Synopsys, Inc. (NASDAQ: SNPS) stock rose over 1.3% in the pre-market session of Feb 21st, 2019 (Source: Google finance) after the company posted better than expected results for the first quarter of FY 19.
Operating cash outflow was $144 million reflecting the typical payout of variable compensation in Q1. SNPS has ended the quarter with a cash balance of $592 million and total debt of $542 million. Building on last year’s significant share repurchases of $400 million, the company repurchased $29 million of the stock in Q1. Since 2016, the company have returned more than $1.2 billion to shareholders and expect buybacks to remain an important piece of the capital allocation strategy.
SNPS in the first quarter of FY 19 has reported the adjusted earnings per share of $1.08, beating the analysts’ estimates for the adjusted earnings per share of 97 cents. The company had reported the adjusted revenue growth of 35.9 percent to $820.40 million in the first quarter of FY 19, beating the analysts’ estimates for revenue by 2.98%. Semiconductor & System Design revenue was $738 million, up 5% year-over-year or just over 11% excluding the extra week in 2018. Software Integrity revenue grew 29% to $82 million reaching approximately 10% of total revenue in the first quarter. Software Integrity revenue for the trailing 12 months was $299 million reflecting a strong leadership position in the application security market. Total non-GAAP costs and expenses were $619 million. And consolidated non-GAAP operating margin was 24.5%. For the quarter, Semiconductor & System Design delivered an adjusted operating margin of 26.5% while Software Integrity delivered an adjusted operating margin of 6.8%.
For the second quarter, the company expect revenue to be between $810 million and $850 million; total GAAP costs and expenses to be between $682 million and $708 million; total non-GAAP costs and expenses to be between $620 million and $640 million; other income and expenses to be between 0 and $2 million; a non-GAAP normalized tax rate of 16%; outstanding shares between 153 million and 156 million; GAAP earnings to be of $0.71 to $0.79 per share; and non-GAAP earnings to be of $1.07 to $1.12 per share. For 2019 the full year, the company expects revenue to be in the range of $3.29 billion to $3.34 billion; total GAAP costs and expenses to be between $2.76 billion and $2.79 billion; total non-GAAP cost and expenses between $2.52 billion and $2.54 billion resulting in a non-GAAP operating margin at the midpoint of just over 23.5%.