Synopsys Inc. (NASDAQ:SNPS)

Current assets and adjusted current assets for the periods examined demonstrate a generally increasing trend, though with notable fluctuations in later years. Both metrics exhibit consistent growth from 2020 through 2023, followed by a significant increase in 2024 and a subsequent decrease in 2025.

Overall Trend

From 2020 to 2023, both current assets and adjusted current assets increased steadily. Current assets grew from US$2,549,217 thousand to US$3,430,624 thousand, while adjusted current assets increased from US$2,577,781 thousand to US$3,473,346 thousand. This indicates a consistent expansion of the company’s short-term asset base during this period.

2024 Surge

A substantial increase is observed in both metrics for the 2024 period. Current assets rose to US$6,469,666 thousand, and adjusted current assets reached US$6,520,674 thousand. This represents a significant jump compared to the prior year, suggesting a substantial inflow of short-term assets or a reclassification of longer-term assets.

2025 Decline

Following the peak in 2024, both current assets and adjusted current assets experienced a decrease in 2025. Current assets fell to US$6,012,102 thousand, and adjusted current assets decreased to US$6,101,061 thousand. This suggests a utilization of current assets, potentially through operational expenses, debt repayment, or other cash outflows.

Adjustment Impact

The difference between current assets and adjusted current assets remains relatively consistent across all periods, typically ranging between US$28,000 and US$51,000 thousand. This suggests that the adjustments made to current assets are systematic and do not represent large, volatile changes. The adjustments likely relate to specific accounting treatments or reclassifications within the current asset category.

In summary, the company experienced consistent growth in its current and adjusted current assets from 2020 to 2023, a substantial increase in 2024, and a subsequent decline in 2025. The adjustments to current assets appear to be consistent and do not significantly alter the overall trend.

Total assets and adjusted total assets for the periods presented demonstrate consistent growth through fiscal year 2024, followed by a substantial increase in fiscal year 2025. However, a notable divergence exists between the reported total assets and the adjusted total assets throughout the observed timeframe.

Overall Growth

Both total assets and adjusted total assets exhibited a pattern of year-over-year increases from 2020 to 2024. Total assets grew from US$8,030,062 thousand in 2020 to US$13,073,561 thousand in 2024, representing a cumulative increase of approximately 62.8%. Adjusted total assets followed a similar trajectory, increasing from US$7,561,080 thousand in 2020 to US$11,877,311 thousand in 2024, a cumulative increase of approximately 57.4%.

Fiscal Year 2025 Anomaly

A significant surge is observed in both total assets and adjusted total assets in 2025. Total assets increased dramatically to US$48,224,461 thousand, while adjusted total assets rose to US$48,201,261 thousand. This represents an increase of approximately 268.8% and 268.5% respectively, compared to 2024 figures. The near equivalence of total and adjusted assets in 2025 suggests the adjustments applied in prior years were substantial, but diminished in impact during this period.

Adjustment Variance

From 2020 through 2024, a consistent difference is present between total assets and adjusted total assets. The difference ranged from approximately US$469,000 thousand in 2020 to approximately US$1,196,250 thousand in 2024. This indicates that adjustments were consistently reducing the reported total asset value. The magnitude of the adjustment increased over time, suggesting a growing impact from the items requiring adjustment. In 2025, the difference between total and adjusted assets narrowed to approximately US$23,200 thousand, representing a minimal adjustment.

The substantial growth in 2025, coupled with the diminishing adjustment variance, warrants further investigation to understand the underlying drivers of these changes and the nature of the adjustments being applied to the total asset value.

Current liabilities exhibited a general increasing trend from 2020 through 2023, followed by a decrease in 2024 and a substantial increase in 2025. Adjusted current liabilities demonstrate a different pattern, with a more moderate increase from 2020 to 2021, a slight decrease in 2022, and then accelerating growth through 2025. The divergence between the two liability figures suggests significant adjustments are being made to the initially reported current liabilities.

Overall Trends in Current Liabilities

Current liabilities increased from approximately $2.14 billion in 2020 to nearly $3.0 billion in 2023, representing a growth of roughly 40%. A decrease to $2.65 billion was observed in 2024, before a considerable jump to $3.72 billion in 2025. This final increase indicates a potential shift in short-term obligations or reporting practices.

Trends in Adjusted Current Liabilities

Adjusted current liabilities grew from $751.7 million in 2020 to $895.9 million in 2021, a rise of approximately 19%. A minor decline to $863.7 million occurred in 2022. From 2022 to 2025, adjusted current liabilities increased substantially, reaching $1.48 billion. This growth rate exceeds that of the initial current liabilities, particularly in the later years.

Relationship Between Reported and Adjusted Values

The difference between current liabilities and adjusted current liabilities widens over time. In 2020, the adjustment reduced current liabilities by approximately 65%. By 2025, the adjustment reduced current liabilities by approximately 60%. This consistent, substantial adjustment suggests the presence of items initially classified as current liabilities that are subsequently reclassified or corrected. Further investigation into the nature of these adjustments would be beneficial.

The accelerating growth in both current and adjusted current liabilities in 2025 warrants further scrutiny. Understanding the drivers behind these increases, and the specific nature of the adjustments being made, is crucial for a comprehensive assessment of the company’s short-term financial health and liquidity.

Total liabilities exhibited a generally increasing trend from 2020 through 2023, followed by a decrease in 2024 and a substantial increase in 2025. Adjusted total liabilities also increased from 2020 to 2023, decreased in 2024, and experienced a significant rise in 2025, mirroring the trend of total liabilities, but at different magnitudes.

Overall Trends

Between 2020 and 2023, total liabilities increased from US$3,117,695 thousand to US$4,148,830 thousand, representing a cumulative growth of approximately 33.1%. Adjusted total liabilities grew from US$1,622,185 thousand to US$2,163,759 thousand over the same period, a cumulative increase of roughly 33.3%. This suggests a consistent, proportional increase in both reported and adjusted liabilities during this timeframe.

In 2024, both total and adjusted liabilities decreased. Total liabilities fell to US$4,050,355 thousand, a decline of approximately 2.4% from 2023. Adjusted total liabilities decreased to US$2,281,230 thousand, representing a decrease of approximately 5.2% from 2023. This indicates a potential effort to reduce liabilities or a reclassification of certain obligations.

The most significant change occurred in 2025. Total liabilities surged to US$19,897,446 thousand, a substantial increase of approximately 391.7% from 2024. Adjusted total liabilities also rose dramatically to US$16,267,858 thousand, an increase of approximately 611.8% from 2024. This substantial increase warrants further investigation to understand the underlying causes, such as a significant acquisition, debt issuance, or change in accounting practices.

Relationship Between Total and Adjusted Liabilities

From 2020 to 2023, adjusted total liabilities consistently represented approximately 52% of total liabilities. This proportion remained relatively stable. However, in 2024 and 2025, this relationship shifted. In 2024, adjusted total liabilities represented approximately 56.3% of total liabilities. In 2025, adjusted total liabilities represented approximately 81.8% of total liabilities. This indicates that the adjustments made to total liabilities became a more significant factor in determining the reported liability position in 2025.

The considerable increase in both total and adjusted liabilities in 2025, coupled with the changing proportion between the two figures, suggests a material event or series of events occurred that significantly impacted the company’s financial position. Further analysis is required to determine the nature of these changes and their implications.

Total stockholders’ equity exhibited a consistent upward trend from 2020 through 2023, followed by substantial increases in 2024 and 2025. Adjusted total stockholders’ equity demonstrates a similar pattern, but consistently reports higher values than the unadjusted equity across all observed periods.

Overall Trend

From 2020 to 2025, total stockholders’ equity increased from US$4,907,404 thousand to US$28,327,602 thousand, representing a significant overall growth. Adjusted total stockholders’ equity followed a parallel trajectory, rising from US$5,938,895 thousand to US$31,937,967 thousand over the same period.

Growth Rates

The growth in total stockholders’ equity appears relatively moderate between 2020 and 2023, with increases ranging from approximately 7.9% to 14.4% annually. However, the period from 2023 to 2025 shows accelerated growth, with increases of approximately 48.3% and 113.1% respectively. Adjusted total stockholders’ equity exhibits similar growth rate patterns, consistently exceeding the growth observed in unadjusted equity.

Adjustment Impact

The difference between total and adjusted stockholders’ equity is substantial and consistently positive. In 2020, the adjustment added approximately US$1,031,491 thousand to the reported equity. This difference widens over time, reaching US$23,600,365 thousand in 2025. This suggests the adjustments being made are material and have a significant impact on the reported equity position.

Recent Acceleration

The most pronounced increases in both total and adjusted stockholders’ equity occur in the final two periods (2024 and 2025). This acceleration warrants further investigation to understand the underlying drivers, such as significant earnings, stock-based compensation, or other equity transactions. The magnitude of the increase in 2025 is particularly noteworthy.

The consistent positive adjustment to stockholders’ equity suggests the presence of items not initially captured in the standard equity calculation. Understanding the nature of these adjustments is crucial for a complete assessment of the company’s financial position.

An examination of the financial information reveals significant shifts in reported and adjusted capital structures over the observed period. Initially, reported debt decreased substantially from 2020 to 2022, before stabilizing and then experiencing a dramatic increase in 2025. Conversely, reported stockholders’ equity demonstrated consistent growth from 2020 through 2024, with an accelerated increase in 2025. Total reported capital followed a similar trajectory to equity, exhibiting substantial growth in the later years.

The adjusted figures present a different, though related, picture. Adjusted total debt remained relatively stable between 2020 and 2024, also experiencing a substantial increase in 2025. Adjusted stockholders’ equity consistently increased throughout the period, mirroring the trend in reported equity, but at a higher magnitude. Adjusted total capital also showed consistent growth, culminating in a significant rise in 2025.

Debt Trends

Reported debt decreased from US$127,907 thousand in 2020 to US$20,824 thousand in 2022, representing a significant deleveraging. However, this trend reversed sharply in 2025, with reported debt reaching US$13,484,515 thousand. Adjusted debt remained relatively stable between US$656,371 and US$687,803 thousand from 2020 to 2024, before increasing substantially to US$14,293,418 thousand in 2025. The divergence between reported and adjusted debt suggests potential off-balance sheet financing or reclassification of liabilities.

Equity Trends

Total stockholders’ equity, both reported and adjusted, exhibited consistent growth from 2020 to 2025. Reported equity increased from US$4,907,404 thousand to US$28,327,602 thousand, while adjusted equity grew from US$5,938,895 thousand to US$31,937,967 thousand. The adjusted equity consistently exceeded the reported equity, indicating the presence of adjustments that increase the stated equity value.

Capital Structure Changes

Total capital, encompassing both debt and equity, increased significantly over the period. The substantial increases in both reported and adjusted debt and equity in 2025 resulted in a dramatic rise in total capital. The adjusted total capital consistently exceeded the reported total capital, reflecting the impact of the adjustments made to the capitalization structure. The ratio of debt to equity, while initially decreasing with the reduction in reported debt, appears to have increased significantly in 2025 based on the substantial rise in adjusted debt.

Adjustment Impact

The differences between reported and adjusted figures are relatively small from 2020 to 2024, but become exceptionally large in 2025. This suggests a significant event or accounting change occurred in 2025 that necessitated substantial adjustments to the capitalization structure. Further investigation is warranted to understand the nature and implications of these adjustments.

In summary, the capitalization structure underwent a period of deleveraging followed by substantial increases in both debt and equity, particularly in 2025. The adjustments to the capitalization structure appear to have a minimal impact on the overall picture until 2025, at which point they become material and require further scrutiny.

Revenue and adjusted revenue both demonstrate a consistent upward trend over the six-year period presented. However, a notable divergence exists between the two figures, indicating the presence of adjustments impacting the reported revenue.

Overall Growth

Reported revenue increased from US$3,685,281 thousand in 2020 to US$7,054,178 thousand in 2025, representing a cumulative growth of 91.4%. Adjusted revenue experienced a more substantial increase, growing from US$3,875,816 thousand in 2020 to US$7,950,128 thousand in 2025, a cumulative growth of 105.3%.

Adjustment Magnitude

In 2020, the adjusted revenue exceeded reported revenue by US$190,535 thousand. This difference widened over time, reaching US$900,000 thousand in 2025. The increasing magnitude of the adjustments suggests a growing impact from the factors necessitating these modifications.

Growth Rate Comparison

While both revenue streams exhibit positive growth annually, the adjusted revenue consistently shows a higher growth rate. For example, in 2024, reported revenue grew by 4.8% while adjusted revenue grew by 6.9%. This indicates that the adjustments are contributing significantly to the overall financial performance as presented.

Adjustment Impact on Percentage of Revenue

The adjustments represent approximately 5.2% of reported revenue in 2020, increasing to approximately 12.7% of reported revenue in 2025. This escalating percentage highlights the increasing importance of understanding the nature of these adjustments to accurately assess the company’s underlying financial performance.

The consistent positive adjustments to revenue suggest potential factors such as revenue recognition timing differences, deferred revenue, or the inclusion of items not initially captured in the primary revenue stream. Further investigation into the specific nature of these adjustments is warranted to fully understand their impact on the financial statements.

Net income attributed to Synopsys demonstrates a generally increasing trend over the observed period, with a notable fluctuation in the final two years. Adjusted net income exhibits a more complex pattern, initially decreasing before increasing and then declining again.

Overall Trend - Net Income

Net income attributed to Synopsys increased from US$664.347 million in 2020 to US$1,229.888 million in 2023, representing substantial growth. However, a significant decrease is observed in 2024, falling to US$2,263.380 million, followed by a further decline to US$1,332.220 million in 2025. This suggests potential volatility or the impact of specific events in the later years.

Overall Trend - Adjusted Net Income

Adjusted net income began at US$800.347 million in 2020 and decreased to US$795.175 million in 2021. It then increased to US$1,167.091 million in 2022, before decreasing to US$943.946 million in 2023. A subsequent increase to US$1,088.809 million in 2024 is followed by a substantial rise to US$1,755.258 million in 2025.

Relationship Between Reported and Adjusted Income

In 2020 and 2021, adjusted net income exceeded net income attributed to Synopsys. However, from 2022 through 2024, net income attributed to Synopsys was higher than adjusted net income. This pattern reverses in 2025, with adjusted net income exceeding reported net income. The differences between the two figures suggest the presence of recurring adjustments impacting the reported earnings.

Year-over-Year Changes - Net Income

The largest year-over-year increase in net income occurred between 2022 and 2023 (24.8% growth). The most significant decline occurred between 2023 and 2024 (-23.2% decline), and again between 2024 and 2025 (-41.1% decline). These fluctuations warrant further investigation.

Year-over-Year Changes - Adjusted Net Income

The largest year-over-year increase in adjusted net income occurred between 2024 and 2025 (61.8% growth). The most significant decline occurred between 2020 and 2021 (-0.6% decline). The volatility in adjusted net income is less pronounced than that of net income.