Highlights:
- Combines Leaders in Semiconductor Design Technology and
Simulation and Analysis to Address Customers' Needs for
Fusion of Electronics and Physics, Augmented with AI
- Enhances and Accelerates Synopsys' Silicon to Systems
Strategy in Core EDA and New Attractive, Adjacent Growth
Areas
- Expands Synopsys' TAM by 1.5x to ~$28
Billion, Growing at ~11% CAGR1
- Delivers High-Growth, High-Margin, Recurring Revenue;
Expected to Expand Non-GAAP Operating Margins by ~125 Basis Points
and Unlevered FCF Margins by ~75 Basis Points in First Full Year
Post Closing
- Expected to Be Accretive to Non-GAAP EPS Within Second Full
Year Post-Close and Substantially Accretive
Thereafter2
SUNNYVALE, Calif. and PITTSBURGH, Jan. 16,
2024 /PRNewswire/ -- Synopsys (NASDAQ: SNPS) and
Ansys (NASDAQ: ANSS) today announced that they have entered into a
definitive agreement under which Synopsys will acquire Ansys. Under
the terms of the agreement, Ansys shareholders will receive
$197.00 in cash and 0.3450 shares of
Synopsys common stock for each Ansys share, representing an
enterprise value of approximately $35
billion based on the closing price of Synopsys common stock
on December 21, 20233.
Bringing together Synopsys' pioneering semiconductor electronic
design automation (EDA) with Ansys' broad simulation and analysis
portfolio will create a leader in silicon to systems design
solutions.
"The megatrends of AI, silicon proliferation and
software-defined systems are requiring more compute performance and
efficiency in the face of growing, systemic complexity. Bringing
together Synopsys' industry-leading EDA solutions with Ansys'
world-class simulation and analysis capabilities will enable us to
deliver a holistic, powerful and seamlessly integrated silicon to
systems approach to innovation to help maximize the capabilities of
technology R&D teams across a broad range of industries," said
Sassine Ghazi, President and CEO of
Synopsys. "This is the logical next step for our successful,
seven-year partnership with Ansys and I look forward to working
closely with Ajei and the talented Ansys team to realize the
benefits of this combination for our customers, shareholders and
employees."
"Since inception 37 years ago, Synopsys has been an innovation
pioneer, central to world-changing semiconductor advances in
computation, networking, and mobility, and now enabling the new era
of 'pervasive intelligence'," said Aart de
Geus, Executive Chair and Founder of Synopsys. "Joining
forces with Ansys, a company we know well from our long-standing
partnership, is the latest example of how Synopsys remains at the
forefront. Our Board and management team carefully evaluated our
top strategic options to lead and win in this fast-growing new wave
of electronics and system design. The technology-broadening team-up
with Ansys is an ideal, value-enhancing step for our company, our
shareholders, and the innovative customers we serve."
"For more than 50 years, Ansys has enabled customers to design,
develop and deliver cutting-edge products that are limited only by
imagination. By joining forces with Synopsys, we will amplify our
joint efforts to drive new levels of customer innovation," said
Ajei Gopal, President and CEO of Ansys. "This transformative
combination brings together each company's highly complementary
capabilities to meet the evolving needs of today's engineers and
give them unprecedented insight into the performance of their
products. Ansys has a strong foundation, as demonstrated by
preliminary annual contract value ("ACV") results for Q4 that are
expected to exceed the high end of our guidance, and I am confident
that building on our partnership with Synopsys will position us
well to deliver even greater value for our customers, partners and
shareholders. The combined company will accelerate the development
of our joint portfolio and deliver an increased level of
innovation, which will benefit Ansys' traditional customers. I am
proud of all that our employees do every day to make Ansys and our
customers successful and look forward to the combined company
achieving even greater heights in this next chapter."
Compelling Rationale and Significant Value Creation
- Combining Leading Capabilities to Meet Customer Demand:
The complexity of today's intelligent systems demands the
integration of semiconductor design and simulation and analysis to
ensure interconnected systems function properly in real-world
settings. Combining Synopsys' EDA technology with Ansys'
established simulation and analysis capabilities can provide
customers a comprehensive, powerful and system-focused approach to
innovation. All Ansys customers, including those outside of the
semiconductor industry, can benefit from access to a comprehensive
portfolio of products and technologies that will drive
innovation.
- Accelerates Strategy and Growth in Attractive, Adjacent
Areas: Synopsys and Ansys have highly complementary businesses
and significant expansion opportunities. The combination will
enhance Synopsys' Silicon to Systems strategy both across the core
EDA segment and in highly attractive adjacent growth areas such as
Automotive, Aerospace and Industrial, among others, where Ansys has
an established presence and successful go-to-market experience.
- Complementary Fit: Synopsys and Ansys have had a
successful and growing partnership since 2017, and share a culture
built on integrity, execution excellence and empowering customers.
Combining their highly complementary solutions is expected to
provide customers with a broader, deeply integrated suite of
software tools to solve their most difficult design challenges
while also gaining valuable insights through model-based analysis
of complex systems.
- Meaningfully Expands Total Addressable Market: Synopsys'
total addressable market (TAM) is expected to increase by 1.5x to
approximately $28 billion. This
combined TAM is expected to grow at roughly an 11%
CAGR4, driven by megatrends accelerating the need for
the fusion of electronics and physics across industries.
- Bolsters Synopsys' Strong Financial Position and
Outlook: The combination is expected to strengthen Synopsys'
financial profile. The combined company expects to continue its
industry-leading, double-digit growth, which is expected to outpace
TAM growth. The combination is expected to expand Synopsys'
non-GAAP operating margin by approximately 125 basis points and
unlevered free cash flow margins by approximately 75 basis points
the first full year post-closing. The combination is expected to be
accretive to non-GAAP EPS within the second full year post-closing
and substantially accretive thereafter.
- Strong Balance Sheet Supporting Rapid Deleveraging: The
combined company is expected to generate substantial and sustained
free cash flow, which will enable rapid de-leveraging to less than
2x debt to Adjusted EBITDA within two years post-closing, with a
long-term leverage target of less than 1x. Synopsys expects to
maintain investment grade credit ratings given its strong cash flow
generation and commitment to rapidly de-lever.
- Delivers Cost and Revenue Synergies: The combined
company expects to achieve approximately $400 million of run-rate cost synergies by year
three post-closing and approximately $400
million of run-rate revenue synergies by year four
post-closing, growing to more than approximately $1 billion annually in the longer-term.
Transaction Terms
The implied per share consideration of $390.19, based on the closing price of Synopsys
common stock of $559.96 as of
December 21, 2023, represents a
premium of approximately 29% over Ansys' closing stock price on
December 21,
20235 and a premium of approximately 35% to
Ansys' 60-day volume-weighted average price for the period ending
on the same date. Under the terms of the agreement, Ansys
shareholders are expected to own approximately 16.5% of the
combined company on a pro forma basis.
Synopsys intends to fund the $19
billion6 of cash consideration through a
combination of its cash on hand and debt financing. Synopsys has
obtained $16 billion of fully
committed debt financing.
The transaction is anticipated to close in the first half of
2025, subject to approval by Ansys shareholders, the receipt of
required regulatory approvals and other customary closing
conditions.
Advisors
Evercore is serving as financial advisor to Synopsys and
Cleary Gottlieb Steen & Hamilton
LLP is serving as legal advisor. Qatalyst Partners LP is serving as
financial advisor to Ansys and Skadden, Arps, Slate, Meagher &
Flom LLP and Goodwin Procter LLP are serving as legal advisors.
Conference Call
The two companies will host a joint conference call on
January 16, 2024 at 8:30 a.m. (ET) to discuss the announcement. The
conference call can be accessed by dialing 800-245-3047 (domestic)
or 203-518-9765 (international) and entering SYNOPSYS as the
conference ID. A live webcast can also be accessed at
https://join.eventcastplus.com/eventcastplus/Synopsys-Inc-Special-Event-Conference-Call.
A replay of the call will be available.
About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the Silicon to Software™
partner for innovative companies developing the electronic products
and software applications we rely on every day. As an S&P 500
company, Synopsys has a long history of being a global leader in
electronic design automation (EDA) and semiconductor IP and offers
the industry's broadest portfolio of application security testing
tools and services. Whether you're a system-on-chip (SoC) designer
creating advanced semiconductors, or a software developer writing
more secure, high-quality code, Synopsys has the solutions needed
to deliver innovative products. Learn more at www.synopsys.com.
About Ansys
Our Mission: Powering Innovation that Drives Human
Advancement™
When visionary companies need to know how their world-changing
ideas will perform, they close the gap between design and reality
with Ansys simulation. For more than 50 years, Ansys software has
enabled innovators across industries to push boundaries by using
the predictive power of simulation. From sustainable transportation
to advanced semiconductors, from satellite systems to life-saving
medical devices, the next great leaps in human advancement will be
powered by Ansys.
Ansys and any and all ANSYS, Inc. brand, product, service and
feature names, logos and slogans are registered trademarks or
trademarks of ANSYS, Inc. or its subsidiaries in the United States or other countries. All
other brand, product, service and feature names or trademarks are
the property of their respective owners.
ANSS-T
Contacts
Synopsys Media Relations:
Email: Corp-pr@synopsys.com
FGS Global (for Synopsys): synopsys@fgsglobal.com
Ansys Media Relations:
Email: MaryKate.Joyce@ansys.com
Joele Frank, Wilkinson Brimmer
Katcher (for Ansys): media-ansys@joelefrank.com
Synopsys Investor Relations:
Trey Campbell
Synopsys-ir@synopsys.com
Ansys Investor Relations:
Kelsey DeBriyn
kelsey.debriyn@ansys.com
Ansys Fiscal Year 2023 Preliminary Results
Ansys has not completed preparation of its financial statements
for the fourth quarter or the fiscal year ended December 31, 2023. The annual contract value
("ACV"), recurring ACV and ACV growth figures provided here as of
and for the fiscal year ended December 31,
2023, are preliminary and unaudited and are thus subject to
change as Ansys completes its financial results.
Synopsys Cautionary Statement Regarding Forward Looking
Statements
This document contains certain forward-looking statements within
the meaning of the federal securities laws with respect to the
proposed transaction between Synopsys and Ansys, including, but not
limited to, statements regarding the proposed transaction and the
anticipated timing of the closing thereof; Ansys' anticipated
results of operations for fiscal year 2023; the market outlook,
products and business of Synopsys, Ansys and the combined company,
and the benefits of and cost and revenue synergies from the
transaction to Synopsys; pro forma financial information; the
expected structure and the proposed financing for the transaction
and long-term leverage and debt paydown targets; short-term and
long-term financial targets of the companies; Synopsys'
expectations and objectives; strategies related to Synopsys' and
Ansys' products, technology and services; trends, opportunities,
strategies and technological trends, such as artificial
intelligence; customer demand and market expansion of each of
Synopsys and Ansys and the combined company; Synopsys' planned
product releases and capabilities; industry growth rates; the total
addressable markets of Synopsys, Ansys and the combined company;
software trends; planned acquisitions and stock repurchases; the
exploration of strategic alternatives; Synopsys' expected tax rate;
and the impact and result of pending legal, administrative and tax
proceedings. These forward-looking statements generally are
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be,"
"will continue," "will likely result," and similar expressions or
the negatives of these words or other comparable terminology to
convey uncertainty of future events or outcomes. Forward-looking
statements are predictions, projections and other statements about
future events that are based on current expectations and
assumptions and, as a result, are subject to risks and
uncertainties.
Many risks, uncertainties and other factors could cause actual
future events to differ materially from the forward-looking
statements in this press release, including, but not limited to:
(i) the completion of the proposed transaction on anticipated terms
and timing, anticipated tax treatment and unforeseen liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, economic performance, indebtedness, financial condition,
losses, pricing trends, future prospects, credit ratings, business
and management strategies which may adversely affect each of
Synopsys' and Ansys' business, financial condition, operating
results and the price of their common stock, (ii) the failure to
satisfy the conditions to the consummation of the transaction,
including the adoption of the merger agreement by the stockholders
of Ansys and the receipt of certain governmental and regulatory
approvals on the terms expected, in a timely manner, or at all,
(iii) the risk that such regulatory approvals may result in the
imposition of conditions that could adversely affect, following
completion of the proposed transaction (if completed), the combined
company or the expected benefits of the proposed transaction
(including as noted in any forward-looking financial information),
(iv) uncertainties as to access to available financing (including
any future refinancing of Ansys' or the combined company's debt) to
consummate the proposed transaction upon acceptable terms and on a
timely basis or at all, (v) the occurrence of any event, change or
other circumstance that could give rise to the termination of the
merger agreement, (vi) the effect of the announcement or pendency
of the transaction on Ansys' or Synopsys' business relationships,
competition, business, financial condition, and operating results,
(vii) risks that the proposed transaction disrupts current plans
and operations of Ansys or Synopsys and the ability of Ansys or
Synopsys to retain and hire key personnel, (viii) risks related to
diverting either management team's attention from ongoing business
operations of Ansys or Synopsys, (ix) the outcome of any legal
proceedings that may be instituted against Ansys or Synopsys
related to the merger agreement or the transaction, (x) the ability
of Synopsys to successfully integrate Ansys' operations and product
lines, (xi) the ability of Synopsys to implement its plans,
forecasts, expected financial performance and other expectations
with respect to Ansys' business or the combined business after the
completion of the proposed mergers and realize additional
opportunities, develop customer relationships, additional products
and Ansys' existing operations and product lines, (xii) the ability
of Synopsys to manage additional debt and successfully de-lever
following the transaction and the outcome of any strategic review
and any resulting transactions, (xiii) risks associated with third
party contracts containing consent and/or other provisions that may
be triggered by the proposed transaction, (xiv) macroeconomic
conditions and geopolitical uncertainty in the global economy, (xv)
uncertainty in the growth of the semiconductor, electronics and
artificial intelligence industries, (xvi) the highly competitive
industries Synopsys and Ansys operate in, (xvii) actions by the
U.S. or foreign governments, such as the imposition of additional
export restrictions or tariffs, (xviii) consolidation among
Synopsys' customers and Synopsys' dependence on a relatively small
number of large customers, (xix) legislative, regulatory and
economic developments affecting Ansys' and Synopsys' businesses,
(xx) the evolving legal, regulatory and tax regimes under which
Ansys and Synopsys operate, (xxi) restrictions during the pendency
of the proposed transaction that may impact Ansys' or Synopsys'
ability to pursue certain business opportunities or strategic
transactions, and (xxii) unpredictability and severity of
catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as Ansys' and
Synopsys' response to any of the aforementioned factors. The
foregoing list of risks, uncertainties and factors is not
exhaustive. Unlisted factors may present significant
additional obstacles to the realization of forward looking
statements.
You should carefully consider the foregoing factors and the
other risks and uncertainties that affect the businesses of
Synopsys and Ansys described in the "Risk Factors" section of their
respective Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and other documents filed by either of them from time to time
with the SEC. These filings identify and address other important
risks and uncertainties that could cause actual events and results
to differ materially from those contained in the forward-looking
statements. Forward-looking statements speak only as of the date
they are made. All forward-looking statements by their nature
address matters that involve risks and uncertainties, many of which
are beyond Synopsys' and Ansys' control, and are not guarantees of
future results. Readers are cautioned not to put undue reliance on
forward-looking statements, and Synopsys and Ansys assume no
obligation and do not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise, unless required by law. Neither
Synopsys nor Ansys gives any assurance that either Synopsys or
Ansys will achieve its expectations.
Ansys Cautionary Statement Regarding Forward-Looking
Statements
This document contains "forward-looking statements" within the
meaning of the federal securities laws, including Section 27A of
the U.S. Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements are based on Ansys' current expectations, estimates and
projections about the expected date of closing of the proposed
transaction and the potential benefits thereof, its business and
industry, management's beliefs and certain assumptions made by
Ansys and Synopsys, all of which are subject to change. In this
context, forward-looking statements often address expected future
business and financial performance and financial condition, and
often contain words such as "expect," "anticipate," "intend,"
"plan," "believe," "could," "seek," "see," "will," "may," "would,"
"might," "potentially," "estimate," "continue," "expect," "target,"
similar expressions or the negatives of these words or other
comparable terminology that convey uncertainty of future events or
outcomes. Examples of such forward-looking statements include, but
are not limited to, statements regarding our preliminary results,
expected ACV, recurring ACV, ACV growth and additional 2023
guidance which are subject to change through our audit and
customary year-end close and review process. All forward-looking
statements by their nature address matters that involve risks and
uncertainties, many of which are beyond our control, and are not
guarantees of future results, such as statements about the
consummation of the proposed transaction and the anticipated
benefits thereof. These and other forward-looking statements,
including the failure to consummate the proposed transaction or to
make or take any filing or other action required to consummate the
transaction on a timely matter or at all, are not guarantees of
future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially
from those expressed in any forward-looking statements.
Accordingly, there are or will be important factors that could
cause actual results to differ materially from those indicated in
such statements and, therefore, you should not place undue reliance
on any such statements and caution must be exercised in relying on
forward-looking statements. Important risk factors that may cause
such a difference include, but are not limited to: (i) the
completion of the proposed transaction on anticipated terms and
timing, including obtaining shareholder and regulatory approvals,
anticipated tax treatment, unforeseen liabilities, future capital
expenditures, revenues, expenses, earnings, synergies, economic
performance, indebtedness, financial condition, losses, future
prospects, business and management strategies for the management,
expansion and growth of Ansys' and Synopsys' businesses and other
conditions to the completion of the transaction; (ii) failure to
realize the anticipated benefits of the proposed transaction,
including as a result of delay in completing the transaction or
integrating the businesses of Ansys and Synopsys; (iii) Ansys'
ability to implement its business strategy; (iv) pricing trends,
including Ansys' and Synopsys' ability to achieve economies of
scale; (v) potential litigation relating to the proposed
transaction that could be instituted against Ansys, Synopsys or
their respective directors; (vi) the risk that disruptions from the
proposed transaction will harm Ansys' or Synopsys' business,
including current plans and operations; (vii) the ability of Ansys
or Synopsys to retain and hire key personnel; (viii) potential
adverse reactions or changes to business relationships resulting
from the announcement or completion of the proposed transaction;
(ix) uncertainty as to the long-term value of Synopsys' common
stock; (x) legislative, regulatory and economic developments
affecting Ansys' and Synopsys' businesses; (xi) general economic
and market developments and conditions; (xii) the evolving legal,
regulatory and tax regimes under which Ansys and Synopsys operate;
(xiii) potential business uncertainty, including changes to
existing business relationships, during the pendency of the
Transaction that could affect Ansys' or Synopsys' financial
performance; (xiv) restrictions during the pendency of the proposed
transaction that may impact Ansys' or Synopsys' ability to pursue
certain business opportunities or strategic transactions; (xv)
unpredictability and severity of catastrophic events, including,
but not limited to, acts of terrorism or outbreak of war or
hostilities, as well as Ansys' and Synopsys' response to any of the
aforementioned factors; and (xvi) failure to receive the approval
of the stockholders of Ansys. These risks, as well as other risks
associated with the proposed transaction, are more fully discussed
in the proxy statement/prospectus to be filed with the U.S.
Securities and Exchange Commission in connection with the proposed
transaction. While the list of factors presented here is, and the
list of factors presented in the proxy statement/prospectus will
be, considered representative, no such list should be considered to
be a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to
the realization of forward looking statements. Consequences of
material differences in results as compared with those anticipated
in the forward-looking statements could include, among other
things, business disruption, operational problems, financial loss,
legal liability to third parties and similar risks, any of which
could have a material adverse effect on Ansys' or Synopsys'
consolidated financial condition, results of operations, or
liquidity. Neither Ansys nor Synopsys assumes any obligation to
publicly provide revisions or updates to any forward-looking
statements, whether as a result of new information, future
developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws.
Important Information and Where to Find It
This document relates to a proposed transaction between Synopsys
and Ansys. Synopsys will file a registration statement on
Form S-4 with the SEC, which will include a document that serves as
a prospectus of Synopsys and a proxy statement of Ansys referred to
as a proxy statement/prospectus. A proxy statement/prospectus
will be sent to all Ansys shareholders. Each party also will
file other documents regarding the proposed transaction with the
SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ALL OTHER
RELEVANT DOCUMENTS FILED OR THAT WILL BE FILED WITH THE SEC IN
CONNECTION WITH THE PROPOSED TRANSACTION, AS WELL AS ANY AMENDMENTS
OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free
copies of the registration statement, proxy statement/prospectus
and all other relevant documents filed or that will be filed with
the SEC by Synopsys or Ansys through the website maintained by the
SEC at www.sec.gov.
The documents filed by Synopsys with the SEC also may be
obtained free of charge at Synopsys' website at
https://investor.synopsys.com/overview/default.aspx or upon written
request to Synopsys at Synopsys, Inc., 675 Almanor Avenue,
Sunnyvale, California 94085,
Attention: Investor Relations Department. The documents filed by
Ansys with the SEC also may be obtained free of charge at Ansys'
website at https://investors.ansys.com/ or upon written request to
kelsey.debriyn@ansys.com.
Participants in Solicitation
Synopsys, Ansys and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from Ansys' shareholders in connection with the proposed
transaction. Information about Ansys' directors and executive
officers and their ownership of Ansys' common stock is set forth in
Ansys' proxy statement for its 2023 Annual Meeting of Shareholders
on Schedule 14A filed with the SEC on March
28, 2023. To the extent that holdings of Ansys' securities
have changed since the amounts printed in Ansys' proxy statement,
such changes have been or will be reflected on Statements of Change
in Ownership on Form 4 filed with the SEC. Information about
Synopsys' directors and executive officers is set forth in
Synopsys' proxy statement for its 2023 Annual Meeting of
Shareholders on Schedule 14A filed with the SEC on February 17, 2023 and Synopsys' subsequent
filings with the SEC. Additional information regarding the direct
and indirect interests of those persons and other persons who may
be deemed participants in the proposed transaction may be obtained
by reading the proxy statement/prospectus regarding the proposed
transaction when it becomes available. You may obtain free
copies of these documents as described in the preceding
paragraph.
No Offer or Solicitation
This document is for informational purposes only and is not
intended to and shall not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities, or a
solicitation of any vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of
securities shall be made, except by means of a prospectus meeting
the requirements of Section 10 of the U.S. Securities Act of 1933,
as amended.
Non-GAAP Financial Information
This document includes certain forward looking financial
measures that are not in accordance with the U.S. generally
accepted accounting principles ("GAAP").
- Adjusted EBITDA ("Adj. EBITDA") is calculated as GAAP Operating
Income excluding depreciation and amortization, stock compensation,
non-qualified deferred compensation plan, acquisition-related costs
and restructuring charges
- Free Cash Flow ("FCF") is calculated as cash provided from
operating activities less capital expenditures and capitalization
of software development costs
- Unlevered Free Cash Flow ("uFCF") is calculated as Free Cash
Flow excluding tax-effected cash net interest
- Unlevered Free Cash Flow Margin is calculated as Unlevered Free
Cash Flow for a period divided by revenue for the same period
- Non-GAAP Earnings Per Share ("EPS") is calculated as GAAP net
income excluding amortization of intangible assets, stock
compensation, acquisition-related costs, restructuring charges, and
legal matters, adjusted for the difference between GAAP and
non-GAAP tax rates, divided by fully diluted outstanding
shares
- Non-GAAP Operating Income is calculated as GAAP Operating
Income, excluding amortization of intangible assets, stock
compensation, non-qualified deferred compensation plan,
acquisition-related costs and restructuring charges
- Non-GAAP Operating Margin is Non-GAAP Operating income for a
period divided by revenue for the same period
Synopsys and Ansys present non-GAAP financial measures to
provide their investors with an additional tool to evaluate
Synopsys' and Ansys' respective operating results in a manner that
focuses on what Synopsys and Ansys each believe to be their
respective core business operations and what Synopsys and Ansys
each use to evaluate their respective business operations and for
internal budgeting and resource allocation purposes. These non-GAAP
measures may be different from non-GAAP measures used by other
companies. In addition, these non-GAAP measures are not based on
any comprehensive set of accounting rules or principles, and
management exercises judgment in determining which items should be
excluded in the calculation of non-GAAP measures. The presentation
of non-GAAP financial information is not meant to be considered in
isolation from, as superior to or as a substitute for the directly
comparable financial measures prepared in accordance with GAAP.
These non-GAAP financial measures are meant to supplement, and be
viewed in conjunction with, the corresponding GAAP financial
measures.
When possible with respect to non-GAAP financial measures
presented with respect to historical periods, Synopsys and Ansys,
respectively, provide a reconciliation of their historic non-GAAP
financial measures to their most closely applicable GAAP financial
measures in the documents filed by Synopsys and Ansys with the SEC.
Synopsys and Ansys, respectively, are unable to provide a
reconciliation of certain non-GAAP guidance measures to the
corresponding GAAP measures on a forward-looking basis because
doing so would not be possible without unreasonable effort due to,
among other things, the potential variability and limited
visibility of the excluded items and expectations as to the
financial of performance of each of Synopsys and Ansys upon the
completion of the mergers. For the same reasons, Synopsys and Ansys
are each unable to address the probable significance of the
unavailable information. Synopsys and Ansys are presenting forward
looking non-GAAP financial measures for illustrative purposes and
may not report on this basis going forward.
Combined company measures for historical periods are based on
combining Synopsys' historical financial results and Ansys'
historical or preliminary financial results, as applicable, without
pro forma adjustments and are included for illustrative purposes in
order to provide investors with estimates of what the combined
company results could have been. Combined company estimates
are not pro forma financial measures, are not prepared in
accordance with Regulation S-X under the U.S. Securities Act of
1933, as amended, and are not necessarily indicative of the results
that actually would have been realized had Synopsys and Ansys been
a single entity during the relevant periods.
Other Key Business Metrics
Annual Contract Value ("ACV") is a key performance metric for
Ansys and is useful to investors in assessing the strength and
trajectory of the business. ACV is a supplemental metric to help
evaluate the annual performance of the business. Over the life of
the contract, ACV equals the total value realized from a customer.
ACV is not impacted by the timing of license revenue recognition.
ACV is used by Ansys' management in financial and operational
decision-making and in setting sales targets used for compensation.
ACV is not a replacement for, and should be viewed independently
of, GAAP revenue and deferred revenue as ACV is a performance
metric and is not intended to be combined with any of these items.
There is no GAAP measure comparable to ACV.
ACV is composed of the following: 1) the annualized value of
maintenance and subscription lease contracts with start dates or
anniversary dates during the period, plus; 2) the value of
perpetual license contracts with start dates during the period,
plus; 3) the annualized value of fixed-term services contracts with
start dates or anniversary dates during the period, plus; 4) the
value of work performed during the period on fixed-deliverable
services contracts.
1 Compound annual growth rate from FY 2023
to 2028.
2 Expected to be accretive in second full year
post-close including cost synergies only, substantially accretive
thereafter including cost and revenue synergies.
3 The last trading day prior to media speculation
regarding a potential transaction.
4 Compound annual growth rate from FY 2023 to
2028.
5 The last trading day prior to media speculation
regarding a potential transaction.
6 Includes the refinancing of Ansys' existing debt
and transaction expenses.
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SOURCE Synopsys, Inc.