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Segment Disclosure
9 Months Ended
Jul. 31, 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 
 July 31,
Nine Months Ended 
 July 31,
 2021202020212020
 (in thousands)
Total Segments:
Revenue$1,057,130 $964,134 $3,051,774 $2,659,842 
Adjusted operating income337,396 323,553 941,456 731,890 
Adjusted operating margin32 %34 %31 %28 %
Semiconductor & System Design:
Revenue$959,155 $870,734 $2,767,950 $2,392,542 
Adjusted operating income328,742 308,730 916,434 697,273 
Adjusted operating margin34 %35 %33 %29 %
Software Integrity:
Revenue$97,975 $93,400 $283,824 $267,300 
Adjusted operating income8,654 14,823 25,022 34,617 
Adjusted operating margin%16 %%13 %
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 
 July 31,
Nine Months Ended 
 July 31,
 2021202020212020
 (in thousands)
Total segment adjusted operating income$337,396 $323,553 $941,456 $731,890 
Reconciling items:
Amortization of intangible expense(20,440)(23,649)(60,437)(70,277)
Stock-based compensation expense(85,162)(61,837)(248,530)(170,155)
Other(29,871)(27,469)(87,987)(67,449)
Total operating income$201,923 $210,598 $544,502 $424,009 
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 
 July 31,
Nine Months Ended 
 July 31,
 2021202020212020
 (in thousands)
Revenue:
United States$477,218 $432,692 $1,417,636 $1,245,570 
Europe112,877 94,297 324,212 277,951 
China164,172 160,230 405,460 308,663 
Korea110,536 96,344 314,178 291,175 
Other192,327 180,571 590,288 536,483 
Consolidated$1,057,130 $964,134 $3,051,774 $2,659,842 
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.