Slide 1: Corporate Overview for Investors
Corporate Overview for Investors FEBRUARY 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements, including, but not limited to, statements regarding Synopsys’ short-term and long-term financial targets, expectations and objectives; strategies related to our products, technology and services; business and market ou
Slide 3: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader FY22 F Y 2 3 Ta r g e t s ( 1 ) ( 2 ) Broad Product Portfolio Revenue: $5.08B $5.775B - $5.825B Growth Rate: 20.9% 14% - 15% Electronic Design Non-GAAP ~34.1%* 33.0% Automation Operating Margin: *Midpoint of range (EDA) Non-GAAP $8.90 $10.53 - $10.60 Diluted
Slide 4: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Design Design Software Automation IP Integrity ~35 years of investment >20 years ~9 years and execution ~25% of revenue ~10% of revenue ~65% of revenue Industry Leader, Market Leader #2 IP Vendor Broadest Portfolio © 2023 Synopsys, Inc. 4
Slide 5: Long-term Financial Objectives
Long-term Financial Objectives 1 While the results in any given period will vary due to timing of product deliverables, acquisitions or other near-term priorities, our long-term, multi-year objectives2 are: Revenue Margin Earnings Annual double-digit growth Annual non-GAAP Annual non-GAAP EPS • Desi
Slide 6: Synopsys: The Market and Technology Leader
Synopsys: The Market and Technology Leader Uniquely Positioned for Growth and Stability ► Robust End Markets • Clear Technology Leadership • Financial Strength and Growth © 2023 Synopsys, Inc. 6
Slide 7: Global Value Chain – 2022E
Global Value Chain – 2022E EDA & IP – At the Heart of Accelerating Electronics Innovation EDA & IP $16.3B Embedded Software $13.9B Foundry $144B Semiconductors $637B Electronic Systems $1.855T Sources: ESD Alliance, Ipnest, MarketsandMarkets, IC Insights © 2023 Synopsys, Inc. 7
Slide 8: Blue Chip, Diversified Customer Base
Blue Chip, Diversified Customer Base Semiconductors Systems Software Developers • Semi R&D (including EDA) is a • ~45% of our revenue comes from • Key function across all industries: top investment priority for semi systems companies semis and systems, to enterprises and system customers in all • Sy
Slide 9: Dynamic Change in Many Markets
Dynamic Change in Many Markets HPC, Data Center N e t w o rk i n g M o b i l e / 5G Au t o m o t i ve ( AI a c c e l e r a t o r s ) Demand for Smart Everything seems limitless Industrial Enterprise Healthcare Memory Au t o m a t i o n S o f t w a re Innovation is fueled by semiconductor and softwar
Slide 10: Enabling and Leveraging the Potential of AI
Enabling and Leveraging the Potential of AI Design and Verification Tools for AI Processors • Multiple years of collaboration alongside AI pioneers – deep understanding of AI design implications and challenges • Verification solutions from architecture to simulation to emulation and prototyping • Di
Slide 11: Enabling and Leveraging the Potential of AI
Enabling and Leveraging the Potential of AI DSO.ai – World’s First Autonomous Design Space Optimization Settings Breakthrough Reinforcement Capable of searching trillions of design Learning permutations for best PPA solutions Hierarchy Flow Fast Fully-integrated with the Digital Design Family Ramp-U
Slide 12: Enabling and Leveraging the Potential of AI
Enabling and Leveraging the Potential of AI IP Solutions Designed Algorithm Inference Model Optimization for AI Applications ARC EV Optimization Processors Processors • Proven IP solutions accelerate Memory Bandwidth/ Video Input time-to-market Storage Capacity HBM2 USB/eDP DDR/LPDDR • Memory/interf
Slide 13: Automotive – A Case Study
Automotive – A Case Study CHIPS 4 Billion transistors SYSTEMS Infotainment, GPS, Drivetrain, Sensors SOFTWARE >150M Lines of Code per vehicle SECURE ARTIFICIAL INTELLIGENCE Big Data, Capture, Analyze, Decision Making AUTONOMOUS DRIVING Systems of Systems OWNERSHIP & INFRASTRUCTURE Entire Ecosystem ©
Slide 14: New Electronics Architecture Required
New Electronics Architecture Required Integrated Compute and Smart Sensor Architecture Requires Redesign DOMAINS • Integrated Controllers per Domain Gateway Powertrain ADAS Comfort Infotainment/V2X • Sensor Fusion • Connectivity and upgradeability • Highest reliability, security and safety FUNCTIONA
Slide 15: Synopsys: The Market and Technology Leader
Synopsys: The Market and Technology Leader Uniquely Positioned for Growth and Stability • Robust End Markets • Clear Technology Leadership • Financial Strength and Growth © 2023 Synopsys, Inc. 17
Slide 16: Synopsys Enables System Innovation, Silicon to Software
Synopsys Enables System Innovation, Silicon to Software Comprehensive World-Class Technology Software: IP: Application security testing & quality Broadest portfolio, silicon-proven Leader in Gartner’s Magic Quadrant #1 interface, analog, memories, physical Systems: Silicon: Leader in HW/SW verificat
Slide 17: Leader in EDA
LEADER IN EDA • Market and technology leader in EDA, the tools and technologies used to design semiconductor chips and systems ~$9.9 billion market*; generally tracks semiconductor R&D spend over time • Growth drivers: all aspects of chip & system complexity • All leading semiconductor companies in
Slide 18: #1 in Digital Design: Synopsys Digital Design Family
#1 in Digital Design: Synopsys Digital Design Family S Y N O P S Y S D I G I TA L D E S I G N FA M I LY SYSTEM DESIGN 3DIC Compiler DIGITAL DESIGN Fusion #1 Anchors: Synthesis, P&R, Signoff RTL Architect Architecture Fusion of algorithms, engines, data model Test Fusion Design Compiler NXT TestMAX I
Slide 19: Synopsys Fusion Compiler
Synopsys Fusion Compiler ™ S Y N O P S Y S D I G I TA L D E S I G N FA M I LY SYSTEM DESIGN • Only single product on market with innovative 3DIC Compiler next-generation integration of synthesis, place DIGITAL DESIGN & route and key signoff technologies RTL Architect • Built with market-leading prod
Slide 20: Synopsys Custom Design Family
Synopsys Custom Design Family S Y N O P S Y S C U S T O M D E S I G N F A M LY Innovative Industry anchors HSPICE, CustomSim, FineSim Products Custom Compiler Next-generation custom layout Custom Compiler PrimeSim Competitive Flexible, open environment Differentiation Faster custom design closure Si
Slide 21: #1 in Verification: Synopsys Verification Family
#1 in Verification: Synopsys Verification Family S Y N O P S Y S V E R I F I C AT I O N F A M I LY Planning & Coverage Complete platform with #1 products Best-in-Class Verdi in all categories, hardware-based Verification and software-based VC SpyGlass Fastest Highest-performance engines Virtualizer
Slide 22: Verification Hardware: ZeBu EP1 Unified Emulation/Prototyping
Verification Hardware: ZeBu ® EP1 Unified Emulation/Prototyping Industry’s First Unified Hardware for Emulation and Prototyping Industry’s fastest emulation and prototyping system with flexible capacity Highest Emulation Performance, up to 19MHz Verification for SoCs up to 1.2 billion gates, up to 3
Slide 23: Verification Hardware: HAPS-100 Prototyping System
Verification Hardware: HAPS-100 Prototyping System Industry’s Highest Performance Prototyping System 20-50 MHZ for complex SoC software development and system validation Industry’s Highest Prototyping Debug Productivity 4x higher debug performance vs HAPS-80 Enterprise and Ecosystem Scalability HAPS
Slide 24: Efficient Design Implementation for Multi-Die Systems
Efficient Design Implementation for Multi-Die Systems UNIFIED EXPLORATION-TO-SIGNOFF DIE-TO-DIE IP 3DIC COMPILER UCIe Die-to-Die IP Complete architecture- to-signoff solution in a Delivers up to 4Tbps Exploration & PHY Creation consolidated user bandwidth in a multi- environment Controller module co
Slide 25: Synopsys Silicon Lifecycle Management Family
Synopsys Silicon Lifecycle Management Family Monitor, manage and optimize S Y N O P S Y S S I L I C O N L I F E C Y C L E M A N A G E M E N T F A M I LY New the performance, health and Insights security of the chip from initial Design Product Test and qualification to in-field Calibration In-Field R
Slide 26: Synopsys Cloud – Industry's First SaaS Cloud Solution
Synopsys Cloud – Industry’s First SaaS Cloud Solution BYOC SaaS B r i n g Yo u r O w n C l o u d Software-as-a-Service Customer Uses Own Public Cloud Synopsys Provides EDA Tools & Infrastructure Customer Cloud Cloud Cloud Vendor(s) BROWSER METERING Engineer EDA & CAD Apps Portal | Pay-Per-Use Portal
Slide 27: Leader in Semi IP
Leader in Semi IP • #2 market share in IP, the reusable building blocks that are used for chip designs – Leading supplier of interface, memory, analog and physical IP – ~$6.4 billion market*, benefitting from our customers’ move to outsourcing more and more complex IP • IP reuse reduces our customer
Slide 28: Broadest and Most Comprehensive IP Platform
Broadest and Most Comprehensive IP Platform SYNOPSYS IP PORTFOLIO Design Solutions Growing IP >20% growth in FY22 DDR/HBM PCIe HDMI/DP USB 10/56/112G XSR/UCIe Demand C/D-PHY M-PHY PHY PHY PHY PHY PHY PHY CPUs Security MPUs DDR/HBM PCIe HDMI/DP USB Ethernet Die-to-Die CSI UFS controller controller co
Slide 29: High-Impact Markets: Increasing Technology Complexity
High-Impact Markets: Increasing Technology Complexity Driving Growth in Third-Party IP Demand AI AUTOMOTIVE CLOUD IoT Machine Learning, ADAS, Networking, Smart Home, Deep Neural Infotainment, Servers AI Industrial, Networks Connected Vehicle Accelerators Wearables © 2023 Synopsys, Inc. 31
Slide 30: Comprehensive IP Solutions for Cloud Computing SoCs
Comprehensive IP Solutions for Cloud Computing SoCs Synopsys Interface, Foundation Servers Networking and Processor IP for Cloud Applications Interposer/Package 112G 112G 112G D2D D2D D2D D2D DDR5 DDR5 DDR5 DDR5 • Improved power efficiency • Increasing data volume Control for high-density and driven
Slide 31: Leader in Software Integrity
Leader in Software Integrity • Assembled and developed the broadest portfolio of solutions on the market; ~$466 million FY22 revenue • Solutions that enable organizations to manage application security, quality and compliance risks at the speed their business demands • Approximately $2.5-3.0 billion
Slide 32: Software Security & Quality Market
Software Security & Quality Market TAM: • Evolving market, ~15% growth ~$4.5-6.5B • Growth drivers: - Ubiquity and growth of software - Cloud transformation - Significant business risk from breaches SAM: ~$2.5-3.0B - Rise of open source - Software supply chain complexities • Synopsys L-T multi-year
Slide 33: Synopsys Vision – Build Trust in Software
Synopsys Vision – Build Trust in Software Complete Security Assurance Addressing All Customer for All Software Demand Drivers • Align people, process and tools across the • Cloud transformation - rapid cloud adoption entire lifecycle and movement of dev workflows to the cloud • Secure all sources of
Slide 34: Software Integrity Portfolio
Software Integrity Portfolio Software Intelligent Code Sight™ Coverity® Black Duck® Seeker® Defensics® Code Dx® Orchestration Insight – Risk Management and Software Supply Chain SaaS fAST Static fAST SCA WhiteHat® fAST Dynamic Future services Polaris Software Integrity Platform® Security Testing Ser
Slide 35: Market Leadership
Market Leadership Magic Quadrant for Top ranking in all five Critical Capabilities Application Security Testing for Application Security Testing This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartne
Slide 36: Synopsys: The Market and Technology Leader
Synopsys: The Market and Technology Leader Uniquely Positioned for Growth and Stability • Robust End Markets • Clear Technology Leadership ► Financial Strength and Growth © 2023 Synopsys, Inc. 38
Slide 37: Excellent Financial Execution
Excellent Financial Execution Revenue (M) Non-GAAP EPS* $10.53-$10.60 $5,775-$5,825 (18-19% y/y) (14% - 15% y/y) $5,082 $8.90 $4,204 $6.84 $3,685 $3,361 $3,121 $5.55 $4.56 $3.91 FY18 FY19 FY20 FY21 FY22 FY23E** FY18 FY19 FY20 FY21 FY22 FY23E** Recurring revenue model with $6.9B Strong financial exec
Slide 38: Cash Flow & Capital Allocation
Cash Flow & Capital Allocation Operating Cash Flow (M) Stock Repurchases (M) $1,100 $1,739 ~$1,650 $1,493 $788 $991 $801 $400 $329 $306 $424 $242 FY18* FY19 FY20 FY21 FY22 FY23E** FY18 FY19 FY20 FY21 FY22 FY23 YTD • Roughly tracks EBITDA less cash taxes on • Repurchased >$3B in stock since 2018 mult
Slide 39: Synopsys Environment, Social, Governance
Synopsys Environment, Social, Governance Creating a Smart Future Together Synopsys Smart Future corporate social responsibility strategy provides a focus and structure for how we manage our own operational impact and influence others around us to create a better world. © 2023 Synopsys, Inc. 41
Slide 40: Synopsys ESG Progress Highlights
Synopsys ESG Progress Highlights Scope 1 and 2 GHG emissions • Pledged to reduce by 25% by 2024 over 2018 baseline, in line with Paris Agreement’s goal to limit global temperature rise within 1.5 degrees Celsius above pre-industrial levels. • Entered into one of the largest corporate aggregated clea
Slide 41: Synopsys ESG Progress Highlights
Synopsys ESG Progress Highlights Security • Formally adopted industry-recognized frameworks to structure, test and assess the rigor of our cybersecurity and product security practices. • Our leading Software Integrity business offers security-enhancing products and services that help enterprises bui
Slide 42: Market and Technology Leader, Solid Financials
Market and Technology Leader Electronic Design Automation Semiconductor Intellectual Property Software Security & Quality Solid Financials Recurring revenue model Large, non-cancellable backlog Excellent execution © 2023 Synopsys, Inc. 44
Slide 43: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (1) Earnings Per Share – Full Fiscal Year 2023 Targets Range for Fiscal Year Ending October 31, 2023 Low High Target GAAP earnings per diluted share $ 7.12 $ 7.30 Adjustments: Amortization of intangible assets 0.66 0.63 Stock compensation 3.87 3.79 Acquisition-related
Slide 44: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (1)(2) Operating Margin – Midpoint of Fiscal Year 2023 Targets Twelve Months Ending October 31, 2023 At midpoint of revenue and expense guidance ranges GAAP operating margin 21.3% Amortization of intangible assets 1.7% Stock compensation 10.3% Acquisition-related item
Slide 45: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Earnings Per Share – Full Fiscal Years 2018 to 2022 Actual Results ASC 605 ASC 606 ASC 606 ASC 606 ASC 606 FY2018 FY2019 FY2020 FY2021 FY2022 GAAP diluted net income per share $ 2.82 $ 3.45 $ 4.27 $ 4.81 $ 6.29 Adjustments: Amortization of intangible assets 0.82 0.65
Slide 46: Thank You
SyNOPsys' Silicon to Software”