Synopsys, Inc. · NASDAQ:SNPS
Synopsys — Investor Day (April 2019)
102 slides from Synopsys's investor day presentation, Apr 2, 2019
Slide 1: Synopsys Investor Day
Synopsys Investor Day April 2, 2019 New York © 2019 Synopsys, Inc. 1
Slide 2: Agenda
AGENDA Markets Aart de Geus, Chairman & co-CEO Technology Andreas Kuehlmann, co-GM Software Integrity Group Graham Holmes, Sr. Director, Advanced Security Initiatives Group, Cisco Break John Koeter, VP Marketing Solutions Group Sassine Ghazi, co-GM Design Group Financial Update Trac Pham, CFO Panel
Slide 3: Forward-Looking Statements Regulation G
Forward-Looking Statements This presentation contains forward-looking statements under the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, including, but not limited to, financial targets for the second quarter and full fiscal year 2019, their comparative metrics under
Slide 4: Why Synopsys?
Why Synopsys? Aart de Geus Chairman and co-CEO © 2019 Synopsys, Inc. 4
Slide 5: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Uniquely Positioned for Growth and Stability • Dynamic markets and electronics complexity • Clear technology leadership • Financial strength & growth © 2019 Synopsys, Inc. 5
Slide 6: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Uniquely Positioned for Growth and Stability • Dynamic markets and electronics complexity • Clear technology leadership • Financial strength & growth © 2019 Synopsys, Inc. 6
Slide 7: From Silicon to Software
From Silicon to Software Synopsys is at the Heart of Innovations in the new era of Smart, Secure Everything © 2019 Synopsys, Inc. 7
Slide 8: Synopsys Today
Synopsys Today FY18 Revenue: Employees: Patents: Offices: $ $3.121B ~13,500 ~3,100 ~120 3,500 3,000 #1 Electronic Design Automation 2,500 tools & services Canada Russia Europe Broadest IP portfolio and $ Millions 2,000 Armenia S. Korea USA China Israel Japan #1 interface, analog, embedded 1,500 Indi
Slide 9: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Software 5 years Integrity Emerging Leader, ~10% of revenue Broadest Portfolio Growth: ~20% Semiconductor >15 years IP 20%+ of revenue #2 IP Vendor Growth: low double digits >30 years of Electronic investment and Market Leader Design execution Growth: mid-hig
Slide 10: Dynamic Market Drivers
Dynamic Market Drivers $120B Smart AI Secure Cloud Everything 5G IoT Compute Mobility Phone Smartphone Social Media Compute PC Internet Networking Server “Cloud” ‘85 ‘95 ‘05 ‘15 © 2019 Synopsys, Inc. 10
Slide 11: Software Silicon
SOFTWARE AI Secure Cloud 5G IoT Compute SILICON © 2019 Synopsys, Inc. 11
Slide 12: New Technology is Impacting Every Vertical
New Technology is Impacting Every Vertical Automotive Manufacturing Banking AI Cloud Secure IoT Health Robotics 5G Compute Household Agriculture Goods © 2019 Synopsys, Inc. 12
Slide 13: Automotive
Secure OWNERSHIP & INFRASTRUCTURE Entire Ecosystem AUTONOMOUS DRIVING Systems of systems Automotive ARTIFICIAL INTELLIGENCE Big Data, Capture, Analyze, Decision Making SOFTWARE >150M Lines of Code per vehicle SYSTEMS Infotainment, GPS, Drivetrain, Sensors CHIPS 4 Billion transistors © 2019 Synopsys,
Slide 14: Strategy Principles
Strategy Principles Execution Leadership Excellence Vision Growth Technology Business Markets Margin Customers Courage © 2019 Synopsys, Inc. 14
Slide 15: Software Silicon
SOFTWARE Software Verification IP Design Silicon SILICON © 2019 Synopsys, Inc. 15
Slide 16: Synopsys: Silicon to Software
Synopsys: Silicon to Software Software • Polaris Software Integrity PlatformTM Software Verification Verification • HW/SW Verification IP IP • Sophisticated Blocks & Subsystems Design Design • Fusion Design PlatformTM Silicon Silicon • Atomic Level Simulation © 2019 Synopsys, Inc. 16
Slide 17: Investing for the Long-Term
Investing for the Long-Term Software Broaden TAM IP ? Verification Broaden TAM ? Design Silicon EDA © 2019 Synopsys, Inc. 17
Slide 18: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Uniquely Positioned for Growth and Stability • Dynamic markets and electronics complexity • Clear technology leadership • Financial strength & growth © 2019 Synopsys, Inc. 18
Slide 19: Software Integrity
Software Integrity Andreas Kuehlmann Co-GM, Software Integrity Group © 2019 Synopsys, Inc. 19
Slide 20: Software Integrity
Software Integrity TOOLS TTM Revenue: To test software code – as it’s being $ ~$299M written – for known security vulnerabilities and quality defects. Customers: >4,000 C O N S U LT I N G S E R V I C E S To help companies assess, build Countries: and implement their software ~18* security strategy *
Slide 21: Scaling the Business
Scaling the Business Revenue $280M Products Services $174M $99M $74M $27M FY14 FY15 FY16 FY17 FY18 © 2019 Synopsys, Inc. 21
Slide 22: Every company is a software company
WHY? “Every company is a software company” — Satya Nadella, CEO © 2019 Synopsys, Inc. 22
Slide 23: Security Risk: Shifted from the Network to the Application
WHY? Security Risk: Shifted from the Network to the Application 84% of all cyber attacks happen on the application layer Source: Tim Clark, SAP brand journalist (March 10, 2015) © 2019 Synopsys, Inc. 23
Slide 24: Yet, Getting Software Right is Challenging
WHY? Yet, Getting Software Right is Challenging Time to Quality Cost market Security © 2019 Synopsys, Inc. 24
Slide 25: DevOps: Fast Iterations & Automation
DevOps: Fast Iterations & Automation $ Continuous Reduced Higher Lower feedback friction speed cost © 2019 Synopsys, Inc. 25
Slide 26: Evolving into DevSecOps
Evolving into DevSecOps Sec By 2021, DevSecOps practices will be embedded in 80% of rapid development teams, up from 15% in 2017 Source: Gartner, Integrating Security Into the DevSecOps Toolchain Nov. 16, 2017 $ Continuous Reduced Higher Lower feedback friction speed cost © 2019 Synopsys, Inc. 26
Slide 27: Software Security & Quality Market
WHAT? Software Security & Quality Market • Evolving, nascent market TAM: $4.5-6.5B • Growth drivers: • Omnipresence of software • Widespread connectivity exacerbates security issues • Significant business risk from SAM: breaches ~$2-2.5B • Large development teams • ~20% growth segment Sources: Gartn
Slide 28: Software Security & Quality Testing Landscape
WHAT? Software Security & Quality Testing Landscape* Static Dynamic Open Interactive Managed Professional Testing Testing Source Testing Services Services *Designed to provide an illustrative view of key market categories and a selection of vendors in each category. Sources: Gartner, Forrester, IDC,
Slide 29: Addressing Security & Quality Holistically
WHAT? Addressing Security & Quality Holistically Strategy & Building Security in Maturity Action Plan (MAP) Planning Maturity Model (BSIMM) Professional Architecture Security DevSecOps Cloud Industry Services and Design Training Integration Security Solutions Static Mobile Dynamic Managed Penetratio
Slide 30: Building Security In Maturity Model (BSIMM)
WHAT? Building Security In Maturity Model (BSIMM) Assess where a company’s software security initiative stands compared to peers • Maturity assessment based on industry best practices • 100+ metrics in 12 categories • Report provides comparison against industry peers • Participation in BSIMM communi
Slide 31: Synopsys Polaris Software Integrity Platform
WHAT? Synopsys Polaris Software Integrity PlatformTM Polaris • Platform that integrates all products Centralized Consolidated Alerting & and managed services Management Reporting Workflow • Cloud-based Integrated Analysis Engines • Enterprise scale Coverity Black Duck Seeker Managed • Single user in
Slide 32: Customer Success Story: Large U.S. Health Care Company
WHO? Customer Success Story: Very large U.S. consumer health care, medical device & pharmaceuticals company August 2016 Oct - Dec 2017 September 2018 Launch of security initiative Further maturation Program rollout • Limited scope & budget • Attended BSIMM conference • Black Duck + implementation •
Slide 33: Trusted Partner to >4,000 Companies
WHO? Trusted Partner to >4,000 Companies 16 of top 20 Commercial Banks 7 of top 10 Aerospace & Defense Firms 8 of top 10 Global Brands 6 of top 10 Semiconductor Companies 9 of top 10 ISVs © 2019 Synopsys, Inc. 33
Slide 34: Recognized Leader in End-to-End Application Security
Recognized Leader in End-to-End Application Security WHO? Synopsys is the only vendor recognized as the leader in both SAST and Open Source (SCA) Gartner Magic Quadrant Application Security Testing Download a free copy of the 2019 Magic Quadrant for Application Security Testing. © 2019 Synopsys, Inc
Slide 35: Recognized Leader in End-to-End Application Security
Recognized Leader in End-to-End Application Security WHO? Synopsys is the only vendor recognized as the leader in both SAST and Open Source (SCA) Forrester Wave Static Application Security Testing Forrester Wave Software Composition Analysis Source: Forrester (December 2017) Source: Forrester (April
Slide 36: Expanding Beyond Traditional Customer Base
Expanding Beyond Traditional Customer Base RESULTS Semis/Systems Enterprise* Semis/Sys Enterprise 2015 2015 2018 *Defined as customers beyond the historical Synopsys semiconductor and systems companies © 2019 Synopsys, Inc. 36
Slide 37: Expanding Geographically
Expanding Geographically RESULTS CAGR = 41% CAGR = 24% CAGR = 64% FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 EMEA JAPAN CAGR = 128% FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 N.AMERICA APAC Annual Revenue; Updated from information presented on April 2, 2019 to reflect allocation of backlog acquired with C
Slide 38: Expanding Platform Adoption: Products & Services
Expanding Platform Adoption: Products & Services RESULTS 2 SOLUTIONS 3 SOLUTIONS 4 SOLUTIONS 7% 2% 25% 12x logo growth 5x logo growth 6% 20% 5% 6x logo growth % of Logos % of Logos 4% % of Logos 15% 1% 3% 10% 2% 5% 1% 0% 0% 0% FY16 FY17 FY18 FY16 FY17 FY18 FY16 FY17 FY18 % of Logos % of Logos % of L
Slide 39: Growth Strategy
Growth Strategy • Continue to scale business and extend our lead in this emerging market • Land in core and new verticals with best-in-class capabilities in each tool • Expand through suite of additional solutions delivered via integrated Polaris Software Integrity PlatformTM • Leverage existing int
Slide 40: Partnerships for Secure Development
Partnerships for Secure Development Graham Holmes Sr. Director, Advanced Security Initiatives Group 2 April 2019
Slide 41: Security is a Cisco Priority
Security is a Cisco Priority Brand Promise “Security is fundamental across We securely our portfolio and business and is connect everything foundational to all we do at to make Cisco.” anything possible Chuck Robbins CEO, Cisco © 2019 Cisco and/or its affiliates. All rights reserved. Cisco Confident
Slide 42: Cisco's Trust Journey
Cisco’s Trust Journey Security Ninja Snowden public 1st Transparency 1st Gen hardware, software Education program, disclosures, May ‘13 Report, Apr 2015 technologies, 2002-2005 2012 Transparency Cisco Trust Center, June Cisco Value Chain & TWS blog, Mar 2013 2015 1st Gen Product Security Security, 2
Slide 43: Built-in Security for our Offers
Built-in Security for our Offers Cisco Secure Trustworthy Standards and Other Secure Development Supply Chain Security Technologies Certifications Product Efforts Lifecycle Ensure and enforce secure Design and implement Align with global Enforce Cisco security Privacy by design development practices
Slide 44: Partnerships in Secure Development Lifecycles
Partnerships Software in Secure Development Development Lifecycle Lifecycles Third party tools Cisco tools Security Secure Requirements Configurations Compliance Verification Testing Testing Code Build Validation Testing Verification Testing Release (Codenomicon, (BlackDuck Binary) Design Unit Test
Slide 45: Partnerships in Secure Development Lifecycles
Partnerships Software in Secure Development Development Lifecycle Lifecycles Third party tools Cisco tools Security Secure Requirements Configurations Compliance Verification Testing Testing Code Build Validation Testing Verification Testing Release (Codenomicon, (BlackDuck Binary) Design Unit Test
Slide 46: Semiconductor IP
Semiconductor IP John Koeter VP Marketing, Solutions Group © 2019 Synopsys, Inc. 46
Slide 47: Software Silicon
SOFTWARE Software Verification IP Design Silicon SILICON © 2019 Synopsys, Inc. 47
Slide 48: Comprehensive Semiconductor IP Portfolio
Comprehensive Semiconductor IP Portfolio Pre-designed functional blocks that are integrated onto larger SoCs Software • 20%-plus of total revenue; low double-digit growth Verification • Market leader in interfaces, embedded memory, physical IP (foundry-specific) and analog IP • New markets (Auto, AI
Slide 49: Semiconductor IP Market Segments
Semiconductor IP Market Segments 2018 Design IP Revenue: $3.6B Wireless I/F (1%) Infra. IP (3%) Misc Digital IP (3%) #1 GP Analog (2%) Physical Library 4.6% OTP, MTP, Flash, Etc. 4% #1 Memory 6% Microprocessors (CPU) #2 42% Wired I/F IP 20% #1 GPU/ DSP ISP 5% 9% Source: IPNest, May 2018 © 2019 Synop
Slide 50: IP Growth Drivers
IP Growth Drivers Outsourcing Complexity New Markets Design teams focused Protocols are more complex; Automotive, AI, IoT, on differentiation Moore’s Law, Integration Hyperscale computing © 2019 Synopsys, Inc. 50
Slide 51: Third Party IP Use Continues to Grow
Third Party IP Use Continues to Grow 100% 29% 30% 38% 75% 56% 61% 67% 50% 71% 70% 62% 25% 44% 39% 33% 0% Verification IP Wired Interface IP Embedded Analog IP Security IP Wireless IP Memory IP Obtained from 3rd-Party IP exists internally Source: Global Users Survey 2018 © 2019 Synopsys, Inc. 51
Slide 52: IP Portfolio Complexity
Complexity: New Protocols, Integration and New Process Technologies Drive New Opportunities IP titles get USB 4.0 USB 3.1 more complex USB 3.0 USB 2.0 IP Interface Foundation Processor Security More functions IP IP IP IP integrated Portfolio Planar FinFET 55nm40nm Gate-All-Around 28nm 22nm 16/14nm M
Slide 53: IP Moving from Blocks to Complex, Integrated IP Systems
IP Moving from Blocks to Complex, Integrated IP Systems 300 250 200 150 100 50 IP Subsystems IP Blocks 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 # of Blocks Source: Semico, October 2018 © 2019 Synopsys, Inc. 53
Slide 54: New Markets: More Functionality in Key Markets
New Markets: More Functionality in Key Markets Driving New Technology Requirements AI AUTOMOTIVE CLOUD IoT Machine Learning, ADAS, Networking, Smart Home, Deep Neural Infotainment, Servers AI Industrial, Networks Connected Vehicle Accelerators Wearables © 2019 Synopsys, Inc. 54
Slide 55: IP Enabling Critical Functions in Automotive SoCs
IP Enabling Critical Functions in Automotive SoCs USB Data Converters ARC Processors Ethernet TSN Embedded Vision Processors CONNECTIVITY HDMI GATEWAY Security IP LPDDR4 ADAS COMFORT Embedded Memory Sensor & Control Subsystem INFOTAINMENT Logic Library MIPI CSI/DSI POWERTRAIN Security IP Mobile Stor
Slide 56: New Markets Driving Green Field Opportunities
New Markets Driving Green Field Opportunities Outsourcing IP Key To Meeting Technology Requirements FABU Selects DesignWare® IP to Deliver Intelligence in ADAS & Autonomous Driving SoCs “Our ADAS and autonomous vehicle chip uses DesignWare IP to help us integrate intelligent functionality into our S
Slide 57: Habana Labs Achieves First-Pass Silicon Success
Habana Labs Achieves First-Pass Silicon Success for High-Performance AI Processor SoC Using DesignWare IP DesignWare® for PCI Express 4.0 Delivers Required AI Inference Throughput “After an extensive evaluation process, we selected Synopsys' leading 16 GT/s DesignWare IP for PCI Express 4.0 due to i
Slide 58: Synopsys DesignWare IP
Synopsys DesignWare® IP Specialty I/O Application CPU Embedded CPU RAM RAM ROM Graphic Core(s) • Broadest portfolio available in the market Flash • Covers vast majority of chip RAM RAM RAM RAM Interface • Growing demand for more On-Chip Bus DDR Interface integrated subsystems Basic Peripherals (UART
Slide 59: Electronic Design Automation
Electronic Design Automation Sassine Ghazi Co-GM, Design Group © 2019 Synopsys, Inc. 59
Slide 60: Software Silicon
SOFTWARE Software Verification IP Design Silicon SILICON © 2019 Synopsys, Inc. 60
Slide 61: What Drives EDA? Design Complexity
What Drives EDA? Design Complexity Massive SW Content HW Established SW Nodes Advanced 28nm+ Processes © 2019 Synopsys, Inc. 61
Slide 62: Chip Designs are Huge Investments
Chip Designs are Huge Investments 580 Chip Design Cost $M $500+ Million Advanced Design Cost 435 Software 290 Validation Prototype 145 Software Hardware Physical Verification Architecture 0 IP Qualification 65nm 40nm 28nm 22nm 16nm 10nm 7nm 5nm Source IBS, July 2018 © 2019 Synopsys, Inc. 62
Slide 63: Leader in Advanced Process Designs
100 150 200 250 300 350 400 450 500 550 600 0 50 Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 nm Q2'05 Q3'05 90 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 nm 65 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 nm on established nodes Q1'10 Q2'10 45/40 Q3'10 Q4'10 Q1'11 Q2'11 Innovations benefit advanced
Slide 64: Synopsys used for 99% of 12nm and below
100 150 200 250 300 350 400 450 500 550 600 0 50 Q1'04 Q2'04 Q3'04 Q4'04 Q1'05 nm Q2'05 Q3'05 90 Q4'05 Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 nm 65 Q3'07 Q4'07 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 nm on established nodes Q1'10 Q2'10 45/40 Q3'10 Q4'10 Q1'11 Q2'11 Innovations benefit advanced
Slide 65: Leader in Advanced Process Designs
Leader in Advanced Process Designs Industry Leader at 7nm Highly Advanced GAA Design Early Successes Shared at SNUG and DAC World’s First Advanced Gate-All-Around Tape-out • Fusion Design PlatformTM • Extensive collaboration with Samsung Foundry • Full-flow validation of target Wide Customer Deploym
Slide 66: #1 in Silicon Manufacturing Solutions
#1 in Silicon Manufacturing Solutions Software • Synopsys TCAD tools used by virtually all major semiconductor manufacturers Verification • Earliest access to critical process models • Synopsys OPC used IP • to generate 80% of logic foundry revenues • at all top memory fabs Design • Yield management
Slide 67: #1 in Design Solutions
#1 in Design Solutions Software Verification • Market and technology leader • 14 of top 15 semiconductor companies use IP Synopsys as their primary digital design solution • Growing adoption of custom/analog Design design solution Silicon © 2019 Synopsys, Inc. 67
Slide 68: From Position of Strength to Next Level of Impact
From Position of Strength . . . SYNTHESIS PLACE & SIGNOFF ROUTE . . . To Next Level of Impact © 2019 Synopsys, Inc. 68
Slide 69: Synopsys Fusion Design Platform
Synopsys Fusion Design Platform™ Trusted Anchor Products, Correlated Platform with Synergistic Value Links Trusted Anchor #1 Synthesis, #1 P&R, #1 Signoff Products Machine Learning Technologies Massively Parallel Architecture Correlated Platform with Deep Integrations Across Platform Value Links In-
Slide 70: Introducing Synopsys Fusion Compiler
Introducing Synopsys Fusion Compiler™ • Only single product on market that integrates synthesis, place & route and key signoff technologies • Built with market-leading products • Redefines conventional product boundaries; sharing of algorithms, code and data model • New synthesis engine, developed f
Slide 71: Fusion Compiler: Unprecedented Customer Ramp-up
Fusion Compiler™: Unprecedented Customer Ramp-up 16 38 Mobile 5X Increase Logos Tapeouts in logos Early Public 8 Process 150+ Active Server Engagements Launch Designs Nodes GPU GPU Nov 2018 Feb 2019 © 2019 Synopsys, Inc. 71
Slide 72: Synopsys Custom Compiler Adoption Growing
Synopsys Custom Compiler™ Adoption Growing Custom Compiler Adoption DRC Fusion HSPICE Custom FineSim Compiler CustomSim Extraction Fusion StarRC, IC Validator © 2019 Synopsys, Inc. 72
Slide 73: #1 in Verification Solutions
#1 in Verification Solutions Software • Verifying most complex SoCs in the world Verification • Clear market leader in digital and analog/mixed signal • Market leader in verification software since 2008 • Market leader in verification hardware since 2016 IP • 12 of top 15 semiconductor companies use
Slide 74: #1 in Analog/Mixed Signal Simulation
#1 in Analog/Mixed Signal Simulation Circuit Simulation Leadership Foundry CPU GPU Auto FLASH DRAM DRC Fusion HSPICE Custom FineSim Compiler CustomSim • Market leader for >20 years Extraction Fusion • Close collaboration with leaders in memory, automotive IC and StarRC, IC Validator high-performance
Slide 75: Complexity Driving Unsustainable Growth in Cost, Schedules
Complexity Driving Unsustainable Growth in Cost, Schedules Verification complexity and growing software content driving growth in cost, schedules Software Cost Hardware Validation Arch. Early Customer Volume Enablement Production © 2019 Synopsys, Inc. 75
Slide 76: Complexity Driving Unsustainable Growth in Cost, Schedules
Complexity Driving Unsustainable Growth in Cost, Schedules Verification complexity and growing software content driving growth in cost, schedules Verification Continuum Software Cost Hardware Validation Arch. Early Customer Volume Early Customer Enablement Volume Production Enablement Production © 2
Slide 77: #1 in Digital/Functional Verification
#1 in Digital/Functional Verification Verification Continuum™ Platform • Complete platform with #1 products Verification Continuum in all categories Planning Planning & & Coverage Coverage • Industry’s highest-performance engines #1 Verdi • Uniquely positioned for early software bring-up #1 #1 #1 #1
Slide 78: Verification Software Customer Successes
Verification Software Customer Successes • Top 5 mobile SoC vendors use VCS® • Top 15 semiconductor companies use SpyGlass® • 18 of top 20 semiconductor vendors use VCS® • 14 of top 15 semiconductor companies use Verdi® Debug Solution © 2019 Synopsys, Inc. 78
Slide 79: Verification Hardware: Introducing ZeBu Server 4
Verification Hardware: Introducing ZeBu® Server 4 Leading system for software bring-up Only modern system to allow software-on-hardware validation Industry’s fastest emulation system Now 2x higher performance Industry’s largest capacity Scalable to 19B+ gates Industry’s lowest total cost of ownershi
Slide 80: Software Silicon
SOFTWARE Software Verification IP Design Silicon SILICON © 2019 Synopsys, Inc. 80
Slide 81: Financial Update
Financial Update Trac Pham Chief Financial Officer © 2019 Synopsys, Inc. 81
Slide 82: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Uniquely Positioned for Growth and Stability • Dynamic markets and electronics complexity • Clear technology leadership • Financial strength & growth © 2019 Synopsys, Inc. 82
Slide 83: Excellent Financial Execution
Excellent Financial Execution Revenue ($M) $3,290 - Non-GAAP EPS* $3,340 $4.20 - $3,121 $4.27 $2,725 $3.91 $2,423 $3.42 $2,242 $3.02 $2.77 FY15 FY16 FY17 FY18 FY19E** FY15 FY16 FY17 FY18 FY19E** ~90% recurring revenue model with Strong financial execution while investing $4.3B noncancelable backlog
Slide 84: Strength Across the Board
Strength Across the Board $3.1B $3.1B $2.7B $2.7B $2.4B $2.4B FY16 FY17 FY18 FY16 FY17 FY18 EDA IP & System Integration Software Integrity North America Europe Japan Asia Pacific © 2019 Synopsys, Inc. 84
Slide 85: Cash: Invest in the Business and Return to Shareholders
Cash: Invest in the Business and Return to Shareholders* $0.3 $0.4 $0.5 $1.3 Billions $2.0 $1.6 $1.0 $0.5 FY12 FY14 Operating Debt Debt Other Other** Capital M&A Gross Share FY19 YTD Q119* Cash & ST Year Inv End Operating Cash Flow Capital Purchases Gross Share Repurchases Cash & ST Inv Balance Cash
Slide 86: Cash Flow & Capital Allocation
Cash Flow & Capital Allocation Operating Cash Flow ($M) Stock Repurchases ($M) ~$700 $400 $400 $400 $635 $587 $495 $280 $424 $129 FY15 FY16 FY17 FY18* FY19E** FY15 FY16 FY17 FY18 FY19 YTD Roughly tracks EBITDA less cash taxes on Repurchased ~$1.6B in stock since 2015, multi-year basis reducing share
Slide 87: Long-Term Financial Objectives: Revenue
Long-Term Financial Objectives Revenue ($M)** • Next milestone: $4 billion in $4,000 $3,290 - next few years $3,340 $3,121 $3,000 • High-single-digit revenue $2,725 $2,000 growth on a multi-year basis • EDA mid-to-high single digits $1,000 • IP low double digits • Software Integrity ~20% range $0 FY
Slide 88: Long-Term Financial Objectives: Operating Margin
Long-Term Financial Objectives Non-GAAP Op Margin*** 30% • Manage on a path to “Rule of 40” 24% ~24% 22% • Long-term NG OM in 30% range 20% • On track for high 20s OM by 2021 10% 0% FY17 FY18* FY19E** FY20E LT FY21E Objectives FY20-21 Excludes impact of any future material acquisitions * Operating e
Slide 89: Long-Term Financial Objectives: Non-GAAP EPS
Long-Term Financial Objectives Non-GAAP EPS** • Sustainable double-digit non-GAAP EPS growth $4.20 - $4.27 $3.91 • Driven by: • Solid revenue growth $3.42 • Expanding operating margin – Operating leverage – Driving higher productivity and efficiency throughout the enterprise – Scaling of Software In
Slide 90: Reaffirming Q219 and FY19 Guidance
Reaffirming Q219 and FY19 Guidance ASC 606 METRIC Q219 FY19 Revenue (millions) $810 - $850 $3,290 - $3,340 GAAP Expenses (millions) $682 - $708 $2,758 - $2,788 Non-GAAP Expenses (millions) $620 - $640 $2,520 - $2,540 OI&E (millions) $0 - $2 ($13) - ($9) Normalized Annual Non-GAAP Tax Rate 16% 16% Fu
Slide 91: Appendix
Appendix © 2019 Synopsys, Inc. 91
Slide 92: Speaker Biographies: Aart de Geus and Andreas Kuehlmann
Dr. Aart de Geus - Chairman and co-Chief Executive Officer Since co-founding Synopsys in 1986, Aart has expanded Synopsys from a start-up synthesis company to a global high-tech leader. He has long been considered one of the world's leading experts on logic synthesis and simulation, and frequently k
Slide 93: Speaker Biographies: John Koeter and Graham Holmes
Graham Holmes - Senior Director, Advanced Security Initiatives Group Cisco Systems, Inc. Graham Holmes joined Cisco Systems in 1997 and has had a distinguished career with over twenty-five years of technical management experience as an officer in the US Navy and with industry in product management,
Slide 94: Speaker Biographies: Sassine Ghazi and Trac Pham
Sassine Ghazi - co-General Manager Design Group Sassine is responsible for leading the development and deployment of the Synopsys design implementation and analog/mixed-signal product lines. He first joined Synopsys in 1998 and has held several technical and management positions in field operations.
Slide 95: Software Integrity Glossary
Software Integrity Glossary Term Description Building Security in Maturity Model - A study of existing software security initiatives. Compiles practices of many different BSIMM organizations to identify both common and unique practices. A development "paradigm," emphasizing rapid delivery through th
Slide 96: Summary of Certain Discrete Items
Summary of Certain Discrete Items Income Statement: Certain Discrete Operating Items Revenue FY17A FY18A Revenue FY18A FY19E* FY17-FY18 ASC 605 ASC 605 FY18-FY19 ASC 605 ASC 606 Reported results $2,724.9 $3,121.1 Reported results; Guidance midpoint $3,121.1 $3,315.0 Extra week in Q1'18 ~+$46M Extra
Slide 97: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. Forward- looking statements include, bu
Slide 98: Forward-Looking Statements (continued)
Forward-Looking Statements (continued) increased risks resulting from an increase in sales of our hardware products, including increased variability in upfront revenue; changes in accounting principles or standards; changes in our effective tax rate; liquidity requirements in our U.S. operations; cl
Slide 99: GAAP to Non-GAAP Reconciliation: EPS Actuals
GAAP to Non-GAAP Reconciliation EPS – Actuals ASC 605 ASC 605 ASC 605 ASC 605 FY 2015 FY 2016 FY 2017 FY 2018 GAAP net income per share $ 1.43 $ 1.73 $ 0.88 $ 2.82 Adjustments: Amortization of intangible assets 0.86 0.84 0.70 0.82 Stock compensation 0.54 0.63 0.70 0.91 Acquisition-related costs 0.10
Slide 100: GAAP to Non-GAAP Reconciliation: EPS Targets
GAAP to Non-GAAP Reconciliation EPS – Targets ASC 606 ASC 606 Q2 FY 2019* FY 2019* GAAP net income per share $0.71 - $0.79 $3.19 - $3.32 Adjustments: Estimated impact of amortization of intangible assets 0.18 - 0.16 0.67 - 0.64 Estimated impact of stock compensation 0.26 - 0.24 1.04 - 1.01 Legal mat
Slide 101: GAAP to Non-GAAP Reconciliation: Total Expenses Targets
GAAP to Non-GAAP Reconciliation Total Expenses – Targets ASC 606 ASC 606 (Thousands) Q2 FY 2019* FY 2019* Target GAAP expenses $682,000 - $708,000 $2,757,562 - $2,787,562 Adjustments: Estimated impact of amortization of intangible assets (25,000) - (28,000) (99,000) - (104,000) Estimated impact of s
Slide 102: GAAP to Non-GAAP Reconciliation: Operating Margin
GAAP to Non-GAAP Reconciliation Operating Margin – Actuals and Targets ASC 605 ASC 605 ASC 606 FY 2017 FY 2018 FY 2019* GAAP operating margin 12.8% 11.5% 16.3% Adjustments: Amortization of intangible assets 3.9% 4.0% 3.1% Stock compensation 4.0% 4.5% 4.8% Acquisition-related costs 0.4% 0.7% Restruct