×

Subscribe Today

Get our free articles delivered directly to your email!

Continue reading

Synopsys Appoints Insider Sassine Ghazi to CEO Position – C-Suite Transitions

  • August 24, 2023

A couple of weeks ago we covered an unusual situation related to a CEO transition in an article titled ‘RB Global Experiences Simultaneous Departures of CEO and CFO – C-Suite Transitions‘. We wrote the following about the departures of the CEO and CFO of RB Global (RBA):

RB Global Experiences Simultaneous Departures of CEO and CFO – C-Suite TransitionsThis week’s departure at the car auctioneer Ritchie Bros wasn’t quite as amusing but is up there in terms of drama. Not only did the CEO leave after disagreements over her pay package, the CFO was also terminated at the same time. In fact, the resignation part is also in question.

In a twist of events, on August 21, 2023, Ann Fandozzi, the former CEO of RB Global, expressed her disagreement in a letter to RB shareholders that she did not submit her resignation from the company.

This development aligns with a report from the Wall Street Journal, revealing concerns from major RB Global shareholders, such as Independent Franchise Partners and Beutel, Goodman & Co, over Fandozzi’s sudden exit from the vehicle marketplace company.

The transition we discuss this week has none of the drama from the RBA situation but involves the transition of Founder/CEO with a very long and successful track record in the semiconductor industry.

Welcome to edition 55 of C-Suite Transitions, a weekly series on InsideArbitrage that tracks appointments and departures at publicly traded companies during the prior week. We highlight five appointments and departures each week by picking the largest companies from the full list of management changes.

Sudden Departures

  1. MWA: On August 20, 2023, Mueller Water Products President and Chief Executive Officer J. Scott Hall stepped down from all his positions at the company effective August 21, 2023. The company has commenced a search for a permanent Chief Executive Officer.
  2. RSG: On August 18, 2023, Republic Services announced that Chief Operating Officer Timothy E. Stuart was terminated on August 17, 2023.
  3. KOD:   On August 16, 2023, Kodiak Sciences Chief Medical Officer and Chief Development Officer Jason Ehrlich informed the company of his resignation effective August 25, 2023.
  4. DKNG: On August 10, 2023, DraftKings  Chief Accounting Officer Erik Bradbury announced his intent to leave the company, effective September 8, 2023.
  5. AGL: On August 11, 2023, Agilon Health Chief Accounting Officer Priscilla Kasenchak notified the company of her decision to resign to pursue another professional opportunity
  6. ABSI: On August 16, 2023, Absci Corporation and Chief Legal Officer and interim Chief Business Officer  Sarah Korman mutually agreed that Dr. Korman would resign effective September 15, 2023.
  7. ARE: On August 16, 2023, Alexandria Real Estate Equities President and Chief Financial Officer Dean A. Shigenaga submitted his resignation from all of his positions with the company and its subsidiaries for important personal family health reasons, effective September 15, 2023.
  8. ARQT: On August 15, 2023, Arcutis Biotherapeutics Chief Financial Officer Scott Burrows notified the company about his decision to resign effective August 31, 2023.
  9. ZVSA: On August 7, 2023, ZyVersa Therapeutics Chief Scientific Officer  Nicholas A. LaBella, Jr., notified the company of his planned retirement from the company effective August 18, 2023.
  10. FOXO: On August 14, 2023, FOXO Technologies Chief Financial Officer Robert Potashnick notified the company of his decision to resign effective September 13, 2023, to pursue other opportunities.
  11. ONVO: As part of the reduction in its workforce  General Counsel  Tom Jurgensen and Chief Scientific Officer Jeffrey Miner were terminated effective August 25, 2023.
  12. ZBH:  On August 17, 2023, Zimmer Biomet Holdings President and Chief Executive Officer  Bryan C. Hanson notified the company that he planned to step down effective August 22, 2023.
  13. UAVS: On August 15, 2023, AgEagle Aerial Systems received notice from Chief Financial Officer Nicole Fernandez-McGovern, which states that she has been terminated for “Good Reason” under her employment offer letter agreement. The Board of Directors has accepted the Notice as a notice of voluntary resignation by Mrs. Fernandez-McGovern, and not of termination for Good Reason.
  14. AEYE: On August 15, 2023, AudioEye and Chief Operating Officer Dominic Varacalli, mutually agreed that Mr. Varacalli’s employment with the company would terminate effective August 18, 2023.
  15. BOF: On August 14, 2023, BranchOut Food terminated  Chief Financial Officer Douglas Durst.
  16. JUPW: On August 14, 2023, Jupiter Wellness Chief Financial Officer Douglas McKinnon resigned from his position.

Synopsys. (SNPS): $436.39

This week’s article centers on Synopsys, Inc., a specialist in semiconductors, automation, and security testing based in Mountain View, California. The company revealed last week that Sassine Ghazi, currently the President and COO, will assume the role of CEO starting next year, succeeding the long-serving leader and co-founder Aart de Geus.

Founded in 1986 by Dr. Aart J. de Geus and a group of engineers in Silicon Valley Synopsys is at the forefront of electronic design automation (EDA) and semiconductor intellectual property (IP).

The company specializes in providing software, tools, and services for designing and verifying complex integrated circuits (ICs), system-on-chips (SoCs), and electronic systems. It comprises of products and solutions that aid in various stages of the semiconductor design process, from initial concept to manufacturing.

Having established partnerships with leading firms, such as IBM, Intel, and NVIDIA, Synopsys is a crucial player within the semiconductor ecosystem, driven by a mission to accelerate the upcoming era of AI-driven “Smart Everything.”

On August 16, 2023, Synopsys, Inc. (SNPS) announced that its Board of Directors has appointed 25-year industry veteran Sassine Ghazi as President and Chief Executive Officer of the company, effective on January 1, 2024.

Following this appointment, Aart de Geus, the current Chair and Chief Executive Officer will transition into the role of Executive Chair of Synopsys’ Board of Directors.

Aart de Geus – Founder and CEO

Together with his GE colleagues, David Gregory and Bill Krieger, Dr. Aart de Geus established Optimal Solutions in 1986. The company underwent a name change in 1987 to become Synopsys and relocated to Mountain View, California.

Since then Dr. Aart de Geus has transformed the company from a fledgling enterprise into a prominent global high-tech frontrunner.

Dr. Aart de Geus is acknowledged as a pioneer in electronic design automation (EDA), a field that employs synthesis and other tools to automate chip design. He has been the CEO or co-CEO since 1994 and Chairman of the Board since 1998.

“I am ecstatic about Sassine’s transition into the CEO role,” said Aart. “Sassine embodies our values and culture, has driven very innovative technology, has strong operational experience in running our company, and has built deep, trusting relationships with our customers and partners.”

“Following a systematic, multi-year succession planning process and speaking for the entire board,” added Roy Vallee, Lead Independent Director of Synopsys’ board, “we are delighted to promote Sassine to become our next president and CEO and thank Aart for the exemplary transition.”

Sassine Ghazi

Sassine Ghazi joined Synopsys in 1998, initially serving as an applications engineer. Guided by his leadership, the company introduced various innovative solutions, notable among them is the flagship Fusion Design Platform™ featuring 3DIC Compiler, DSO.ai™, and the SiliconMAX™ Silicon Lifecycle Management Platform.

He took on the COO position in August 2020 and was later appointed as President in November 2021. Before joining Synopsys, Sassine served as a design engineer at Intel. As the current President and COO, he leads and drives strategy for all business units, sales, marketing, and customer success.

Synopsys.ai

In March 2023, Synopsys launched Synopsys.ai, the industry’s first electronic design automation (EDA) suite to seamlessly integrate AI capabilities across system architecture, design, and manufacturing.

Synopsys.ai comprises of three core elements:

  • DSO.ai streamlines automatic design space exploration to enhance chip design efficiency in terms of power, performance, and area.
  • VSO.ai accelerates coverage closure for verification engineers and aids in identifying design bugs,
  • TSO.ai automates silicon testing, evaluating defect coverage, pattern count, and runtime for new chip designs via automatic test pattern generation tools.

Capitalizing on AI

While the semiconductor industry’s growth is slowing down, Synopsys continues to expand due to surging semiconductor innovation, marked by increased chip starts and R&D investments. This surge is largely fueled by AI, an area where Synopsys has strategically established itself by integrating AI into EDA tools. The company has already generated $500 million in revenue from AI chips in the past year alone, which constitutes just 10% of its total revenue. This indicates substantial growth potential, as the demand for Synopsys’ IP remains essential for any AI chip development endeavor.

Intel and Synopsys Agreement

On August 14, 2023, Intel and Synopsys signed an agreement to expand their strategic partnership with the development of a portfolio of IP for Intel’s foundry customers. This agreement was signed just two days before Intel terminated its intended purchase of Israeli chip maker Tower Semiconductor (TSEM) after an unsuccessful 18-month wait for Chinese regulatory review.

Synopsys also collaborates with Tower Semiconductor to provide solutions for complex designs – like power management, CIS, RF, silicon photonics, and more.

Acquisition of PikeTec GmbH

On August 23, 2023, Synopsys completed the acquisition of PikeTec GmbH a company that provides solutions for the testing and verification of automotive software for control unit systems. According to Synopsys, PikeTec delivers a key asset that will be immediately accretive to the business and fit in perfectly with its high-level “silicon-to-software” approach and IP portfolio for application security testing.

Valuation

Price chart comparing SP500 to SNPS - Source SeekingAlpha
Source: SeekingAlpha

Riding the semiconductor and AI wave, Synopsys is up 40% YTD. The company has a market cap of $66.37B and an enterprise value of $65.26B on account of $1.14B of net cash. It trades at a forward EV/EBITDA of 30.10 and forward P/E 34.72.

Synopsys Quarterly Income Statement Graph (source: InsideArbitrage)

Earnings (Press Release) (Investor Overview)

“We achieved another record quarter as semi-design starts and R&D investments continue, unabated, to capitalize on the AI-driven, ‘Smart Everything’ era,” de Geus said.

  • Quarterly revenue reached a record high of $1.487 billion, marking 19% YoY growth.
  • GAAP earnings per diluted share was $2.17.
  • On a non-GAAP basis, net income for the third quarter of fiscal year 2023 was $445.9 million, or $2.88 per diluted share, compared to non-GAAP net income of $327.4 million, or $2.10 per diluted share, for the third quarter of fiscal year 2022.
  • non-GAAP operating margin expansion to 35.3%
  • non-GAAP earnings per share were up an impressive 37%
Investor Presentation

Earnings Forecasts

Synopsys has projected fourth-quarter results that surpass expectations. Looking ahead, the company is adjusting its full-year guidance, projecting a revenue growth range of 14-15%. Additionally, non-GAAP earnings per share are expected to grow by 24-25% year over year.

  • Anticipated revenue for October quarter: $1.567 billion to $1.597 billion
  • Estimated non-GAAP profit per share: $3.01 to $3.06
  • Projected revenue for October 2023 fiscal year: $5.81 billion to $5.84 billion
  • Estimated adjusted profit per share: $11.04 to $11.09
Investor Presentation

Conclusion

The company plans to increase investment in AI tools, and with a multitude of high-end multi-die systems on the horizon, the trajectory points to significant growth in the AI chip market. With a strong presence in advanced chip design, Synopsys remains a pivotal player as the industry progresses rapidly in the direction of multi-die systems.

“Use cases for AI are proliferating rapidly, as are the number of companies designing AI chips,” said de Geus. “Novel architectures are multiplying, stimulated by vertical markets, all wanting solutions optimized for their specific application. Third parties estimate that today’s $20 billion to $30 billion market for AI chips will exceed $100 billion by 2030.”

As Ghazi points out, more than 95% of advanced chips today are built using Synopsys technology. “We’re tracking over 100 designs today, with an uptick of 20% over the last six months,” adds Ghazi. “That tells me this is a design direction which is maturing very fast indeed.”

Appointments 

1. Republic Services (RSG): $146.30

On August 18, 2023, Republic Services announced that Gregg Brummer had been appointed to the position of Executive Vice President and Chief Operating Officer, effective as of August 18, 2023, succeeding Mr. Stuart.

MarketCap: $46.28BAvg. Daily Volume (30 days): 1,177,217Revenue (TTM): $14.43B
Net Income Margin (TTM): 10.91%ROE (TTM): 16.22%Net Debt: $12.27B
P/E: 29.44Forward P/E: 28.25EV/EBIDTA (TTM): 14.21
P/S (TTM): 3.21P/B (TTM): 4.5452 Week Range: $119.74 – $156.65

2. MDU Resources Group (MDU): $20.12

On August 17, 2023, the Board appointed Nicole A. Kivisto to succeed Mr. Goodin as President and Chief Executive Officer, effective as of January 6, 2024. Ms. Kivisto was also appointed to the Board, effective January 6, 2024, to serve until the 2024 Annual Meeting of Stockholders.

 

MarketCap: $4.10BAvg. Daily Volume (30 days): 1,922,281Revenue (TTM): $7.38B
Net Income Margin (TTM): 5.88%ROE (TTM): 16.22%Net Debt: $2.37B
P/E: 8.28Forward P/E: 12.53EV/EBIDTA (TTM): 6.92
P/S (TTM): 0.56P/B (TTM): 1.5152 Week Range: $18.13 – $22.55

3. Alexandria Real Estate Equities (ARE): $117.28

On August 17, 2023, the Board elected Marc E. Binda as Chief Financial Officer and Treasurer, effective September 15, 2023.

MarketCap: $20.29BAvg. Daily Volume (30 days): 893,285Revenue (TTM): $2.75B
Net Income Margin (TTM): 20.65%ROE (TTM): 3.40%Net Debt: $6.67B
P/E: 35.18Forward P/E: 34.36EV/EBIDTA (TTM): 21.23
P/S (TTM): 7.19P/B (TTM): 1.0852 Week Range: $107.61 – $169.07

4. Synopsys (SNPS): $448.24

On August 13, 2023, the Board promoted Sassine Ghazi, Synopsys’ President and Chief Operating Officer, to the role of President and Chief Executive Officer.

MarketCap: $68.17BAvg. Daily Volume (30 days): 696,790Revenue (TTM): $5.53B
Net Income Margin (TTM): 18.71%ROE (TTM): 17.56%Net Cash: $1.14B
P/E: 67.37Forward P/E: 35.71EV/EBIDTA (TTM): 51.66
P/S (TTM): 12.60P/B (TTM): 11.4452 Week Range: $267 – $468.03

5. Agilon Health (AGL): $17.16

On August 11, 2023, agilon health announced Vice President, Controller Timothy Gertsch, assumed the role of Chief Accounting Officer on August 16, 2023.

MarketCap: $6.96BAvg. Daily Volume (30 days): 2,356,289Revenue (TTM): $3.67B
Net Income Margin (TTM): -2.39%ROE (TTM): -8.86%Net Cash: $529.06
P/E: -80.66Forward P/E: 204.08EV/EBIDTA (TTM): -61.28
P/S (TTM): 1.93P/B (TTM): 7.9152 Week Range: $15 – $29.44

Departures

1.  Mueller Water Products (MWA): $13.75

On August 20, 2023, J. Scott Hall, President and Chief Executive Officer and a director of Mueller Water Products stepped down from all his positions at the company effective August 21, 2023.

MarketCap: $2.15BAvg. Daily Volume (30 days): 1,260,290Revenue (TTM): $1.31B
Net Income Margin (TTM): 5.77%ROE (TTM): 10.63%Net Debt: $332.6M
P/E: 28.69Forward P/E: 19.92EV/EBIDTA (TTM): 13.62
P/S (TTM): 1.65P/B (TTM): 3.0152 Week Range: $9.71 – $16.55

2. Republic Services (RSG): $146.30

On August 18, 2023, Republic Services announced that the employment of Timothy E. Stuart, Executive Vice President, and Chief Operating Officer, terminated on August 17, 2023.

MarketCap: $46.28BAvg. Daily Volume (30 days): 1,177,217Revenue (TTM): $14.43B
Net Income Margin (TTM): 10.91%ROE (TTM): 16.22%Net Debt: $12.27B
P/E: 29.44Forward P/E: 28.25EV/EBIDTA (TTM): 14.21
P/S (TTM): 3.21P/B (TTM): 4.5452 Week Range: $119.74 – $156.65

3. MDU Resources Group (MDU): $20.12

On August 17, 2023, David L. Goodin, President and Chief Executive Officer of MDU Resources Group, informed the Board of Directors of the Company of his intention to retire as President and Chief Executive Officer effective January 5, 2024.

MarketCap: $4.10BAvg. Daily Volume (30 days): 1,922,281Revenue (TTM): $7.38B
Net Income Margin (TTM): 5.88%ROE (TTM): 16.22%Net Debt: $2.37B
P/E: 8.28Forward P/E: 12.53EV/EBIDTA (TTM): 6.92
P/S (TTM): 0.56P/B (TTM): 1.5152 Week Range: $18.13 – $22.55

4. Axonics (AXNX): $55.34

On August 18, 2023, Dan L. Dearen, President and Chief Financial Officer of Axonics, provided formal notice of his decision to retire from the company effective October 2, 2023.

 

 

MarketCap: $2.79BAvg. Daily Volume (30 days): 884,653Revenue (TTM): $319.85M
Net Income Margin (TTM): -10.06%ROE (TTM): -6.20%Net Cash: $328.55M
P/E: -83.39Forward P/E: N/AEV/EBIDTA (TTM): N/A
P/S (TTM): 8.39P/B (TTM): 4.6552 Week Range: $47.59 – $79.92

5. Alexandria Real Estate Equities (ARE): $117.28

On August 16, 2023, Dean A. Shigenaga, President and Chief Financial Officer of Alexandria Real Estate Equities, submitted his resignation from all of his positions with the company and its subsidiaries for important personal family health reasons, effective September 15, 2023.

MarketCap: $20.29BAvg. Daily Volume (30 days): 893,285Revenue (TTM): $2.75B
Net Income Margin (TTM): 20.65%ROE (TTM): 3.40%Net Debt: $6.67B
P/E: 35.18Forward P/E: 34.36EV/EBIDTA (TTM): 21.23
P/S (TTM): 7.19P/B (TTM): 1.0852 Week Range: $107.61 – $169.07

If you are reading this article and have not signed up to receive such articles by email, please sign up either for our free, IA Plus or IA Premium service here. If you are an existing subscriber, you can login to the InsideArbitrage.com website to adjust the kinds of articles you receive by email by turning on or turning off specific categories of articles.