Synopsys Stock Earnings Reports

Synopsys reported a strong Q2 FY2026: revenue $2.276B, non-GAAP operating margin 39.5% and non-GAAP EPS $3.35, all above guidance. Management raised full‑year FY2026 guidance for revenue, operating margin, EPS and free cash flow. Drivers include AI-driven demand across EDA, IP and multiphysics simulation, strength in hardware‑assisted verification, advanced‑node and 3DIC design wins, growing momentum for GPU‑accelerated EDA and early traction for agentic AI (AgentEngineer) evaluations. Ansys (included in results) performed well and integration is progressing; management introduced Multiphysics Fusion (expected commercial ramp H2 2026) to combine EDA and physics simulation, targeting productivity gains and cross‑sell synergies. Design IP showed sequential recovery (IP revenue $454M, down YoY but +12% sequentially); Synopsys is shifting IP toward higher‑value, customized hyperscaler engagements and expects the Processor IP Solutions divestiture to close soon. Accounting change: certain Ansys channel revenue is now recognized gross, adding ~$12.5M to Q2 revenue (and an offsetting expense). Cash flow remains strong (Q2 free cash flow ~$575M; cash & short‑term investments $2.48B; total debt ~$10B); share repurchases underway (ASR $250M initiated, plus $50M buybacks). Management expects to realize about half of committed Ansys cost synergies by FY end and reiterated further synergy and margin opportunities to be detailed at Investor Day (Sept 30, 2026). Key near‑term guidance: Q3 revenue $2.41B–$2.46B; full‑year revenue $9.625B–$9.705B; full‑year non‑GAAP EPS $14.72–$14.80 and non‑GAAP operating margin ~41% at midpoint.