Synopsys, Inc. · NASDAQ:SNPS
Synopsys — Investor Presentation (February 2022)
49 slides from Synopsys's investor presentation, February 2022
Slide 1: Corporate Overview for Investors
Corporate Overview for Investors FEBRUARY 2022
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; business outlook, opportunities and strategies; customer demand and market expansion
Slide 3: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader FY21 F Y 2 2 Ta r g e t s ( 1 ) Broad Product Portfolio Revenue: $4.20B $4.775B - $4.825B Growth Rate: 14.1% 14% - 15% Electronic Design Non-GAAP ~31.9%* 30.5% Automation Operating Margin: *Midpoint of range (EDA) Non-GAAP EPS: $6.84 $7.85 - $7.92 Semiconduct
Slide 4: Synopsys: The Market & Technology Leader
Synopsys: The Market & Technology Leader Electronic Design Semiconductor Software Automation IP Integrity ~35 years of investment >20 years ~7 years and execution ~25% of revenue ~10% of revenue ~65% of revenue Emerging Leader, Market Leader #2 IP Vendor Broadest Portfolio Synopsys Confidential Info
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 • EDA:
Slide 6: Synopsys: The Market and Technology Leader
Synopsys: The Market and Technology Leader Uniquely Positioned for Stability and Growth ► Robust End Markets Driving Growth • Clear Technology Leadership • Financial Strength and Growth Synopsys Confidential Information © 2022 Synopsys, Inc. 6
Slide 7: Global Value Chain – 2021E
updated Global Value Chain – 2021E EDA & IP – At the Heart of Accelerating Electronics Innovation EDA & IP $14.0B Embedded Software $12.8B Foundry $107.2B Semiconductors $613.9B Electronic Systems $1,850B Sources: ESD Alliance, Ipnest (Apr 2021), MarketsandMarkets (Mar 2020), IC Insights (Jan 2022),
Slide 8: Blue Chip, Diversified Customer Base
Blue Chip, Diversified Customer Base Semiconductors Systems Software Developers • Semi R&D (including EDA) is a • >40% 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: Demand for “Smart Everything” is Impacting Every Vertical
Demand for “Smart Everything” is Impacting Every Vertical Automotive Manufacturing Banking AI Cloud Secure IoT Health Robotics 5G Compute Agriculture Household Goods Synopsys Confidential Information © 2022 Synopsys, Inc. 9
Slide 10: Artificial Intelligence Market Growth
Artificial Intelligence Market Growth Deep Learning Chipset Market to Reach $72B by 2025 Deep Learning Chipset Revenue, World Markets: 2018 - 2025 $80,000 $70,000 $60,000 ($ Millions) $50,000 $40,000 $30,000 $20,000 $10,000 $0 2018 2019 2020 2021 2022 2023 2024 2025 Source: Tractica 2019 Synopsys Co
Slide 11: 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 • Fu
Slide 12: Enabling and Leveraging the Potential of AI
Enabling and Leveraging the Potential of AI Leading AI-based Chip Design Technologies • DSO.ai (Mar. 2020): The world’s first AI-driven design solution, delivers a significant leap in designer productivity • “ML Everywhere” enables continuous improvement for better PPA and faster TTR • “Synopsys’s P
Slide 13: 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 14: 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 S
Slide 15: New Electronics Architecture Required
New Electronics Architecture Required Integrated Compute and Smart Sensor Architecture Requires Redesign DOMAINS • Integrated Controllers per Domain Powertrain ADAS Comfort Infotainment/V2X Gateway • Sensor Fusion • Connectivity and upgradeability • Highest reliability, security and safety FUNCTIONA
Slide 16: Synopsys: The Market and Technology Leader
Synopsys: The Market and Technology Leader Uniquely Positioned for Stability and Growth • Robust End Markets Driving Growth ► Clear Technology Leadership • Financial Strength and Growth Synopsys Confidential Information © 2022 Synopsys, Inc. 18
Slide 17: Synopsys: Silicon to Software
Synopsys: Silicon to Software •• Application Application security security && quality quality testing testing Software •• Leader Leader in in Gartner’s Gartner’s Magic Magic Quadrant Quadrant •• Fastest Fastest engines engines && unified unified platform platform Verification •• HW/SW HW/SW verifica
Slide 18: Leader in EDA
LEADER IN EDA • Market and technology leader in EDA, the tools and technologies used to design semiconductor chips and systems ~$8.9 billion market*; generally tracks semiconductor R&D spend over time • Growth drivers: all aspects of chip & system complexity • All leading semiconductor companies in
Slide 19: #1 in Digital Design: Synopsys Fusion Design Platform
#1 in Digital Design: Synopsys Fusion Design Platform ™ Fusion #1 Anchors: Synthesis, P&R, Signoff Architecture Fusion of algorithms, engines, data model Innovative Industry Unique Fusion Compiler Products DC NXT, TestMAX, IC Validator NXT Market AI-enhanced tools, AI-driven apps Leadership Cloud-re
Slide 20: Synopsys Fusion Compiler
Synopsys Fusion Compiler ™ • Only single product on market with innovative next-generation integration of synthesis, place & route and key signoff technologies • Built with market-leading products • Redefines conventional product boundaries; sharing of algorithms, code and data model • New synthesis
Slide 21: Custom Design Platform
Custom Design Platform Innovative Industry anchors HSPICE, CustomSim, FineSim Products Custom Compiler Next-generation custom layout Competitive Flexible, open environment Differentiation Faster custom design closure Market PrimeSim launched in March 2021 Momentum Multiple full flow competitive disp
Slide 22: Verification Continuum Platform
Verification Continuum ® Platform Complete platform with #1 products Best-in-Class in all categories, hardware-based Verification and software-based Fastest Highest-performance engines Engines speed time-to-market Investing in domain-specific, AI and Accelerating cloud technology to improve Innovati
Slide 23: Verification Hardware: ZeBu Server Emulation System
Verification Hardware: ZeBu ® Server 4 Emulation System Leading System for Software Bring-up Only modern system to allow software-on-hardware validation Industry’s Fastest Emulation System 2X higher performance Industry’s Largest Capacity Scalable to 19B+ gates Industry’s Lowest Total Cost of Owners
Slide 24: Introducing Application-Specific Verification Hardware
Introducing Application-Specific Verification Hardware ZeBu EP1: Industry’s First 10 MHz Emulator Accelerates hardware/software verification for SoCs up to 2 billion gates 3-4x higher performance vs competition Supports at-speed, full-visibility debug and all emulation use cases ZeBu EP1 ZeBu Empowe
Slide 25: 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 26: 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 – ~$5.1 billion market*, benefitting from our customers’ move to outsourcing more and more complex IP • IP reuse reduces our customer
Slide 27: Broadest and Most Comprehensive IP Platform
Broadest and Most Comprehensive IP Platform Specialty I/O Application CPU Embedded CPU RAM RAM ROM Graphic Core(s) • Broadest portfolio available in the market; FY21 revenue >$1B RAM RAM RAM RAM Flash Interface • Covers vast majority of chip • Growing demand for more On-Chip Bus DDR Interface integr
Slide 28: 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 Synopsys Confidential Information ©
Slide 29: Comprehensive IP Solutions for Cloud Computing SoCs
Comprehensive IP Solutions for Cloud Computing SoCs DesignWare® 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 dri
Slide 30: Silicon Lifecycle Management Platform
Silicon Lifecycle Management Platform Monitor, manage and optimize Silicon Lifecycle Management New the performance, health and Insights security of the chip from initial Design Product Test and qualification to end-of-life Calibration Yield Ramp Quality Predictive Analytics Analytics Analytics Main
Slide 31: Leader in Software Integrity
Leader in Software Integrity Entered the software security & quality space in 2014 • Assembled and developed the broadest portfolio of solutions on the market; $394 million revenue in FY21 • Solutions allow organizations to identify and fix security and quality defects early in software development
Slide 32: Software Security & Quality Market
Software Security & Quality Market • Evolving, nascent market • Growth drivers: TAM 1: ~$4.5-6.5B - Omnipresence of software - Widespread connectivity exacerbates security issues - Significant business risk from breaches SAM: - Large development teams ~$2-2.5B • Market growth rate: mid-teens % • Syn
Slide 33: Growing the Software Integrity Platform - Acquisitions
Growing the Software Integrity Platform - Acquisitions Synopsys Confidential Information © 2022 Synopsys, Inc. 36
Slide 34: The Most Complete Portfolio in the Industry
The Most Complete Portfolio in the Industry Software Static Analysis Dynamic Analysis Security Services Composition Analysis • Find critical defects and • Find known vulnerabilities • Tests running apps for • Strategic analysis to build vulnerabilities in code in open-source & 3rd security vulnerabi
Slide 35: Build Trust in Your Software
Build Trust in Your Software Polaris Code Sight Intelligent Orchestration Code Dx SAST/ SCA/ IAST/ 3rd Party Products Coverity Black Duck Seeker Fuzzing/ DAST/ eLearning Open Source Products Defensics Tinfoil Security Testing Services Strategy, programs, and services Comprehensive Developer-centric
Slide 36: Synopsys is a Leader in Application Security Testing
Synopsys is a Leader in Application Security Testing Recognized as a Leader for the 5 th year in a row 2021 Gartner Magic Quadrant for Application Security Testing Download a free copy of the 2021 Magic Quadrant for Application Security Testing. This graphic was published by Gartner, Inc. as part of
Slide 37: Recognized Leader in End-to-End Application Security
Recognized Leader in End-to-End Application Security Synopsys is the only vendor recognized as the leader in both SAST & Open Source (SCA) Forrester Wave TM : Static Forrester Wave TM : Software Application Security Testing, 2021 Composition Analysis, 2021 Source: Forrester (January 2021) Source: Fo
Slide 38: Trusted Partner
Trusted Partner 17 of the Top 25 5 of the Top 5 9 of the Top 10 5 of the Top 5 14 of the Top 15 3 of the Top 4 Commercial Financial Data Software Aerospace & Semiconductor U.S. communications Banks Services Firms Companies Defense Firms Manufacturers providers Our mission is to help build secure, hi
Slide 39: Synopsys: The Market and Technology Leader
Synopsys: The Market and Technology Leader Uniquely Positioned for Stability and Growth • Robust End Markets Driving Growth • Clear Technology Leadership ► Financial Strength and Growth Synopsys Confidential Information © 2022 Synopsys, Inc. 43
Slide 40: Excellent Financial Execution
Excellent Financial Execution Revenue (M) $4,775-$4,825 Non-GAAP EPS* (14% - 15% y/y) $7.85-$7.92 $4,204 (15% - 16% y/y) $3,685 $6.84 $3,361 $3,121 $5.55 $2,725 $4.56 $3.91 $3.42 FY17 FY18 FY19 FY20 FY21 FY22E** FY17 FY18 FY19 FY20 FY21 FY22E** Recurring revenue model with $6.9B non- Strong financia
Slide 41: Cash Flow & Capital Allocation
Cash Flow & Capital Allocation Operating Cash Flow (M) Stock Repurchases (M) $1,493 $1,450-$1,500 $788 $991 $801 $400 $400 $635 $329 $424 $242 $250 FY17 FY18* FY19 FY20 FY21 FY22E FY17 FY18 FY19 FY20 FY21 FY22 YTD • Roughly tracks EBITDA less cash taxes on • Repurchased more than $2B in stock since
Slide 42: Synopsys Corporate Social Responsibility
Synopsys Corporate Social Responsibility Working Together for a Smart Future Environment Our Smart Future CSR program provides a focus and S yn o p s ys Human Cyber Impact Capital Security structure for how we address S M A RT FUTURE both our own operational impact S yn o p s ys Industry Supply Infl
Slide 43: 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 44: 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 45: 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 © 2022 Synopsys, Inc. 49
Slide 46: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (1) Earnings Per Share – Full Fiscal Year 2022 Targets Range for Fiscal Year October 31, 2022 Low High Target GAAP earnings per share $ 5.53 $ 5.72 Adjustments: Amortization of intangible assets 0.54 0.50 Stock compensation 2.98 2.90 Acquisition-related costs 0.01 0.0
Slide 47: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (1) Operating Margin – Midpoint of Fiscal Year 2022 Targets Twelve Months Ended October 31, 2022 At midpoint of revenue and expense guidance ranges GAAP operating margin 20.3% Amortization of intangible assets 1.7% Stock compensation 9.7% Acquisition-related costs 0.0
Slide 48: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Earnings Per Share – Full Fiscal Years 2017 to 2021 Actual Results ASC 605 ASC 605 ASC 606 ASC 606 ASC 606 FY2017 FY2018 FY2019 FY2020 FY2021 GAAP diluted net income per share $ 0.88 $ 2.82 $ 3.45 $ 4.27 $ 4.81 Adjustments: Amortization of intangible assets 0.70 0.82
Slide 49: Thank You
SyNOPsys' Silicon to Software”