investments as growth drivers, how might capacity constraints like space and power limitations for hardware installations affect your hardware business growth in fiscal '25, and what strategies are you employing to address these challenges?

be86cb006971a988bac26dbce16a29e584d5cd8789f1662a11d18c95c408c3fb

Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) (USD billions)

non-cancellable FSA commitments from customers (USD billions)

95beb0b15839b1616f905a797b30c5b1f06c2fafcd05f4aa2149811c01a5da07

- Cadence Design Systems, Inc. - Competitor in both the Design Automation and Design IP segments  **[0000883241-23-000019_snps-20231031.htm:16]** .
- Siemens EDA - Competitor in the Design Automation segment  **[0000883241-23-000019_snps-20231031.htm:16]** .
- Checkmarx Ltd. - Competitor in the Software Integrity segment, named in the Gartner Magic Quadrant for Application Security Testing  **[0000883241-23-000019_snps-20231031.htm:16]** .
- Veracode, Inc. - Competitor in the Software Integrity segment, named in the Gartner Magic Quadrant for Application Security Testing  **[0000883241-23-000019_snps-20231031.htm:16]** .
- Open Text Corporation - Competitor in the Software Integrity segment, named in the Gartner Magic Quadrant for Application Security Testing  **[0000883241-23-000019_snps-20231031.htm:16]** .
- GitHub, Inc. - Competitor in the Software Integrity segment, named in the Gartner Magic Quadrant for Application Security Testing  **[0000883241-23-000019_snps-20231031.htm:16]** .
- Snyk Ltd. - Competitor in the Software Integrity segment, named in the Gartner Magic Quadrant for Application Security Testing  **[0000883241-23-000019_snps-20231031.htm:16]** .

f941b277782789e351db8bd4ddd21b783f00419f2ad900b614af648106373968

5fe8cec464a6459b9dad3a4cb49bc320a4a4ed863a82a3490d5ddc46af27fe80

b7c2462b5ce849fcba9272eabf8b235e5070eec1cd8a8e0e70a175739a8411f8

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

### Q4 2024 Earnings Call
- **Issued Period:** Q4 2024
- **Guided Period:** FY 2025 and Q1 2025
  - **Revenue:** $6.745 billion to $6.805 billion  **[SNPS_3410740_4]** .
  - **Total GAAP Costs and Expenses:** $4.93 billion to $4.98 billion  **[SNPS_3410740_4]** .
  - **Total Non-GAAP Costs and Expenses:** $4.05 billion to $4.09 billion  **[SNPS_3410740_4]** .
  - **Non-GAAP Operating Margin:** 40% at the midpoint  **[SNPS_3410740_4]** .
  - **Non-GAAP Tax Rate:** 16%  **[SNPS_3410740_4]** .
  - **GAAP EPS:** $10.42 to $10.63  **[SNPS_3410740_4]** .
  - **Non-GAAP EPS:** $14.88 to $14.96  **[SNPS_3410740_4]** .
  - **Cash Flow from Operations:** Approximately $1.8 billion  **[SNPS_3410740_4]** .
  - **Free Cash Flow:** Approximately $1.6 billion  **[SNPS_3410740_4]** .
  - **First Quarter Revenue:** $1.435 billion to $1.465 billion  **[SNPS_3410740_4]** .
  - **First Quarter Total GAAP Costs and Expenses:** $1.14 billion to $1.16 billion  **[SNPS_3410740_4]** .
  - **First Quarter Total Non-GAAP Costs and Expenses:** $945 million to $955 million  **[SNPS_3410740_4]** .
  - **First Quarter GAAP EPS:** $1.81 to $1.95  **[SNPS_3410740_4]** .
  - **First Quarter Non-GAAP EPS:** $2.77 to $2.82  **[SNPS_3410740_4]** .

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** FY 2024 and Q4 2024
  - **Full Year 2024 Guidance:**
    - **Revenue:** $6.105 billion to $6.135 billion  **[SNPS_3399556_4]** .
    - **Total GAAP Costs and Expenses:** $4.58 billion to $4.60 billion  **[SNPS_3399556_4]** .
    - **Total Non-GAAP Costs and Expenses:** $3.76 billion to $3.77 billion  **[SNPS_3399556_4]** .
    - **Non-GAAP Operating Margin Improvement:** More than 2 points at the midpoint  **[SNPS_3399556_4]** .
    - **Non-GAAP Tax Rate:** 15%  **[SNPS_3399556_4]** .
    - **GAAP EPS:** $9.71 to $9.85  **[SNPS_3399556_4]** .
    - **Non-GAAP EPS:** $13.07 to $13.12  **[SNPS_3399556_4]** .
    - **Cash Flow from Operations:** Approximately $1.3 billion  **[SNPS_3399556_4]** .
    - **Free Cash Flow:** Approximately $1.1 billion  **[SNPS_3399556_4]** .
  - **Fourth Quarter 2024 Guidance:**
    - **Revenue:** $1.614 billion to $1.644 billion  **[SNPS_3399556_4]** .
    - **Total GAAP Costs and Expenses:** $1.21 billion to $1.23 billion  **[SNPS_3399556_4]** .
    - **Total Non-GAAP Costs and Expenses:** $1.03 billion to $1.04 billion  **[SNPS_3399556_4]** .
    - **GAAP EPS:** $2.25 to $2.39  **[SNPS_3399556_4]** .
    - **Non-GAAP EPS:** $3.27 to $3.32  **[SNPS_3399556_4]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** FY 2024 and Q3 2024
  - **Fiscal Year 2024 Guidance:**
    - **Revenue:** $6.09 billion to $6.15 billion  **[SNPS_3390393_4]** .
    - **Total GAAP Costs and Expenses:** $4.56 billion to $4.61 billion  **[SNPS_3390393_4]** .
    - **Total Non-GAAP Costs and Expenses:** $3.77 billion to $3.81 billion  **[SNPS_3390393_4]** .
    - **Non-GAAP Operating Margin Improvement:** Approximately 2 percentage points at the midpoint  **[SNPS_3390393_4]** .
    - **Non-GAAP Tax Rate:** 15%  **[SNPS_3390393_4]** .
    - **GAAP EPS:** $9.14 to $9.36  **[SNPS_3390393_4]** .
    - **Non-GAAP EPS:** $12.90 to $12.98  **[SNPS_3390393_4]** .
    - **Cash Flow from Operations:** Approximately $1.3 billion  **[SNPS_3390393_4]** .
    - **Free Cash Flow:** Approximately $1.1 billion  **[SNPS_3390393_4]** .
  - **Third Quarter 2024 Guidance:**
    - **Revenue:** $1.505 billion to $1.535 billion  **[SNPS_3390393_4]** .
    - **Total GAAP Costs and Expenses:** $1.10 billion to $1.12 billion  **[SNPS_3390393_4]** .
    - **Total Non-GAAP Costs and Expenses:** $920 million to $930 million  **[SNPS_3390393_4]** .
    - **GAAP EPS:** $2.22 to $2.35  **[SNPS_3390393_4]** .
    - **Non-GAAP EPS:** $3.25 to $3.30  **[SNPS_3390393_4]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** FY 2024 and Q2 2024
  - **Fiscal Year 2024 Guidance:**
    - **Revenue:** $6.57 billion to $6.63 billion  **[SNPS_3374323_4]** .
    - **Total GAAP Costs and Expenses:** $5.02 billion to $5.08 billion  **[SNPS_3374323_4]** .
    - **Total Non-GAAP Costs and Expenses:** $4.14 billion to $4.18 billion  **[SNPS_3374323_4]** .
    - **Non-GAAP Operating Margin Improvement:** Roughly 2 percentage points  **[SNPS_3374323_4]** .
    - **Non-GAAP Tax Rate:** 15%  **[SNPS_3374323_4]** .
    - **GAAP EPS:** $9.56 to $9.74  **[SNPS_3374323_4]** .
    - **Non-GAAP EPS:** $13.47 to $13.55  **[SNPS_3374323_4]** .
    - **Cash Flow from Operations:** Approximately $1.4 billion  **[SNPS_3374323_4]** .
  - **Second Quarter 2024 Guidance:**
    - **Revenue:** $1.56 billion to $1.59 billion  **[SNPS_3374323_4]** .
    - **Total GAAP Costs and Expenses:** $1.21 billion to $1.23 billion  **[SNPS_3374323_4]** .
    - **Total Non-GAAP Costs and Expenses:** $1.01 billion to $1.02 billion  **[SNPS_3374323_4]** .
    - **GAAP EPS:** $2.05 to $2.16  **[SNPS_3374323_4]** .
    - **Non-GAAP EPS:** $3.09 to $3.14  **[SNPS_3374323_4]** .

d8cf88ec33f15aa70bb26e0d8416d726615f20620dac5ada69631d0dc1b124c4

| Name                | Position                               | Start Date         | Short Bio                                                                                                                                                                                                 |
|---------------------|----------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Aart J. de Geus     | Executive Chair of the Board of Directors | January 1, 2024    | Aart J. de Geus co-founded Synopsys in December 1986 and has been a member of the Board of Directors since its inception. He served as Chair of the Board from 1986 to 1992 and again from 1998 until his transition to Executive Chair  **[0000883241-23-000019_snps-20231031.htm:20]** **[0000883241-24-000006_snps-20240216.htm:10]** **[0001193125-23-301233_d550426d8ka.htm:3]** . |
| Sassine Ghazi       | President and Chief Executive Officer  | January 1, 2024    | Sassine Ghazi joined Synopsys in March 1998 as an applications engineer and has held various positions, including Chief Operating Officer from August 2020 to January 2024 and President since November 2021  **[0000883241-23-000019_snps-20231031.htm:20]** **[0000883241-24-000006_snps-20240216.htm:11]** **[0000883241-24-000006_snps-20240216.htm:82]** .                           |
| Shelagh Glaser      | Chief Financial Officer                | December 2022      | Shelagh Glaser has served as the Chief Financial Officer of Synopsys since December 2022. Before joining Synopsys, she was the CFO at Zendesk, Inc. from May 2021 to November 2022 and held senior finance roles at Intel Corporation  **[0000883241-23-000019_snps-20231031.htm:20]** .        |
| Richard Mahoney     | Chief Revenue Officer                  | November 2022      | Richard Mahoney has served as the Chief Revenue Officer of Synopsys since November 2022. He initially joined Synopsys as a Special Projects Advisor in May 2022 and held senior management positions at Ansys, Inc. from 2016 to 2022  **[0000883241-23-000019_snps-20231031.htm:20]** .        |
| John F. Runkel, Jr. | General Counsel and Corporate Secretary| May 2014           | John F. Runkel, Jr. has served as the General Counsel and Corporate Secretary of Synopsys since May 2014. Prior to this role, he was the EVP, General Counsel, and Corporate Secretary of Affymetrix, Inc. from 2008 to 2013  **[0000883241-23-000019_snps-20231031.htm:21]** .                  |

16b8f89059a5f911bad11ebdd2c1e7eaec9495ed248a126f914e711099d56157

| Program Details           | Program 1          |
|---------------------------|--------------------|
| Approval Date             | Fiscal 2022  **[0000883241-24-000024_snps-20241031.htm:121]**     |
| End Date/Duration         | N/A                |
| Total additional amount   | **$1.5 billion**  **[0000883241-24-000024_snps-20241031.htm:121]**  |
| Remaining authorization   | **$194.3 million**  **[0000883241-24-000024_snps-20241031.htm:121]**  |
| Details                   | Program suspended due to pending Ansys Merger until debt levels are reduced  **[0000883241-24-000024_snps-20241031.htm:121]**  |

70123d38cf1d1d4a35a9e999dcdc6afb1e9f36b4fbc7f021dd206b736d0e3f4a

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

bc209db5d8771096dca7f45e56a5813bd481367127f9260a09cc70aadf4ea610

**Quarterly guidance for Q1 2025:**
- **Revenue**: $1.435B–$1.465B  **[SNPS_3410740_4]**  (lowered from $1.614B–$1.644B  **[SNPS_3399556_4]** )  
- **Total GAAP Costs and Expenses**: $1.14B–$1.16B  **[SNPS_3410740_4]**  (lowered from $1.21B–$1.23B  **[SNPS_3399556_4]** )  
- **Total Non-GAAP Costs and Expenses**: $945M–$955M  **[SNPS_3410740_4]**  (lowered from $1.03B–$1.04B  **[SNPS_3399556_4]** )  
- **GAAP EPS**: $1.81–$1.95  **[SNPS_3410740_4]**  (lowered from $2.25–$2.39  **[SNPS_3399556_4]** )  
- **Non-GAAP EPS**: $2.77–$2.82  **[SNPS_3410740_4]**  (lowered from $3.27–$3.32  **[SNPS_3399556_4]** )  

**Annual guidance for FY 2025:**
- **Revenue**: $6.745B–$6.805B  **[SNPS_3410740_4]**  (raised from $6.105B–$6.135B  **[SNPS_3399556_4]** )  
- **Total GAAP Costs and Expenses**: $4.93B–$4.98B  **[SNPS_3410740_4]**  (raised from $4.58B–$4.60B  **[SNPS_3399556_4]** )  
- **Total Non-GAAP Costs and Expenses**: $4.05B–$4.09B  **[SNPS_3410740_4]**  (raised from $3.76B–$3.77B  **[SNPS_3399556_4]** )  
- **Non-GAAP Operating Margin**: 40% at the midpoint  **[SNPS_3410740_4]**  (raised from “more than 2 points at the midpoint”  **[SNPS_3399556_4]** )  
- **Non-GAAP Tax Rate**: 16%  **[SNPS_3410740_4]**  (raised from 15%  **[SNPS_3399556_4]** )  
- **GAAP EPS**: $10.42–$10.63  **[SNPS_3410740_4]**  (raised from $9.71–$9.85  **[SNPS_3399556_4]** )  
- **Non-GAAP EPS**: $14.88–$14.96  **[SNPS_3410740_4]**  (raised from $13.07–$13.12  **[SNPS_3399556_4]** )  
- **Cash Flow from Operations**: ~$1.8B  **[SNPS_3410740_4]**  (raised from ~$1.3B  **[SNPS_3399556_4]** )  
- **Free Cash Flow**: ~$1.6B  **[SNPS_3410740_4]**  (raised from ~$1.1B  **[SNPS_3399556_4]** )  

3d94a40f949a19f664fca3738b71b92f23242352604164ca4d8ad795e4c6b955

- **Sequential decrease in backlog from $8.6 billion to $8.2 billion**, which may indicate potential slowing in future revenue growth.  **[SNPS_3374323_7]**
- **Continued headwinds in China** due to macroeconomic factors and export controls, potentially impacting revenue growth.  **[SNPS_3374323_5]**
- **Uncertainty around the strategic review of the Software Integrity Group**, which could affect company focus and result in divestiture of a business segment.  **[SNPS_3374323_0]**

38eead8c1dd61b0d034d4f4e59863a1c27e487a402741b91e00ffda82cad2c4b

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 1992  **[0000883241-24-000024_snps-20241031.htm:82]**    | Present  | Current auditor   |

196dce1afc0df6d371b3058c6533048f4ff850def574936f5c521e43a5c2f378

3923a2e3667eee2e481355ff8bafc0a3076cf8758acca188af5999818aef138a

- Total Revenue: $1,497.8 million (−6% YoY)  **[0000883241-23-000019_snps-20231031.htm:76]** **[0000883241-23-000019_snps-20231031.htm:52]** **[0000883241-23-000019_snps-20231031.htm:119]** **[0000883241-24-000024_snps-20241031.htm:84]** **[0000883241-24-000024_snps-20241031.htm:133]** **[0000883241-24-000024_snps-20241031.htm:54]** **[0000883241-24-000024_snps-20241031.htm:65]**   
- Design Automation: $1,118.3 million (+17% YoY)  **[0000883241-23-000019_snps-20231031.htm:76]** **[0000883241-23-000019_snps-20231031.htm:52]** **[0000883241-23-000019_snps-20231031.htm:119]** **[0000883241-24-000024_snps-20241031.htm:133]** **[0000883241-24-000024_snps-20241031.htm:65]** **[0000883241-24-000024_snps-20241031.htm:63]**   
- Time-Based Products: $735.1 million (−16% YoY)  **[0000883241-23-000019_snps-20231031.htm:76]** **[0000883241-23-000019_snps-20231031.htm:61]** **[0000883241-24-000024_snps-20241031.htm:84]** **[0000883241-24-000024_snps-20241031.htm:65]**   
- Upfront Products: $515.4 million (+15% YoY)  **[0000883241-23-000019_snps-20231031.htm:76]** **[0000883241-23-000019_snps-20231031.htm:52]** **[0000883241-23-000019_snps-20231031.htm:62]** **[0000883241-24-000024_snps-20241031.htm:84]** **[0000883241-24-000024_snps-20241031.htm:66]**   

- United States: $640.92 million (**−21%** YoY)  **[0000883241-23-000019_snps-20231031.htm:120]** **[0000883241-24-000024_snps-20241031.htm:133]**   
- China: $251 million (**+33%** YoY)  **[0000883241-23-000019_snps-20231031.htm:120]** **[0000883241-24-000024_snps-20241031.htm:133]**   
- Korea: $200.88 million (+19% YoY)  **[0000883241-23-000019_snps-20231031.htm:120]** **[0000883241-24-000024_snps-20241031.htm:133]**   
- Other: $241.58 million (−11% YoY)  **[0000883241-23-000019_snps-20231031.htm:120]** **[0000883241-24-000024_snps-20241031.htm:133]**   

- Net Income: $1,095.62 million in Q4 2024 vs. $346.50 million in Q4 2023 (**+217%** YoY)  **[0000883241-23-000019_snps-20231031.htm:76]** **[0000883241-24-000024_snps-20241031.htm:84]**   

abe8fae59cbf667917b7f51f739194183af788444b250d0f61c4fd0635793046

bab6b1b65098d17f174241ee6e144bada68a1b424977dded367190124602fbd2

f28098618ca6a26df29df27c9be2c4dd6bfe2fe3e8ac930a6417901e3f5c88c4

| Year          | Amount Due (in millions) | Debt Type              | Interest Rate (%) | % of Total Debt                      |
|---------------|--------------------------|------------------------|-------------------|--------------------------------------|
| 2029 and beyond | $15.6 **[0000883241-24-000024_snps-20241031.htm:83]** **[0000883241-24-000024_snps-20241031.htm:77]**   | Credit Facility in China | LPR + 0.74 **[0000883241-24-000024_snps-20241031.htm:77]** | 100% = ($15.6M / $15.6M) * 100 **[0000883241-24-000024_snps-20241031.htm:83]** **[0000883241-24-000024_snps-20241031.htm:77]** |

bc9926d8a5b2fb891a46125470ae59fc86e08d9e6c9b4f6690f08009ccb945c2

- **Synopsys is experiencing significant momentum in its analog segment**, with **20 displacements in the first half of the year**, driven by customers adopting new technologies like **ASO.ai** to modernize their analog design workflows and competitive displacements in the market.  **[SNPS_3390393_22]** **[SNPS_3390393_10]**
- The company's **AI-powered solutions like DSO.ai** are delivering a **20% uplift upon renewal**, with increased bookings and revenue, indicating strong potential for future growth as more customers adopt **ASO.ai and VSO.ai**.  **[SNPS_3390393_5]**
- **Design IP revenue grew 19% year-over-year** in Q2, and Synopsys anticipates continued growth throughout Q3 and Q4, expecting a **strong Q4**, demonstrating robust demand for their IP portfolio.  **[SNPS_3390393_8]**

5086b81822cb3b65e1f450e412225f19c9cb1c3b051f1055ec315dcab54ce2a8

- Synopsys' **monetization of AI products is uncertain**, with key offerings like VSO.ai and ASO.ai still in early stages and lacking sufficient data on their revenue potential, which could delay the expected growth acceleration from AI **(planned increase from 12% to 14% growth)**  **[SNPS_3399556_7]** .
- The integration of generative AI into Synopsys' products presents challenges, including **increased complexity in development and customer-specific customization**, potentially leading to higher R&D costs and affecting profit margins  **[SNPS_3399556_19]** .
- **Customers may begin to expect AI capabilities as standard within EDA tools rather than premium add-ons**, which could limit Synopsys' ability to monetize these features and impact revenue growth  **[SNPS_3399556_19]** .

f51b5593dbf68eaa2777423b9ffb3d62ba98c6212f6f170b589fe06d85924b94

1. **FY'25 Growth Guidance**  
   **Q:** Why is FY'25 growth guidance lower at 11.5%-12.5%?  
   **A:** Management provided a balanced view for FY'25, considering several factors.  **[SNPS_3410740_6]**  They observe a "tale of two markets": customers serving the AI infrastructure build-out are doing incredibly well and benefiting Synopsys across EDA, hardware, and IP.  **[SNPS_3410740_6]**  However, the rest of the semiconductor market (mobile, PC, automotive, industrial) is not delivering similar growth levels.  **[SNPS_3410740_6]**  Additionally, macro uncertainties, particularly in China where the economy continues to decelerate and restrictions are expanding, are impacting their outlook.  **[SNPS_3410740_6]**  Lastly, they are preparing for the closing of the **Ansys acquisition**, the largest in the engineering software industry, and need to be prudent around any potential disruption.  **[SNPS_3410740_6]**  Therefore, after delivering a **15% growth** last year, they are guiding **11.5% to 12.5% growth** for FY'25 with pragmatism.  **[SNPS_3410740_6]** 

2. **Impact of China's Slowdown**  
   **Q:** How is China's slowdown impacting Synopsys' outlook?  
   **A:** Revenue and growth in China have decelerated over the past **3-5 years** due to a shrinking pool of customers caused by restrictions.  **[SNPS_3410740_20]**  The Chinese economy continues to decelerate, and the proliferation of start-ups has diminished.  **[SNPS_3410740_20]**  Synopsys anticipates China will not be above the corporate growth but in line with the corporate average performance.  **[SNPS_3410740_20]**  They are taking these factors into account and continue to be pragmatic in their FY'25 guidance.  **[SNPS_3410740_20]** 

3. **Large Customer Restructuring**  
   **Q:** How does restructuring at your largest customer affect Synopsys?  
   **A:** Large customers have multiyear committed EDA contracts that are ratable over **3+ years**.  **[SNPS_3410740_13]**  They also have contracts for IP and hardware, with pull-downs and timing depending on their roadmap.  **[SNPS_3410740_13]**  If a customer pauses or shifts projects, IP pull-downs and hardware consumption shift to the right, impacting revenue timing.  **[SNPS_3410740_13]**  Synopsys will see lumpiness on a customer-by-customer basis, and they have incorporated these dynamics into the FY'25 guidance and the **45%-55%** revenue split, accounting for the timing of pull-downs.  **[SNPS_3410740_13]** 

4. **Operating Margin Expansion**  
   **Q:** How are you achieving operating margin improvement despite slowing revenue growth?  
   **A:** Synopsys is driving leverage across the company through a multiyear focus on efficiency.  **[SNPS_3410740_14]**  They improved operating margin by **2 points** last year and are targeting another **150 basis points improvement** in FY'25.  **[SNPS_3410740_14]**  This is achieved by enhancing efficiency in R&D, modernizing software development, and driving digital transformation.  **[SNPS_3410740_14]**  As they bring Ansys in, they will work towards synergies.  **[SNPS_3410740_14]** 

5. **Seasonality and Second Half Weighting**  
   **Q:** Why is there significant second-half weighting in FY'25, and should investors be skeptical?  
   **A:** Two main effects drive the **45%-55%** split.  **[SNPS_3410740_21]**  First is a mechanical effect: there are **10 fewer days** in the first half of FY'25 compared to FY'24 due to the fiscal year change, leading to a **$100 million headwind** in the ratable business.  **[SNPS_3410740_21]**  Second, upfront businesses (IP and hardware) are more second-half weighted based on customer pull-downs.  **[SNPS_3410740_21]**  IP is lumpy, and hardware customers need time to secure space and power for installations, leading to more second-half activity.  **[SNPS_3410740_21]**  Synopsys is building out ZeBu Cloud to assist customers in the meantime.  **[SNPS_3410740_21]**  Management emphasizes their track record of delivering on commitments and notes that lumpiness is due to their successes and shifting revenue profiles.  **[SNPS_3410740_21]** 

6. **Growth in AI Design Starts**  
   **Q:** What is the outlook for growth in AI design starts?  
   **A:** Investments from hyperscalers and semiconductor companies serving them have been accelerating over the last **3-5 years**.  **[SNPS_3410740_12]**  Hyperscalers are increasing their silicon investments to differentiate and optimize their workloads.  **[SNPS_3410740_12]**  Semiconductor companies are delivering AI accelerators with increasing roadmaps, greatly contributing to Synopsys' revenue growth.  **[SNPS_3410740_12]**  Management does not see this momentum slowing down in FY'25 with that cohort of customers.  **[SNPS_3410740_12]** 

7. **Impact of Department of Commerce Rules**  
   **Q:** Do new U.S. semiconductor rules impact FY'25 outlook?  
   **A:** Yes, some customers were added to the entity list, and new technology restrictions were introduced.  **[SNPS_3410740_10]**  However, these most recent restrictions are fully incorporated into Synopsys' FY'25 guidance.  **[SNPS_3410740_10]** 

8. **Alignment for Growth and AI Strategy**  
   **Q:** How are you preparing operations for growth and AI opportunities?  
   **A:** Crossing **$6 billion** in revenue requires evolving how they drive product development and deliver solutions.  **[SNPS_3410740_16]**  Synopsys is focusing on scaling the company, restructuring to support market-leading innovation, and modernizing engineering workflows.  **[SNPS_3410740_16]**  They are investing in technologies to improve R&D efficiency and productivity.  **[SNPS_3410740_16]** 

9. **Customer-Specific AI Use Cases**  
   **Q:** How do customer-specific AI use cases affect your offerings?  
   **A:** Synopsys first embedded AI into their products, such as the **XSO.ai** family, which has seen good customer adoption.  **[SNPS_3410740_17]**  For knowledge assistant AI applications, customers prefer to train AI models based on their own data and workflows.  **[SNPS_3410740_17]**  The next phase involves agentic generative AI, which will change how they deliver and monetize solutions, potentially leading to new business models.  **[SNPS_3410740_17]** 

10. **Potential Royalty Models for IP**  
    **Q:** Are you considering royalty models for IP deliverables?  
    **A:** For traditional interface IP, Synopsys does not plan to introduce royalties and will continue with base monetization.  **[SNPS_3410740_19]**  Some parts of their IP business already involve royalties, which will continue.  **[SNPS_3410740_19]**  The next inflection point is delivering beyond interface IP, such as subsystems or chiplets, where new business models, including royalties, could be explored.  **[SNPS_3410740_19]** 

11. **Clarification on Backlog**  
    **Q:** Is the $8.1 billion backlog adjusted for Software Integrity?  
    **A:** Yes, the FY'23 ending backlog of **$8.1 billion** is adjusted for Software Integrity.  **[SNPS_3410740_15]** 

12. **Impact of Optical Solutions Divestiture**  
    **Q:** Is there any revenue impact from the Optical Solutions divestiture?  
    **A:** No, the Optical Solutions Group will remain part of their continuing business until the Ansys transaction closes and is still included in their forecast.  **[SNPS_3410740_9]** 

ae2c7aa622f975c504b88686490e4718d00d3f36be7925f615f673f392346ed4

- **Strong momentum in AI infrastructure investments**: Synopsys is benefiting from increased investments by customers serving the AI infrastructure market, with these customers needing advanced IP for complex multi-die designs and first adopting Synopsys's AI-driven solutions.  **[SNPS_3410740_6]** **[SNPS_3410740_11]** **[SNPS_3410740_12]**
- **Operational efficiency driving margin expansion**: The company has a multiyear focus on driving leverage and improving operating margins, expecting a **150 basis points improvement to 40%** in fiscal year 2025, achieved through efficiency initiatives including AI and software modernization.  **[SNPS_3410740_23]** **[SNPS_3410740_14]** **[SNPS_3410740_16]**
- **Healthy backlog providing revenue visibility**: Synopsys has an **$8.1 billion non-cancelable backlog**, flat year-over-year despite delivering 15% growth, indicating strong business health and high revenue visibility for the future.  **[SNPS_3410740_7]** **[SNPS_3410740_21]**

8390ac97473bd5d30f82ae666554efe2beb916136733fa051864d9fd6a1d5ac4

- Synopsys reported an **exceptionally strong IP quarter**, contributing to **strong hardware momentum**, driven by increased customer adoption of their hardware-assisted verification solutions and IP products.  **[SNPS_3399556_9]**
- The company’s **backlog increased to $7.9 billion**, up from $6.5 billion in the prior year, demonstrating **robust commercial momentum** and strong customer commitments.  **[SNPS_3399556_10]**
- Synopsys is successfully **monetizing AI products**, with their DSO.ai capturing on average about **20% uplift from the baseline** of that portion of the contract, indicating strong revenue growth potential from AI-driven solutions.  **[SNPS_3399556_7]**

5510b3f7e4f9cfbc26634dc664e9c6860e7b1c45bac713b2f7f5ee3eed828ffb

1. **Guidance and Margin Outlook**  
   **Q:** Any areas that could have outperformed or offset strengths in guidance?  
   **A:** We've raised guidance several times this year, narrowing revenue range to a **15%** midpoint growth.  **[SNPS_3399556_12]**  We see strength across our product lines and raised non-GAAP operating margin and non-GAAP EPS.  **[SNPS_3399556_12]**  We're being deliberate with our investments and expenses, improving both metrics.  **[SNPS_3399556_12]** 

2. **EDA Growth Outlook**  
   **Q:** Is EDA growth returning to trend, and what do you see going into next year?  
   **A:** We see double-digit growth in Design Automation.  **[SNPS_3399556_8]**  On a trailing 12 months basis, our TTM growth is **10%**.  **[SNPS_3399556_8]**  Quarter-over-quarter comparisons can be misleading due to fluctuations, but we feel strongly about sustained double-digit growth.  **[SNPS_3399556_8]** 

3. **AI Monetization Impact**  
   **Q:** Where is Synopsys in the journey to 12%-14% EDA growth from AI monetization?  
   **A:** The growth from 12% to 14% is due to system complexity and new technology like AI.  **[SNPS_3399556_7]**  With **DSO.ai** sold for 4 years, we're capturing about **20% uplift** from the baseline contracts.  **[SNPS_3399556_7]**  **VSO.ai** is in early monetization, and **ASO.ai** is in evaluation phase.  **[SNPS_3399556_7]**  While we haven't specified a timeframe, the value we're delivering will justify the additional 2% growth.  **[SNPS_3399556_7]** 

4. **China Demand Environment**  
   **Q:** How is the demand environment in China?  
   **A:** We remain pragmatic on China due to technology restrictions and macro environment.  **[SNPS_3399556_13]**  Despite this, we're executing well and growing in China, but we continue a balanced approach.  **[SNPS_3399556_13]**  We're not seeing unusual pull-ins or changes in customer engagement.  **[SNPS_3399556_17]** 

5. **Backlog Growth**  
   **Q:** Is commercial momentum evident in backlog developments?  
   **A:** Yes, our backlog for the quarter was **$7.9 billion**, up from **$6.5 billion** in last year's Q3.  **[SNPS_3399556_11]**  This significant year-on-year increase reflects robust customer engagement and support of their complexities.  **[SNPS_3399556_11]** 

6. **R&D Investment Outlook**  
   **Q:** Is there scope to flatten R&D expenses to boost earnings?  
   **A:** The industry's pace requires us to invest heavily in innovation.  **[SNPS_3399556_14]**  We must stay ahead of customers, investing in hardware roadmaps and evolving EDA capabilities.  **[SNPS_3399556_14]**  We don't see R&D investment as an area for savings anytime soon.  **[SNPS_3399556_14]** 

7. **Hardware-assisted Verification Growth**  
   **Q:** Is hardware-assisted verification contributing to growth?  
   **A:** Yes, we're seeing strong hardware momentum due to our competitive systems.  **[SNPS_3399556_10]**  The EP system, sitting between prototyping and emulation, is gaining adoption.  **[SNPS_3399556_10]**  We've had wins in simulation acceleration, an area we needed to strengthen.  **[SNPS_3399556_10]** 

8. **Impact of Intel's Changes**  
   **Q:** Any changes in growth expectations due to Intel's layoffs and efficiency moves?  
   **A:** No changes in forward growth expectations due to Intel's actions.  **[SNPS_3399556_19]**  Our engagements are multi-quarter investments, and we don't expect positive or negative impact in the short to midterm.  **[SNPS_3399556_19]**  Agreements are committed for the long term.  **[SNPS_3399556_5]** 

9. **Automotive Market Growth**  
   **Q:** What growth is expected from the automotive market?  
   **A:** Automotive is an exciting, growing segment over the last 3–4 years.  **[SNPS_3399556_15]**  Push towards smarter, connected cars requires sophisticated silicon.  **[SNPS_3399556_15]**  Our virtualization solutions help OEMs design electronic systems, and we anticipate continued market growth.  **[SNPS_3399556_15]** 

10. **Contracting Design Cycles**  
    **Q:** How do contracting design cycles impact your business?  
    **A:** Design cycles are shrinking from 3 years to possibly 1 year, even as complexity increases.  **[SNPS_3399556_16]**  This trend requires the latest technology and is positive for our industry.  **[SNPS_3399556_16]**  However, not many customers can adopt this pace due to resource constraints.  **[SNPS_3399556_16]** 

11. **Integration of AI in Products**  
    **Q:** Will AI products remain separately branded or become part of core products?  
    **A:** AI capabilities are becoming an expected part of solutions.  **[SNPS_3399556_20]**  Customers don't differentiate between AI and non-AI tools; they expect integrated AI to achieve targets.  **[SNPS_3399556_20]**  As we move forward, AI will be fully integrated into our core products.  **[SNPS_3399556_20]** 

12. **Expense Management**  
    **Q:** What is driving the slightly lower OpEx expectation?  
    **A:** We're continuing to invest in product innovation while driving efficiencies.  **[SNPS_3399556_18]**  Implementing AI and digital transformation allows us to be prudent with expenses.  **[SNPS_3399556_18]**  Good news on interest and other also contributes to upside.  **[SNPS_3399556_18]** 

13. **Analog Mixed Signal Market Opportunity**  
    **Q:** What's your ambition for the analog mixed signal business?  
    **A:** We see an opportunity to grow in the analog design environment, currently a smaller portion of the TAM.  **[SNPS_3399556_20]**  Customers face increased complexity and faster design cycles, adopting tools like **ASO.ai**.  **[SNPS_3399556_20]**  We aspire to grow into this TAM and are excited about customer interest.  **[SNPS_3399556_20]** 

258cd681e8f3de8b4353d0f5076425f89e52bd8b685ca4d3d00c8582e76995b3

- **Caution on China Revenue Due to Macro Challenges**: Synopsys expressed caution regarding revenue from China, citing macroeconomic challenges and restrictions, and is taking a balanced approach despite anticipating growth.  **[SNPS_3390393_9]**
- **Lumpiness in IP Revenue with Muted Q2 Growth**: The company acknowledged that IP revenue tends to be lumpy, with Q2 growth of **19%** year-over-year being "a bit muted" compared to the **53%** growth in Q1, indicating potential volatility.  **[SNPS_3390393_8]**
- **R&D Expenses Growing Faster Than Revenue**: R&D expenses grew well above revenue in the quarter, driven by significant investments in AI development and IP, which could impact operating margins.  **[SNPS_3390393_19]**

f0581085cfb817731d431254065f58504268b17569596f16cf154f4dfa2c2cf8

- **Synopsys is experiencing deceleration in China due to economic slowdown and expanded restrictions**, which could impact growth in that region. They anticipate China growth to be in line with corporate average rather than above it.  **[SNPS_3410740_23]** ,  **[SNPS_3410740_22]**
- **The company provided a more conservative revenue growth guidance for FY 2025 at 11.5% to 12.5%, which is below previous starting ranges**, due to macroeconomic uncertainties, slower recovery in certain markets like mobile, PC, automotive, and preparation for the pending Ansys acquisition.  **[SNPS_3410740_6]**
- **Revenue guidance is more second-half weighted than usual**, with **55% of revenue expected in the second half**, leading to skepticism about their ability to achieve these targets if there are delays in customer pull-downs for IP and hardware.  **[SNPS_3410740_21]**

47434494f80d76998b26ef28506df4140fc6713d13d745db2f6c4db77a1a6ec4

- The growing demand for AI and pervasive intelligence is driving more complex chip designs, leading to increased design activity and benefiting Synopsys' EDA and IP businesses.  **[SNPS_3374323_15]**
- Synopsys expects **another record hardware year**, as customers' need for hardware-assisted verification continues to grow due to increasing chip complexity, supporting growth in their hardware business.  **[SNPS_3374323_14]**
- The company has a **backlog of $8.2 billion, up 19% year-over-year**, indicating strong demand and providing revenue visibility.  **[SNPS_3374323_7]**

f0db7343fe5bc3407a85af42b36de900142c13d04c1135def3d0599179a2afa9

1. **Ansys Acquisition Regulatory Approval**  
   **Q:** What is the status of the Ansys acquisition approval process?  
   **A:** Synopsys confirmed that while the transaction falls below China's merger notification threshold, Chinese regulators have indicated they wish to review the deal. Synopsys is currently evaluating the notice and plans to work collaboratively with regulators to address any concerns.  **[SNPS_3390393_10]** 

2. **Guidance Raise and Drivers**  
   **Q:** What drove the strength that led to raising guidance this quarter?  
   **A:** Continued momentum in the core business, with strong demand for faster and energy-efficient compute from semiconductor companies and hyperscalers, increased demand for EDA technology and IP portfolio. Additionally, the hardware segment outperformed expectations. This confidence led to raising the midpoint of guidance to **15% growth**, adding roughly **$30 million** for the year.  **[SNPS_3390393_7]** 

3. **Operating Margin Expansion Goals**  
   **Q:** How is operating margin expansion progressing post-SIG divestiture?  
   **A:** The 2 percentage point operating margin expansion is within continuing operations. Synopsys aims to drive operating margins to the **mid-40s** long-term by scaling the business, leveraging R&D and core infrastructure, and infusing AI into internal processes to drive innovation.  **[SNPS_3390393_14]** 

4. **AI Adoption and Financial Impact**  
   **Q:** How are the newer AI products impacting financials and adoption rates?  
   **A:** For DSO.ai, Synopsys is still in early stages with about **20%** of the TAM addressed and around **15%** adoption within that. ASO.ai and VSO.ai are in early stages, making it difficult to provide average ACV uplift figures. As customers adopt these technologies, Synopsys monetizes them through the same approach as DSO.ai, with uplifts based on consumption.  **[SNPS_3390393_5]** **[SNPS_3390393_13]** 

5. **IP Business Growth Outlook**  
   **Q:** What is the outlook for the IP business this year?  
   **A:** IP revenue can be lumpy due to customer design timelines. After a strong **53%** growth in Q1 and **19%** year-over-year growth in Q2, Synopsys anticipates continued growth throughout Q3 and Q4, expecting a strong Q4.  **[SNPS_3390393_8]** 

6. **China Revenue Outlook**  
   **Q:** How is China revenue expected to perform this year?  
   **A:** Despite macroeconomic challenges and restrictions, Synopsys had a good first half in China and anticipates growth for the year. However, the company remains cautious and is taking a balanced approach due to the overall macro environment.  **[SNPS_3390393_8]** 

7. **Sale of Software Integrity Group (SIG) Proceeds**  
   **Q:** What are the expected net proceeds from the SIG sale?  
   **A:** The SIG transaction will provide up to **$2.1 billion** in consideration. Synopsys expects a **$1.5 billion** payment at close in the second half of 2024, with an additional **$125 million** over the subsequent five quarters, totaling **$1.625 billion** in cash. There is potential for an additional **$475 million** based on agreed-upon returns through a future liquidity event.  **[SNPS_3390393_14]** 

8. **Competitive Wins in Analog Design**  
   **Q:** What is driving competitive displacements in analog design?  
   **A:** Customers are seeking to modernize analog design workflows to be more efficient and digitized. Synopsys's introduction of ASO.ai helps customers migrate between nodes or foundries, and the company's full analog flow offers a modern competitive platform, leading to increased momentum and competitive wins.  **[SNPS_3390393_9]** **[SNPS_3390393_15]** 

9. **Adoption by Memory Companies**  
   **Q:** How are memory companies adopting Synopsys tools?  
   **A:** Memory companies are increasingly adopting Synopsys's fast SPICE simulation tools to handle the complexity of modern memory designs like HBM3. Over the past years, this market has become a growth area as these companies seek to leverage latest technologies to deal with design complexities.  **[SNPS_3390393_10]** 

10. **Hardware Growth Potential**  
    **Q:** What is the outlook for hardware-assisted verification?  
    **A:** Synopsys sees continued growth in hardware use cases, especially in software bring-up before silicon is ready. With the increasing software content in chips, customers need to bring up software as early as possible, driving demand for Synopsys's hardware solutions suited for this purpose.  **[SNPS_3390393_12]** 

b4159ea15afbaf804bc28fff4453ee271e4f6838266056b73cccf34c73dd7cfe

1. **China Sales**  
   **Q:** Do you still anticipate headwinds specific to China?  
   **A:** Despite a strong **Q1** in China due to timing of business pull-downs, Synopsys continues to anticipate headwinds in China for FY '24 related to macroeconomic factors and export controls. They emphasize being pragmatic about China growth, and the remainder of the year aligns with their initial guidance.  **[SNPS_3374323_5]** 

2. **IP Growth and Demand**  
   **Q:** What's driving the strong growth in IP, and how will it trend?  
   **A:** Synopsys experienced a **50%** year-over-year growth in IP this quarter, driven by increased silicon proliferation, more chip starts, and new interface IP standards required for complex AI and data center chips. Multi-die designs also contribute to demand. They expect this secular trend of strong IP demand to continue as long as there's increasing demand for sophisticated silicon.  **[SNPS_3374323_8]** 

3. **Ansys Acquisition Impact**  
   **Q:** How are internal investments progressing ahead of the Ansys acquisition?  
   **A:** Synopsys continues to invest in their core EDA solutions and expand into new markets like automotive by enhancing products and go-to-market strategies. The Ansys acquisition is expected to accelerate knowledge and presence in new market segments such as aero, auto, and industrial, but until the deal closes, Synopsys is maintaining its investment pace.  **[SNPS_3374323_9]** 

4. **Hardware Demand and Cycles**  
   **Q:** How do you see hardware demand and cycles progressing?  
   **A:** Anticipating another record hardware year, Synopsys grew inventory by **17%** quarter-over-quarter to meet customer demand. Unlike in the past, hardware is now essential for chip design verification before tape-out, leading to a constant need for expansion. The hardware demand is persistent and not subject to typical cyclical ebbs and flows.  **[SNPS_3374323_14]** 

5. **AI in Edge Devices**  
   **Q:** Are you seeing increased design activity as AI moves to edge devices?  
   **A:** Synopsys is witnessing the rise of pervasive intelligence, with more devices becoming interconnected and requiring sophisticated silicon. This broadening of AI into edges and endpoints leads to complex chip designs and higher demand for IP and system-level analysis, presenting a significant opportunity for Synopsys's EDA and IP offerings.  **[SNPS_3374323_15]** 

6. **Customer Concentration Evolution**  
   **Q:** How will customer concentration evolve over the next years?  
   **A:** Synopsys expects the market to experience phases of verticalization and horizontalization. They benefit both ways by selling IP and EDA to both chip companies and system companies. In the near term, customer concentration isn't expected to change significantly, but over the next 5+ years, as more system companies develop semiconductor capabilities, it presents an expanded opportunity for Synopsys.  **[SNPS_3374323_10]** 

7. **Backlog and RPO Changes**  
   **Q:** Can you explain the sequential decrease in backlog and RPO?  
   **A:** The backlog at the end of the quarter was **$8.2 billion**, down from the record **$8.6 billion** in Q4 due to the natural lumpiness of timing of big orders. Year-over-year, backlog is up about **19%**. There's nothing unusual about the sequential decrease, and timing of renewals usually evens out over a 12-month period.  **[SNPS_3374323_6]** **[SNPS_3374323_7]** 

8. **Demand for Advanced Technologies**  
   **Q:** How does demand for technologies like 2nm and GAA progress?  
   **A:** When new process technologies are introduced, Synopsys begins work at least two years prior to enable them with IP and EDA tools. Customers start designing with these technologies around 24 months after announcement. Therefore, the revenue impact from nodes like 2nm and 18A will be seen further into **2025** and beyond.  **[SNPS_3374323_11]** 

9. **Synergies with Ansys Customers**  
   **Q:** Can you expand your customer base through Ansys?  
   **A:** Yes, many Ansys customers are not currently Synopsys customers. As industries move toward smarter, connected devices, these customers will require modeling and verification solutions that Synopsys provides. The combination with Ansys will enable cross-selling opportunities, expanding Synopsys's market. By year four, they're targeting **$400 million** in synergies, with cross-sell being a significant part of that.  **[SNPS_3374323_17]** **[SNPS_3374323_18]** **[SNPS_3374323_19]** 

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Synopsys Inc (SNPS)

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