Company: SNPS
Filing Date: 2025-02-26
Form Type: 10-Q
Source: 0000883241-25-000014
Chunk: 64

Company: SYNOPSYS INC
Filing Date: 2025-02-26
Form: 10-Q
Item: Item 1
Chunk 64
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ains (losses) on assets related to deferred compensation plan19,638 39,445 Foreign currency exchange gains (losses)63 3,365 Gain on sale of strategic investments— 55,077 Other, net(5,461)(4,885)Total$39,278 $104,828 

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  January 31, 20252024 (in thousands)Income before income taxes$291,117 $457,454 Provision (benefit) for income taxes$(6,294)$22,909 Effective tax rate(2.2)%5.0 %Our effective tax rate for the three months ended January 31, 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 months ended January 31, 2025, as compared to the same period 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 $13.0 million.

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