Synopsys Stock Earnings Reports

Key points for investors: Synopsys closed the ANSYS acquisition in Q3, expanding the company into simulation/analysis and positioning it as a leader in engineering solutions “from silicon to systems.” Reported Q3 revenue was $1.74B and non-GAAP EPS $3.39; backlog (including ANSYS) was $10.1B. Design automation (including ANSYS) grew ~23% Y/Y driven by hardware/emulation strength, while Design IP declined ~8% Y/Y. Management attributed the IP shortfall to three primary factors: (1) export restrictions and resulting design-start disruption in China, (2) underperformance at a major foundry customer against prior expectations, and (3) roadmap and resource decisions that did not yield expected results. Synopsys plans to pivot IP resources toward higher-growth interface/subsystem opportunities, merge IP engineering teams to scale subsystem delivery, and leverage internal GenAI to improve productivity. The company is taking a more conservative view on Q4 while still expecting to deliver a record revenue year. Updated FY25 guidance (including ANSYS) calls for roughly $7.0B in revenue (range provided), non-GAAP EPS of $12.76–12.80, operating margin pressure in the near term, and free cash flow around $950M (down from prior expectations mainly due to acquisition financing costs). Q4 guide: revenue $2.23–2.26B and non-GAAP EPS $2.76–2.80. Balance sheet: cash & short-term investments ~$2.6B, debt ~$14.3B. Management reiterated confidence in achieving merger synergies but noted some integration timing delays tied to divestiture approvals (OSG and PowerArtist). As part of portfolio & efficiency actions, the company will reduce global headcount by roughly 10% by end of FY2026. Near-term risks remain: continued China/design-start weakness, foundry customer uncertainty, and a transitional/muted year for IP; longer-term opportunities stem from ANSYS cross-sell, multi-die/thermal sign-off integration, and growth in simulation for physical AI.