Australia markets close in 1 hour
  • ALL ORDS

    7,751.30
    -20.50 (-0.26%)
     
  • ASX 200

    7,543.30
    -14.80 (-0.20%)
     
  • AUD/USD

    0.6934
    +0.0010 (+0.14%)
     
  • OIL

    73.53
    +0.14 (+0.19%)
     
  • GOLD

    1,889.40
    +12.80 (+0.68%)
     
  • BTC-AUD

    33,069.10
    -822.05 (-2.43%)
     
  • CMC Crypto 200

    525.83
    -11.03 (-2.05%)
     
  • AUD/EUR

    0.6420
    +0.0009 (+0.14%)
     
  • AUD/NZD

    1.0954
    +0.0020 (+0.18%)
     
  • NZX 50

    12,197.15
    +44.95 (+0.37%)
     
  • NASDAQ

    12,573.36
    -229.74 (-1.79%)
     
  • FTSE

    7,901.80
    +81.64 (+1.04%)
     
  • Dow Jones

    33,926.01
    -127.89 (-0.38%)
     
  • DAX

    15,476.43
    -32.77 (-0.21%)
     
  • Hang Seng

    21,154.12
    -506.35 (-2.34%)
     
  • NIKKEI 225

    27,737.91
    +228.45 (+0.83%)
     

Synopsys (SNPS) Q4 Earnings Beat, Revenues Match Estimates

Synopsys SNPS reported fourth-quarter fiscal 2022 non-GAAP earnings of $1.91 per share, beating the Zacks Consensus Estimate of $1.84. The bottom line improved 4.9% year over year.

Revenues surged 11.3% year over year to $1.28 billion, driven by growth across its business segments. The top line was in line with the Zacks Consensus Estimate.

Synopsys benefited from the increasing demand for its products amid the rapid adoption of Big Data, faster computation and Machine Learning. Complex, connected, specialized and secure chips and systems witnessed strong momentum and drove Synopsys’ quarterly performance.

 

Synopsys, Inc. Price, Consensus and EPS Surprise

Synopsys, Inc. Price, Consensus and EPS Surprise
Synopsys, Inc. Price, Consensus and EPS Surprise

Synopsys, Inc. price-consensus-eps-surprise-chart | Synopsys, Inc. Quote

Quarter in Detail

In the license-type revenues group, Time-Based Product revenues (62.9% of total revenues) of $808.2 million were up 17.5% year over year. Upfront Product revenues (19.7%) declined 7.7% to $253.2 million. Maintenance and Service revenues (17.4%) increased 17.3% year over year to $222.9 million from the year-ago quarter’s $190 million.

Segment-wise, Semiconductor & System Design revenues (90% of total revenues) were $1.16 billion, up 11.5% year over year. Within the segment, Electronic Design Automation revenues (53% of revenues) were $685 million, while IP &Systems Integration revenues (35% of revenues) amounted to $454.3 million.

Software Integrity revenues totaled $127.1 million, contributing approximately 10% to the top line in the reported quarter.

Geographically, Synopsys’ revenues in North America (47% of the total) and Europe (9%) were $610 million and $117.2 million, respectively. Revenues from Korea (13%), China (14%) and Other (16%) were $172.7 million, $177.9 million and $206.5 million, respectively.

The non-GAAP operating margin was 27.5%, contracting 200 basis points (bps) year over year.

Semiconductor & System Design delivered an adjusted operating margin of 29.6%, shrinking 170 bps on a year-over-year basis. Software Integrity margin contracted 370 bps year over year to 8.4%.

Balance Sheet & Cash Flow

Synopsys had cash and short-term investments of $1.57 billion as of Oct 31, 2022 compared with $1.53 billion as of Jul 31, 2022.

Total long-term debt was $20.8 million in the reported quarter, down from $22 million as of Jul 31, 2022.

During fiscal 2022, operating cash flow was $1.74 billion.

Guidance

For the first quarter of fiscal 2023, Synopsys expects revenues between $1.340 billion and $1.370 billion. Management estimates non-GAAP earnings between $2.48 and $2.53 per share. Non-GAAP expenses are anticipated in the band of $875-$885 million.

For fiscal 2023, SNPS projects revenues to be $5.775-$5.825 billion.

The non-GAAP earnings for the fiscal year are expected to be between $10.28 and $10.35 per share.

Non-GAAP expenses are estimated in the range of $3.810-$3.840 billion. Synopsys forecasts an operating cash flow of approximately $1.700 billion for fiscal 2023.

Zacks Rank & Key Picks

Synopsys currently carries a Zacks Rank #4 (Sell). Shares of SNPS have increased 1.4% in the past year.

Some better-ranked stocks from the broader Computer and Technology sector are Celestica CLS, Fabrinet FN and Zscaler ZS. While Celestica flaunts a Zacks Rank #1 (Strong Buy), Fabrinet and Zscaler carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 60 days.

CLS' earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have moved up 13.3% in the past year.

The Zacks Consensus Estimate for Fabrinet's second-quarter fiscal 2023 earnings has been revised 16 cents northward to $1.89 per share over the past 30 days. For fiscal 2023, earnings estimates have improved 7.6% to $7.48 per share in the past 30 days.

FN’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 5.4%. Shares of the company have gained 16.6% in the past year.

The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved south by a penny to $1.17 per share in the past 30 days.

ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 58.1% in the past year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Celestica, Inc. (CLS) : Free Stock Analysis Report

Synopsys, Inc. (SNPS) : Free Stock Analysis Report

Fabrinet (FN) : Free Stock Analysis Report

Zscaler, Inc. (ZS) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research