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Segment Disclosure
6 Months Ended
Apr. 30, 2021
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 Chief Operating Decision Makers (CODMs) in deciding how to allocate resources and in assessing performance. The Company’s CODMs are its two Co-Chief Executive Officers.
The Company has 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 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:
 Three Months Ended 
 April 30,
Six Months Ended 
 April 30,
 2021202020212020
 (in thousands)
Total Segments:
Revenue$1,024,323 $861,327 $1,994,644 $1,695,708 
Adjusted operating income317,240 221,404 604,060 408,337 
Adjusted operating margin31 %26 %30 %24 %
Semiconductor & System Design:
Revenue$930,427 $773,065 $1,808,795 $1,521,809 
Adjusted operating income308,816 209,692 587,692 388,543 
Adjusted operating margin33 %27 %32 %26 %
Software Integrity:
Revenue$93,896 $88,262 $185,849 $173,899 
Adjusted operating income8,424 11,712 16,368 19,794 
Adjusted operating margin%13 %%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, 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:
 Three Months Ended 
 April 30,
Six Months Ended 
 April 30,
 2021202020212020
 (in thousands)
Total segment adjusted operating income$317,240 $221,404 $604,060 $408,337 
Reconciling items:
Amortization of intangible expense(19,721)(24,095)(39,997)(46,628)
Stock-based compensation expense(79,586)(56,435)(163,368)(108,318)
Other(23,702)(14,979)(58,116)(39,980)
Total operating income$194,231 $125,895 $342,579 $213,411 
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 related to operations in the United States and other geographic areas were: 
 Three Months Ended 
 April 30,
Six Months Ended 
 April 30,
 2021202020212020
 (in thousands)
Revenue:
United States$471,716 $404,389 $940,418 $812,878 
Europe106,160 89,284 211,335 183,655 
China125,519 81,113 241,287 148,433 
Korea105,388 105,315 203,642 194,830 
Other215,540 181,226 397,962 355,912 
Consolidated$1,024,323 $861,327 $1,994,644 $1,695,708 
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.