Segment Disclosure

12 Months Ended

Oct. 31, 2020

Segment Reporting [Abstract]

Segment Disclosure

Segment Disclosure

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 CODMs in deciding how to allocate resources and in assessing performance. Synopsys’ CODMs are its two Co-Chief Executive Officers.

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 revenue by geographic region.

Information by reportable segment was as follows:

	Year Ended October 31,
	2020			2019			2018
	(in thousands)
Total Segments:
Revenue	$	3,685,281		$	3,360,694		$	3,121,058
Adjusted operating income	1,031,630			838,821			690,681
Adjusted operating margin	28		%	25		%	22		%
Semiconductor & System Design:
Revenue	$	3,327,211		$	3,026,097		$	2,840,589
Adjusted operating income	990,837			806,618			701,283
Adjusted operating margin	30		%	27		%	25		%
Software Integrity:
Revenue	$	358,070		$	334,597		$	280,469
Adjusted operating income	40,793			32,203			(10,602		)
Adjusted operating margin	11		%	10		%	(4		)%

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:

	Year Ended October 31,
	2020			2019			2018
	(in thousands)
Total segment adjusted operating income	$	1,031,630		$	838,821		$	690,681
Reconciling items:
Amortization of intangible expense	(91,281		)	(100,914		)	(125,664		)
Stock-based compensation expense	(248,584		)	(155,001		)	(140,032		)
Other	(71,624		)	(62,675		)	(64,760		)
Total operating income	$	620,141		$	520,231		$	360,225

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.

In allocating revenue to particular geographic areas, the CODMs consider where individual “seats” or licenses to the Company’s products are located. Revenue is defined as revenue from external customers. Revenue and property and equipment, net, related to operations in the United States and other geographic areas were:

	Year Ended October 31,
	2020		2019		2018
	(in thousands)
Revenue:
United States	$	1,774,348	$	1,676,178	$	1,508,224
Europe	385,287		349,033		369,125
China	420,829		321,777		259,279
Korea	389,008		353,358		307,974
Other	715,809		660,348		676,456
Consolidated	$	3,685,281	$	3,360,694	$	3,121,058

	As of October 31,
	2020		2019
	(in thousands)
Property and Equipment, net:
United States	$	311,350	$	293,725
Other countries	172,468		135,807
Total	$	483,818	$	429,532

Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to the Company’s methodology.

One customer, including its subsidiaries, accounted for 12.4%, 12.8%, and 15.4% of the Company’s consolidated revenue in fiscal 2020, 2019, and 2018, respectively.