Synopsys Inc. (NASDAQ:SNPS) Q4 2019 Earnings Conference Call - Final Transcript

Dec 04, 2019 • 05:00 pm ET


Synopsys Inc. (NASDAQ:SNPS) Q4 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. And welcome to the Synopsys Earnings Conference Call for the Fourth Quarter and Fiscal Year 2019. [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, Vice President of Investor Relations. Please go ahead ma'am.

Lisa L. Ewbank

Thank you, Greg. Good afternoon, everyone. Hosting the call today are Aart de Geus, Chairman and co-CEO of Synopsys and Trac Pham, Chief Financial Officer.

Before we begin, I'd like to remind everyone that during the course of this conference call, Synopsys will discuss forecasts, targets and other forward-looking statements regarding the Company and its financial results. While these statements represent our best current judgment about future results and performance as of today, our actual results and performance are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect. In addition to any risks that we highlight during the call, important factors that may affect our future results are described in our most recent SEC reports and today's earnings press release.

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, financial supplement and 8-K that we released earlier today. All of these items, plus the most recent investor presentation are available on our website at

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.

Aart de Geus

Good afternoon. I'm pleased to report another excellent quarter and with it an outstanding year for Synopsys. In fiscal 2019, a year in which we successfully navigated several external challenges, we once again exceeded our plan. We generated $3.36 billion in revenue and are well on track to our next milestone of $4 billion. Our backlog grew to $4.4 billion. We expanded operating margin significantly and delivered 17% non-GAAP earnings growth to $4.56 for the year, while returning $329 million to shareholders through buybacks. Business was strong across our Semiconductor & System Design segment and strengthened as the year progressed. Software Integrity achieved profitability and grew 19% to $335 million. Trac will discuss the financials in more detail.

Against a challenging global market backdrop with geopolitical stress and unevenness in the semiconductor industry, design activity remains strong. Growth in machine learning, automotive 5G, IoT, cloud and the proliferation of Smart Everything is considerable. New entrants including AI start-ups and cloud hyperscalers are pushing the boundaries of technology and time to market. Synopsys is at the center of this wave of innovation and growth, and we are uniquely positioned to enable electronics design from the intricacies and complexity of silicon to the power