Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Synopsys Inc., EBITDA calculation
US$ in thousands
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 financial data reveals a consistent upward trend in profitability and operational performance over the six-year period.
- Net income attributed to Synopsys
- The net income shows steady growth each year, starting from approximately $532 million in 2019 and increasing to over $2.26 billion in 2024. This more than fourfold increase reflects a significant improvement in the company's bottom-line profitability.
- Earnings before tax (EBT)
- EBT also exhibits a similar growth pattern, rising from about $545 million in 2019 to $1.51 billion in 2024. The progression suggests enhanced earnings capacity before tax obligations, supporting the strong net income growth observed.
- Earnings before interest and tax (EBIT)
- EBIT figures closely track the EBT values, ranging from $557 million in 2019 to nearly $1.55 billion in 2024. The consistent increase indicates improved core operational efficiency and profitability before financial and tax expenses.
- Earnings before interest, tax, depreciation, and amortization (EBITDA)
- EBITDA follows the upward trajectory as well, ascending from approximately $759 million in 2019 to $1.84 billion in 2024. The elevated EBITDA levels suggest strong cash generation capability from operating activities, enhanced by rising earnings and controlled non-cash expenses.
Overall, the data demonstrates solid growth in earnings across all key profitability metrics. The progression from EBITDA through EBIT, EBT, to net income reflects an improving financial position with increasing efficiency and profitability over the years under review. The expansion of income before taxes and after-tax net income also points to effective management of tax and interest expenses, further contributing to the firm’s robust financial performance.
Enterprise Value to EBITDA Ratio, Current
Synopsys Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 81,233,299) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 1,844,084) |
| Valuation Ratio | |
| EV/EBITDA | 44.05 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | 15.30 |
| Adobe Inc. | 19.28 |
| Cadence Design Systems Inc. | 51.76 |
| CrowdStrike Holdings Inc. | 390.59 |
| Fair Isaac Corp. | 52.17 |
| International Business Machines Corp. | 24.93 |
| Intuit Inc. | 46.27 |
| Microsoft Corp. | 28.13 |
| Oracle Corp. | 30.25 |
| Palantir Technologies Inc. | 666.03 |
| Palo Alto Networks Inc. | 98.10 |
| Salesforce Inc. | 21.75 |
| ServiceNow Inc. | 83.79 |
| Workday Inc. | 51.00 |
| EV/EBITDA, Sector | |
| Software & Services | 31.52 |
| EV/EBITDA, Industry | |
| Information Technology | 34.76 |
Based on: 10-K (reporting date: 2024-10-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Synopsys Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 72,228,982) | 84,619,155) | 49,419,269) | 54,103,071) | 36,044,325) | 20,471,792) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 1,844,084) | 1,550,080) | 1,345,617) | 1,012,555) | 853,285) | 758,841) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 39.17 | 54.59 | 36.73 | 53.43 | 42.24 | 26.98 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Accenture PLC | 19.87 | 17.26 | 14.25 | 23.31 | 17.46 | 15.60 | |
| Adobe Inc. | 22.06 | 34.07 | 22.32 | 35.44 | 43.06 | 41.16 | |
| Cadence Design Systems Inc. | 42.25 | 55.61 | 42.11 | 39.61 | 45.75 | — | |
| CrowdStrike Holdings Inc. | 262.20 | — | — | — | — | — | |
| Fair Isaac Corp. | 69.56 | 37.61 | 22.83 | 21.71 | 42.84 | 35.93 | |
| International Business Machines Corp. | 22.90 | 14.41 | 22.17 | 12.53 | 12.28 | — | |
| Intuit Inc. | 38.55 | 38.71 | 36.22 | 51.96 | 35.70 | 34.27 | |
| Microsoft Corp. | 23.66 | 22.92 | 20.17 | 24.59 | 21.74 | 17.21 | |
| Oracle Corp. | 21.81 | 21.80 | 17.12 | 13.78 | 11.54 | — | |
| Palantir Technologies Inc. | 551.39 | 175.93 | — | — | — | — | |
| Palo Alto Networks Inc. | 84.17 | 85.08 | 515.19 | — | 349.99 | 117.18 | |
| Salesforce Inc. | 31.64 | 38.31 | 38.88 | 33.83 | 49.45 | — | |
| ServiceNow Inc. | 87.89 | 96.48 | 104.30 | 147.45 | 220.91 | — | |
| Workday Inc. | 86.37 | 216.44 | 147.90 | 670.04 | — | — | |
| EV/EBITDA, Sector | |||||||
| Software & Services | 27.25 | 25.27 | 22.55 | 25.66 | 23.30 | — | |
| EV/EBITDA, Industry | |||||||
| Information Technology | 27.64 | 23.56 | 18.28 | 20.46 | 19.69 | — | |
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).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= 72,228,982 ÷ 1,844,084 = 39.17
4 Click competitor name to see calculations.
The financial data reveals several notable trends over the six-year period regarding enterprise value, EBITDA, and the EV/EBITDA ratio.
- Enterprise Value (EV)
- The enterprise value displayed a progressive increase from 2019 to 2021, rising sharply from approximately $20.5 billion to over $54 billion. This was followed by a notable decline in 2022 to about $49.4 billion. In 2023, the enterprise value surged significantly to approximately $84.6 billion but then decreased again in 2024 to around $72.2 billion. Overall, the EV shows a high degree of volatility with significant fluctuations especially noticeable in the later years.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA demonstrated consistent growth throughout the entire period. Starting at approximately $759 million in 2019, it increased steadily each year, reaching about $1.84 billion by 2024. This robust upward trend suggests improving operational performance or higher profitability over time.
- EV/EBITDA Ratio
- The EV/EBITDA ratio exhibited considerable fluctuation. It started at 26.98 in 2019 and rose sharply to a peak of 53.43 in 2021, indicating an increase in the company's valuation relative to its earnings. After a decline to 36.73 in 2022, the ratio escalated again to 54.59 in 2023, the highest value in the dataset, before dropping to 39.17 in 2024. These variations suggest changing market perceptions of the company's earnings quality or growth prospects, and potential shifts in investor sentiment or valuation metrics.
In summary, the company exhibited steady growth in earnings capacity (EBITDA) but faced notable volatility in enterprise value and the valuation multiple (EV/EBITDA). The disconnect between consistent EBITDA growth and fluctuating enterprise value may indicate external market influences or changing investor expectations affecting valuation beyond fundamental earnings improvements.