Segment Disclosure

12 Months Ended

Oct. 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 FPGA IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our interface, foundation, security, and embedded processor IP, IP subsystems, and IP implementation services.

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.

The Software Integrity business constituted its own reportable segment under Topic 280. In accordance with applicable accounting guidance, the results of the Software Integrity business are presented as discontinued operations in the 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 Consolidated Financial Statements in this Annual Report.

Information by reportable segment is as follows:

	Year Ended October 31,
	2024			2023			2022
	(in thousands)
Total Segments:
Revenue	$	6,127,436		$	5,318,014		$	4,615,714
Adjusted operating income	2,362,059			1,928,027			1,579,899
Adjusted operating margin	39		%	36		%	34		%
Design Automation:
Revenue	$	4,221,122		$	3,775,288		$	3,300,173
Adjusted operating income	1,631,885			1,413,926			1,176,101
Adjusted operating margin	39		%	37		%	36		%
Design IP:
Revenue	$	1,906,314		$	1,542,726		$	1,315,541
Adjusted operating income	730,174			514,101			403,798
Adjusted operating margin	38		%	33		%	31		%

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:

	Year Ended October 31,
	2024		2023		2022
	(in thousands)
Total segment adjusted operating income	$	2,362,059	$	1,928,027	$	1,579,899
Reconciling items:
Amortization of acquired intangible assets	(124,234)		(54,576)		(56,311)
Stock-based compensation expense	(657,935)		(513,094)		(421,749)
Deferred compensation plan	(85,446)		(20,196)		67,516
Restructuring charges	—		(53,091)		(11,221)
Acquisition/divestiture related items	(138,733)		(13,831)		(9,420)
Total operating income	$	1,355,711	$	1,273,239	$	1,148,714

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 and property and equipment, net, related to operations in the United States and other geographic areas are:

	Year Ended October 31,
	2024		2023		2022
	(in thousands)
Revenue:
United States	$	2,739,756	$	2,462,009	$	2,094,470
Europe	614,584		514,780		430,369
China	989,524		855,023		774,265
Korea	773,018		625,502		523,501
Other	1,010,554		860,700		793,109
Consolidated	$	6,127,436	$	5,318,014	$	4,615,714

	As of October 31,
	2024		2023
	(in thousands)
Property and Equipment, net:
United States	$	335,306	$	334,272
Other	227,700		215,565
Total	$	563,006	$	549,837

Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.

One customer, including its subsidiaries, accounted for 12.6%, 13.5%, and 12.8% of our consolidated revenue in fiscal 2024, 2023, and 2022, respectively. No customer accounted for over 10% of our accounts receivable as of October 31, 2024. One customer accounted for 12.1% of our accounts receivable as of October 31, 2023.