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Segment Disclosure | 9 Months Ended
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Jul. 31, 2019
Segment Reporting [Abstract] |
Segment Disclosure | Segment Disclosure Certain disclosures are required for operating segments, products and services, geographic areas of operation and major customers. Segment reporting is based upon the “management approach,” i.e., how management organizes the Company’s operating segments for which separate financial information is (1) available and (2) evaluated regularly by the Chief Operating Decision Makers (CODMs) in deciding how to allocate resources and in assessing performance. Synopsys’ CODMs are its two co-Chief Executive Officers. In prior periods, the Company operated in a single segment. Effective in fiscal 2019, the Company realigned its business to evaluate the results of its Software Integrity business separately from the Company’s traditional EDA and semiconductor IP business. The CODMs now regularly review disaggregated information for the following two reportable segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and associated services, and (2) Software Integrity, which includes security and quality solutions for software development across many industries. The Company’s historical results have been recast to retrospectively reflect the change from one to two reportable segments. As a result of the change in reporting structure, financial information provided to and used by the CODMs to assist in making operational decisions, allocating resources, and assessing performance reflects consolidated financial information as well as revenue, adjusted operating income, and adjusted operating margin information for the Semiconductor & System Design and Software Integrity segments, accompanied by disaggregated information relating to revenues by geographic region. Information by reportable segment was as follows:
| Three Months Ended July 31, |  | Nine Months Ended July 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
| (in thousands)
Total Segments: |  |  |  |  |  |  |
Revenues | $ | 852,970 |  |  | $ | 779,714 |  |  | $ | 2,509,613 |  |  | $ | 2,325,976 |
Adjusted operating income | 216,581 |  |  | 167,847 |  |  | 627,369 |  |  | 553,909 |
Adjusted operating margin | 25 | % |  | 22 | % |  | 25 | % |  | 24 | %
Semiconductor & System Design: |  |  |  |  |  |  |
Revenues | $ | 769,411 |  |  | $ | 708,413 |  |  | $ | 2,260,372 |  |  | $ | 2,122,780 |
Adjusted operating income | 207,773 |  |  | 169,798 |  |  | 604,497 |  |  | 564,656 |
Adjusted operating margin | 27 | % |  | 24 | % |  | 27 | % |  | 27 | %
Software Integrity: |  |  |  |  |  |  |
Revenues | $ | 83,559 |  |  | $ | 71,301 |  |  | $ | 249,241 |  |  | $ | 203,196 |
Adjusted operating income | 8,808 |  |  | (1,951 | ) |  | 22,872 |  |  | (10,747 | )
Adjusted operating margin | 11 | % |  | (3 | )% |  | 9 | % |  | (5 | )%
Certain operating expenses are not allocated to the segments and are managed at a consolidated level. The unallocated expenses managed at a consolidated level, including amortization of intangible assets, stock compensation and other operating expenses, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to the Company's consolidated operating income:
| Three Months Ended July 31, |  | Nine Months Ended July 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
| (in thousands)
Total segment adjusted operating income | $ | 216,581 |  |  | $ | 167,847 |  |  | $ | 627,369 |  |  | $ | 553,909 |
Reconciling items: |  |  |  |  |  |  |
Amortization of intangible expense | (23,714 | ) |  | (30,805 | ) |  | (77,138 | ) |  | (90,538 | )
Stock-based compensation expense | (39,453 | ) |  | (37,252 | ) |  | (114,827 | ) |  | (102,540 | )
Other | (25,820 | ) |  | (35,822 | ) |  | (44,894 | ) |  | (62,131 | )
Total operating income | $ | 127,594 |  |  | $ | 63,968 |  |  | $ | 390,510 |  |  | $ | 298,700 |
The CODMs do not use total assets by segment to evaluate segment performance or allocate resources. As a result, total assets by segment are not required to be disclosed. Revenue by Geography The CODMs consider where individual “seats” or licenses to the Company’s products are located in allocating revenue to particular geographic areas. Revenue is defined as revenues from external customers. Revenues related to operations in the United States and other geographic areas were:
| Three Months Ended July 31, |  | Nine Months Ended July 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
| (in thousands)
Revenue: |  |  |  |  |  |  |
United States | $ | 407,408 |  |  | $ | 365,414 |  |  | $ | 1,231,951 |  |  | $ | 1,126,624 |
Europe | 90,074 |  |  | 90,657 |  |  | 257,502 |  |  | 273,136 |
Japan | 65,709 |  |  | 71,981 |  |  | 203,486 |  |  | 210,805 |
Asia-Pacific and Other | 289,779 |  |  | 251,662 |  |  | 816,675 |  |  | 715,411 |
Consolidated | $ | 852,970 |  |  | $ | 779,714 |  |  | $ | 2,509,613 |  |  | $ | 2,325,976 |
Geographic revenue data for multi-region, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and the Company’s methodology. For the three and nine months ended July 31, 2019 and 2018, one customer, including its subsidiaries, through multiple agreements accounted for greater than 10% of the Company's total revenues.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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