Company: SNPS
Filing Date: 2025-09-09
Form Type: 10-Q
Source: 0000883241-25-000024
Chunk: 195

Company: SYNOPSYS INC
Filing Date: 2025-09-09
Form: 10-Q
Item: Item 8
Chunk 195
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 millions)Three months endedDesign Automation$1,312.1 $1,062.6 $249.5 23 %Design IP427.6 463.1 (35.5)(8)%Total$1,739.7 $1,525.7 $214.0 14 %Nine months endedDesign Automation$3,454.6 $3,103.0 $351.6 11 %Design IP1,344.7 1,388.5 (43.8)(3)%Total$4,799.3 $4,491.5 $307.8 7 %

Our revenues are subject to fluctuations, primarily due to customer requirements including customer demand, timing requirements and the 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 July 31, 2025 were $10.1 billion, which includes $1.3 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 46% of the backlog as of July 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 and nine months ended July 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 increase in total revenues for the three and nine months