Synopsys shares down on weak margins despite Q1 bottom-line beat and FY guidance boost
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Synopsys (NASDAQ:SNPS) shares edged lower after upbeat bottom-line in Q1.
The company reported revenue growth of 7% in Q1.
Gross margin rate slipped 70 bps Y/Y to 79.1%.
Operating margin rate plunged 850 bps Y/Y to 18.8%. Adjusted operating margin slipped 100 bps Y/Y to 35.2%.
For Q2, the company sees revenue in the range of $1.36B to $1.39B vs. consensus of $1.38B and adjusted EPS between $2.45 to $2.50 vs. consensus of $2.44.
For FY2023, the company sees revenue in the range of $5.775B to $5.825B vs. consensus of $5.8B, adjusted EPS between $10.53 to $10.60 vs. consensus of $10.58 and non-GAAP operating margin improvement of more than 100 basis points.
CEO comment: "As a key technology catalyst in the 'Smart Everything' world, we are driving groundbreaking innovations that radically advance the design of complex chips and software. For FY'23, we are reaffirming our targets of 14-15% revenue growth and continued non-GAAP operating margin expansion, and expect to grow non-GAAP earnings per share by 18-19%."
SNPS is currently trading at $363.39, -4.2%, but so far this year shares have grown ~14%.