Company: SNPS
Filing Date: 2025-05-28
Form Type: 10-Q
Source: 0000883241-25-000017
Chunk: 174

Company: SYNOPSYS INC
Filing Date: 2025-05-28
Form: 10-Q
Item: Item 8
Chunk 174
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164,518 $123,091 

Note 19. Income Taxes

Effective Tax RateWe estimate our annual effective tax rate at the end of each fiscal quarter. The effective tax rate takes into account our estimations of annual pre-tax income, the geographic mix of pre-tax income and interpretations of tax laws and possible outcomes of audits.The following table presents the provision for income taxes and the effective tax rates: Three Months Ended  April 30,Six Months Ended  April 30, 2025202420252024 (in thousands)Income before income taxes$396,191 $341,530 $687,308 $798,984 Provision (benefit) for income taxes$47,181 $45,437 $40,887 $68,346 Effective tax rate11.9 %13.3 %5.9 %8.6 %Our effective tax rate for the six months ended April 30, 2025, is lower than the statutory federal corporate tax rate of 21% primarily due to the capital loss on the sale of our ownership in OpenLight in the first quarter of 2025, U.S. federal research tax credits, foreign-derived intangible income deduction, excess tax benefits from stock-based compensation and U.S. foreign tax credits, partially offset by state taxes and the effect of non-deductible stock-based compensation.Our effective tax rate decreased in the three and six months ended April 30, 2025, as compared to the same periods in fiscal 2024, primarily due to the capital loss on the sale of our ownership in OpenLight in the first quarter of 2025.The timing of the resolution of income tax examinations, and the amounts and timing of various tax payments that are part of the settlement process, are highly uncertain. Variations in such amounts and/or timing could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. We believe that in the coming 12 months, it is reasonably possible that either certain audits and ongoing tax litigation will conclude or the statute of limitations on certain state and foreign income and withholding taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax positions, the range of the estimated potential decrease in underlying unrecognized tax benefits is between $0 and $9.0 million.

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Non-U.S. ExaminationsWe are under examination by the tax authorities