v3.25.2
Revenue
 9 Months Ended
Jul. 31, 2025
Revenue from Contract with Customer [Abstract]  
Revenue Revenue
Disaggregated Revenue
The following table shows the percentage of revenue by product groups:
Three Months Ended 
 July 31,		Nine Months Ended 
 July 31,
2025202420252024
EDA68.6 %66.9 %67.6 %66.8 %
Design IP24.6 %30.4 %28.0 %30.9 %
Simulation and Analysis
4.5 %— %1.6 %— %
Other2.3 %2.7 %2.8 %2.3 %
Total100.0 %100.0 %100.0 %100.0 %
Contract Balances
The timing of revenue recognition may differ from the timing of invoicing customers, resulting in receivables, contract assets, or contract liabilities (deferred revenue) on Synopsys's condensed consolidated balance sheets. For specific software, hardware, and IP agreements with payment plans, Synopsys records an unbilled receivable associated with revenue recognized upon transfer of control, as it holds an unconditional right to invoice and receive payment in the future for those transferred products or services.
A contract asset is recorded when revenue is recognized before Synopsys has the unconditional right to invoice or retains performance risk concerning that performance obligation. These contract assets transition to receivables when the rights become unconditional, generally upon the completion of a milestone. The contract assets listed below are included in prepaid and other current assets and other long-term assets in the condensed consolidated balance sheets.
Contract balances are as follows:
As of
July 31, 2025October 31, 2024
 (in thousands)
Contract assets, net$1,177,744 $757,075 
Unbilled receivables$44,936 $44,166 
Deferred revenue$2,374,834 $1,732,568 
During the three and nine months ended July 31, 2025, we recognized revenue of $245.0 million and $1.4 billion, respectively, that was included in the deferred revenue balance as of October 31, 2024, including previously unfulfilled contracts that have expired and are no longer subject to an implied promise to provide future services.
Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) were approximately $10.1 billion as of July 31, 2025, which includes $1.3 billion in non-cancellable Flexible Spending Account (FSA) commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 46% of the backlog as of July 31, 2025, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder to be recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years.
During the three and nine months ended July 31, 2025, we recognized $44.5 million and $95.2 million, respectively, from performance obligations satisfied from sales-based royalties earned during the periods. During the three and nine months ended July 31, 2024, we recognized $21.1 million and $73.9 million, respectively, from performance obligations satisfied from sales-based royalties earned during the periods.
Costs of Obtaining a Contract with Customer
Capitalized commission costs, net of accumulated amortization, as of July 31, 2025 were $67.9 million, of which $1.4 million are included in prepaid and other current assets, and $66.5 million in other long-term assets in our condensed consolidated balance sheets. Amortization of these assets was $13.5 million and $38.9 million during the three and nine months ended July 31, 2025, respectively, and are included in sales and marketing expense in our condensed consolidated statements of income. Amortization of these assets was $12.6 million and $36.3 million
during the three and nine months ended July 31, 2024, respectively, and are included in sales and marketing expense in our condensed consolidated statements of income.