XML 34 R24.htm IDEA: XBRL DOCUMENT v3.22.2.2
Segment Disclosure
9 Months Ended
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,
 2022202120222021
 (in thousands)
Total Segments:
Revenue$1,247,766 $1,057,130 $3,797,250 $3,051,774 
Adjusted operating income392,127 337,396 1,321,671 941,456 
Adjusted operating margin31 %32 %35 %31 %
Semiconductor & System Design:
Revenue$1,129,427 $959,155 $3,458,499 $2,767,950 
Adjusted operating income380,871 328,742 1,285,391 916,434 
Adjusted operating margin34 %34 %37 %33 %
Software Integrity:
Revenue$118,339 $97,975 $338,751 $283,824 
Adjusted operating income11,256 8,654 36,280 25,022 
Adjusted operating margin10 %%11 %%
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,
 2022202120222021
 (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,
 2022202120222021
 (in thousands)
Revenue:
United States$575,326 $477,218 $1,763,541 $1,417,636 
Europe127,288 112,877 376,195 324,212 
China189,138 164,172 617,524 405,460 
Korea125,307 110,536 358,871 314,178 
Other230,707 192,327 681,119 590,288 
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.