#1Synopsys® Corporate Overview for Investors August 2023 SYNOPSY#2Forward-Looking Statements This presentation contains forward-looking statements, including, but not limited to, statements regarding Synopsys' short-term and long-term financial targets, expectations and objectives; strategies related to our products, technology and services; business and market outlook, opportunities and strategies; the expected impact of U.S. and foreign government actions and regulatory changes, including export control restrictions on our financial results; the potential impact of the uncertain macroeconomic environment on our financial results; customer demand and market expansion; our planned product releases and capabilities; industry growth rates; software trends; planned acquisitions and stock repurchases; our expected tax rate; and the impact and result of pending legal, administrative and tax proceedings. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames or achievements to differ materially from those expressed or implied in such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: macroeconomic conditions and uncertainty in the global economy; uncertainty in the growth of the semiconductor and electronics industries; the highly competitive industry we operate in; actions by the U.S. or foreign governments, such as the imposition of additional export restrictions or tariffs; consolidation among our customers and our dependence on a relatively small number of large customers; risks and compliance obligations relating to the global nature of our operations; and more. Additional information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K, and in our latest Quarterly Report on Form 10-Q. The financial information contained in this presentation should be read in conjunction with the consolidated financial statements and notes thereto included in Synopsys' most recent reports on Forms 10-K and 10-Q, each as may be amended from time to time. Synopsys' financial results for its third quarter of fiscal year 2023 are not necessarily indicative of Synopsys' operating results for any future periods. The information provided herein is as of August 16, 2023. Synopsys undertakes no duty to, and does not intend to, update any forward-looking statement, whether as a result of new information, future events or otherwise, unless required by law. Regulation G In addition to financial results prepared in accordance with Generally Accepted Accounting Principles, or GAAP, this presentation also contains certain non-GAAP financial measures. When possible, Synopsys provides a reconciliation of non-GAAP financial measures to their most closely applicable GAAP financial measures. Reconciliations of certain of the non-GAAP financial measures (either contained in this presentation or given verbally) to their most comparable GAAP measures are included in the table at the end of this presentation, along with the third quarter of fiscal year 2023 earnings release and financial supplement, dated August 16, 2023, and available on Synopsys' website at https://investor.synopsys.com/news/default.aspx. Synopsys is unable to provide a reconciliation of certain non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis because doing so would not be possible without unreasonable effort due to, among other things, the potential variability and limited visibility of the excluded items. For the same reasons, Synopsys is unable to address the probable significance of the unavailable information. Investors are encouraged to review Item 2.02 of Synopsys' Current Report on Form 8-K filed on August 16, 2023, for additional information about the measures Synopsys uses to evaluate its core business operations. synopsys © 2023 Synopsys, Inc. 2#3Synopsys: The Market & Technology Leader FY22 FY23 Targets 1, 2 Semiconductor Intellectual Software Security Broad Product Portfolio Electronic Design Automation (EDA) Property (IP) and Quality Revenue: $5.08B $5.81B $5.84B Growth Rate: 20.9% 14-15% Non-GAAP Operating Margin: 33.0% ~35.0%* *Midpoint of range Non-GAAP Diluted EPS: $8.90 $11.04-$11.09 Growth Rate: 30.1% 24-25% Operating Cash Flow: $1.74B ~$1.65B Business Model: Time-based, recurring revenue model; Non-cancellable backlog. 1 These targets are being provided by Synopsys as of August 16, 2023. 2 Assumes no further changes to export control restrictions or the current U.S. government "Entity List" restrictions. Synopsys © 2023 Synopsys, Inc. 3#4Synopsys: The Market & Technology Leader Design Automation -35 -65% years of investment and execution synopsys of revenue Market Leader Design IP >25 -25% years of revenue #2 IP Vendor 1011 |0100 -9 years Software Integrity -10% of revenue Industry Leader, Broadest Portfolio © 2023 Synopsys, Inc. 4#5Long-term Financial Objectives¹ While the results in any given period will vary due to timing of product deliverables, acquisitions or other near-term priorities, our long-term, multi-year objectives² are: Revenue Annual double-digit growth Margin Annual non-GAAP • Design Automation: double digits operating margin expansion · Design IP: mid-teens of more than 100 bps · Software Integrity: 15-20% Earnings Annual non-GAAP EPS growth in the mid-teens range Utilize our strong cash flow for organic investments, M&A and stock buybacks 1 These multi-year objectives are provided as of August 16, 2023. 2 Period to period fluctuations are a normal element of our business, driven particularly by timing of hardware and IP deliveries. Variability, which increased as a result of adopting Financial Standards Board Accounting Standards Code (ASC) 606 adoption, should be expected. synopsys © 2023 Synopsys, Inc. 5 LO#6Synopsys: The Market and Technology Leader Uniquely Positioned for Growth and Stability Robust End Markets Clear Technology Leadership Financial Strength and Growth synopsys U1 © 2023 Synopsys, Inc. 6#7Global Value Chain-2022 EDA & IP-At the Heart of Accelerating Electronics Innovation 899279 3-4 DE الاسم EDA & IP $16.6B 774 Embedded Software Foundry Semiconductors Electronic Systems $15.0B $142B $641B $1.86T Sources: ESD Alliance, Ipnest, MarketsandMarkets, IC Insights synopsys 10:15 © 2023 Synopsys, Inc. 7#8Blue Chip, Diversified Customer Base น 1011 0100 Semiconductors Semi R&D (including EDA) is a top investment priority for semi and system customers in all phases of the business cycle • Consists of virtually all semiconductor companies in the world, including all of the top 20 One >10% customer in FY22 Systems ~45% of our revenue comes from systems companies Systems companies develop chips as an input to an end product, rather than selling the chip itself Verification challenges are rapidly growing at the intersection of hardware and software • Software Developers Key function across all industries: semis and systems, to enterprises in segments such as financial services, medical devices, automotive, and industrial Targeting software developers, DevOps groups, corporate security teams synopsys © 2023 Synopsys, Inc. 8#9Dynamic Change in Many Markets HPC, Data Center (Al accelerators) Networking Mobile/5G Automotive Industrial Automation Memory PC/Gaming AR/VR Healthcare A Enterprise Software Financial Services Government & Aerospace Demand for Smart Everything seems limitless Innovation is fueled by semiconductor and software advances Driven by fusion of Al and machine learning synopsys © 2023 Synopsys, Inc. 9#10Synopsys: The Market and Technology Leader Uniquely Positioned for Growth and Stability Robust End Markets Clear Technology Leadership Financial Strength and Growth synopsys U1 © 2023 Synopsys, Inc. 10#11Synopsys at the Heart of Chip Design, From Silicon to Software Software Software: Application security & quality testing Systems IP: Broadest portfolio of interface, foundation & physical IP System: HW/SW verification, IP virtual prototyping, VIP and models Silicon: Tools for process optimization, CAD, lithography & yield optimization Software: Digital & AMS, Design Best QoR, Highest productivity Solutions: Automotive, low power, SLM, multi-die, DTCO, memory, photonic IC Silicon synopsys © 2023 Synopsys, Inc. 11#12Leader in EDA • Market and technology leader in EDA, the tools and technologies used to design semiconductor chips and systems - ~$9.9 billion market*; generally tracks semiconductor R&D spend over time Growth drivers: all aspects of chip and system complexity • All leading semiconductor companies in the world · use Synopsys technology State-of-the-art design and verification solutions with unmatched global support * 2022; Source: ESD Alliance, Internal estimates synopsys Synopsys Confidential Information © 2023 Synopsys, Inc. 12#13Synopsys.aiTM: Industry's First Full-Stack, Al-Driven EDA Suite For design, verification, testing & manufacturing of digital and analog chips AI synopsys ynopsys.a System Architecture Design Capture Verification Implementation Design Space Optimization Verification Space Optimization Achieve power, performance and area (PPA) targets, and boost productivity with DSO.ai Faster functional testing closure, higher coverage and predictive bug detection with VSO.ai Signoff Test & SLM Silicon Manufacturing Test Space Optimization Automated test generation resulting in fewer, optimized test patterns with TSO.ai Analog and Manufacturing Rapid migration of analog designs and development of lithography models © 2023 Synopsys, Inc. 13#14DSO.ai Success & Momentum Al driven EDA Innovation Industry first Al App for Implementation Deployed in 9 out of top 10 semi logos 270+ production tape-outs & counting WIRED Samsung Has Its Own Al-Designed Chip. Soon, Others Will Too Synopsys, which sells software for designing semiconductors to dozens of companies, is adding artificial intelligence to its arsenal. +digitaltrends COMPUTING A.I. is leading a chip design revolution, and it's only just getting started By Jacob Roach August 23, 2021 G REUTERS® 2020 World Electronics Achievement Awards Synopsys DSO.ai Innovative Product of the Year 2020 For decades, constant innovation in the world of semiconductor chip design has made processors faster, more efficient, and easier to produce. Artificial intelligence (A.I.) is leading the next wave innovation, trimming the chip design process from years to months by making it fully autonomous. Disrupted Synopsys design software uses Al to make chips more power efficient The Machine GamesBest Special Issue VB The Machine Become a Member By Stephen Nellis f in a Synopsys CEO: AI-designed chips will generate 1,000X performance in 10 years Software is Eating the World! Aug 23 (Reuters) - Synopsys Inc (SNPS.O) said on Monday one of its customers used artificial intelligence software to get a 26% gain in the power efficiency of a computer chip, a leap that usually has to wait for a new generation of chip manufacturing technology. Making sense of Al And Al is Eating Software.. PETAFLOP/S-DAYS 10+0 16-2 1e-4 70-6 1-8 16-12 ALVIN 1960 1970 1980 1990 2000 ZDNet a FIRST ERA MODERN ERA 2010 2020 Al will help design chips in ways humans wouldn't dare, says Synopsys CEO de Geus A machine will take risks on the margin where it can calculate the odds better than a person can. Synopsys Solutions Products Support Company Al-designed Chips Reach Scale with First 100 Commercial Tape-outs Using Synopsys Technology Share fin PNDS Awwarthwing Synopsys DSOai Solution Transforms Customer Capability with Significant Productivity and Performance Gains and Cloud Scalability Key Highlights: A Chip design ecosystem working with Synopsys achieves first 100 commercial tape outs across a range of applications and advanced nodes ⚫STMicroelectronics achieves the first-ever commercial design tape-out using Al on the cloud, realizing a 3x productivity uplift for power performance and area (PPA) using Synopsys D50 al on Microsoft Azure SK hynix reduced de size by up to 5% on the most advanced process technologies Forbes . synopsys in afva By Teman May August 23, 2021-16:34 GMT 09:34 POT)Topic Artificial igence Aug 23, 2021, 03:30pm EDT | 8 views Synopsys Laps Competition With Second Generation AI Karl Freund Contributor Enterprise Tech Founder and Principal Analyst, Cambrian-AI Research LLC Listen to this article now Powered by Trinity Audio Follow -04:40 Margin is essentially a risk calculation, and that is a sheer impossible ming to die for a human expat de Guer executive of chip design software maker Synopsys machine wit optice everything everything" f EDA Leader Synopsys paints path to Software-Designed Si Artificial intelligence is increasingly being utilized in the design of semiconductors, and one of its Last year, EDA leader Synopsys announced it had developed an AI chip#15Synopsys Digital Design SYNOPSYS DIGITAL DESIGN FAMILY SYSTEM DESIGN 3DIC Compiler DIGITAL DESIGN RTL Architect Test Fusion Design Compiler NXT IC Compiler II TestMAX Signoff Fusion PrimeTime, PrimeShield PrimePower PrimeLib PrimeClosure synopsys Fusion Compiler CLOUD BIG DATA Fusion Architecture #1 Anchors: synthesis, P&R, signoff • Fusion of algorithms, engines, data model . • Innovative Products Market Leadership • Two fusion types: test and signoff . • Industry-unique Fusion Compiler Design Compiler NXT, TestMAX, IC Validator NXT PrimeShield, PrimeClosure, RTL Architect ML-enhanced tools, Al-driven apps: DSO.ai and TSO.ai Accelerating Al, automotive, and multi-die systems Cloud-ready StarRC IC Validator NXT Formality/Formality ECO RedHawk Analysis Fusion Yield Explorer 20% Better QOR 2X Faster TAT POST SILICON Monitor IP SiliconDash © 2023 Synopsys, Inc. 15#16Verification Hardware: ZeBuⓇ Server 5 Highest performance for large workloads. Performance and throughput 2X higher than prior generation Ready for largest, multi-die designs Unmatched reliability 99.9+% projected uptime Best datacenter scalability through power and footprint synopsys Synopsys ZeBu Server#17Efficient Design Implementation for Multi-Die Systems UNIFIED EXPLORATION-TO-SIGNOFF 3DIC COMPILER Exploration & Creation Implementation System Signoff Complete architecture-to-signoff solution in a consolidated user environment End-to-end solution for DIE-TO-DIE IP UCle Die-to-Die IP PHY Controller Security Common Fusion Data-model efficient 2.5D and 3D multi-die system integration Verification IP Scalable 100s of billions of transistors Productive Fast exploration & design Golden Signoff Convergence to optimal PPA/mm3 Complete PHY, Controller, VIP... synopsys Delivers up to 4Tbps bandwidth in a multi-module configuration Enables ultra-low latency link between two dies Secure Opt. Authentication Engine Robust Based on Proven IP © 2023 Synopsys, Inc. 17#18Leader in Design IP • · • · #2 market share in IP, the reusable building blocks that are used for chip designs Leading supplier of interface, memory, analog and physical IP - ~$6.7 billion market*, benefitting from our customers' move to outsourcing more and more complex IP IP reuse reduces our customers' chip design costs, lowers risk and speeds time to market Serving high impact, growing markets (IoT, Automotive, Security, Cloud Computing), advanced processes & protocols ~25 years of investment and commitment resulting in unmatched portfolio breadth, quality and reliability * 2022; Source: IPnest, Internal estimates Synopsys Synopsys Confidential Information © 2023 Synopsys, Inc. 18#19Broadest and Most Comprehensive IP Portfolio SYNOPSYS IP PORTFOLIO Software DDR/HBM PCle PHY PHY HDMI/DP PHY USB PHY 10G to 224G PHY Die-to-Die PHY C/D-PHY M-PHY CPUs MPUS DDR/HBM PCle controller controller HDMI/DP USB Ethernet Die-to-Die controller controller controller controller Safety Security CSI DSI UFS UniPro AMBA 4 AXI, AMBA 3 AXI & AMBA 2.0 AHB DSPs AI & ML Processor Subystems IP ADCs DACs Peripherals (Timer, SSI, 12S, UART) Embedded Memories (TCAM, SRAM, ROM, NVM) SD/eMMC controller BLE 5 Link Layer GPIOs, LVDS PVT Sensors SD/eMMC PHY BLE Radio synopsys ARC Processor IP Datapath, incl. Floating Point Elements Logic Libraries Digital IP Physical IP Broadest Portfolio Foundation IP, analog, interfaces, security, processors, subsystems Highly Differentiated Delivering IP at the cutting edge of technology and functionality across key markets Competitive Differentiation Unmatched global engineering team dedicated to quality © 2023 Synopsys, Inc. 19#20High-Impact Markets: Increasing Technology Complexity Driving Growth in Third-Party IP Demand AI Machine Learning, Deep Neural Networks Automotive Cloud ADAS, Infotainment, Connected Vehicle Networking, Servers Al Accelerators IoT Smart Home, Industrial, Wearables synopsys © 2023 Synopsys, Inc. 20#21Leader in Software Integrity • • ● • Assembled and developed the broadest portfolio of solutions on the market; >$0.5 billion TTM revenue Solutions that enable organizations to manage application security, quality and compliance risks at the speed their business demands Approximately $2.5-3 billion served market: fragmented, with numerous point solutions; recognition of cost of software failure has increased dramatically Serving organizations in sectors ranging from embedded (including semis, systems) to enterprise (incl financial services, medical, industrial, automotive) Source: Gartner, Forrester, IDC, other external and internal analyses synopsys Synopsys Confidential Information 2023 Synopsys, Inc. 21#22Software Security & Quality Market TAM -$4.5-6.5B SAM -$2.5-3.0B Source: Gartner, Forrester, IDC, other external and internal analyses *This multi-year objective was provided as of August 16, 2023 synopsys Evolving market, ~15% growth Growth drivers • • · Ubiquity and growth of software Cloud transformation Significant business risk from breaches Rise of open source • Software supply chain complexities Synopsys L-T multi-year growth objective: ~15-20% range* © 2023 Synopsys, Inc. 22#23SaaS Software Services synopsys Software Integrity Portfolio Static Analysis Coverity Polaris Platform Open Source Analysis Black Duck Interactive AST Seeker AST Orchestration Intelligent Orchestration Developer Plug-in Code Sight Security Testing Services Dynamic Analysis White Hat M&A Audits Correlation/Prioritization Code Dx Fuzzing Defensics Static Analysis fAST Static Open Source Analysis fAST SCA AppSec Programs, Strategy and Implementation © 2023 Synopsys, Inc. 23#24ABILITY TO EXECUTE The Recognized Leader in Application Security Testing Gartner Magic Quadrant for Application Security Testing Forrester Wave™: FORRESTER Static Application Security Testing Contenders Strong Performers Leaders Forrester Wave™: Software Composition Analysis Challengers Contenders Strong Performers CHALLENGERS Synopsys LEADERS Challengers Stronger current offering Synopsys Veracode GitLab Checkmarx Open Text HCL Software Snyk GitHub Onapsis Sonatype Mendio Parasoft O Synopsys® Veracode Synopsys Micro Focus CAST SonarSource Contrast Security WhiteHat Security. O Perforce Software NICHE PLAYERS VISIONARIES COMPLETENESS OF VISION As of April 2023 © Gartner, Inc Gartner Sources: Gartner, Forrester. synopsys® Weaker current offering Weaker strategy Checkmarx HCL Software - GitHub GitLab Stronger current offering synopsys® Aqua Security GitHub ( GitLab Weaker current offering Stronger strategy Weaker strategy Synopsys Sonatype Mend.io Checkmarx O Snyk Revenera O Veracode Palo Alto Networks O JFrog Leaders Stronger strategy © 2023 Synopsys, Inc. 24#25Synopsys: The Market and Technology Leader Uniquely Positioned for Growth and Stability Robust End Markets Clear Technology Leadership Financial Strength and Growth synopsys U1 © 2023 Synopsys, Inc. 25#26Excellent Financial Execution Revenue (M) $5,082 $4,204 $3,685 $3,361 $3,121 $5,810-$5,840 (14-15% y/y) Non-GAAP EPS $11.04 $11.09 (24-25% y/y) $6.84 $5.55 $4.56 $3.91 $8.90 FY18 FY19 FY20 FY21 FY22 FY23E* FY18 FY19 FY20 FY21 FY22 FY23E Recurring revenue model with $7.1B non-cancellable backlog provides stability throughout the business cycle * FY23E reflects guidance provided as of August 16, 2023 synopsys® Strong financial execution while investing for long term growth © 2023 Synopsys, Inc. 26#27Cash Flow & Capital Allocation Operating Cash Flow (M) $991 $801 $424 $1,739 ~ $1,650 $1,493 FY18 FY19 FY20 FY21 FY22 FY23E* • Roughly tracks EBITDA less cash taxes on multi year basis • • It is important to consider multi-year averages, as operating cash flow is inherently lumpy * FY23E reflects guidance provided as of August 16, 2023 synopsys® Stock Repurchases (M) $400 $329 $242 $788 $1,100 $906 FY18 FY19 FY20 FY21 FY22 FY23 YTD Repurchased $3.8B in stock since 2018 Capital allocation priorities: - Internal investments - Buybacks and acquisitions © 2023 Synopsys, Inc. 27#28GAAP to Non-GAAP Reconciliation1 Earnings Per Share―Full Fiscal Year 2023 Targets Target GAAP earnings per diluted share attributed to Synopsys Adjustments: Amortization of intangible assets Stock compensation Acquisition-related items Restructuring charges Tax settlement Range for Fiscal Year Ending October 31, 2023 Low High 7.85 $ 7.96 0.64 0.62 3.74 3.70 0.06 0.06 0.51 0.51 (0.15) (0.15) (1.61) (1.61) 11.04 $ 11.09 Tax adjustments Target non-GAAP earnings per diluted share attributed to Synopsys Shares used in non-GAAP calculation (midpoint of target range) 156,000 1 Synopsys' fiscal year 2023 will end on October 28, 2023. For presentation purposes, we refer to the closest calendar month end. For additional information about the measures Synopsys uses to evaluate its core business operations, please review the earnings press release and Item 2.02 of the Current Report on Form 8 K filed on August 16, 2023. synopsys 156,000 © 2023 Synopsys, Inc. 28#29GAAP to Non-GAAP Reconciliation 1, 2 Operating Margin-Midpoint of Fiscal Year 2023 Targets At midpoint of revenue and expense guidance ranges GAAP operating margin Amortization of intangible assets Stock compensation Acquisition-related items Restructuring charges Target non-GAAP operating margin Twelve Months Ending October 31, 2023 21.8 % 1.7 % 9.9 % 0.2 % 1.4 % 35.0 % 1 Synopsys' fiscal year 2023 will end on October 28, 2023. For presentation purposes, we refer to the closest calendar month end. 2 These numbers represent the midpoint of targets in the prepared remarks provided on August 16, 2023, and do not represent official guidance for fiscal year 2023. For additional information about the measures Synopsys uses to evaluate its core business operations, please review the earnings press release and Item 2.02 of the Current Report on Form 8 K filed on August 16, 2023. synopsys © 2023 Synopsys, Inc. 29 29#30Smart Future ESG Strategy Our Smart Future ESG strategy provides a framework to assess and manage the ESG matters that are relevant to our business, generate value for our stockholders, and at the same time, make meaningful progress with respect to environmental and social issues within our ecosystem, such as climate action, inclusion and diversity in our workforce, and social impact in our communities. Our strategy considers the recommended disclosures in the Sustainability Accounting Standards Board (SASB) Software & IT Services Standard and the 2021 GRI Standards • Reporting aligns with the Task Force on Climate-related Financial Disclosures (TCFD), the United Nations Sustainable Development Goals (UN SDGs) · Synopsys reports to the CDP as part of our disclosure efforts Synopsys IMPACT Environment Optimizing our own n operational footprint Our People Synopsys SMART FUTURE Sustainable | Just | Secure Social impact tainability Industry INFLUENCE Cybersecurity Supply those we partner and work with Influencing © 2023 Synopsys, Inc. 30#31Synopsys 2022 ESG Progress Highlights Environment • · . Our low power electronic design automation (EDA) solutions allow our customers to achieve an additional 25% power reduction for their systems-on-chip (SoCs) Developed new Greenhouse Gas (GHG) emissions reduction targets for review and validation by the Science Based Targets initiative (SBTi) • Achieved Carbon NeutralⓇ company certification for the fourth consecutive year • Mitigated approximately 50% of our 2022 North America energy demand through the Azure Sky Wind Farm VPPA Social • ~30% representation of women on the Board of Directors • Increased total representation of women globally to 24.9% • Launched NEX-GEN, a new ERG for young professionals at Synopsys South Asia • Donated $4.7M to charities focused on STEM education, communities in which we work, and environment matters through Synopsys Foundation and Synopsys India Governance • Obtained ISO 22301 certification, the international standard for Business Continuity Management Systems to help safeguard our business operations For more details, please refer to our 2022 ESG Report. © 2023 Synopsys, Inc. 31#32Thank You Synopsys®