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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                      TO
COMMISSION FILE NUMBER: 000-19807
snps-20220430_g1.jpg
SYNOPSYS, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-1546236
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification Number)
690 EAST MIDDLEFIELD ROAD
MOUNTAIN VIEW, CA 94043
(Address of principal executive offices, including zip code)
(650) 584-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock
(par value of $0.01 per share)
SNPSNasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý  Accelerated Filer 
Non-accelerated filer 
¨  
  Smaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ý
As of May 18, 2022, there were 152,970,249 shares of the registrant’s common stock outstanding.



SYNOPSYS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED APRIL 30, 2022
TABLE OF CONTENTS
  Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 6.




PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value amounts)
April 30,
2022
 October 31,
2021*
ASSETS
Current assets:
Cash and cash equivalents$1,573,620 $1,432,840 
Short-term investments146,901 147,949 
      Total cash, cash equivalents and short-term investments1,720,521 1,580,789 
Accounts receivable, net722,992 568,501 
Inventories213,532 229,023 
Prepaid and other current assets417,201 430,028 
Total current assets3,074,246 2,808,341 
Property and equipment, net491,641 472,398 
Operating lease right-of-use assets, net585,108 493,251 
Goodwill3,616,133 3,575,785 
Intangible assets, net333,321 279,132 
Deferred income taxes605,785 612,655 
Other long-term assets504,147 510,698 
Total assets$9,210,381 $8,752,260 
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities$612,221 $741,191 
Operating lease liabilities, current55,170 79,678 
Deferred revenue1,795,267 1,517,623 
Short-term debt 74,992 
Total current liabilities2,462,658 2,413,484 
Operating lease liabilities, non-current601,317 487,003 
Long-term deferred revenue165,911 136,303 
Long-term debt23,775 25,094 
Other long-term liabilities345,774 391,433 
Total liabilities3,599,435 3,453,317 
Redeemable non-controlling interest43,516  
Stockholders’ equity:
Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding
  
Common stock, $0.01 par value: 400,000 shares authorized; 152,955 and 153,062 shares outstanding, respectively
1,530 1,531 
Capital in excess of par value1,517,481 1,576,363 
Retained earnings5,157,633 4,549,713 
Treasury stock, at cost: 4,306 and 4,198 shares, respectively
(999,234)(782,866)
Accumulated other comprehensive income (loss)(113,099)(49,604)
Total Synopsys stockholders’ equity5,564,311 5,295,137 
Non-controlling interest3,119 3,806 
Total stockholders’ equity5,567,430 5,298,943 
Total liabilities, redeemable non-controlling interest and stockholders’ equity$9,210,381 $8,752,260 
*Derived from audited financial statements.
See accompanying notes to unaudited condensed consolidated financial statements.
1


SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
 Three Months Ended 
 April 30,
Six Months Ended 
 April 30,
 2022202120222021
Revenue:
Time-based products$723,821 $648,794 $1,431,304 $1,280,084 
Upfront products336,625 209,116 704,899 383,497 
Maintenance and service218,783 166,413 413,281 331,063 
Total revenue1,279,229 1,024,323 2,549,484 1,994,644 
Cost of revenue:
Products150,690 134,738 316,089 262,085 
Maintenance and service87,666 67,840 165,891 136,606 
Amortization of intangible assets14,455 11,408 27,815 23,294 
Total cost of revenue252,811 213,986 509,795 421,985 
Gross margin1,026,418 810,337 2,039,689 1,572,659 
Operating expenses:
Research and development389,964 362,345 773,935 719,813 
Sales and marketing191,573 172,754 372,083 343,382 
General and administrative73,957 72,694 154,965 150,182 
Amortization of intangible assets6,912 8,313 15,912 16,703 
Restructuring charges311  12,057  
Total operating expenses662,717 616,106 1,328,952 1,230,080 
Operating income363,701 194,231 710,737 342,579 
Other income (expense), net(23,913)21,764 (43,706)50,520 
Income before income taxes339,788 215,995 667,031 393,099 
Provision for income taxes45,896 21,193 59,798 36,269 
Net income$293,892 $194,802 $607,233 $356,830 
Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest(889)(276)(1,235)(593)
Net income attributed to Synopsys$294,781 $195,078 $608,468 $357,423 
Net income per share attributed to Synopsys:
Basic$1.93 $1.28 $3.97 $2.34 
Diluted$1.89 $1.24 $3.88 $2.27 
Shares used in computing per share amounts:
Basic153,090 152,725 153,154 152,612 
Diluted156,167 157,077 156,815 157,226 
See accompanying notes to unaudited condensed consolidated financial statements.

2


SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
 Three Months Ended 
 April 30,
Six Months Ended 
 April 30,
 2022202120222021
Net income$293,892 $194,802 $607,233 $356,830 
Other comprehensive income (loss):
Change in foreign currency translation adjustment(39,999)(3,171)(40,612)14,762 
Changes in unrealized gains (losses) on available-for-sale securities, net of tax of $0 for periods presented(1,173) (1,673) 
Cash flow hedges:
Deferred gains (losses), net of tax $9,181 and $9,411, for the three and six months ended April 30, 2022, respectively, and of $438 and $(967) for each of the same periods in fiscal 2021, respectively.
(21,132)1,214 (22,717)5,307 
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $(170) and $(472), for the three and six months ended April 30, 2022, respectively, and of $1,463 and $2,348 for each of the same periods in fiscal 2021, respectively.
662 (4,623)1,507 (7,350)
Other comprehensive income (loss), net of tax effects(61,642)(6,580)(63,495)12,719 
Comprehensive income232,250 188,222 543,738 369,549 
Less: net income (loss) attributed to non-controlling interest and redeemable non-controlling interest(889)(276)(1,235)(593)
Comprehensive income attributed to Synopsys$233,139 $188,498 $544,973 $370,142 
See accompanying notes to unaudited condensed consolidated financial statements.

3


SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
 Capital in
Excess of
Par
Value
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total 
Synopsys
Stockholders’
Equity
Non-controlling
Interest
Stockholders’
Equity
Common Stock
 SharesAmount
Balance at January 31, 2022
153,256 $1,533 $1,430,226 $4,863,400 $(856,929)$(51,457)$5,386,773 $3,460 $5,390,233 
Net income294,781 294,781 (341)294,440 
Other comprehensive income (loss), net of tax effects(61,642)(61,642)(61,642)
Purchases of treasury stock(984)(9)9 (290,000)(290,000)(290,000)
Equity forward contract, net40,000 40,000 40,000 
Common stock issued, net of shares withheld for employee taxes683 6 (62,815)147,695 84,886 84,886 
Stock-based compensation110,061 110,061 110,061 
Adjustments to redeemable non-controlling interest(548)(548)(548)
Balance at April 30, 2022
152,955 $1,530 $1,517,481 $5,157,633 $(999,234)$(113,099)$5,564,311 $3,119 $5,567,430 
Balance at October 31, 2021
153,062 $1,531 $1,576,363 $4,549,713 $(782,866)$(49,604)$5,295,137 $3,806 $5,298,943 
Net income608,468 608,468 (687)607,781 
Other comprehensive income (loss), net of tax effects(63,495)(63,495)(63,495)
Purchases of treasury stock(1,685)(16)16 (535,000)(535,000)(535,000)
Equity forward contract, net35,000 35,000 35,000 
Common stock issued, net of shares withheld for employee taxes1,578 15 (299,730)318,632 18,917 18,917 
Stock-based compensation205,832 205,832 205,832 
Adjustments to redeemable non-controlling interest(548)(548)(548)
Balance at April 30, 2022
152,955 $1,530 $1,517,481 $5,157,633 $(999,234)$(113,099)$5,564,311 $3,119 $5,567,430 
 Capital in
Excess of
Par
Value
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total 
Synopsys
Stockholders’
Equity
Non-controlling
Interest
Stockholders’
Equity
Common Stock
 SharesAmount
Balance at January 31, 2021
152,364 $1,526 $1,589,175 $3,954,542 $(628,216)$(34,775)$4,882,252 $4,646 $4,886,898 
Net income195,078 195,078 (276)194,802 
Other comprehensive income (loss), net of tax effects(6,580)(6,580)(6,580)
Purchases of treasury stock(756)(8)8 (195,211)(195,211)(195,211)
Equity forward contract, net50,000 50,000 50,000 
Common stock issued, net of shares withheld for employee taxes946 8 (38,968)121,970 83,010 83,010 
Stock-based compensation79,586 79,586 79,586 
Balance at April 30, 2021
152,554 $1,526 $1,679,801 $4,149,620 $(701,457)$(41,355)$5,088,135 $4,370 $5,092,505 
Balance at October 31, 2020
152,618 $1,528 $1,653,166 $3,795,397 $(488,613)$(54,074)$4,907,404 $4,963 $4,912,367 
Net income357,423 357,423 (593)356,830 
Retained earnings adjustment due to adoption of ASC 326(1)
(3,200)(3,200)(3,200)
Other comprehensive income (loss), net of tax effects12,719 12,719 12,719 
Purchases of treasury stock(1,593)(16)16 (398,082)(398,082)(398,082)
Common stock issued, net of shares withheld for employee taxes1,529 14 (136,749)185,238 48,503 48,503 
Stock-based compensation163,368 163,368 163,368 
Balance at April 30, 2021
152,554 $1,526 $1,679,801 $4,149,620 $(701,457)$(41,355)$5,088,135 $4,370 $5,092,505 
(1) At the beginning of fiscal 2021, we adopted the Accounting Standards Codification (ASC) 326, Measurement of Credit Losses on Financial Instruments, issued by the Financial Accounting Standards Board (FASB). ASC 326 replaced the incurred loss methodology with an expected loss methodology.

See accompanying notes to unaudited condensed consolidated financial statements.
4


SYNOPSYS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Six Months Ended 
 April 30,
 20222021
Cash flows from operating activities:
Net income attributed to Synopsys$608,468 $357,423 
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation111,962 100,066 
Reduction of operating lease right-of-use assets42,412 42,711 
Amortization of capitalized costs to obtain revenue contracts34,574 30,475 
Stock-based compensation205,832 163,368 
Allowance for credit losses(4,516)10,051 
Deferred income taxes8,944 (16,461)
Other non-cash6,244 (401)
Net changes in operating assets and liabilities, net of acquired assets and liabilities:
Accounts receivable(169,785)157,637 
Inventories7,725 (38,305)
Prepaid and other current assets(2,417)(45,972)
Other long-term assets(8,701)(97,519)
Accounts payable and accrued liabilities(181,008)(96,798)
Operating lease liabilities(43,963)(41,105)
Income taxes(34,246)(8,386)
Deferred revenue324,176 183,512 
Net cash provided by operating activities905,701 700,296 
Cash flows from investing activities:
Proceeds from sales and maturities of short-term investments43,653  
Purchases of short-term investments(45,158) 
Proceeds from sales of long-term investments582  
Purchases of long-term investments(7,000) 
Purchases of property and equipment(67,367)(44,060)
Cash paid for acquisitions, net of cash acquired(109,060)(74,626)
Capitalization of software development costs(1,065)(1,264)
Other(600)(800)
Net cash used in investing activities(186,015)(120,750)
Cash flows from financing activities:
Repayment of debt(75,938)(13,194)
Issuances of common stock120,710 103,203 
Payments for taxes related to net share settlement of equity awards(101,126)(54,664)
Purchases of treasury stock(500,000)(398,082)
Other(2,709)(1,000)
Net cash used in financing activities(559,063)(363,737)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(19,955)6,457 
Net change in cash, cash equivalents and restricted cash 140,668 222,266 
Cash, cash equivalents and restricted cash, beginning of year1,435,183 1,237,970 
Cash, cash equivalents and restricted cash, end of period$1,575,851 $1,460,236 
See accompanying notes to unaudited condensed consolidated financial statements.
5


SYNOPSYS, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Description of Business
Synopsys, Inc. (Synopsys, we, our or us) provides products and services used across the entire silicon to software spectrum, from engineers creating advanced semiconductors to software developers seeking to ensure the security and quality of their code.
We are a global leader in electronic design automation (EDA) software that engineers use to design and test integrated circuits (ICs), also known as chips. We also offer semiconductor intellectual property (IP) products, which are pre-designed circuits that engineers use as components of larger chip designs rather than designing those circuits themselves. We provide software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them. We also provide technical services and support to help our customers develop advanced chips and electronic systems. These products and services are part of our Semiconductor & System Design segment.
We are also a leading provider of software tools and services that improve the security, quality and compliance of software in a wide variety of industries, including electronics, financial services, automotive, medicine, energy and industrials. These tools and services are part of our Software Integrity segment.
Note 2. Summary of Significant Accounting Policies
We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our unaudited condensed consolidated balance sheets, results of operations, comprehensive income, stockholders’ equity and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021 as filed with the SEC on December 13, 2021 (our Annual Report).
Use of Estimates. To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and may result in material effects on our operating results and financial position.
Principles of Consolidation. The unaudited condensed consolidated financial statements include our accounts and the accounts of our subsidiaries. All intercompany accounts and transactions have been eliminated.
Fiscal Year End. Our fiscal year generally ends on the Saturday nearest to October 31 and consists of 52 weeks, with the exception that approximately every five years, we have a 53-week year. When a 53-week year occurs, we include the additional week in the first quarter to realign fiscal quarters with calendar quarters. Fiscal 2022 and 2021 are both 52-week years. Fiscal 2022 will end on October 29, 2022. Fiscal 2021 ended on October 30, 2021. For presentation purposes, the unaudited condensed consolidated financial statements and accompanying notes refer to the closest calendar month end.
Significant Accounting Policies. There have been no material changes to our significant accounting policies included in our Annual Report, other than our accounting policy for redeemable non-controlling interest.
Redeemable Non-controlling Interest. Non-controlling interest that is not solely redeemable within our control is reported as the temporary equity in our unaudited condensed consolidated balance sheets. The carrying value of the redeemable non-controlling interest equals the redemption value at the end of each reporting period, after giving effect to the change from the net income (loss) attributable to the redeemable non-controlling interest. We adjust the redemption value of the non-controlling interest on a quarterly basis and changes in the estimated redemption value are recorded with corresponding adjustments against retained earnings.
Recently Adopted Accounting Pronouncements
6


In December 2019, FASB issued Accounting Standards Update (ASU) 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. We adopted the standard as of the beginning of fiscal 2022 on a prospective basis and the adoption of this standard did not have a material impact on our unaudited condensed consolidated financial statements.
In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. We early adopted the standard in the second quarter of fiscal 2022 and the adoption had no material retrospective impact on our unaudited condensed consolidated financial statements for acquisitions completed in fiscal 2022. Any future impact will be dependent on the facts and circumstances of future acquisitions.
We continue to monitor new accounting pronouncements issued by FASB and do not believe any accounting pronouncements issued through the date of this Quarterly Report on Form 10-Q will have a material impact on our unaudited condensed consolidated financial statements.
Note 3. Revenue
Disaggregated Revenue
The following table showed the percentage of revenue by product groups:
Three Months Ended 
 April 30,
Six Months Ended 
 April 30,
2022202120222021
EDA50.2 %57.4 %50.0 %56.3 %
IP & System Integration40.7 %33.1 %41.1 %34.0 %
Software Integrity Products & Services8.8 %9.2 %8.6 %9.3 %
Other0.3 %0.3 %0.3 %0.4 %
Total100.0 %100.0 %100.0 %100.0 %
Contract Balances
The contract assets indicated below are presented as prepaid and other current assets in the unaudited condensed consolidated balance sheets. The contract assets are transferred to receivables when the rights to invoice and receive payment become unconditional. Unbilled receivables are presented as accounts receivable, net, in the unaudited condensed consolidated balance sheets.
Contract balances were as follows:
As of
April 30, 2022October 31, 2021
 (in thousands)
Contract assets, net$235,705 $284,574 
Unbilled receivables$38,022 $35,589 
Deferred revenue$1,961,178 $1,653,926 
During the three and six months ended April 30, 2022, we recognized revenue of $327.5 million and $937.0 million, respectively, that was included in the deferred revenue balance as of October 31, 2021.
Contracted but unsatisfied or partially unsatisfied performance obligations were approximately $7.3 billion as of April 30, 2022, which includes $1.0 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 41% of the contracted but unsatisfied or partially unsatisfied performance obligations as of April 30, 2022, excluding non-cancellable FSA, are expected to be recognized over the next 12 months, with the remainder recognized thereafter.
7


During the three and six months ended April 30, 2022, we recognized $37.7 million and $69.7 million, respectively, from performance obligations satisfied from sales-based royalties earned during the periods. During the three and six months ended April 30, 2021, we recognized $34.5 million and $60.8 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 April 30, 2022 were $107.4 million and included in other long-term assets in our unaudited condensed consolidated balance sheets. Amortization of these assets was $17.8 million and $34.6 million during the three and six months ended April 30, 2022, respectively, and included in sales and marketing expense in our unaudited condensed consolidated statements of income. Amortization of these assets was $15.5 million and $30.5 million during the three and six months ended April 30, 2021, respectively, and included in sales and marketing expense in our unaudited condensed consolidated statements of income.
Note 4. Business Combinations
During the three months ended January 31, 2022, we completed an acquisition for purchase consideration of $20.0 million, net of cash acquired. The preliminary purchase price allocations were $4.3 million of identifiable intangible assets and $15.7 million of goodwill, which were attributable to the Semiconductor & System Design reporting segment. There was no tax deductible goodwill related to the acquisition.
Acquisition of Equity Interest in OpenLight Photonics, Inc. (OpenLight)
During the three months ended April 30, 2022, we acquired 75% equity interest in OpenLight for $90.0 million in cash consideration. The remaining 25% equity interest in OpenLight is held by Juniper Networks, Inc. (the Minority Investor) from their contribution of IP and certain tangible assets.
The preliminary purchase price allocations were $94.0 million of identifiable intangible assets and $45.1 million of goodwill, which were attributable to the Semiconductor & System Design reporting segment. The goodwill was mainly attributable to the assembled workforce and planned growth in new markets. There was no tax deductible goodwill related to the acquisition.
The agreement with the Minority Investor contains redemption features whereby the interest held by the Minority Investor is redeemable either (i) at the option of the Minority Investor on or after the third anniversary of the acquisition or sooner in certain circumstances or (ii) at our option beginning on the third anniversary of the acquisition. This option is exercisable at the greater of fair value at the time of redemption or $30.0 million and was valued at $10.1 million, resulting in a total consideration of $100.1 million.
As of April 30, 2022, the carrying amount of the redeemable non-controlling interest was recorded at its estimated fair value of $43.5 million in the unaudited condensed consolidated balance sheet.
We have included the financial results of these acquisitions in our unaudited condensed consolidated financial statements from the date of acquisition. We do not consider these acquisitions to be material, individually or in the aggregate, to our unaudited condensed consolidated financial statements.
Preliminary Fair Value Estimates
The preliminary fair value estimates for the assets acquired and liabilities assumed for all acquisitions completed within 12 months from the applicable acquisition date are not yet finalized and may change as additional information becomes available during the respective measurement periods. The primary areas of those preliminary estimates relate to certain tangible assets and liabilities, identifiable intangible assets, and income taxes.
Acquisition-Related Transaction Costs
Transaction costs were $4.0 million and $6.1 million during the three and six months ended April 30, 2022, respectively. Transaction costs were $2.3 million and $5.9 million during the three and six months ended April 30, 2021, respectively. These costs mainly consisted of professional fees and administrative costs and were expensed as incurred in our unaudited condensed consolidated statements of income.
Note 5. Goodwill and Intangible Assets
Goodwill
8


The changes in the carrying amount of goodwill during the six months ended April 30, 2022 were as follows:
 (in thousands)
Balance at October 31, 2021
$3,575,785 
Additions60,797 
Adjustments1,285 
Effect of foreign currency translation(21,734)
Balance at April 30, 2022
$3,616,133 
During the six months ended April 30, 2022, we finalized certain estimates impacting total purchase consideration for certain acquisitions and recorded the resulting measurement period adjustments which increased goodwill.
Intangible Assets
Intangible assets as of April 30, 2022 consisted of the following:
Gross Carrying AmountAccumulated
Amortization
Net Amount
 (in thousands)
Core/developed technology$1,010,204 $775,334 $234,870 
Customer relationships404,083 322,380 81,703 
Contract rights intangible192,061 188,429 3,632 
Trademarks and trade names43,095 32,355 10,740 
Capitalized software development costs47,162 44,786 2,376 
Total$1,696,605 $1,363,284 $333,321 
Intangible assets as of October 31, 2021 consisted of the following:
Gross Carrying AmountAccumulated
Amortization
Net Amount
 (in thousands)
Core/developed technology$911,903 $748,759 $163,144 
Customer relationships404,571 308,355 96,216 
Contract rights intangible193,317 188,231 5,086 
Trademarks and trade names43,095 31,155 11,940 
Capitalized software development costs46,098 43,352 2,746 
Total$1,598,984 $1,319,852 $279,132 
Amortization expense related to intangible assets consisted of the following:
 Three Months Ended 
 April 30,
Six Months Ended 
 April 30,
 2022202120222021
 (in thousands)
Core/developed technology$13,728 $10,969 $26,576 $21,986 
Customer relationships6,312 7,703 14,497 15,482 
Contract rights intangible727 439 1,454 1,309 
Trademarks and trade names600 610 1,200 1,220 
Capitalized software development costs(1)
681 1,072 1,433 2,110 
Total$22,048 $