Press Releases

Synopsys Posts Financial Results for Second Quarter of Fiscal 2006
PRNewswire-FirstCall
MOUNTAIN VIEW, Calif.

Synopsys, Inc. (NASDAQ: SNPS), a world leader in semiconductor design software, today reported results for its second fiscal quarter ended April 30, 2006.

For the second quarter, Synopsys reported revenue of $274.8 million, a 12 percent increase compared to $244.3 million for the second quarter of fiscal 2005.

"Synopsys has delivered another strong quarter," said Aart de Geus, chairman and CEO of Synopsys. "Our technology continues to demonstrate strong momentum and we again executed very well against our financial goals."

GAAP Results

On a generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal 2006 was $5.4 million, or $0.04 per share, compared to a net loss of ($5.0) million, or ($0.03) per share, for the second quarter of fiscal 2005. GAAP net income for the current period includes employee stock-based compensation expense of $13.8 million due to the adoption of Statement of Financial Accounting Standards 123( R ) (FAS 123( R )) in fiscal 2006. Net income prior to fiscal 2006 did not include employee stock- based compensation expense related to FAS 123( R ).

Non-GAAP Results

On a non-GAAP basis, net income for the second quarter of fiscal 2006 was $24.5 million, or $0.17 per share, compared to non-GAAP net income of $12.7 million, or $0.09 per share, for the second quarter of fiscal 2005.

Non-GAAP net income consists of GAAP net income excluding employee stock- based compensation expense calculated in accordance with FAS 123( R ) and, to the extent incurred in a particular quarter or period, amortization of intangible assets, in-process research and development charges, integration and other acquisition-related expenses, facilities and workforce realignment charges, and other significant items which, in the opinion of management, are infrequent or non-recurring. See "GAAP to Non-GAAP Reconciliation of Second Quarter 2006 Results" below.

Financial Targets

Synopsys also announced its operating model targets for the third quarter and full fiscal year 2006. These targets constitute forward-looking information and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.

  Third Quarter of Fiscal 2006 Targets:
  * Revenue: $270 million - $278 million
  * GAAP expenses: $261 million - $274 million
  * Non-GAAP expenses: $232 million - $242 million
  * Other income and expense: $0 million - $4 million
  * Fully diluted outstanding shares: 144 million - 150 million
  * Tax rate applied in non-GAAP net income calculations: 30 percent
  * GAAP earnings: $0.02 - $0.07 per share
  * Non-GAAP earnings: $0.17 - $0.20 per share
  * Revenue from backlog:  more than 90 percent

  Full-Year Fiscal Year 2006 Targets
  * Revenue: $1,075 million - $1,090 million
  * Fully diluted outstanding shares: 144 million - 150 million
  * Tax rate applied in non-GAAP net income calculations: 31 percent
  * GAAP earnings: $0.08 - $0.17 per share
  * Non-GAAP earnings: $0.68 - $0.74 per share
  * GAAP cash flow from operations:  greater than $175 million

  GAAP Reconciliation

Synopsys' management evaluates and makes operating decisions about the Company's business operations primarily based on the bookings, revenue and direct, ongoing and recurring costs of those operations. Management does not believe amortization of intangible assets, in-process research and development charges, integration and other acquisition-related expenses, facilities and workforce realignment charges and other significant infrequent items are ongoing and recurring operating costs of its core software, intellectual property and service business operations. In addition, while employee stock- based compensation expense calculated in accordance with FAS 123( R ) constitutes an ongoing and recurring expense of the Company, such expense is excluded from non-GAAP results because it is not an expense that typically requires or will require cash settlement by the Company and because such expense is not used by management to assess the core profitability of the Company's business operations. Therefore, management adjusts the following GAAP financial measures included in this earnings release to exclude such costs, to the extent incurred in a particular quarter: total cost of revenue, gross margin, total operating expenses, operating income (loss), income (loss) before provision (benefit) for income taxes, provision (benefit) for income taxes, net income (loss) and net income (loss) per share.

For each such measure, excluding these costs provides management with more consistent, comparable information about the Company's core profitability. For example, since the Company does not acquire businesses on a predictable cycle, management would have difficulty evaluating the Company's profitability as measured by gross margin, operating margin, income before taxes and net income on a period-to-period basis unless it excluded acquisition-related charges. Similarly, the Company does not undertake significant restructuring or realignments on a regular basis, and, as a result, excludes associated charges in order to enable better and more consistent evaluations of the Company's operating expenses before and after such actions are taken. Management also uses these measures to help it make budgeting decisions, for example, as between product development expenses (which affect cost of revenue and gross margin) and research and development, sales and marketing and general and administrative expenses (which affect operating expenses and operating margin). Finally, the availability of such information helps management track performance to both internal and externally communicated financial targets and to its competitors' operating results.

Management recognizes that the use of these non-GAAP measures has certain limitations, including the fact that management must exercise judgment in determining whether certain types of charges, such as those relating to workforce reductions executed in the ordinary course, should be excluded from non-GAAP results. However, management believes that, although it is important for investors to understand GAAP measures, providing investors with these non- GAAP measures gives them additional important information to enable them to assess, in a way management assesses, Synopsys' current and future continuing operations.

Reconciliation of Second Quarter Results

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP earnings per share and non-GAAP expenses for the second quarter fiscal 2006.

        GAAP to Non-GAAP Reconciliation of Second Quarter Results
                 (in thousands, except per share amounts)

  Income Statement Reconciliation      Three Months Ended Six Months Ended
  (in thousands)                             April 30,        April 30,
                                          2006     2005     2006     2005
  GAAP net income (loss)                 $5,375  $(4,972)  $7,072  $(19,297)
  Adjustments:
    Amortization of intangible assets    13,625   36,928   29,624    73,879
    Stock-based compensation (1)         13,776       --   32,206        --
    In-process research and development      --       --      800     5,700
    Tax effect                           (8,292) (19,233) (18,822)  (32,871)
  Non-GAAP net income                   $24,484  $12,723  $50,880   $27,411

  (1) Employee stock-based compensation results from the Company's adoption
      of FAS 123( R ) during the first quarter of fiscal 2006.


  Earnings Per Share Reconciliation     Three Months Ended Six Months Ended
                                             April 30,         April 30,
                                           2006     2005     2006     2005
  GAAP earnings (loss) per share           $0.04   $(0.03)   $0.05   $(0.13)
  Adjustments:
    Amortization of intangible assets       0.09     0.25     0.20     0.51
    Stock-based compensation (1)            0.09       --     0.22       --
    In-process research and development       --       --     0.01     0.04
    Tax effect                             (0.05)   (0.13)   (0.13)   (0.23)
  Non-GAAP earnings per share              $0.17    $0.09    $0.35    $0.19

  Shares used in calculation             146,010  144,801  146,491  145,429

  (1) Employee stock-based compensation results from the Company's adoption
      of FAS 123( R ) during the first quarter of fiscal 2006.


  Reconciliation of Estimated Target Operating Results

The following tables reconcile the specific items excluded from GAAP in the calculation of target non-GAAP operating results for the periods indicated below:

GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2006 Targets
                  (in thousands, except per share data)

                                                  Range for Three Months
                                                   Ending July 31, 2006
                                                  Low               High
  Target GAAP expenses                          $261,000          $274,000
  Adjustment:
    Estimated impact of amortization of
     intangible assets                           (13,000)          (14,000)
    Estimated impact of stock compensation
     expense (1)                                 (16,000)          (18,000)
  Target non-GAAP expenses                      $232,000          $242,000

  (1) Employee stock-based compensation results from the Company's adoption
      of FAS 123( R ) during the first quarter of fiscal 2006.


                                                  Range for Three Months
                                                   Ending July 31, 2006
                                                    Low               High
  Target GAAP earnings (loss) per share            $0.02             $0.07
  Adjustment:
    Estimated impact of amortization of
     intangible assets                              0.10              0.09
    Estimated impact of stock-based
     compensation (1)                               0.12              0.11
    Net non-GAAP tax effect                        (0.07)            (0.07)
  Target non-GAAP earnings per share               $0.17             $0.20

  Shares used in non-GAAP calculation (midpoint
   of target range)                              147,000           147,000

  (1) Employee stock-based compensation results from the Company's adoption
      of FAS 123( R ) during the first quarter of fiscal 2006.


       GAAP to Non-GAAP Reconciliation of Fiscal Year 2006 Targets

                                                    Range for Fiscal Year
                                                   Ending October 31, 2006
                                                    Low               High
  Target GAAP earnings per share                   $0.08             $0.17
  Adjustment:
    Estimated impact of amortization of
     intangible assets                              0.39              0.38
    Estimated impact of stock-based
     compensation (1)                               0.47              0.44
    Net non-GAAP tax effect                        (0.26)            (0.25)
  Target non-GAAP earnings per share               $0.68             $0.74

  Shares used in non-GAAP calculation
   (midpoint of target range)                    147,000           147,000

  (1) Employee stock-based compensation results from the Company's adoption
      of FAS 123( R ) during the first quarter of fiscal 2006.


  Additional Financial Information Available on Synopsys Website

In connection with this earnings release, Synopsys is making available to investors supplemental financial information which can be found on Synopsys' website at http://www.synopsys.com/corporate/invest/finsupp/q206.pdf. Synopsys currently intends to provide this information on a quarterly basis.

Earnings Call Open to Investors

Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m., Pacific Time. A live webcast of the call will be available at Synopsys' corporate website at http://www.synopsys.com/corporate/invest/invest.html. A recording of the call will be available by calling 1-800-475-6701 (320-365-3844 for international callers), access code 827525, beginning at 5:30 p.m. Pacific Time today. A webcast replay will also be available at http://www.synopsys.com/corporate/invest/invest.html from approximately 5:30 p.m. Pacific Time today through to the time Synopsys announces its results for the third quarter of fiscal 2006 in August 2006. In addition, Synopsys will post copies of the prepared remarks of Aart de Geus, chairman and chief executive officer, and Brian Beattie, chief financial officer, on its website following the call.

Effectiveness of Information

The targets included in this release, the statements made during the earnings conference call and the information contained in the financial supplement represent Synopsys' expectations and beliefs as of the date of this release only. Although this press release, copies of the prepared remarks of the chief executive officer and chief financial officer made during the call and the financial supplement will remain available on Synopsys' website through the date of the third quarter earnings call in August 2006, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys does not currently intend to report on its progress during the third quarter of fiscal 2006 or comment to analysts or investors on, or otherwise update, the targets given in this earnings release until it releases such results in August 2006.

Availability of Final Financial Statements

Synopsys will include final financial statements for the second quarter of fiscal 2006 in its Quarterly Report on Form 10-Q to be filed in June 2006.

About Synopsys

Synopsys, Inc. is a world leader in electronic design automation (EDA) software for semiconductor design. The company delivers technology-leading semiconductor design and verification platforms and IC manufacturing software products to the global electronics market, enabling the development and production of complex systems-on-chips. Synopsys also provides intellectual property and design services to simplify the design process and accelerate time-to-market for its customers. Synopsys is headquartered in Mountain View, California and has offices in more than 60 locations throughout North America, Europe, Japan and Asia. Visit Synopsys online at http://www.synopsys.com/.

Forward-Looking Statements

The statements made in this press release regarding projected financial results in the sections entitled "Financial Targets," and "Reconciliation of Estimated Target Operating Results" and certain statements made in the earnings conference call are forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those described by these statements due to a number of uncertainties, including, but not limited to:

  * weakness or continued budgetary caution in the semiconductor or
    electronics industries;
  * lower-than-expected research and development spending by semiconductor
    and electronic systems companies;
  * competition in the market for Synopsys' products and services;
  * lower-than-anticipated new IC design starts;
  * lower-than-anticipated purchases or delays in purchases of software or
    consulting services by Synopsys' customers, including delays in the
    renewal, or non-renewal, of Synopsys' license arrangements with major
    customers;
  * unexpected changes in the mix of time-based licenses and upfront
    licenses;
  * lower-than-expected bookings of licenses on which revenue is recognized
    upfront;
  * failure of our cost control efforts to result in the anticipated
    savings;
  * failure to successfully develop additional intellectual property blocks
    for its IP business or to develop and integrate its design for
    manufacturing products;
  * difficulties in the integration of the products and operations of
    acquired companies or assets into Synopsys' products and operations;
  * downward pressure on maintenance orders, adversely affecting Synopsys'
    future level of service revenue; and
  * changes in the anticipated amount of employee stock-based compensation
    recognized on the Company's financial statements.

In addition, Synopsys' actual operating expenses and earnings per share on a GAAP basis for the fiscal quarter ending July 31, 2006 and actual earnings per share and operating cash flow on a GAAP basis for fiscal year 2006 could differ materially from the targets stated under "Financial Targets" above for a number of reasons, including (i) a determination by Synopsys that any portion of its goodwill or intangible assets have become impaired, (ii) application of the actual consolidated GAAP tax rate for such periods, (iii) integration and other acquisition-related expenses, amortization of additional intangible assets associated with future acquisitions, if any, (iv) increases or decreases in employee stock-based compensation expense caused by employee terminations or otherwise, and (vi) increases or decreases to estimated capital expenditures.

For further discussion of these and other factors that may cause results to differ from those projected in this release, readers are referred to the reports which Synopsys has filed with the Securities and Exchange Commission (SEC), and which are available at www.sec.gov, particularly the information contained in the section of Part I, Item 2 of Synopsys' Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2006 filed with the SEC on March 9, 2006 entitled "Factors That May Affect Future Results." Synopsys is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements made in this earnings release, the conference call or the financial supplement whether as a result of new information, future events or otherwise, unless otherwise required by law.

NOTE: Synopsys is a registered trademark of Synopsys, Inc. Any other trademarks mentioned in this release are the intellectual property of their respective owners.

  INVESTOR CONTACT:
  Lisa L. Ewbank
  Synopsys, Inc.
  650-584-1901

  EDITORIAL CONTACT:
  Yvette Huygen
  Synopsys, Inc.
  650-584-4547


                              SYNOPSYS, INC.
      Unaudited Condensed Consolidated Statements of Operations (1)
                  (in thousands, except per share data)

                      Three Months Ended            Three Months Ended
                        April 30, 2006                April 30, 2005
                          Adjustments                   Adjustments
                     GAAP      (2)     Non-GAAP     GAAP    (2)    Non-GAAP
  Revenue:
    Time-based
     license        $209,417       -- $209,417   $175,781      -- $175,781
    Upfront license   25,959       --   25,959     17,183      --  17,183
    Maintenance and
     service          39,403       --   39,403     51,375      --  51,375
      Total revenue  274,779       --  274,779    244,339      -- 244,339
  Cost of revenue:
    License           32,457   (1,330)  31,127     23,245     (44) 23,201
    Maintenance and
     service          16,904     (728)  16,176     18,446     (23) 18,423
    Amortization of
     intangible assets 6,494   (6,494)      --     28,032 (28,032)     --
      Total cost of
       revenue        55,855   (8,552)  47,303     69,723 (28,099) 41,624
  Gross margin       218,924    8,552  227,476    174,616  28,099 202,715
  Operating expenses:
    Research and
     development      91,296   (6,385)  84,911     80,350    (325) 80,025
    Sales and
     marketing        85,725   (3,722)  82,003     80,916    (137) 80,779
    General and
     administrative   26,661   (1,611)  25,050     25,343     (32) 25,311
    Amortization of
     intangible assets 7,131   (7,131)      --      8,335  (8,335)     --
      Total operating
       expenses      210,813  (18,849) 191,964    194,944  (8,829)186,115
  Operating income
   (loss)              8,111   27,401   35,512    (20,328) 36,928  16,600
  Other income, net    1,032       --    1,032      1,322      --   1,322
  Income (loss) before
   provision (benefit)
   for income taxes    9,143   27,401   36,544    (19,006) 36,928  17,922
  Provision (benefit)
   for income taxes    3,768    8,292   12,060    (14,034) 19,233   5,199
  Net income (loss)   $5,375  $19,109  $24,484    $(4,972)$17,695 $12,723

  Net income (loss)
   per share:
    Basic              $0.04             $0.17     $(0.03)          $0.09
    Diluted            $0.04             $0.17     $(0.03)          $0.09

  Shared used in
   computing per
   share amounts:
    Basic            143,352           143,352    144,801         144,801
    Diluted          146,010           146,010    144,801         145,684

  (1)  Synopsys' second quarter ends on the Saturday nearest to April 30.
       For presentation purposes, the Unaudited Condensed Consolidated
       Statements of Operations refer to a calendar month end.
  (2)  Adjustments consist of stock-based compensation and related tax
       effect under FAS 123( R ) and, to the extent incurred, amortization
       of intangible assets, in-process research and development charges,
       integration and other significant items, which in the opinion of
       management are extraordinary.  Pre-tax income for the three months
       ended April 30, 2006 includes total stock-based compensation for its
       employees of $13.8 million as follows: cost of revenue $2.1 million;
       research & development $6.4 million; sales & marketing $3.7 million;
       general & administrative $1.6 million.  As of April 30, 2005, no FAS
       123( R ) stock-based compensation was recorded.


                              SYNOPSYS, INC.
      Unaudited Condensed Consolidated Statements of Operations (1)
                  (in thousands, except per share data)

                         Six Months Ended              Six Months Ended
                          April 30, 2006                April 30, 2005
                            Adjustments                  Adjustments
                      GAAP      (2)    Non-GAAP    GAAP      (2)    Non-GAAP
  Revenue:
    Time-based
     license        $420,527       -- $420,527   $362,065      -- $362,065
    Upfront license   34,326       --   34,326     27,981      --  27,981
    Maintenance
     and Service      80,115       --   80,115     95,597      --  95,597
      Total revenue  534,968       --  534,968    485,643      -- 485,643
  Cost of revenue:
    License           62,446   (2,949)  59,497     48,135     (87) 48,048
    Maintenance
     and service      33,477   (1,584)  31,893     35,498     (46) 35,452
    Amortization of
     intangible
     assets           15,153  (15,153)      --     56,065 (56,065)     --
      Total cost
       of revenue    111,076  (19,686)  91,390    139,698 (56,198) 83,500
  Gross margin       423,892   19,686  443,578    345,945  56,198 402,143
  Operating expenses:
    Research and
     development     178,900  (14,534) 164,366    153,607    (665)152,942
    Sales and
     marketing       162,914   (8,431) 154,483    165,045    (276)164,769
    General and
     administrative   57,465   (4,708)  52,757     50,348     (64) 50,284
    In-process
     research and
     development         800     (800)      --      5,700  (5,700)     --
    Amortization of
     intangible
     assets           14,471  (14,471)      --     16,676 (16,676)     --
      Total operating
       expenses      414,550  (42,944) 371,606    391,376 (23,381)367,995
  Operating income
   (loss)              9,342   62,630   71,972    (45,431) 79,579  34,148
  Other income, net    2,827       --    2,827      7,271      --   7,271
  Income (loss) before
   provision (benefit)
   for income taxes   12,169   62,630   74,799    (38,160) 79,579  41,419
  Provision (benefit)
   for income taxes    5,097   18,822   23,919    (18,863) 32,871  14,008
  Net income (loss)   $7,072  $43,808  $50,880   $(19,297)$46,708 $27,411

  Net income (loss)
   per share:
    Basic              $0.05             $0.35     $(0.13)          $0.19
    Diluted            $0.05             $0.35     $(0.13)          $0.19

  Shared used in
   computing per
   share amounts:
    Basic            144,172           144,172    145,429         145,429
    Diluted          146,491           146,491    145,429         146,340

  (1)  Synopsys' second quarter ends on the Saturday nearest to April 30.
       For presentation purposes, the Unaudited Condensed Consolidated
       Statements of Operations refer to a calendar month end.
  (2)  Adjustments consist of stock-based compensation and related tax
       effect under FAS 123( R ) and, to the extent incurred, amortization
       of intangible assets, in-process research and development charges,
       integration and other significant items, which in the opinion of
       management are extraordinary.  Pre-tax income for the six months
       ended April 30, 2006 includes total stock-based compensation for its
       employees of $32.2 million as follows: cost of revenue $4.5 million;
       research & development $14.5 million; sales & marketing $8.4 million;
       general & administrative $4.8 million.  As of April 30, 2005, no FAS
       123( R ) stock-based compensation was recorded.


                              SYNOPSYS, INC.
           Unaudited Condensed Consolidated Balance Sheets (1)
                 (in thousands, except par value amounts)

                                                       April 30, October 31,
                                                        2006 (2)    2005
  ASSETS:
  Current assets:
    Cash and cash equivalents                          $294,931   $404,436
    Short-term investments                              239,609    182,070
    Total cash, cash equivalents and short-term
     investments                                        534,540    586,506
    Accounts receivable, net                            138,325    100,178
    Deferred income taxes                               196,176    195,501
    Income taxes receivable                              48,223     48,370
    Prepaid expenses and other current assets            23,173     16,924
            Total current assets                        940,437    947,479
  Property and equipment, net                           166,805    170,195
  Long-term investments                                   6,542      8,092
  Goodwill, net                                         735,175    728,979
  Intangible assets, net                                124,021    142,519
  Long-term deferred income taxes                        90,174     82,384
  Other assets                                           68,606     61,828
             Total assets                            $2,131,760 $2,141,476

  LIABILITIES AND STOCKHOLDERS' EQUITY:
  Current liabilities:
    Accounts payable and accrued liabilities           $169,006   $231,359
    Accrued income taxes                                172,232    169,632
    Deferred revenue                                    477,449    415,689
             Total current liabilities                  818,687    816,680
  Deferred compensation and other liabilities            71,915     63,841
  Long-term deferred revenue                             42,683     42,019
  Stockholders' equity:
    Preferred stock,  $0.01 par value:
     2,000 shares authorized; none outstanding               --         --
    Common stock,  $0.01 par value:
     400,000 shares authorized; 143,833 and
     145,897 shares outstanding, respectively             1,438      1,459
    Capital in excess of par value                    1,293,783  1,263,952
    Retained earnings                                   168,774    171,108
    Treasury stock, at cost: 13,345 and
     11,259 shares, respectively                       (250,251)  (199,482)
    Deferred stock compensation                              --     (2,100)
    Accumulated other comprehensive loss                (15,269)   (16,001)
           Total stockholders' equity                 1,198,475  1,218,936
           Total liabilities and
            stockholders' equity                     $2,131,760 $2,141,476

  (1)  The Company's second quarter and fiscal year ends on the Saturday
       nearest to April 30 and October 31, respectively. For presentation
       purposes, the Unaudited Condensed Consolidated Balance Sheets refer
       to a calendar month end.
  (2)  During the six months ended April 30, 2006, Synopsys completed the
       acquisition of HPL Technologies, Inc. and completed the final
       valuation analysis of the tangible and identifiable intangible assets
       and liabilities.


                              SYNOPSYS, INC.
       Unaudited Condensed Consolidated Statement of Cash Flows (1)
                              (in thousands)

                                                 Six Months Ended April 30,
                                                   2006             2005
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                               $7,072          $(19,297)
  Adjustments to reconcile net income (loss)
   to net cash provided by operating activities:
    Amortization and depreciation                 57,974           101,112
    Stock-based compensation                      32,333                --
    In-process research and development              800             5,700
    Deferred income taxes                             70           (23,220)
    Write-down of long-term assets                 1,336             2,564
    Provision for (reduction to) doubtful accounts   375            (2,757)
    Net change in deferred gains and losses on cash
     flow hedges                                      93            (9,739)
    Gain (loss) on sale of short and long-term
     investment                                       20               322
    Net changes in operating assets and
     liabilities, net of acquired assets and
     liabilities assumed:
       Accounts receivable                       (37,501)            7,182
       Income taxes receivable                        --                62
       Prepaid expenses and other current assets  (6,051)           (2,502)
       Other assets                               (6,905)           (7,484)
       Accounts payable and accrued liabilities  (67,276)          (14,065)
       Accrued income taxes                       (4,374)           (4,703)
       Deferred revenue                           61,315            89,556
       Deferred compensation and other
        liabilities                                7,397             7,877
    Net cash provided by operating activities     46,678           130,608

  CASH FLOWS FROM INVESTING ACTIVITIES:
    Cash paid for acquisitions, net of cash
     received                                    (11,894)          (91,293)
    Proceeds from sales and maturities of
     short-term investments                      136,093           201,800
    Purchases of short-term investments         (194,084)         (151,410)
    Purchases of long-term investments            (1,539)               --
    Purchases of property and equipment          (23,136)          (21,436)
    Capitalization of software development costs  (1,523)           (1,476)
    Net cash used in investing activities        (96,083)          (63,815)

  CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuances of common stock                     38,428            17,208
    Purchases of treasury stock                  (99,026)          (85,139)
    Net cash used in financing activities        (60,598)          (67,931)
  Effect of exchange rate changes on cash and
   cash equivalents                                  498            (2,442)
  Net (decrease) increase in cash and cash
   equivalents                                  (109,505)           (3,580)
  Cash and cash equivalents, beginning of
   period                                        404,436           346,709
  Cash and cash equivalents, end of period      $294,931          $343,129

  (1)  Synopsys' second quarter ends on the Saturday nearest to April 30.
       For presentation purposes, the Unaudited Condensed Consolidated
       Statements of Cash Flows refer to a calendar month end.

SOURCE: Synopsys, Inc.

CONTACT: investors, Lisa L. Ewbank, +1-650-584-1901, or media,
Yvette Huygen, +1-650-584-4547, both of Synopsys, Inc.

Web site: http://www.synopsys.com/