Synopsys Posts Financial Results for Fourth Quarter and Fiscal Year 2008

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 (available in the Investor Relations section of Synopsys' website at 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 first quarter earnings call in February 2009, 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 first quarter of fiscal 2009 or comment to analysts or investors on, or otherwise update, the targets given in this earnings release.

Availability of Final Financial Statements

Synopsys will include final financial statements for fiscal 2008 in its Annual Report on Form 10-K to be filed by December 31, 2008.

About Synopsys

Synopsys, Inc. (NASDAQ: SNPS) is the world leader in electronic design automation (EDA), supplying the global electronics market with the software, intellectual property (IP) and services used in semiconductor design and manufacturing. Synopsys' comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and field-programmable gate array (FPGA) solutions helps address the key challenges designers and manufacturers face today, such as power and yield management, software-to- silicon verification and time-to-results. These technology-leading solutions help give Synopsys customers a competitive edge in bringing the best products to market quickly while reducing costs and schedule risk. Synopsys is headquartered in Mountain View, California, and has more than 60 offices located throughout North America, Europe, Japan, Asia and India. Visit Synopsys online at

Forward-Looking Statements

The statements made in this press release regarding projected financial results in the sections entitled "Financial Targets," and "Reconciliation of 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
    * failure of customers to pay license fees as scheduled;
    * changes in the mix of time-based licenses and upfront licenses;
    * lower-than-expected orders; and
    * difficulties in the integration of the products and operations of
      acquired companies or assets into Synopsys' products and operations.

In addition, Synopsys' actual expenses, earnings per share and tax rate on a GAAP and non-GAAP basis for the fiscal quarter ending January 31, 2009 and actual expenses, earnings per share, tax rate, cash flow from operations and other projections on a GAAP and non-GAAP basis for fiscal year 2009 could differ materially from the targets stated under "Financial Targets" above for a number of reasons, including, but not limited to, (i) a determination by Synopsys that any portion of its goodwill or intangible assets have become impaired, (ii) application of the actual consolidated GAAP and non-GAAP tax rates for such periods, or judgment by management, based upon the status of pending audits to increase or decrease an income tax asset or liability, (iii) integration and other acquisition-related expenses including amortization of intangible assets associated with future acquisitions, if any, (iv) changes in the anticipated amount of employee share-based compensation expense recognized on Synopsys' financial statements, (v) actual change in the fair value of Synopsys' non-qualified deferred compensation plan obligations, (vi) increases or decreases to estimated capital expenditures, (vii) changes driven by new accounting rules, regulations, interpretations or pronouncements, (viii) general economic conditions, and (ix), other risks as detailed in our SEC filings, including those described in the "Risk Factors" section in our Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2008. Furthermore, Synopsys' actual tax rates applied to income for the first quarter fiscal year 2009 could differ from the targets given in this press release as a result of a number of factors, including the actual geographic mix of revenue during the quarter and actions by the government. Finally, Synopsys' targets for outstanding shares in the first quarter and fiscal year 2009 could differ from the targets given in this press release as a result of higher than expected employee stock plan issuances or stock option exercises, acquisitions and the extent of Synopsys' stock repurchase activity.

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.

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

     Lisa L. Ewbank
     Synopsys, Inc.

     Yvette Huygen
     Synopsys, Inc.

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

                                   Three Months Ended    Twelve Months Ended
                                       October 31,           October 31,
                                     2008       2007       2008        2007
      Time-based license           $290,515  $257,935  $1,125,845  $1,004,026
      Upfront license                26,090    20,416      71,383      67,524
      Maintenance and service        36,200    36,882     139,723     140,919
          Total revenue             352,805   315,233   1,336,951   1,212,469
    Cost of revenue:
      License                        45,213    39,151     171,974        146,420
            Maintenance  and  service                15,440        16,899            63,596            64,358
            Amortization  of  intangible
              assets                                                  6,215          6,032            23,326            23,487
                  Total  cost  of  revenue              66,868        62,082          258,896          234,265
        Gross  margin                                        285,937      253,151      1,078,055          978,204
        Operating  expenses:
            Research  and  development            102,564        97,016          394,747          379,221
            Sales  and  marketing                        87,706        85,158          334,779          349,395
            General  and  administrative          27,328        25,330          103,852          101,735
            In-process  research  and
              development                                            -              1,100              4,800              3,200
            Amortization  of  intangible
              assets                                                  3,035          6,671            20,765            26,609
                  Total  operating  expenses      220,633      215,275          858,943          860,160
        Operating  income                                  65,304        37,876          219,112          118,044
        Other  income,  net                                (9,584)        9,324                (156)          47,755
        Income  before  income  taxes              55,720        47,200          218,956          165,799
        Provision  for  income  taxes                9,323          6,186            28,978            35,308
        Net  income                                            $46,397      $41,014        $189,978        $130,491

        Net  income  per  share:
            Basic                                                      $0.33          $0.28              $1.33              $0.91
            Diluted                                                  $0.32          $0.27              $1.29              $0.87

        Shares  used  in  computing  per
          share  amounts:
            Basic                                                  142,684      144,973          143,258          143,953
            Diluted                                              145,638      150,701          147,672          149,716

        (1)  Synopsys'  fiscal  years  ended  on  November  1,  2008  and  November  3,
                2007,  respectively.    For  presentation  purposes,  the  Unaudited
                Consolidated  Statements  of  Operations  refer  to  a  calendar  month  end.

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

                                                                                                    October  31,            October  31,
                                                                                                          2008                          2007
        Current  assets:
            Cash  and  cash  equivalents                                      $577,632                      $579,327
            Short-term  investments                                              373,669                        405,126
                              Total  cash,  cash  equivalents  and
                                short-term  investments                          951,301                        984,453
            Accounts  receivable,  net                                          147,365                        123,900
            Deferred  income  taxes                                                133,609                        123,165
            Income  taxes  receivable                                              49,859                          42,525
            Prepaid  expenses  and  other  current  assets          40,156                          53,496
                              Total  current  assets                            1,322,290                    1,327,539
        Property  and  equipment,  net                                        145,087                        131,866
        Goodwill                                                                              899,640                        767,087
        Intangible  assets,  net                                                  114,760                          78,792
        Long-term  deferred  income  taxes                                177,386                        216,642
        Other  assets                                                                        83,315                          95,411
                              Total  assets                                          $2,742,478                  $2,617,337

        Current  liabilities:
            Accounts  payable  and  accrued  liabilities        $289,769                      $246,209
            Accrued  income  taxes                                                    14,496                        207,572
            Deferred  revenue                                                          604,718                        577,295
                              Total  current  liabilities                      908,983                    1,031,076
        Deferred  compensation  and  other  liabilities          76,970                          84,648
        Long-term  accrued  income  taxes                                  152,745                                    -
        Long-term  deferred  revenue                                            75,409                          65,220
                              Total  liabilities                                  1,214,107                    1,180,944
        Stockholders'  equity:
            Preferred  stock,  $0.01  par  value:  2,000
              shares  authorized;  none    outstanding                            -                                    -
            Common  stock,  $0.01  par  value:  400,000
              shares  authorized;  141,786  and  146,365
              shares  outstanding,  respectively                            1,418                            1,464
            Capital  in  excess  of  par  value                          1,471,031                    1,401,965
            Retained  earnings                                                        434,057                        263,977
            Treasury  stock,  at  cost:  15,485
              and  10,867  shares,  respectively                        (342,856)                    (234,918)
            Accumulated  other  comprehensive  income
              (loss)                                                                            (35,279)                          3,905
                              Total  stockholders'  equity                1,528,371                    1,436,393
                              Total  liabilities  and
                                stockholders'  equity                        $2,742,478                  $2,617,337

        (1)  Synopsys'  fiscal  years  ended  on  November  1,  2008  and  November  3,
                2007,  respectively.    For  presentation  purposes,  the  Unaudited
                Consolidated  Balance  Sheets  refer  to  a  calendar  month  end.

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

                                                                                              Twelve  Months  Ended  October  31,
                                                                                                        2008                            2007
        Net  income                                                                        $189,978                    $130,491
        Adjustments  to  reconcile  net  income  to  net
          cash  provided  by  operating  activities:
            Amortization  and  depreciation                                  97,143                      105,367
            Share-based  compensation                                            65,474                        62,011
            Allowance  for  doubtful  accounts                                    135                            (330)
            (Gain)  loss  on  sale  of  investments                        (1,404)                            (72)
            (Gain)  on  sale  of  land                                                      -                            (4,284)
            Deferred  income  taxes                                                (12,258)                          (972)
            Net  change  in  deferred  gains  and  losses  on
              cash  flow  hedges                                                        (14,884)                        9,053
            In-process  research  and  development                        4,800                          3,200
            Net  changes  in  operating  assets  and
              liabilities,  net  of  acquired  assets  and
                Accounts  receivable                                                  (8,571)                          (124)
                Prepaid  expenses  and  other  current  assets    (22,484)                    (15,610)
                Other  assets                                                                      647                              139
                Accounts  payable  and  accrued  liabilities        36,413                            (590)
                Accrued  income  taxes                                                (6,960)                        2,127
                Deferred  revenue                                                          6,856                      142,002
                Deferred  compensation  and  other  liabilities  (3,797)                        1,070
            Net  cash  provided  by  operating  activities        331,088                      433,478

            Proceeds  from  sales  and  maturities  of
              short-term  investments                                            597,902                      284,615
            Purchases  of  short-term  investments                  (564,978)                  (447,100)
            Proceeds  from  sales  of  long-term  investments            77                              -
            Purchases  of  long-term  investments                        (7,694)                      (4,620)
            Purchases  of  property  and  equipment                    (38,869)                    (44,690)
            Proceeds  from  sale  of  land                                              -                            26,298
            Cash  paid  for  acquisitions  and
              intangible  assets,  net  of  cash  acquired        (184,650)                    (57,473)
            Capitalization  of  software  development
              costs                                                                                (2,874)                      (2,599)
            Net  cash  used  in  investing  activities              (201,086)                  (245,569)

            Payments  on  lease  obligations                                  (2,970)                            -
            Issuances  of  common  stock                                          79,181                      208,484
            Purchases  of  common  stock                                      (220,053)                  (151,620)
            Net  cash  (used  in)  provided  by  financing
              activities                                                                  (143,842)                      56,864
        Effect  of  exchange  rate  changes  on  cash  and
          cash  equivalents                                                              12,145                          3,795
        Net  change  in  cash  and  cash  equivalents                  (1,695)                    248,568
        Cash  and  cash  equivalents,  beginning
          of  period                                                                          579,327                      330,759
        Cash  and  cash  equivalents,  end  of  period            $577,632                    $579,327

        (1)  Synopsys'  fiscal  years  ended  on  November  1,  2008  and  November  3,
                2007,  respectively.    For  presentation  purposes,  the  Unaudited
                Consolidated  Statements  of  Cash  Flows  refer  to  a  calendar  month  end.

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