Synopsys, Inc. (NASDAQ: SNPS) stock rose over 0.6% on 6th December 2018 (As of 10:23 am GMT-5 ; Source: Google finance) after the company posted better than expected results of revenue in the fourth quarter of FY 18. On a non-GAAP basis, net income for the fourth quarter of fiscal 2018 was $119.6 million compared to non-GAAP net income of $106.5 million for the fourth quarter of fiscal 2017. Non-GAAP net income for fiscal year 2018 was $599.7 million, or $3.91 per share, compared to non-GAAP net income of $529.1 million, or $3.42 per share, for fiscal year 2017.
SNPS in the fourth quarter of FY 18 has reported the adjusted earnings per share of 78 cents, which is as per the analysts’ estimates for the adjusted earnings per share of 78 cents, as per Zacks Investment Research. The company had reported the adjusted revenue growth of 35.9 percent to $795.1 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $794.5 billion. The 3 year backlog grew more than $300 million to $4 billion, which along with the recurring revenue model, provides a level of stability and predictability not often seen in enterprise software companies. Total non-GAAP cost and expenses were $658 million for the quarter and $2.43 billion for the year.
The resulting non-GAAP operating margin for the year was 22.1% as the company made targeted investments to further strengthen the business while continuing to deliver strong earnings growth. SNPS generated $131 million of operating cash flow in the quarter and $424 million for the year. This was below the historical levels due to approximately $230 million of onetime items. The company ended the year with a cash balance of $723 million with total debt of $469 million.
The company has completed the $165 million accelerated share repurchase begun in May this year, bringing the total buybacks to $400 million in 2018. Over the last 3 years, the company have repurchased $1.2 billion of the stock, reducing the share count by 5 million shares. The company also used the cash to acquire Black Duck, adding the market leader in open-source security testing to the Software Integrity Group. Black Duck came in at the high end of the plan with $60 million in revenue and was slightly less dilutive than the company expected at approximately $0.10 for 2018. Black Duck remains on track to breakeven on the second half of 2019.