Synopsys, Inc. (NASDAQ:SNPS) stock fell 1.63% (As on August 18, 11:55:32 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the third quarter of FY 22. For its fiscal third quarter ended July 31, Synopsys reported a profit before costs such as stock compensation of $327.4 million, up from $284.5 million, in the same quarter of 2021. The vast majority of the company’s revenue in the quarter came from its semiconductor and systems design division, coming in at $1.13 billion, down slightly from $1.17 billion in the previous quarter but up from $959 million a year ago. This is driven by continued strength in EDA and IP. Trailing-twelve-month Semiconductor & System Design adjusted operating margin was 35.8%. Synopsys’ software integrity division reported revenue of $118 million, its highest figure on record but accounting for only 9% of total revenue. Recurring revenue as a percentage of total revenue ended the quarter at 84%. Cash, cash equivalents and short-term investments totaled $1.53 billion, the same figure as this time last year, and debt of $22 million.
SNPS in the third quarter of FY 22 has reported the adjusted earnings per share of $2.10, beating the analysts’ estimates for the adjusted earnings per share of $1.99. The company had reported the adjusted revenue growth of 18 percent to $1.25 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $1.2 billion.
Additionally, the company used $257 million of the cash for buybacks, and have repurchased $972 million of stock over the past twelve months. In addition, it has paid $330 million to acquire WhiteHat Security.
Looking forward, Synopsys said it expects an adjusted profit of $1.80 to $1.85 a share in its fiscal fourth quarter on revenue of $1.263 billion to $1.269 billion. Analysts had been expecting an adjusted profit of $1.79 a share.
For the full fiscal year 2022, Synopsys expects an adjusted profit of $8.80 to $8.85 a share on revenue of $5.06 billion to $5.09 billion. The full-year outlook includes over 20% revenue growth, strong margin expansion and more than $1.6 billion in operating cash flow. The company continues to expect Software Integrity to deliver 15-20% growth with expanded adjusted operating margin in 2022. The company expects FY 22 cash flow from operations to be in the range of $1.6 to $1.65 billion and capital expenditures of approximately $145 million.