SYNOPSYS, INC.

Unaudited Reconciliation of Consolidated Statements of Operations Under ASC 606 & ASC 605 ⁽¹⁾

(in thousands, except per share amounts)

Three Months Ended 

January 31, 2019

As reported
under ASC 606

Adjustments

Balances under
ASC 605

Revenue:

  Time-based products

$               553,716

$       15,856

$          569,572

  Upfront products

130,513

(16,786)

113,727

  Maintenance and service

136,172

(21,414)

114,758

      Total revenue

820,401

(22,344)

798,057

Cost of revenue:

  Products

116,620

116,620

  Maintenance and service

58,829

58,829

  Amortization of intangible assets

17,443

17,443

     Total cost of revenue

192,892

-

192,892

Gross margin

627,509

(22,344)

605,165

Operating expenses:

  Research and development

271,326

271,326

  Sales and marketing

155,959

11,184

167,143

  General and administrative

42,061

42,061

  Amortization of intangible assets 

10,784

10,784

  Restructuring

(35)

(35)

     Total operating expenses

480,095

11,184

491,279

Operating income

147,414

(33,528)

113,886

Other income (expense), net

(359)

-

(359)

Income before income taxes

147,055

(33,528)

113,527

Provision (benefit) for income taxes

(6,459)

(5,670)

(12,129)

Net income (loss)

$               153,514

$          125,656

Net income (loss) per share:

  Basic

$                     1.03

$          (0.19)

$                0.84

  Diluted

$                     1.01

$          (0.19)

$                0.82

Shares used in computing per share amounts:

  Basic

149,288

149,288

  Diluted

152,661

152,661

(1)  Synopsys' first quarter of fiscal year 2019 ended on February 2, 2019. For presentation purposes, we refer to the closest calendar month end.