The 10-second takeaway
For the quarter ended Jan. 31 (Q1), Synopsys beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share improved significantly.
Margins increased across the board.
Synopsys reported revenue of $425.5 million. The seven analysts polled by S&P Capital IQ hoped for a top line of $416.5 million on the same basis. GAAP reported sales were 17% higher than the prior-year quarter's $364.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.56. The seven earnings estimates compiled by S&P Capital IQ averaged $0.52 per share on the same basis. GAAP EPS of $0.39 for Q1 were 26% higher than the prior-year quarter's $0.31 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 82.0%, 150 basis points better than the prior-year quarter. Operating margin was 16.5%, 370 basis points better than the prior-year quarter. Net margin was 13.3%, 10 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $417.3 million. On the bottom line, the average EPS estimate is $0.55.
Next year's average estimate for revenue is $1.67 billion. The average EPS estimate is $2.02.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 82 members out of 105 rating the stock outperform, and 23 members rating it underperform. Among 29 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 26 give Synopsys a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Synopsys is outperform, with an average price target of $33.86.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.