Synopsys (SNPS), a provider of software, IP and services, has announced a 25.54 percent rise in profit for the quarter ended Jul. 31, 2014, driven by growth in sales and margins.

The company earned $65.66 million or $0.42 a share in the third-quarter compared with $52.30 million or $0.33 a share a year ago. Non-GAAP earnings per share came in at $0.65, when analysts expected $0.60.

Revenue during the third-quarter climbed 8.05 percent to $521.81 million from $482.94 million in the last year period.

Gross margin expanded by 181 basis points over the last year period to 77.86 percent. Total expenses as a percentage of revenues decreased to 87.12 percent from 88.61 percent in the same period last year. That has resulted in improvement of 150 basis points in operating margins to 12.88 percent.

The company reported operating income of $67.23 million, compared with $55 million in the previous year period.

''Synopsys delivered an excellent fiscal third quarter, solidifying the year's financial outlook,'' said Aart de Geus, chairman and co-CEO of Synopsys.  ''We shipped game-changing new products that are generating intense customer interest and high-impact results, and have already started a multi-year upgrade cycle. We also achieved encouraging results through Coverity, the recent acquisition that expands our total addressable market into the software quality, test and security space.''

The company expects the fourth quarter revenues to be in the range of to $537 - $547 million. It anticipates earnings per share at $0.32 - $0.38 for the third quarter.

For full-year, the company expects revenues to be in the range of to $2.055 - $2.065 billion. It anticipates earnings per share at $2.48 - $2.50 for full-year.

Cash Flow

Synopsys has generated cash of $378.04 million from operating activities during the nine month period, up 23.80 percent or $72.67 million when compared with the last year period.

The company has spent $430.10 million cash to meet investing activities during the nine month period, as against cash outgo of $48.08 million in the last year period. It has made net capital expenditure of $60.90 million during the nine month period, which was higher by 26.07 percent or $12.59 million, from a year ago.

The company's free cash flow accounted for 83.89 percent of operating cash flow for the nine month period, compared with 84.18 percent in the last year period.

The company has spent $62.66 million cash to meet financing activities during the nine month period, as against cash outgo of $52.23 million in the last year period. It has made net repayment of $23.24 million debt during the nine month period. It has spent net of $34.41 million on repurchase of common stocks.

As on Jul. 31, 2014, the company's cash balance stood at $903.05 million, up 1.20 percent or $10.68 million from Jul. 31, 2013.

Working Capital

Synopsys has witnessed a decline in the working capital over the last one year. The company's working capital stood at $87.50 million as at Jul. 31, 2014, down $70.90 million or 44.76 percent from $158.40 million on Jul. 31, 2013. It registered a decrease in current ratio to 1.07 as at Jul. 31, 2014 from 1.14 on Jul. 31, 2013.

Debt Position

Synopsys has witnessed a decline in the total debt over the last one year. As on Jul. 31, 2014, total debt stood at $82.50 million, down 26.67 percent or $30 million, from Jul. 31, 2013. The company's total debt was 1.82 percent of total assets as on Jul. 31, 2014, compared with 2.62 percent on Jul. 31, 2013.

Shares of the company gained $0.20 or 0.51 percent to settle at $39.30 on Wednesday.