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Segment Disclosure | 9 Months Ended
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Jul. 31, 2022
Segment Reporting [Abstract] |
Segment Disclosure | Segment Disclosure Segment reporting is based upon the “management approach,” i.e., how management organizes our operating segments for which separate financial information is (1) available and (2) evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and in assessing performance. Until the second quarter of fiscal 2022, we had two CODMs, our two Co-Chief Executive Officers. One of our Co-Chief Executive Officers transitioned out of this role effective May 1, 2022. In the third quarter of fiscal 2022, our CODM was our Chief Executive Officer. We have two reportable segments: (1) Semiconductor & System Design, which includes EDA tools, IP products, system integration solutions and other associated revenue categories, and (2) Software Integrity, which includes a comprehensive solution for building integrity—security, quality and compliance testing—into the customers’ software development lifecycle and supply chain. The financial information provided to and used by the CODM 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 revenue by geographic region. Information by reportable segment was as follows:
| Three Months Ended July 31, |  | Nine Months Ended July 31,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (in thousands)
Total Segments: |  |  |  |  |  |  |
Revenue | $ | 1,247,766 |  |  | $ | 1,057,130 |  |  | $ | 3,797,250 |  |  | $ | 3,051,774 |
Adjusted operating income | 392,127 |  |  | 337,396 |  |  | 1,321,671 |  |  | 941,456 |
Adjusted operating margin | 31 | % |  | 32 | % |  | 35 | % |  | 31 | %
Semiconductor & System Design: |  |  |  |  |  |  |
Revenue | $ | 1,129,427 |  |  | $ | 959,155 |  |  | $ | 3,458,499 |  |  | $ | 2,767,950 |
Adjusted operating income | 380,871 |  |  | 328,742 |  |  | 1,285,391 |  |  | 916,434 |
Adjusted operating margin | 34 | % |  | 34 | % |  | 37 | % |  | 33 | %
Software Integrity: |  |  |  |  |  |  |
Revenue | $ | 118,339 |  |  | $ | 97,975 |  |  | $ | 338,751 |  |  | $ | 283,824 |
Adjusted operating income | 11,256 |  |  | 8,654 |  |  | 36,280 |  |  | 25,022 |
Adjusted operating margin | 10 | % |  | 9 | % |  | 11 | % |  | 9 | %
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-based compensation and certain other operating expenses, were presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income:
| Three Months Ended July 31, |  | Nine Months Ended July 31,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (in thousands)
Total segment adjusted operating income | $ | 392,127 |  |  | $ | 337,396 |  |  | $ | 1,321,671 |  |  | $ | 941,456 |
Reconciling items: |  |  |  |  |  |  |
Amortization of intangible assets | (26,454) |  |  | (20,440) |  |  | (70,181) |  |  | (60,437) |
Stock-based compensation expense | (127,605) |  |  | (85,162) |  |  | (333,437) |  |  | (248,530) |
Other | (4,140) |  |  | (29,871) |  |  | 26,612 |  |  | (87,987) |
Total operating income | $ | 233,928 |  |  | $ | 201,923 |  |  | $ | 944,665 |  |  | $ | 544,502 |
The CODM does 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. In allocating revenue to particular geographic areas, the CODM considers where individual “seats” or licenses to our products are located. Revenue is defined as revenue from external customers. Revenue related to operations in the United States and other geographic areas were:
| Three Months Ended July 31, |  | Nine Months Ended July 31,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (in thousands)
Revenue: |  |  |  |  |  |  |
United States | $ | 575,326 |  |  | $ | 477,218 |  |  | $ | 1,763,541 |  |  | $ | 1,417,636 |
Europe | 127,288 |  |  | 112,877 |  |  | 376,195 |  |  | 324,212 |
China | 189,138 |  |  | 164,172 |  |  | 617,524 |  |  | 405,460 |
Korea | 125,307 |  |  | 110,536 |  |  | 358,871 |  |  | 314,178 |
Other | 230,707 |  |  | 192,327 |  |  | 681,119 |  |  | 590,288 |
Consolidated | $ | 1,247,766 |  |  | $ | 1,057,130 |  |  | $ | 3,797,250 |  |  | $ | 3,051,774 |
Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our methodology.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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