About Magma Design Automation, Inc.

To sum up, Synopsys is a leading provider of electronic design automation (EDA) software and services. Its products are used by designers of integrated circuits (ICs) to develop, simulate, and test the physical design of ICs before production, and then to test finished products. The company also provides semiconductor intellectual property (SIP), pre-designed circuits used as part of larger chips. Customers come from a variety of markets, but particularly the semiconductor and electronics manufacturing industries. (Intel is its top customer.) Synopsys offers time-based software licenses, where customers make yearly payments for use and support. It generates about half its sales outside the US.

Operations

Synopsys makes money from four groups: Core EDA, which includes digital and custom IC design products, verification products, and field-programmable gate array (FPGA) design products; IP and Software Solutions, which includes the Designware IP portfolio, system-level design tools, and Coverity quality and security testing; manufacturing solutions; and professional services. CoreEDA is the core source of revenue, accounting for more than 60%. IP and Software Solutions brings in 25%, followed by Manufacturing Solutions at 10%, and professional services rounding it out at 3%.

Geographic Reach

The company has about 25 offices in the US. It has offices in another 25 countries, with major operations in China, France, Germany, India, and Taiwan.

The US represents Synopsys' largest market, accounting for nearly half of sales. Japan and Europe contributed 13% and 14%, respectively. All regions except Japan reported year-over-year growth in fiscal 2014 (ended October).

Sales and Marketing

Synopsys markets its products primarily to semiconductor and electronics systems companies through direct sales efforts in the US and in select international markets.

Financial Performance

The company's revenue and net income rose nearly in tandem in 2015. Revenue increased almost 5% to $2.06 billion (breaking the $2 billion mark for the first time). Net income rose 4.5% to $260 million from about $248 million in 2013.

Synposys posted 6% growth in time-based licensing. Contributions from acquired companies also pushed revenue higher. The net income increase came from higher revenue and less money spent on income tax provision.

Cash provided by operating activities increased to $550 million due to cash generated from prepaid and other current assets, accounts payable and accrued liabilities, and deferred revenue.

Strategy

The company has had success growing through acquisitions and by expanding its operations outside the US. 

Mergers and Acquisitions

In 2014 Synopsys continued its use of acquisitions to expand its product lines.

In picking up Coverity Inc. for about $334 million, Synopsys got a provider of software quality, testing, and security tools that position Synopsys to enter a growing market of enterprise IT and independent software providers in financial services, energy, entertainment, and retail.

Synopsy strengthened its application-specific instruction-set processors tools portfolio with the acquisition of Target Compiler Technologies.

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Magma Design Automation, Inc.

1650 Technology Dr Ste 100
San Jose, CA 95110
Phone: 1 (408) 565-7500
www.magma-da.com

Stats

  • Employer Type: Public
  • Vice President Product Development: Ed Huijbregts
  • Pres-magma Kk: Noriaki Kikuchi
  • Vice President Sales: Charlie Shin

Major Office Locations

  • San Jose, CA

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