Synopsys, Inc. · NASDAQ:SNPS
Synopsys — Investor Presentation (May 2020)
45 slides from Synopsys's investor presentation, May 2020
Slide 1: Corporate Overview for Investors
Corporate Overview for Investors May 2020
Slide 2: Forward-Looking Statements
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 third quarter and full fiscal year 2020, projected financial results; long
Slide 3: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader FY19(1) FY20 Targets(2) Broad Product Portfolio Revenue: $3.361B $3.60B - $3.65B Electronic Design Growth Rate: 8% 7% - 9% Automation (EDA) Non-GAAP 25% ~27% Operating Margin: Semiconductor Intellectual Property (IP) Non-GAAP EPS: $4.56 $5.21 - $5.28 Operatin
Slide 4: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Software 6 years Integrity Emerging Leader, ~10% of revenue Broadest Portfolio L-T growth: ~15-20%* Semiconductor >15 years IP 20%+ of revenue #2 IP Vendor L-T growth: low double-digits* >30 years of Electronic investment and Market Leader Design execution L-
Slide 5: Long-Term Financial Objectives
Long-Term Financial Objectives1 • While the results in any given period may vary due to acquisitions or other near-term priorities, our primary long-term objective is to drive double-digit non-GAAP EPS growth on a multi- year basis, through a mix of the following elements: • Grow total revenue2 gene
Slide 6: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Uniquely Positioned for Stability and Growth • Electronics complexity driving growth • Clear technology leadership • Financial strength and growth © 2020 Synopsys, Inc. 6
Slide 7: Global Value Chain – 2019
Global Value Chain – 2019 EDA & IP – At the Heart of Accelerating Electronics Innovation EDA & IP $10.8B Embedded Software $10.4B Foundry $70.1B Semiconductors $444.5B Electronic Systems $1,680B Sources: ESD Alliance, IPnest, MarketsandMarkets, IC Insights © 2020 Synopsys, Inc. 7
Slide 8: Blue Chip, Diversified Customer Base
Blue Chip, Diversified Customer Base Semiconductors Systems Software Developers • Semi R&D (including EDA) is a top • ~40% of our revenue comes from • Key function across all industries: investment priority for semi and systems companies semis and systems, to enterprises system customers in all phas
Slide 9: 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 © 2020 Synopsys, Inc. 9
Slide 10: Artificial Intelligence Market Growth
Artificial Intelligence Market Growth Deep Learning Chipset Market to Reach $72B by 2025 Source: Tractica 2019 Synopsys Confidential Information © 2020 Synopsys, Inc. 10
Slide 11: Enabling and Leveraging the Potential of AI
Enabling and Leveraging the Potential of AI Synopsys tools incorporate AI/ML technologies while enabling AI processor development Inference Algorithm Model Optimization ARC EV Processors Processors Optimization Memory Bandwidth/ Video Input Storage Capacity HBM2 USB/eDP DDR/LPDDR Chip-to-Chip Bandwi
Slide 12: 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 © 2020 Synopsys,
Slide 13: New Electronics Architecture Required
New Electronics Architecture Required Integrated Compute and Smart Sensor Architecture Requires Redesign Domains • Integrated Controllers per Domain Powertrain ADAS Comfort Infotainment /V2X Gateway • Sensor Fusion • Connectivity and upgradeability • Highest reliability, security and safety FUNCTION
Slide 14: Automotive Opportunity: Quality, Safety, & Security
Automotive Opportunity: Quality, Safety, & Security 11 of the top 15 Automotive OEMs use Synopsys Software Integrity Quality Safety Security Find critical defects and Functional Safety Compliance Find known vulnerabilities in open- vulnerabilities in code (MISRA, ISO26262) source & 3rd party code Ga
Slide 15: Advanced Process Development Continues
Advanced Process Development Continues © 2020 Synopsys, Inc. 15
Slide 16: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Uniquely Positioned for Stability and Growth • Electronics complexity driving growth • Clear technology leadership • Financial strength and growth © 2020 Synopsys, Inc. 16
Slide 17: Synopsys: Silicon to Software
Synopsys: Silicon to Software • Application security & quality testing Software • Leader in Gartner’s Magic Quadrant • Fastest engines & unified platform Verification • HW/SW verification & early SW bring-up • Broadest portfolio of silicon-proven IP IP • #1 interface, embedded mem. & physical IP • D
Slide 18: EDA
• Market and technology leader in EDA, the tools and technologies used to design semiconductor chips ~$6.8 billion market*; generally tracks semiconductor R&D spend over time Leader in • Growth drivers: all aspects of chip & system complexity • All leading semiconductor companies in the EDA world us
Slide 19: 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 Fusion: algorithms, engines, data model Correlated Platform with Deep Integrations Across Platform Value L
Slide 20: Synopsys Fusion Compiler
Synopsys Fusion Compiler™ • Only single product on market with innovative next-generation integration of 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
Slide 21: Synopsys Custom Compiler Adoption Growing
Synopsys Custom Compiler™ Adoption Growing Custom Compiler Adoption Customers 120 100 80 60 40 20 0 © 2020 Synopsys, Inc. 21
Slide 22: #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 23: Verification Hardware: ZeBu Server Emulation System
Verification Hardware: ZeBu® Server 4 Emulation System 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 own
Slide 24: #1 in Analog/Mixed Signal Simulation
#1 in Analog/Mixed Signal Simulation Circuit Simulation Leadership Foundry CPU GPU Auto FLASH DRAM • Market leader for >20 years • Close collaboration with leaders in memory, automotive IC and high-performance computing © 2020 Synopsys, Inc. 24
Slide 25: Semi IP
• #2 market share in IP, the reusable building Leading Provider blocks that are used for chip designs – Leading supplier of interface, memory, analog and physical IP – ~$3.9 billion market*, benefitting from our Semi IP customers’ move to outsourcing more and more complex IP • IP reuse reduces our c
Slide 26: 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; FY19 revenue >$750M Flash • Covers vast majority of chip RAM RAM RAM RAM Interface • Growing demand for more On-Chip Bus DDR Interface integrated subsystems Ba
Slide 27: 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 © 2020 Synopsys, Inc. 27
Slide 28: Software
• Entered the software security & quality space in 2014 – Since then, have assembled and developed the broadest portfolio of solutions on the market; $335 million revenue in FY19 – Solutions allow software code developers to fix security and quality defects early in development – Approximately $2.5
Slide 29: Software Security & Quality Market
Software Security & Quality Market • Evolving, nascent market • Growth drivers: TAM: ~$4.5-6.5B • Omnipresence of software • Widespread connectivity exacerbates security issues • Significant business risk from breaches SAM: • Large development teams ~$2-2.5B • Market growth rate: mid-teens % • Synop
Slide 30: Growing the Software Integrity Platform - Acquisitions
Growing the Software Integrity Platform - Acquisitions © 2020 Synopsys, Inc. 30
Slide 31: The Most Complete Portfolio in the Industry
The Most Complete Portfolio in the Industry Software Composition Static Analysis Dynamic Analysis Security Services Analysis Find critical defects and Find known vulnerabilities in Tests running apps for Strategic analysis to build vulnerabilities in code open-source & 3rd party code security vulner
Slide 32: Synopsys Polaris Software Integrity Platform
Synopsys Polaris Software Integrity PlatformTM Polaris • Platform that integrates products Centralized Consolidated Alerting & and managed services Management Reporting Workflow • Cloud-based Integrated Analysis Engines • Enterprise scale SAST SCA DAST/IAST Managed • Single user interface, easy to u
Slide 33: Recognized Leader in End-to-End Application Security
Recognized Leader in End-to-End Application Security Synopsys recognized as a leader for the fourth year in a row 2020 Gartner Magic Quadrant for Application Security Testing Download a free copy of the 2020 Magic Quadrant for Application Security Testing. This graphic was published by Gartner, Inc.
Slide 34: Recognized Leader in End-to-End Application Security
Recognized Leader in End-to-End Application Security 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 2019
Slide 35: Trusted Partner to >4,000 Companies
Trusted Partner to >4,000 Companies 17 of the top 25 9 of the top 10 9 of the top 10 6 of the top 10 4 of the top 5 3 of the top 4 commercial software aerospace & semiconductor managed U.S. wireless banks companies defense firms manufacturers healthcare firms providers Our mission is to help you bui
Slide 36: Growth Strategy
Growth Strategy • High-value products and consulting services to enable efficient and effective security testing during the software development process • Expand Polaris Software Integrity PlatformTM Cloud-based platform integrating multiple technologies: expands testing capabilities and supports la
Slide 37: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Uniquely Positioned for Stability and Growth • Electronics complexity driving growth • Clear technology leadership • Financial strength and growth © 2020 Synopsys, Inc. 37
Slide 38: Excellent Financial Execution
Excellent Financial Execution Revenue (M) $3,600 - Non-GAAP EPS* $3,650 $5.21 - $3,361 $3,121 $5.28 $2,725 $4.56 $2,423 $3.91 $2,242 $3.42 $3.02 $2.77 FY15 FY16 FY17 FY18 FY19 FY20E** FY15 FY16 FY17 FY18 FY19 FY20E** ~90% recurring revenue model with Strong financial execution while investing $4.8B
Slide 39: Cash Flow & Capital Allocation
Cash Flow & Capital Allocation Operating Cash Flow (M) $815 - Stock Repurchases (M) $840 $801 $400 $400 $400 $635 $329 $587 $280 $495 $424 $100 $100 FY15 FY16 FY17 FY18* FY19 FY20E** FY15 FY16 FY17 FY18 FY19 Q1'20 Q2'20 Roughly tracks EBITDA less cash taxes on Repurchased ~$2.0B in stock since 2015,
Slide 40: Market & Technology Leader; Solid Financials
Market & Technology Leader: • Electronic Design Automation • Semiconductor Intellectual Property • Software Security & Quality Solid Financials: • Recurring revenue model • Large, non-cancellable backlog • Excellent execution © 2020 Synopsys, Inc. 40
Slide 41: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Earnings Per Share – Full Fiscal Year 2020 Targets Range for Fiscal Year October 31, 2020 Low High Target GAAP earnings per share $ 3.74 $ 3.90 Adjustments: Estimated impact of amortization of intangible assets 0.61 0.58 Estimated impact of stock compensation 1.50 1.4
Slide 42: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Operating Margin – Full Fiscal Year 2019 and Midpoint of 2020 Targets Twelve Months Ended Twelve Months Ending October 31, 2019 (1) October 31, 2020 (1)(2) At midpoint of revenue and expense guidance ranges GAAP operating margin 15.5% 16.9% Amortization of intangible
Slide 43: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Earnings Per Share – Full Fiscal Years 2015 to 2019 Actual Results ASC 605 ASC 605 ASC 605 ASC 605 ASC 606 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 GAAP diluted net income per share $ 1.43 $ 1.73 $ 0.88 $ 2.82 $ 3.45 Adjustments: Amortization of intangible assets 0.86
Slide 44: Thank You
Silicon to Software Thank You
Slide 45: Synopsys
Synopsys n to Softwa