Synopsys, Inc. · NASDAQ:SNPS
Synopsys — Investor Presentation (December 2019)
44 slides from Synopsys's investor presentation, December 2019
Slide 1: Corporate Overview for Investors
Corporate Overview for Investors December 2019
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 first 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 $5.18 - $5.25 Operating
Slide 4: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Software 5 years Integrity Emerging Leader, ~10% of revenue Broadest Portfolio Growth: ~15-20% 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-
Slide 5: 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 © 2019 Synopsys, Inc. 5
Slide 6: Global Value Chain – 2019E
Global Value Chain – 2019E EDA & IP – at the Heart of Accelerating Electronics Innovation EDA & IP $11.8B Embedded Software $10.8B Foundry $69.6B Semiconductors $443.8B Electronic Systems $1,680B Sources: IC Insights, VDC Research, Synopsys Internal Estimates © 2019 Synopsys, Inc. 6
Slide 7: Blue Chip, Diversified Customer Base
Blue Chip, Diversified Customer Base Semiconductors Systems Software Developers • Consists of virtually all semiconductor • ~40% of our revenue comes from • Key function across all industries: companies in the world, including all of systems companies semis and systems, to enterprises the top 20 • S
Slide 8: 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. 8
Slide 9: Artificial Intelligence Market Growth
Artificial Intelligence Market Growth • Mobile - All premier smartphones will Chipsets across all markets will include Deep Learning integrate AI Processing Capabilities Capabilities by 2021 • Data Center - More than 50% of enterprises will deploy AI accelerators in their server infrastructure by 20
Slide 10: 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 11: 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 12: 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 13: Automotive Opportunity: Software Security & Quality
Automotive Opportunity: Software Security & Quality 11 of the top 15 Automotive OEMs use Synopsys Software Integrity Supply Chain Static Analysis Security Testing Security Services Management Find critical defects and Find vulnerabilities before Find known vulnerabilities in Gap analysis / vulnerabi
Slide 14: Advanced Process Development Continues
Advanced Process Development Continues © 2019 Synopsys, Inc. 14
Slide 15: 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 © 2019 Synopsys, Inc. 15
Slide 16: EDA
• Market and technology leader in EDA, the tools and technologies used to design semiconductor chips ~$7.4 billion market*; generally tracks semiconductor R&D spend over time Leader in • All leading semiconductor companies in the world use Synopsys technology EDA • State-of-the-art design and verifi
Slide 17: 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 18: 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 19: Synopsys Custom Compiler Adoption Growing
Synopsys Custom Compiler™ Adoption Growing Custom Compiler Adoption Customers 120 DRC Fusion HSPICE Custom 100 FineSim Compiler 80 CustomSim 60 40 Extraction 20 Fusion 0 StarRC, IC Validator © 2019 Synopsys, Inc. 19
Slide 20: #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 21: 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 22: #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 23: 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 – ~$4.4 billion market*, benefitting from our Semi IP customers’ move to outsourcing more and more complex IP • IP reuse reduces our c
Slide 24: 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 25: 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. 25
Slide 26: Software
• Entered the software security & quality space in 2014 – Since then, have assembled the broadest portfolio of solutions on the market; $335 million revenue in 2019 – Solutions allow software code developers to fix security or quality defects early in development – Approximately $2.5 billion+ market
Slide 27: 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: ~15% • Synopsys gro
Slide 28: Growing the Software Integrity Platform - Acquisitions
Growing the Software Integrity Platform - Acquisitions © 2019 Synopsys, Inc. 28
Slide 29: The Most Complete Portfolio in the Industry
The Most Complete Portfolio in the Industry 11 of the Static Analysis top 15 Software Composition 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 cod
Slide 30: Synopsys Polaris Software Integrity Platform
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 interfac
Slide 31: 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) Gartner Magic Quadrant Application Security Testing Download a free copy of the 2019 Magic Quadrant for Application Security Testing. © 2019 Synopsys, Inc. 31
Slide 32: 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 33: 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 34: 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 35: 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 © 2019 Synopsys, Inc. 35
Slide 36: Long-Term Financial Objectives
Long-Term Financial Objectives* • 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 revenue gener
Slide 37: Excellent Financial Execution
Excellent Financial Execution Revenue (M) $3,600 - Non-GAAP EPS* $3,650 $5.18 - $3,361 $3,121 $5.25 $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 $4.4B
Slide 38: Cash Flow & Capital Allocation
Cash Flow & Capital Allocation Operating Cash Flow (M) $800 - Stock Repurchases (M) $801 $825 $400 $400 $400 $635 $329 $587 $280 $495 $424 FY15 FY16 FY17 FY18* FY19 FY20E** FY15 FY16 FY17 FY18 FY19 Roughly tracks EBITDA less cash taxes on Repurchased ~$1.8B in stock since 2015, multi-year basis redu
Slide 39: 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 © 2019 Synopsys, Inc. 39
Slide 40: 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 $ 3.72 $ 3.90 Adjustments: Estimated impact of amortization of intangible assets 0.57 0.54 Estimated impact of stock compensation 1.40 1.3
Slide 41: 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 (1) October 31, 2019 October 31, 2020 (1)(2) GAAP operating margin 15.5% 18.4% Amortization of intangible assets 3.0% 2.4% Stock compensation 4.6% 5.9% Acqui
Slide 42: 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 43: Thank You
Silicon to Software Thank You
Slide 44: Synopsys
Synopsys n to Softwa