Q4 2012 Earnings Call
December 05, 2012 5:00 pm ET
Aart J. de Geus - Co-Founder, Chairman and Co-Chief Executive Officer
Brian M. Beattie - Chief Financial Officer
Richard Valera - Needham & Company, LLC, Research Division
Thomas Yeh - BofA Merrill Lynch, Research Division
Sterling P. Auty - JP Morgan Chase & Co, Research Division
Thomas Diffely - D.A. Davidson & Co., Research Division
Jay Vleeschhouwer - Griffin Securities, Inc., Research Division
Mahesh Sanganeria - RBC Capital Markets, LLC, Research Division
Satya Kumar - Crédit Suisse AG, Research Division
Previous Statements by SNPS
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Thank you, Chris. Good afternoon, everyone. With us on the call today are Aart de Geus, Chairman and Co-CEO of Synopsys; and Brian Beattie, Chief Financial Officer.
Before we begin our remarks this afternoon, I'd like to remind everyone that during the course of this conference call, Synopsys will discuss plans, forecasts and targets and will make other forward-looking statements regarding the company, its business and its financial results. While these statements represent our best current judgment about future results and performance as of today, our actual results and performance are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect.
In addition to any risks that we highlight during this call, important factors that may affect our future results are described in our most recent quarterly report on Form 10-Q and today's earnings press release. All financial information to be discussed on this conference call, the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures and supplemental financial information can be found in the 8-K, the earnings press release and the financial supplement that we released today. All these items are currently available on our website at www.synopsys.com.
With that, I'll turn the call over to Aart de Geus.
Aart J. de Geus
Good afternoon and thank you for joining us. Today, I'm happy to report that we closed an excellent Q4, achieving very strong fiscal 2012 results. We completed several important acquisitions during the year, and we're positioned well and feel momentum as we head into 2013.
Let me begin with our results. In Q4, we delivered revenue of $454 million, resulting in $1.756 billion for the fiscal year, a 14% increase over 2011. This revenue reflects both excellent organic growth and momentum from key strategic acquisitions.
With non-GAAP earnings per share of $0.47 in Q4, we delivered $2.10 for the year, 17% growth and substantially above the target range communicated at the beginning of fiscal '12. Simultaneously, we increased our non-GAAP operating margin over 100 basis points to 23.6% for the year while generating $486 million at operating cash flow. Our 3-year backlog grew to $2.7 billion, and we have approximately 80% of next year's revenue target already in hand. This provides us a high degree of stability in a difficult-to-predict economic environment.
In summary, it was a very strong year with double-digit growth in both top and bottom line and excellent momentum into FY '13. We therefore reiterate our intent to deliver ongoing high-single-digit earnings growth and are setting our FY '13 non-GAAP EPS objective of $2.26 to $2.31. Brian will provide more detail in just a minute.
Looking forward, let me briefly comment on the customer landscape. While the overall economy is certainly filled with question marks, the semiconductor industry is racing forward through a combination of technology pushes, efficiency drives and competition as our customers vie for share in ever-changing and demanding end markets.
While challenging in terms of both technology and support for EDA suppliers, we're observing that customers increasingly see EDA as a differentiator rather than a cost factor. This is very positive for our industry. Meanwhile, design moves forward aggressively, new technology nodes and even new transistor type are rapidly being adopted, and overall complexity demands a strong reliance on leading EDA capabilities. The heightened value of EDA bodes well for our industry. And as tool consumption and demand for new technology continues to rise, Synopsys is clearly benefiting. Our strong financial and backlog position anchors our ability for continued investment, our R&D focus continues to deliver the technology leadership needed by our customers to differentiate themselves and our recent strategic acquisitions form an excellent springboard to deliver some great next generation solutions.
From a technology perspective, our customers count on us for 3 fundamental task sets: one, the implementation of designs in smaller and more complex technologies; two, the verification of designs of enormous size and complexity; and three, the availability of a broadening set of the most important IP cores. We have made significant progress in all 3. Let me give a bit more detail while also highlighting the impact and opportunities created by the key acquisitions we closed this year.
Starting with the chip implementation flow, we see an unabated push for new technologies in terms of both smaller geometries and the emergence of a new type of vertical transistor called a FinFET. Looking at the now stable but still quite advanced 28-nanometer node, we find that over 90% of the tape-outs use the Synopsys Galaxy Implementation Platform. While much more design will be done in this node, the most advanced companies are now migrating to the 20-nanometer node and below technologies. This migration is done with extensive help on Synopsys' part, and we are now assisting on approximately 100 20-nanometer designs.