Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Synopsys Inc., income tax expense (benefit), continuing operations

US$ in thousands

12 months ended:	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
Federal	244,523)	105,493)	85,950)	29,272)	22,821)	(1,120)
State	22,193)	23,201)	11,898)	1,863)	11,846)	2,025)
Foreign	27,986)	45,297)	79,890)	55,103)	61,092)	140,430)
Current	294,702)	173,991)	177,738)	86,238)	95,759)	141,335)
Federal	(192,762)	(42,086)	(108,530)	(84,739)	(41,219)	(139,547)
State	(1,842)	1,519)	1,796)	(20,233)	(7,227)	(25,661)
Foreign	(16,441)	3,654)	(21,849)	(6,554)	(34,174)	(45,102)
Deferred	(211,045)	(36,913)	(128,583)	(111,526)	(82,620)	(210,310)
Provision (benefit) for income taxes	83,657)	137,078)	49,155)	(25,288)	13,139)	(68,975)

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Synopsys Inc. current decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Synopsys Inc. deferred increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Provision (benefit) for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Synopsys Inc. provision (benefit) for income taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Synopsys Inc., effective income tax rate (EITR) reconciliation

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
	Statutory federal income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%	23.42%
	Effective income tax rate	6.43%	12.29%	6.10%	-3.96%	2.41%	-18.97%

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

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Item	Description	The company
Effective income tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Synopsys Inc. effective income tax rate increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Synopsys Inc., components of deferred tax assets and liabilities

US$ in thousands

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
Accruals and reserves	—)	—)	—)	—)	—)	17,766)
Deferred revenue	37,641)	41,941)	30,113)	2,367)	—)	37,072)
Deferred compensation	69,824)	67,782)	59,823)	55,172)	56,483)	50,096)
Intangible and depreciable assets	94,564)	119,791)	117,211)	115,097)	160,072)	185,940)
Capitalized research and development costs	592,536)	231,733)	203,052)	118,857)	48,804)	4,817)
Stock-based compensation	65,039)	60,537)	40,922)	28,478)	20,372)	19,825)
Tax loss carryovers	62,779)	59,754)	30,305)	35,571)	40,068)	37,029)
Foreign tax credit carryovers	41,972)	27,153)	32,498)	18,645)	20,187)	64,803)
Research and other tax credit carryovers	182,999)	316,650)	326,164)	320,317)	278,382)	250,069)
Operating lease liabilities	118,679)	119,575)	94,519)	101,386)	—)	—)
Accruals and reserves	27,636)	—)	—)	—)	—)	—)
Other	—)	16,887)	—)	—)	—)	4,480)
Gross deferred tax assets	1,293,669)	1,061,803)	934,607)	795,890)	624,368)	671,897)
Valuation allowance	(229,259)	(198,213)	(174,117)	(158,895)	(157,343)	(201,258)
Deferred tax assets	1,064,410)	863,590)	760,490)	636,995)	467,025)	470,639)
Intangible assets	(116,465)	(102,796)	(61,448)	(45,915)	(58,697)	(72,682)
Operating lease right-of-use assets	(94,068)	(96,598)	(77,877)	(84,716)	—)	—)
Accruals and reserves	—)	(5,998)	(6,216)	(7,780)	(4,450)	—)
Deferred revenue	—)	—)	—)	—)	(6,611)	—)
Undistributed earnings of foreign subsidiaries	(8,900)	(1,000)	(7,580)	(3,063)	(6,864)	(523)
Other	(18,006)	—)	(628)	(372)	(1,762)	—)
Deferred tax liabilities	(237,439)	(206,392)	(153,749)	(141,846)	(78,384)	(73,205)
Net deferred tax assets (liabilities)	826,971)	657,198)	606,741)	495,149)	388,641)	397,434)

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

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Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Synopsys Inc. gross deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Synopsys Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Synopsys Inc. net deferred tax assets (liabilities) increased from 2021 to 2022 and from 2022 to 2023.

Synopsys Inc., deferred tax assets and liabilities, classification

US$ in thousands

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
	Deferred tax assets	860,914)	670,653)	612,655)	497,546)	390,129)	404,166)
	Deferred tax liabilities	33,943)	13,455)	5,914)	2,397)	1,488)	6,732)

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

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Item	Description	The company
Deferred tax assets	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Synopsys Inc. deferred tax assets increased from 2021 to 2022 and from 2022 to 2023.
Deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Synopsys Inc. deferred tax liabilities increased from 2021 to 2022 and from 2022 to 2023.

Synopsys Inc., adjustments to financial statements

US$ in thousands

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
Adjustment to Total Assets
Total assets (as reported)	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)	6,145,974)
Less: Noncurrent deferred tax assets, net	860,914)	670,653)	612,655)	497,546)	390,129)	404,166)
Total assets (adjusted)	9,472,217)	8,747,434)	8,139,605)	7,532,516)	6,015,031)	5,741,808)
Adjustment to Total Liabilities
Total liabilities (as reported)	4,148,830)	3,858,897)	3,453,317)	3,117,695)	2,316,284)	2,660,959)
Less: Noncurrent deferred tax liabilities, net	33,943)	13,455)	5,914)	2,397)	1,488)	6,732)
Total liabilities (adjusted)	4,114,887)	3,845,442)	3,447,403)	3,115,298)	2,314,796)	2,654,227)
Adjustment to Total Synopsys Stockholders’ Equity
Total Synopsys stockholders’ equity (as reported)	6,147,308)	5,515,725)	5,295,137)	4,907,404)	4,083,013)	3,479,152)
Less: Net deferred tax assets (liabilities)	826,971)	657,198)	606,741)	495,149)	388,641)	397,434)
Total Synopsys stockholders’ equity (adjusted)	5,320,337)	4,858,527)	4,688,396)	4,412,255)	3,694,372)	3,081,718)
Adjustment to Net Income Attributed To Synopsys
Net income attributed to Synopsys (as reported)	1,229,888)	984,594)	757,516)	664,347)	532,367)	432,518)
Add: Deferred income tax expense (benefit)	(211,045)	(36,913)	(128,583)	(111,526)	(82,620)	(210,310)
Net income attributed to Synopsys (adjusted)	1,018,843)	947,681)	628,933)	552,821)	449,747)	222,208)

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

Synopsys Inc., Financial Data: Reported vs. Adjusted

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Synopsys Inc., adjusted financial ratios

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
Net Profit Margin
Reported net profit margin	21.05%	19.38%	18.02%	18.03%	15.84%	13.86%
Adjusted net profit margin	17.44%	18.65%	14.96%	15.00%	13.38%	7.12%
Total Asset Turnover
Reported total asset turnover	0.57	0.54	0.48	0.46	0.52	0.51
Adjusted total asset turnover	0.62	0.58	0.52	0.49	0.56	0.54
Financial Leverage
Reported financial leverage	1.68	1.71	1.65	1.64	1.57	1.77
Adjusted financial leverage	1.78	1.80	1.74	1.71	1.63	1.86
Return on Equity (ROE)
Reported ROE	20.01%	17.85%	14.31%	13.54%	13.04%	12.43%
Adjusted ROE	19.15%	19.51%	13.41%	12.53%	12.17%	7.21%
Return on Assets (ROA)
Reported ROA	11.90%	10.45%	8.66%	8.27%	8.31%	7.04%
Adjusted ROA	10.76%	10.83%	7.73%	7.34%	7.48%	3.87%

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Synopsys Inc. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Synopsys Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Synopsys Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Synopsys Inc. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Synopsys Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Synopsys Inc., Financial Ratios: Reported vs. Adjusted

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	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributed to Synopsys	1,229,888)	984,594)	757,516)	664,347)	532,367)	432,518)
Revenue	5,842,619)	5,081,542)	4,204,193)	3,685,281)	3,360,694)	3,121,058)
Profitability Ratio
Net profit margin¹	21.05%	19.38%	18.02%	18.03%	15.84%	13.86%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributed to Synopsys	1,018,843)	947,681)	628,933)	552,821)	449,747)	222,208)
Revenue	5,842,619)	5,081,542)	4,204,193)	3,685,281)	3,360,694)	3,121,058)
Profitability Ratio
Adjusted net profit margin²	17.44%	18.65%	14.96%	15.00%	13.38%	7.12%

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

2023 Calculations

¹ Net profit margin = 100 × Net income attributed to Synopsys ÷ Revenue
= 100 × 1,229,888 ÷ 5,842,619 = 21.05%

² Adjusted net profit margin = 100 × Adjusted net income attributed to Synopsys ÷ Revenue
= 100 × 1,018,843 ÷ 5,842,619 = 17.44%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Synopsys Inc. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Revenue	5,842,619)	5,081,542)	4,204,193)	3,685,281)	3,360,694)	3,121,058)
Total assets	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)	6,145,974)
Activity Ratio
Total asset turnover¹	0.57	0.54	0.48	0.46	0.52	0.51
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Revenue	5,842,619)	5,081,542)	4,204,193)	3,685,281)	3,360,694)	3,121,058)
Adjusted total assets	9,472,217)	8,747,434)	8,139,605)	7,532,516)	6,015,031)	5,741,808)
Activity Ratio
Adjusted total asset turnover²	0.62	0.58	0.52	0.49	0.56	0.54

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

2023 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 5,842,619 ÷ 10,333,131 = 0.57

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 5,842,619 ÷ 9,472,217 = 0.62

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Synopsys Inc. adjusted total asset turnover ratio improved from 2021 to 2022 and from 2022 to 2023.

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)	6,145,974)
Total Synopsys stockholders’ equity	6,147,308)	5,515,725)	5,295,137)	4,907,404)	4,083,013)	3,479,152)
Solvency Ratio
Financial leverage¹	1.68	1.71	1.65	1.64	1.57	1.77
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted total assets	9,472,217)	8,747,434)	8,139,605)	7,532,516)	6,015,031)	5,741,808)
Adjusted total Synopsys stockholders’ equity	5,320,337)	4,858,527)	4,688,396)	4,412,255)	3,694,372)	3,081,718)
Solvency Ratio
Adjusted financial leverage²	1.78	1.80	1.74	1.71	1.63	1.86

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Total Synopsys stockholders’ equity
= 10,333,131 ÷ 6,147,308 = 1.68

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Synopsys stockholders’ equity
= 9,472,217 ÷ 5,320,337 = 1.78

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Synopsys Inc. adjusted financial leverage ratio increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributed to Synopsys	1,229,888)	984,594)	757,516)	664,347)	532,367)	432,518)
Total Synopsys stockholders’ equity	6,147,308)	5,515,725)	5,295,137)	4,907,404)	4,083,013)	3,479,152)
Profitability Ratio
ROE¹	20.01%	17.85%	14.31%	13.54%	13.04%	12.43%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributed to Synopsys	1,018,843)	947,681)	628,933)	552,821)	449,747)	222,208)
Adjusted total Synopsys stockholders’ equity	5,320,337)	4,858,527)	4,688,396)	4,412,255)	3,694,372)	3,081,718)
Profitability Ratio
Adjusted ROE²	19.15%	19.51%	13.41%	12.53%	12.17%	7.21%

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

2023 Calculations

¹ ROE = 100 × Net income attributed to Synopsys ÷ Total Synopsys stockholders’ equity
= 100 × 1,229,888 ÷ 6,147,308 = 20.01%

² Adjusted ROE = 100 × Adjusted net income attributed to Synopsys ÷ Adjusted total Synopsys stockholders’ equity
= 100 × 1,018,843 ÷ 5,320,337 = 19.15%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Synopsys Inc. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019	Oct 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributed to Synopsys	1,229,888)	984,594)	757,516)	664,347)	532,367)	432,518)
Total assets	10,333,131)	9,418,087)	8,752,260)	8,030,062)	6,405,160)	6,145,974)
Profitability Ratio
ROA¹	11.90%	10.45%	8.66%	8.27%	8.31%	7.04%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in thousands)
Adjusted net income attributed to Synopsys	1,018,843)	947,681)	628,933)	552,821)	449,747)	222,208)
Adjusted total assets	9,472,217)	8,747,434)	8,139,605)	7,532,516)	6,015,031)	5,741,808)
Profitability Ratio
Adjusted ROA²	10.76%	10.83%	7.73%	7.34%	7.48%	3.87%

Based on: 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31).

2023 Calculations

¹ ROA = 100 × Net income attributed to Synopsys ÷ Total assets
= 100 × 1,229,888 ÷ 10,333,131 = 11.90%

² Adjusted ROA = 100 × Adjusted net income attributed to Synopsys ÷ Adjusted total assets
= 100 × 1,018,843 ÷ 9,472,217 = 10.76%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Synopsys Inc. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

Synopsys Inc. (NASDAQ:SNPS)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Synopsys Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Synopsys Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)