Analysis of Reportable Segments
Synopsys Inc. operates in 3 segments: Design Automation; Design IP; and Software Integrity.
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- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
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- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Return on Assets (ROA) since 2005
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Segment Profit Margin
Synopsys Inc., profit margin by reportable segment
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|---|
| Design Automation | ||||||
| Design IP | ||||||
| Software Integrity |
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).
- Design Automation Segment Profit Margin
- The profit margin for the Design Automation segment shows a consistent upward trend from 2019 to 2024. Starting at 33.56% in 2021, the margin increased steadily each year, reaching 38.66% by 2024. This indicates a positive trend in profitability and likely improving operational efficiency or pricing power within this segment.
- Design IP Segment Profit Margin
- The Design IP segment also exhibits a clear upward trajectory in profit margin over the observed years. Beginning at 30.17% in 2021, it rose progressively to 38.3% by 2024. The increase, particularly notable between 2023 and 2024, suggests strengthening profitability and potentially enhanced market position or cost management in this segment.
- Software Integrity Segment Profit Margin
- The Software Integrity segment shows a more modest profit margin with a steady increase from 9.73% in 2021 to 14.55% in 2023. However, data for 2024 is not available, making it difficult to determine whether this upward trend continued. Nonetheless, the margin improvement over the available years may reflect growth in the segment's profitability or scaling benefits.
Segment Profit Margin: Design Automation
Synopsys Inc.; Design Automation; segment profit margin calculation
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Adjusted operating income | ||||||
| Revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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).
1 2024 Calculation
Segment profit margin = 100 × Adjusted operating income ÷ Revenue
= 100 × ÷ =
- Revenue
- Revenue demonstrates a continuous upward trend from the fiscal year ending October 31, 2021, through October 31, 2024. The figures increased from approximately $2.75 billion in 2021 to over $4.22 billion in 2024. This represents a steady growth each year, indicating expansion and increased sales within the segment.
- Adjusted Operating Income
- Adjusted operating income shows a consistent rise across the observed years starting in 2021. It increased from roughly $925 million in 2021 to about $1.63 billion in 2024. This gain mirrors the revenue growth and suggests improved profitability and efficient operational management within the segment.
- Segment Profit Margin
- The segment profit margin has progressively improved over the same period. It started at 33.56% in 2021 and rose to 38.66% by 2024. This indicates not only an increase in profitability but also optimization of cost structure or pricing strategies, leading to higher margins despite expanding revenue.
- Overall Trends and Insights
- The data collectively reveals strong and consistent growth in revenue, operating income, and profit margin over the four-year span. The upward trajectory in profit margin alongside revenue growth points to effective management and operational scalability in the Design Automation segment. The improvements reflect positively on the segment’s financial health and suggest sustained competitive performance.
Segment Profit Margin: Design IP
Synopsys Inc.; Design IP; segment profit margin calculation
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Adjusted operating income | ||||||
| Revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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).
1 2024 Calculation
Segment profit margin = 100 × Adjusted operating income ÷ Revenue
= 100 × ÷ =
- Revenue Trends
- Revenue has demonstrated a consistent and robust upward trajectory over the analyzed periods. Starting from 1,055,672 thousand USD in the period ending October 2021, revenue increased to 1,315,541 thousand USD in October 2022, then further to 1,542,726 thousand USD in October 2023, and reached 1,906,314 thousand USD in October 2024. This represents a steady and significant growth year over year, reflecting a strong expansion in sales or demand within the segment.
- Adjusted Operating Income Trends
- Adjusted operating income exhibits a parallel upward trend, indicating successful operational leverage as revenues increased. Starting at 318,473 thousand USD in October 2021, it rose to 421,547 thousand USD in October 2022, then to 532,055 thousand USD in October 2023, and significantly to 730,174 thousand USD in October 2024. The growth in operating income outpaced revenue growth in percentage terms, suggesting improved operational efficiency or cost management within the segment.
- Segment Profit Margin Analysis
- The segment profit margin has steadily improved from 30.17% in October 2021 to 32.04% in October 2022, 34.49% in October 2023, and up to 38.3% in October 2024. This rising margin reflects enhanced profitability per unit of revenue, suggesting better cost control, pricing power, or a favorable product mix. This margin improvement further confirms that operational gains are not solely volume-driven but also margin-accretive.
- Overall Insights
- The financial data reveals a strong positive performance trend within the segment, characterized by continuous revenue growth, increasing adjusted operating income, and enhancing profitability margins. These patterns collectively imply effective management strategies, scaling efficiencies, and potentially a growing market or competitive positioning. The upward trend in profit margins alongside revenue growth indicates that the segment is not sacrificing profitability for growth, but rather achieving both simultaneously.
Segment Profit Margin: Software Integrity
Synopsys Inc.; Software Integrity; segment profit margin calculation
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Adjusted operating income | ||||||
| Revenue | ||||||
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | ||||||
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).
1 2024 Calculation
Segment profit margin = 100 × Adjusted operating income ÷ Revenue
= 100 × ÷ =
- Revenue
- The revenue for the segment shows a consistent upward trend over the observed periods from 2019 to 2024. Starting at 393,784 thousand US dollars in 2021, it increased to 465,828 thousand US dollars in 2022 and further to 524,606 thousand US dollars in 2023. This indicates steady growth in the segment’s revenue base, reflecting either expanding market demand, pricing improvements, or increases in volume of sales.
- Adjusted Operating Income
- Adjusted operating income demonstrates significant improvement in the years where data is available. In 2021, the operating income was 38,311 thousand US dollars and increased notably to 46,994 thousand US dollars in 2022, followed by a considerable jump to 76,324 thousand US dollars in 2023. This suggests effective cost management or improved operational efficiencies alongside revenue growth, contributing to enhanced profitability.
- Segment Profit Margin
- The segment profit margin has increased steadily across the reported periods, starting at 9.73% in 2021, rising slightly to 10.09% in 2022, and then showing a marked increase to 14.55% in 2023. This upward trend in margin aligns with the growth in adjusted operating income and indicates stronger profitability, likely derived from both revenue growth and enhanced control over operating expenses.
- Overall Assessment
- Overall, the segment exhibits a robust financial performance with increasing revenue, growing adjusted operating income, and improving profit margins. The data suggests that the segment is expanding its revenue base while simultaneously enhancing profitability and operating efficiency, leading to stronger financial returns over time.
Revenue
Synopsys Inc., revenue by reportable segment
US$ in thousands
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|---|
| Design Automation | ||||||
| Design IP | ||||||
| Software Integrity | ||||||
| Total |
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).
- Design Automation Segment Revenue
- The revenue from the Design Automation segment exhibits a consistent upward trajectory over the observed periods. Starting at approximately 2,754,737 thousand USD in 2021, it increased to 3,300,173 thousand USD in 2022, then to 3,775,287 thousand USD in 2023, and further to 4,221,122 thousand USD in 2024. This reflects a strong growth trend, with each year showing notable increases in revenue.
- Design IP Segment Revenue
- The Design IP segment also demonstrates steady growth. Beginning at around 1,055,672 thousand USD in 2021, revenues increased to 1,315,541 thousand USD in 2022, 1,542,726 thousand USD in 2023, and 1,906,314 thousand USD in 2024. The pattern indicates robust expansion, with the segment progressively contributing more to the total revenue over time.
- Software Integrity Segment Revenue
- For Software Integrity, data is available only for 2021 through 2023. Revenue grew from 393,784 thousand USD in 2021 to 465,828 thousand USD in 2022, and further to 524,606 thousand USD in 2023. This segment showed consistent growth during these years; however, the absence of data for 2024 precludes analysis beyond 2023.
- Total Revenue Trends
- The total revenue mirrors the growth seen in individual segments, increasing from 4,204,193 thousand USD in 2021 to 5,081,542 thousand USD in 2022, then to 5,842,619 thousand USD in 2023, and reaching 6,127,436 thousand USD in 2024. The total revenue growth is sustained across all periods, indicating overall business expansion.
- General Observations
- Overall, all segments with available data show positive revenue growth across the periods observed. Design Automation consistently contributes the largest share to total revenue, followed by Design IP and then Software Integrity. The steady increase in revenues across all segments reveals a strong upward performance trend. The missing data for some earlier years and the absence of Software Integrity data in 2024 limits full trend analysis for those periods, but the available data suggests continuous expansion.
Adjusted operating income
Synopsys Inc., adjusted operating income by reportable segment
US$ in thousands
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|---|
| Design Automation | ||||||
| Design IP | ||||||
| Software Integrity | ||||||
| Total |
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).
The adjusted operating income data exhibits a clear upward trend across all reportable segments over the analyzed periods, indicating consistent growth in operating profitability.
- Design Automation
- The Design Automation segment shows substantial growth from US$924,605 thousand in the period ending October 31, 2021, to US$1,631,885 thousand in the period ending October 31, 2024. This reflects a steady increase each year, with the segment nearly doubling over the four-year span. The continuous upward trajectory suggests strengthening operational performance and possibly effective market penetration or product development within this segment.
- Design IP
- Similar to Design Automation, the Design IP segment demonstrates significant growth, increasing from US$318,473 thousand in October 2021 to US$730,174 thousand by October 2024. This segment more than doubled its adjusted operating income within the same timeframe, indicating an expanding contribution to the overall profitability. The growth trend here is consistent and reflects a potentially increased demand or enhanced profitability of Design IP offerings.
- Software Integrity
- Software Integrity shows growth as well, rising from US$38,311 thousand in October 2021 to US$76,324 thousand in October 2023. However, no data is available for October 2024, which limits the ability to fully assess the latest trend. The segment’s growth, although positive, is comparatively modest when juxtaposed with the other two segments. This may indicate a smaller but steadily developing part of the business.
- Total Adjusted Operating Income
- The aggregate values reflect the combined effect of the individual segment performances. The total adjusted operating income increased from US$1,281,389 thousand in October 2021 to US$2,362,059 thousand by October 2024. This nearly doubling signifies robust overall growth in operating income across the segments, driven primarily by strong gains in Design Automation and Design IP, complemented by moderate growth in Software Integrity.
Overall, the data reveals a positive trend in adjusted operating income, with Design Automation and Design IP segments being the primary contributors to growth. The absence of the most recent Software Integrity figure presents a slight limitation, but the general pattern points to an expanding and improving operating performance across the reportable segments over the past several years.