Synopsys Inc (SNPS) Reports Strong Q1 FY2024 Earnings, Raises Non-GAAP EPS Guidance
Revenue: Q1 FY2024 revenue increased to $1.649 billion from $1.361 billion in Q1 FY2023.
Net Income: GAAP net income rose to $449.1 million, or $2.89 per diluted share, from $271.5 million, or $1.75 per diluted share in the prior year.
Non-GAAP Net Income: Non-GAAP net income for Q1 FY2024 was $553.7 million, or $3.56 per diluted share, up from $406.7 million, or $2.62 per diluted share in Q1 FY2023.
Financial Guidance: Synopsys raises its non-GAAP EPS guidance for FY2024 and reaffirms revenue and non-GAAP operating margin targets.
Operational Highlights: The company cites AI-driven customer investments and strong execution across the company as key drivers of growth.
On February 21, 2024, Synopsys Inc (NASDAQ:SNPS) released its 8-K filing, detailing the financial results for the first quarter of fiscal year 2024. The company, a leading provider of electronic design automation software and services, reported a significant increase in revenue and earnings, highlighting a strong start to the fiscal year.
Company Overview
Synopsys Inc (NASDAQ:SNPS) is at the forefront of electronic design automation (EDA) software, providing advanced solutions that automate the chip design process. The company's comprehensive portfolio supports technology R&D teams in overcoming design complexity and propelling innovation in an era of pervasive intelligence. Synopsys' strategic positioning benefits from the convergence of semiconductor companies moving up-stack and systems companies moving down-stack toward in-house chip design, expanding the EDA customer base and capitalizing on the digitalization of various end markets.
Financial Performance and Challenges
For Q1 FY2024, Synopsys reported revenue of $1.649 billion, a substantial increase from $1.361 billion in the same quarter of the previous fiscal year. This growth reflects the company's strong execution and leadership in the semiconductor and systems design sectors. GAAP net income for the quarter was $449.1 million, or $2.89 per diluted share, compared to $271.5 million, or $1.75 per diluted share, for Q1 FY2023. On a non-GAAP basis, net income reached $553.7 million, or $3.56 per diluted share, up from $406.7 million, or $2.62 per diluted share, in the prior year.
President and CEO Sassine Ghazi attributed the robust performance to AI driving customer investments in silicon and systems, positioning them for future growth. CFO Shelagh Glaser noted the record quarterly revenue and non-GAAP earnings, which exceeded the high end of the target range, as evidence of the company's execution and leadership position.
"The first quarter marked an excellent start to the year with strong execution across the company as AI continues to drive our customers investments in silicon and systems that position them for future growth," said Sassine Ghazi, president and CEO of Synopsys.
"The Synopsys team delivered a solid start to the year, achieving record quarterly revenue and non-GAAP earnings above the high end of our target range," said Synopsys CFO, Shelagh Glaser.
Financial Outlook
Looking ahead, Synopsys reaffirmed its full-year 2024 targets for revenue and non-GAAP operating margin and raised its non-GAAP EPS guidance. The company provided consolidated financial targets for the second quarter and full fiscal year 2024, which include the impact of an extra week in the fiscal year that occurred in the first quarter.
The company's financial targets for Q2 and the full fiscal year 2024 are based on current expectations and do not account for further changes to export control restrictions or the U.S. government "Entity List" restrictions. Synopsys expects Q2 revenue to range between $1.560 billion and $1.590 billion, with GAAP EPS between $2.05 and $2.16 and non-GAAP EPS between $3.09 and $3.14. For the full fiscal year, revenue is targeted between $6.570 billion and $6.630 billion, with GAAP EPS between $9.56 and $9.74 and non-GAAP EPS between $13.47 and $13.55.
Investors and analysts are encouraged to review the full financial details in the company's 8-K filing and to participate in the earnings call for further insights into Synopsys' performance and outlook.
Conclusion
Synopsys Inc (NASDAQ:SNPS) has demonstrated a strong start to fiscal year 2024, with significant increases in revenue and earnings per share. The company's strategic focus on AI-driven design automation and semiconductor IP positions it well for continued growth in the face of design complexity. With raised non-GAAP EPS guidance and reaffirmed revenue targets, Synopsys is poised to maintain its leadership in the EDA industry and deliver value to its stakeholders.
Explore the complete 8-K earnings release (here) from Synopsys Inc for further details.
This article first appeared on GuruFocus.
