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Segment Disclosure
9 Months Ended
Jul. 31, 2024
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 CODM in deciding how to allocate resources and in assessing performance. Our CODM is our CEO.
We have two reportable segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, system integration products and services, digital, custom and field programmable gate array (FPGA) IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our Design IP products.
The financial information provided to and used by the CODM to assist in making operational decisions, allocating resources, and assessing performance includes consolidated financial information as well as revenue, adjusted operating income, and adjusted operating margin information for the Design Automation and Design IP segments, accompanied by disaggregated information relating to revenue by geographic region.
In accordance with applicable accounting guidance, the results of the Software Integrity business are presented as discontinued operations in the condensed consolidated statements of income and, as such, have been excluded from both continuing operations and segment results for all periods presented. See Note 3. Discontinued Operations of the Notes to Condensed Consolidated Financial Statements.
Information by reportable segment is as follows:
 Three Months Ended 
 July 31,
Nine Months Ended 
 July 31,
 2024202320242023
 (in thousands)
Total Segments:
Revenue$1,525,749 $1,354,390 $4,491,450 $3,850,631 
Adjusted operating income610,589 492,791 1,758,823 1,380,537 
Adjusted operating margin40 %36 %39 %36 %
Design Automation:
Revenue$1,062,666 $1,004,156 $3,102,938 $2,821,570 
Adjusted operating income440,864 410,023 1,218,574 1,102,837 
Adjusted operating margin41 %41 %39 %39 %
Design IP:
Revenue$463,083 $350,234 $1,388,512 $1,029,061 
Adjusted operating income169,725 82,768 540,249 277,700 
Adjusted operating margin37 %24 %39 %27 %
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 acquired intangible assets, stock-based compensation, changes in the fair value of deferred compensation plan, restructuring charges, and acquisition/divestiture related items, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income from continuing operations:
 Three Months Ended 
 July 31,
Nine Months Ended 
 July 31,
 2024202320242023
 (in thousands)
Total segment adjusted operating income$610,589 $492,791 $1,758,823 $1,380,537 
Reconciling items:
Amortization of acquired intangible assets
(18,572)(13,008)(53,317)(38,632)
Stock-based compensation expense(164,354)(131,496)(492,550)(384,454)
Deferred compensation plan(25,780)(21,492)(76,276)(44,123)
Restructuring charges— (21,879)— (54,439)
Acquisition/divestiture related items
(41,672)(4,840)(91,771)(9,815)
Total operating income$360,211 $300,076 $1,044,909 $849,074 
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 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 are: 
 Three Months Ended 
 July 31,
Nine Months Ended 
 July 31,
 2024202320242023
 (in thousands)
Revenue:
United States$660,479 $561,500 $2,015,066 $1,733,107 
Europe144,631 125,789 429,377 377,087 
China266,699 292,079 729,583 673,575 
Korea194,817 161,848 569,538 459,384 
Other259,123 213,174 747,886 607,478 
Consolidated$1,525,749 $1,354,390 $4,491,450 $3,850,631 
Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.