Company: SNPS
Filing Date: 2025-02-26
Form Type: 10-Q
Source: 0000883241-25-000014
Chunk: 171

Company: SYNOPSYS INC
Filing Date: 2025-02-26
Form: 10-Q
Item: Item 8
Chunk 171
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,   20252024Change% Change (dollars in millions)Three months endedAdjusted operating income$126.5 $245.7 $(119.2)(49)%Adjusted operating margin29 %47 %(18)%(38)%

The decrease in adjusted operating income for the three months ended January 31, 2025 compared to the same period in fiscal 2024 was primarily due to a decrease in the revenue of IP products driven by timing of customer spending.

Income Taxes

Our effective tax rate decreased in the three months ended January 31, 2025, as compared to the same period in fiscal 2024, primarily due to capital loss on the sale of our ownership in OpenLight in the first quarter of 2025.

See Note 19. Income Taxes of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further discussion. 

Liquidity and Capital Resources

Our principal sources of liquidity are funds generated from our business operations and funds that may be drawn down under our revolving credit and term loan facilities. 

As of January 31, 2025, we held $3.8 billion in cash, cash equivalents and short-term investments. We also held $3.9 million in restricted cash primarily associated with deposits for office leases and employee loan programs. Our cash equivalents consisted primarily of taxable money market mutual funds, time deposits and highly liquid investments with maturities of three months or less. Our short-term investments include U.S. government and municipal obligations, investment-grade available-for-sale debt and asset backed securities with an overall weighted-average credit rating of approximately AA.

As of January 31, 2025, approximately $800.8 million of our cash and cash equivalents were domiciled in various foreign jurisdictions. We have provided for foreign withholding taxes on the undistributed earnings of certain of our foreign subsidiaries to the extent such earnings are no longer considered to be indefinitely reinvested in the operations of those subsidiaries.

38

We expect that the pending Ansys Merger is likely to result in a material increase in our debt and liquidity needs that will impact our capital needs during the next twelve months and beyond. We intend to fund our anticipated $19 billion cash consideration payment through a combination of cash and debt, and have a fully-committed debt financing in place for $14.9 billion (including $10.6 billion under the Bridge Commitment). Net cash proceeds received from certain debt and equity issuances or the sale of