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Segment Disclosure
6 Months Ended
Apr. 30, 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 
 April 30,
Six Months Ended 
 April 30,
 2024202320242023
 (in thousands)
Total Segments:
Revenue$1,454,712 $1,262,744 $2,965,701 $2,496,241 
Adjusted operating income543,042 434,981 1,148,234 887,746 
Adjusted operating margin37 %34 %39 %36 %
Design Automation:
Revenue$1,054,933 $927,568 $2,040,272 $1,817,414 
Adjusted operating income418,245 353,439 777,710 692,814 
Adjusted operating margin40 %38 %38 %38 %
Design IP:
Revenue$399,779 $335,176 $925,429 $678,827 
Adjusted operating income124,797 81,542 370,524 194,932 
Adjusted operating margin31 %24 %40 %29 %
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 
 April 30,
Six Months Ended 
 April 30,
 2024202320242023
 (in thousands)
Total segment adjusted operating income$543,042 $434,981 $1,148,234 $887,746 
Reconciling items:
Amortization of acquired intangible assets
(18,061)(12,392)(34,745)(25,624)
Stock-based compensation expense(162,691)(130,360)(328,196)(252,958)
Deferred compensation plan(11,051)(2,791)(50,496)(22,631)
Restructuring charges— 5,578 — (32,560)
Acquisition/divestiture related items
(19,167)(2,641)(50,099)(4,975)
Total operating income$332,072 $292,375 $684,698 $548,998 
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 
 April 30,
Six Months Ended 
 April 30,
 2024202320242023
 (in thousands)
Revenue:
United States$630,766 $582,485 $1,354,587 $1,171,607 
Europe147,476 134,067 284,746 251,298 
China221,820 190,044 462,884 381,496 
Korea192,676 154,374 374,721 297,536 
Other261,974 201,774 488,763 394,304 
Consolidated$1,454,712 $1,262,744 $2,965,701 $2,496,241 
Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.