Synopsys Inc. (NASDAQ:SNPS) Q4 2018 Earnings Conference Call Transcript

Dec 05, 2018 • 05:00 pm ET

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Synopsys Inc. (NASDAQ:SNPS) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Synopsys Earnings Conference Call for the Fourth Quarter and Fiscal Year 2018. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) Today's call will last one hour. Five minutes prior to the end of the call, we will announce the amount of time remaining in the conference. As a reminder, today's call is being recorded.

At this time, I would like to turn the conference over to Lisa Ewbank, VP of IR. Please go ahead.

Executive
Lisa Ewbank

Thank you, Laurie. Good afternoon. Hosting the call today are Aart de Geus, Chairman and co-CEO of Synopsys and Trac Pham, CFO.

(Forward-Looking Cautionary Statements)

In addition, we will refer to non-GAAP financial measures during the discussion. Reconciliations to their most directly comparable GAAP financial measures and supplemental financial information can be found in the earnings press release and financial supplement that we released earlier today and the 8-K, which we will file tomorrow morning due to the closure of financial markets today. Also included in the financial supplement is detailed information around our transition to ASC 606, which we will adopt in Q1 and our long-term financial objective.

All of these items plus the most recent investor presentation are available on our website at synopsys.com. In addition, the prepared remarks will be posted on the site at the conclusion of the call.

With that, I'll turn the call over to Aart de Geus.

Executive
Aart de Geus

Good afternoon, I'm pleased to report another excellent quarter and with it an outstanding year for Synopsys. In fiscal 2018, we crossed the $3 billion mark with revenue of $3.12 billion and delivered non-GAAP earnings per share of $3.91, both record results with strong double-digit growth. Our three-year backlog grew by approximately $300 million to $4 billion. Our business was comprehensively strong with very good growth across all product groups and all geographies. We repurchased $400 million of our stock and simultaneously made targeted investments to drive long-term growth both organically and through the acquisition of Black Duck. Our diversification into software security and quality progressed very well as we passed the $0.25 billion annual revenue mark. Notwithstanding some turbulence in the market, Synopsys is in a strong position, and we're increasing our long-term financial objectives. Trac will discuss the financials in more detail.

The excellent fiscal 2018 results highlight a five-year unparalleled period of technology innovation, market share growth, TAM expansion and strong financial execution for Synopsys. Early on, we envisioned a world of Smart Everything where complex connected chips and systems, combined with enormous software content, would launch the age of AI-powered electronics. Our strategy flowed from there as we shifted our center of gravity to the critical intersection of hardware and software. Our investments were targeted at not only advanced EDA tools and platforms, but at broadening our mission-critical IP portfolio and entering a new business aimed at solving