Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Synopsys Inc., consolidated cash flow statement

US$ in thousands

12 months ended:	Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Net income	2,235,810)	1,218,125)	978,436)	756,359)	663,447)	532,367)
Amortization and depreciation	295,065)	247,120)	228,405)	203,676)	209,986)	201,676)
Reduction of operating lease right-of-use assets	97,273)	97,705)	89,541)	86,645)	82,895)	—)
Amortization of capitalized costs to obtain revenue contracts	73,587)	82,190)	73,026)	64,698)	61,185)	62,750)
Stock-based compensation	692,316)	563,292)	459,029)	345,272)	248,584)	155,001)
Allowance for credit losses	19,724)	19,932)	(3,477)	18,515)	20,875)	11,669)
Gain on sale of strategic investments	(55,077)	—)	—)	—)	—)	—)
Gain on divestitures, net of transaction costs	(868,830)	—)	—)	—)	—)	—)
Amortization of bridge financing costs	33,677)	—)	—)	—)	—)	—)
Deferred income taxes	(407,649)	(211,045)	(36,913)	(128,583)	(111,526)	(82,620)
Other	(1,295)	13,295)	10,188)	15,859)	4,325)	(4,052)
Accounts receivable	(103,460)	(178,432)	(251,390)	201,706)	(236,806)	(8,575)
Inventories	(51,449)	(123,752)	1,320)	(48,046)	(55,024)	(19,243)
Prepaid and other current assets	(410,432)	(106,396)	(89,983)	(102,174)	(11,298)	(49,779)
Other long-term assets	(168,255)	(100,618)	(15,283)	(153,037)	(83,367)	(124,895)
Accounts payable and accrued liabilities	187,564)	170,496)	(34,066)	125,133)	113,773)	(19,280)
Operating lease liabilities	(96,966)	(73,281)	(85,828)	(82,581)	(78,578)	—)
Income taxes	(73,215)	198,078)	1,644)	28,855)	14,120)	19,777)
Deferred revenue	8,641)	(113,435)	414,251)	160,325)	148,722)	125,717)
Net changes in operating assets and liabilities, net of effects from acquisitions and dispositions	(707,572)	(327,340)	(59,335)	130,181)	(188,458)	(76,278)
Adjustments to reconcile net income to net cash provided by operating activities	(828,781)	485,149)	760,464)	736,263)	327,866)	268,146)
Net cash provided by operating activities	1,407,029)	1,703,274)	1,738,900)	1,492,622)	991,313)	800,513)
Proceeds from maturities and sales of short-term investments	138,961)	130,435)	93,696)	12,850)	—)	—)
Purchases of short-term investments	(136,821)	(131,079)	(97,245)	(161,732)	—)	—)
Proceeds from sales of strategic investments	55,696)	8,492)	582)	—)	2,151)	6,361)
Purchases of strategic investments	(1,293)	(435)	(7,000)	(7,591)	(2,762)	(3,245)
Purchases of property and equipment, net	(123,161)	(189,618)	(136,589)	(93,764)	(154,717)	(198,129)
Acquisitions, net of cash acquired	(156,947)	(297,692)	(422,374)	(296,017)	(201,045)	(36,605)
Proceeds from business divestiture, net of cash divested	1,446,578)	—)	—)	—)	—)	—)
Capitalization of software development costs	—)	(2,204)	(2,493)	(1,976)	(4,045)	(4,259)
Other	—)	—)	(1,200)	(800)	—)	—)
Net cash (used in) provided by investing activities	1,223,013)	(482,101)	(572,623)	(549,030)	(360,418)	(235,877)
Proceeds from credit facilities	—)	—)	—)	—)	276,489)	192,897)
Repayment of debt	(2,607)	(2,603)	(76,838)	(28,061)	(288,879)	(524,063)
Payment of bridge financing and term loan costs	(72,265)	—)	—)	—)	—)	—)
Issuances of common stock	232,212)	252,986)	237,956)	210,719)	197,403)	156,364)
Payments for taxes related to net share settlement of equity awards	(337,541)	(241,408)	(174,005)	(138,950)	(82,225)	(57,143)
Purchase of equity forward contract	—)	(45,000)	—)	(35,000)	—)	—)
Purchases of treasury stock	—)	(1,160,724)	(1,100,000)	(753,081)	(242,078)	(329,185)
Other	(1,096)	(122)	(3,413)	(4,375)	(1,316)	(762)
Net cash used in financing activities	(181,297)	(1,196,871)	(1,116,300)	(748,748)	(140,606)	(561,892)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	8,797)	(2,979)	(65,296)	2,369)	17,154)	2,782)
Net change in cash, cash equivalents and restricted cash	2,457,542)	21,323)	(15,319)	197,213)	507,443)	5,526)
Cash, cash equivalents and restricted cash, beginning of year	1,441,187)	1,419,864)	1,435,183)	1,237,970)	730,527)	725,001)
Cash, cash equivalents and restricted cash, end of year	3,898,729)	1,441,187)	1,419,864)	1,435,183)	1,237,970)	730,527)

Based on: 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31).

Net Income: The net income has shown consistent growth over the periods, increasing from approximately $532 million in 2019 to over $2.2 billion in 2024. This reflects a strong upward trend in profitability, with particularly substantial growth in the most recent year.
Operating Expenses: Amortization, Depreciation, and Stock-based Compensation: Amortization and depreciation expenses have risen steadily from about $202 million in 2019 to nearly $295 million in 2024. Similarly, stock-based compensation expenses have shown a marked increase from $155 million in 2019 to $692 million in 2024, indicating increased investment in employee incentives or executive compensation.
Allowance for Credit Losses and Gains/Losses on Investments: The allowance for credit losses has generally fluctuated, with negative values in some years reflecting recoveries or reversals. There were significant losses recognized in 2024 related to the sale of strategic investments and divestitures, with charges around $-55 million and $-869 million respectively, which may have affected the overall financial results for that year.
Deferred Income Taxes and Income Taxes: Deferred income taxes have worsened over time, moving from a liability (negative balance) of approximately $-83 million in 2019 to $-408 million in 2024, suggesting increasing deferred tax obligations. Income taxes paid show variability, with a large spike to $198 million in 2023 followed by a negative amount indicating tax benefits in 2024.
Working Capital Changes: Changes in operating assets and liabilities show significant volatility. Notable are large negative changes affecting cash flow in recent years, such as a $-707 million change in 2024. Accounts receivable and inventories feature fluctuating values, with some large negative changes indicating possible challenges in asset management or collection periods.
Net Cash Provided by Operating Activities: Cash flow from operating activities increased steadily from $800 million in 2019 to peak near $1.74 billion in 2022 before declining to approximately $1.4 billion in 2024, still representing strong cash-generating capacity relative to net income.
Investing Activities: Investing cash flows reflect consistent outflows driven by property and equipment purchases and acquisitions. However, 2024 stands out with a large positive investing cash flow of $1.22 billion, primarily due to proceeds from a business divestiture, indicating a strategic shift or asset monetization in that year.
Financing Activities: Financing cash flows have been predominantly negative throughout the periods, with significant outflows linked to repurchases of treasury stock, payments for taxes related to equity awards, and debt repayments. The largest negative financing outflow occurred in 2024 at $181 million, although this is comparatively lower than some previous years when exceeding $1 billion.
Cash and Cash Equivalents: Cash balances have generally increased from $730 million in 2019 to nearly $3.9 billion by the end of 2024, indicating strong liquidity growth. The large increase in 2024 aligns with the positive net cash provided by investing activities, emphasizing the impact of divestitures on cash reserves.
Summary: The financial data reveal sustained growth in profitability and operating cash flow over the analyzed period, supported by rising net income and strong cash generation. However, increased amortization, stock-based compensation, and deferred tax liabilities have added to expenses and financial obligations. Cash outflows from financing activities reflect ongoing commitments to managing equity and debt, while investing activities in 2024 demonstrate a strategic pivot through significant divestitures, positively affecting cash positions. The overall financial position appears robust, with substantial increases in cash resources by the latest period.

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Synopsys Inc. (NASDAQ:SNPS)

Cash Flow Statement