Synopsys, Inc.’s (SNPS) fourth quarter EPS of 33 cents beat the Zacks Consensus Estimate of 24 cents.

Revenue

Revenue for the fourth quarter was $338.3 million down 4.1% from $352.8 million reported in the year-ago period. Revenue for the quarter was in line with the management guidance range of between $335 million and $343 million. License revenue (including time-based and upfront) was $301.3 million, down 4.8% from $316.6 million reported in the year-ago quarter.  Maintenance and service revenue was $36.9 million, down 2.2% from $36.2 million reported in the year-ago quarter. One customer accounted for slightly more than 10% of fourth quarter revenue.

Operating Results

Total gross profit for the fourth quarter was $265.1 million (78.4% of revenue), down from a gross profit of $285.9 million (81.0% of revenue). Total operating expense for the quarter was $240.2 million, up 8.9% from $220.7 million reported in the year-ago quarter. R&D expense increased substantially by 11.2% on a year over year basis as the company invested heavily in the development of new products. Operating margin for the quarter was 7.4%, down from 18.5% reported in the year-ago period.

GAAP net income for the fourth quarter of fiscal 2009 was $19.5 million, or $0.13 per share, compared to $46.4 million, or $0.32 per share in the fourth quarter of fiscal 2008. Excluding special items like amortization, stock based compensation, in process R&D and facility restructuring charge, non-GAAP net income for the fourth quarter of fiscal 2009 was $49.5 million, or $0.33 per share, compared to non-GAAP net income of $62.7 million, or $0.43 per share in the fourth quarter of fiscal 2008.

Balance Sheet

Synopsys has a very strong cash position. As of October 31, cash and short-term investments were $1.17 billion compared to $1.08 billion in the previous quarter. The company has no long-term debt. Total deferred revenue at the end of the quarter was $553.9 million, compared to $581.8 million reported in the previous quarter. Days sales outstanding for the quarter declined 2 days sequentially to 34 days, reflecting the timing of invoices.

Guidance

For the first quarter of fiscal 2010, the company expects revenue in the range of $325 million – $333 million. Total GAAP expenses are expected to remain in the range of $269 million – $286 million. On a non-GAAP basis, expenses are expected to remain in the range of $245 million – $255 million. The company has projected GAAP earnings per share of $0.23 to $0.28 and non-GAAP EPS of $0.38 – $0.40.

For full year 2010, the company expects revenue in the range of $1.33 billion – $1.35 billion. The company has projected GAAP earnings per share of $1.01 to $1.20 and non-GAAP EPS of $1.52 – $1.62.
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