SYNOPSYS INCSNPS
SYNOPSYS INC Segments Disclosure
Segment Disclosure
Segment reporting is based upon the “management approach,” i.e., how management organizes our operating segments for which separate financial information is (1) available and (2) evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. Our CODM is our CEO.
We have two reportable segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, Ansys products, system integration products and services, digital, custom and field programmable gate array (FPGA) IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our interface, foundation, security, and embedded processor IP, IP subsystems, and IP implementation services.
We completed our assessment of our organizational structure after the Ansys Merger and concluded that Ansys is included within our Design Automation segment based on how our CODM evaluates the financial results in making operational decisions, allocating resources and assessing performance.
The financial information provided to and used by the CODM to assist in making operational decisions, allocating resources, and assessing performance includes consolidated financial information as well as revenue, adjusted operating income, and adjusted operating margin information for the Design Automation, and Design IP segments, accompanied by disaggregated information relating to revenue by geographic region.
The Software Integrity business constituted its own reportable segment under Topic 280. In accordance with applicable accounting guidance, the results of the Software Integrity business were presented as discontinued operations in the consolidated statements of income and, as such, have been excluded from both continuing operations and segment results for all periods presented. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in this Annual Report.
Information by reportable segment is as follows:
| Year Ended October 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Total Segments: | |||||||||||||||||
| Revenue | $ | 7,054,178 | $ | 6,127,436 | $ | 5,318,014 | |||||||||||
Cost of revenue and operating expenses | 4,421,327 | 3,765,377 | 3,389,987 | ||||||||||||||
| Adjusted operating income | 2,632,851 | 2,362,059 | 1,928,027 | ||||||||||||||
| Adjusted operating margin | 37 | % | 39 | % | 36 | % | |||||||||||
| Design Automation: | |||||||||||||||||
| Revenue | $ | 5,302,340 | $ | 4,221,122 | $ | 3,775,288 | |||||||||||
Cost of revenue and operating expenses | 3,088,814 | 2,589,237 | 2,361,362 | ||||||||||||||
| Adjusted operating income | 2,213,526 | 1,631,885 | 1,413,926 | ||||||||||||||
| Adjusted operating margin | 42 | % | 39 | % | 37 | % | |||||||||||
| Design IP: | |||||||||||||||||
| Revenue | $ | 1,751,838 | $ | 1,906,314 | $ | 1,542,726 | |||||||||||
Cost of revenue and operating expenses | 1,332,513 | 1,176,140 | 1,028,625 | ||||||||||||||
| Adjusted operating income | 419,325 | 730,174 | 514,101 | ||||||||||||||
| Adjusted operating margin | 24 | % | 38 | % | 33 | % | |||||||||||
Certain operating expenses are not allocated to the segments and are managed at a consolidated level. The unallocated expenses managed at a consolidated level, including amortization of acquired intangible assets, stock-based compensation, changes in the fair value of deferred compensation plan, restructuring charges, and acquisition/divestiture related items, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income from continuing operations:
| Year Ended October 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Total segment adjusted operating income | $ | 2,632,851 | $ | 2,362,059 | $ | 1,928,027 | |||||||||||
| Reconciling items: | |||||||||||||||||
| Amortization of acquired intangible assets | (504,383) | (124,234) | (54,576) | ||||||||||||||
| Stock-based compensation expense | (893,294) | (657,935) | (513,094) | ||||||||||||||
| Deferred compensation plan | (65,492) | (85,446) | (20,196) | ||||||||||||||
| Restructuring charges | — | — | (53,091) | ||||||||||||||
| Acquisition/divestiture related items | (254,755) | (138,733) | (13,831) | ||||||||||||||
| Total operating income | $ | 914,927 | $ | 1,355,711 | $ | 1,273,239 | |||||||||||
The CODM does not use total assets by segment to evaluate segment performance or allocate resources. As a result, total assets by segment are not disclosed.
In allocating revenue to particular geographic areas, the CODM considers where individual “seats” or licenses to our products are located. Revenue is defined as revenue from external customers. Revenue and property and equipment, net, related to operations in the United States and other geographic areas are:
| Year Ended October 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Revenue: | |||||||||||||||||
United States | $ | 3,100,095 | $ | 2,739,756 | $ | 2,462,009 | |||||||||||
Europe | 888,524 | 614,584 | 514,780 | ||||||||||||||
China | 814,324 | 989,524 | 855,023 | ||||||||||||||
Korea | 946,999 | 773,018 | 625,502 | ||||||||||||||
Other | 1,304,236 | 1,010,554 | 860,700 | ||||||||||||||
| Consolidated | $ | 7,054,178 | $ | 6,127,436 | $ | 5,318,014 | |||||||||||
| As of October 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Property and Equipment, net: | |||||||||||
United States | $ | 327,803 | $ | 335,306 | |||||||
| Other | 368,890 | 227,700 | |||||||||
| Total | $ | 696,693 | $ | 563,006 | |||||||
Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.
One customer, including its subsidiaries, accounted for 12.6%, and 13.5% of our consolidated revenue in fiscal 2024 and 2023, respectively. No customer accounted for over 10% of our accounts receivable as of October 31, 2025, and October 31, 2024.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 22, 2025 | Showing above |
| 2024 | Dec 19, 2024 | |
| 2023 | Dec 12, 2023 | |
| 2022 | Dec 12, 2022 | |
| 2021 | Dec 13, 2021 | |
| 2020 | Dec 15, 2020 | |
| 2019 | Dec 20, 2019 | |
| 2018 | Dec 17, 2018 | |
| 2017 | Dec 14, 2017 | |
| 2016 | Dec 12, 2016 | |
| 2015 | Dec 14, 2015 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.