Company: SNPS
Filing Date: 2025-02-26
Form Type: 10-Q
Source: 0000883241-25-000014
Chunk: 78

Company: SYNOPSYS INC
Filing Date: 2025-02-26
Form: 10-Q
Item: Item 1
Chunk 78
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 customer requirements including the timing and value of contract renewals. For example, we experience fluctuations in our revenues due to factors such as the timing of IP product sales, Flexible Spending Account (FSA) drawdowns, royalties, and hardware products sales. As revenues from IP products sales and hardware products sales are recognized upfront, customer demand and timing requirements for such IP products and hardware products could result in increased variability of our total revenues.

Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) as of January 31, 2025 were $7.7 billion, which includes $1.1 billion in non-cancellable FSA commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 42% of the backlog as of January 31, 2025, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years.

The amount and composition of unsatisfied performance obligations will fluctuate period to period. We do not believe the amount of unsatisfied performance obligations is indicative of future sales or revenue, or that such obligations at the end of any given period correlates with actual sales performance of a particular geography or particular products and services. For more information regarding our revenue during the three months ended January 31, 2025, including our contract balances as of such date, see Note 5. Revenue of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report.

The decrease in total revenues for the three months ended January 31, 2025 compared to the same period in fiscal 2024 was primarily due to the impact of the extra week in the first quarter of fiscal 2024 of approximately $63.2 million, as well as a decrease in the revenue of IP and hardware products of approximately $74.0 million driven by the timing of customer spending and strong IP revenue in the first quarter of fiscal 2024. 

For a discussion of revenue by geographic areas, see Note 17. Segment Disclosure of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report.

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Time-Based Products Revenue

 January 31,   20252024$ Change% Change (dollars in millions)Three months ended$828.2