Announces Plan for September 2026 Investor Day
Results Summary
- Quarterly revenue of $2.276 billion, above prior guidance; quarterly GAAP earnings per diluted share (EPS) of $0.09, and non-GAAP EPS of $3.35
- Raising expectations for full-year total revenue to $9.665 billion at the midpoint, driven by strong performance across the business and an EPS-neutral Ansys channel-related accounting impact, partly offset by the impending close of the Processor IP Solutions business
- Raising full-year non-GAAP EPS guidance to $14.76 at the midpoint on expanded operating margin driven by strong cost discipline and accelerating synergies
SUNNYVALE, Calif., May 27, 2026 /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its second quarter of fiscal year 2026. Revenue for the second quarter of fiscal year 2026 was $2.276 billion, compared to $1.604 billion for the second quarter of fiscal year 2025.
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"Synopsys delivered a strong second quarter with solid execution and strength across the business," said Sassine Ghazi, Synopsys president and CEO. "AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power - driving demand across our portfolio. Our momentum, leadership roadmap, and deep customer engagements are a strong foundation for sustained growth and margin expansion as we solve our customers' toughest engineering challenges."
"Second quarter revenue and non-GAAP EPS exceeded guidance. Our continued focus on execution and financial discipline sets us up for a strong second half," said Shelagh Glaser, CFO of Synopsys. "We are raising our targets for revenue, operating margin, EPS, and free cash flow for the year, as we drive greater efficiency across the business."
The company plans to host an Investor Day on Sept. 30, during which management will provide additional detail regarding the company's long-term financial targets and strategy to capitalize on its sizable opportunity as the leader in engineering solutions from silicon to systems.
GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal year 2026 was $17.1 million, or $0.09 per diluted share, compared to $349.2 million, or $2.24 per diluted share, for the second quarter of fiscal year 2025.
Non-GAAP Results
On a non-GAAP basis, net income for the second quarter of fiscal year 2026 was $643.7 million, or $3.35 per diluted share, compared to non-GAAP net income of $572.7 million, or $3.67 per diluted share, for the second quarter of fiscal year 2025.
For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Business Segments
Synopsys reports revenue and operating income in two segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, Ansys products, system integration products and services, digital, custom and field programmable gate array IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors.
Financial Targets
Synopsys also provided its consolidated financial targets for the third quarter and full fiscal year 2026. These targets assume no further changes to export control restrictions or the current U.S. government "Entity List" restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.
Third Quarter and Full Fiscal Year 2026 Financial Targets | |||||
(in millions, except per share amounts) | |||||
Range for Three Months | Range for Fiscal Year | ||||
July 31, 2026 | October 31, 2026 | ||||
Low | High | Low | High | ||
Revenue (1) | $ 2,410 | $ 2,460 | $ 9,625 | $ 9,705 | |
GAAP Expenses | $ 2,075 | $ 2,125 | $ 8,469 | $ 8,599 | |
Non-GAAP Expenses | $ 1,440 | $ 1,470 | $ 5,675 | $ 5,725 | |
Non-GAAP Interest and Other Income (Expense), net | $ (121) | $ (117) | $ (495) | $ (485) | |
Non-GAAP Tax Rate | 18 % | 18 % | 18 % | 18 % | |
Outstanding Shares (fully diluted) | 192 | 194 | 192 | 194 | |
GAAP EPS | $ 0.84 | $ 0.98 | $ 2.49 | $ 2.91 | |
Non-GAAP EPS | $ 3.63 | $ 3.69 | $ 14.72 | $ 14.80 | |
Operating Cash Flow | ~$2,300 | ||||
Free Cash Flow (2) | ~$2,000 | ||||
Capital Expenditures | ~$300 | ||||
(1) Fiscal year 2026 revenue includes $2.96 billion of expected Ansys revenue (including $60 million related to an divestiture of the Processor IP Solutions business. | |||||
(2) Free cash flow is calculated as cash provided from operating activities less capital expenditures. | |||||
Fiscal Year 2026 Revenue Target Raise Breakdown | |||||
(in millions) | |||||
For Fiscal Year Ending | |||||
October 31, 2026 | |||||
Prior Guidance | Business | Ansys Channel Accounting | Processor IP | New Guidance Mid-Point | |
Revenue | $9,610 | + $35 | + $60 | ($40) | $9,665 |
For a reconciliation of Synopsys' third quarter and fiscal year 2026 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAP basis, a discussion of the financial targets that we are not able to reconcile without unreasonable efforts and a discussion of why management believes such measurements provide useful information to investors, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Earnings Call Open to Investors
Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be available in the investor relations portion of Synopsys' corporate website at www.synopsys.com. Synopsys uses its website as a tool to disclose important information about Synopsys and comply with its disclosure obligations under Regulation Fair Disclosure. A webcast replay will also be available on the corporate website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the third quarter of fiscal year 2026.
Availability of Final Financial Statements
Synopsys will include final financial statements for the second quarter of fiscal year 2026 in its quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission (SEC) and available at www.sec.gov on or before June 9, 2026.
Continuing Operations
On Sept. 30, 2024, Synopsys completed the sale of its Software Integrity business. Unless otherwise noted, Synopsys' Software Integrity business has been presented as a discontinued operation in the Synopsys' consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis.
Reconciliation of Second Quarter Fiscal Year 2026 Results
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income, earnings per diluted share, and tax rate for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Second Quarter Fiscal Year 2026 Results | |||||||
(unaudited and in thousands, except per share amounts) | |||||||
Three Months Ended | Six Months Ended | ||||||
April 30, | April 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
GAAP net income from continuing operations attributed to | $ 17,105 | $ 349,232 | $ 82,063 | $ 644,915 | |||
Adjustments: | |||||||
Amortization of acquired intangible assets | 403,631 | 11,656 | 807,866 | 24,252 | |||
Stock-based compensation | 222,303 | 201,723 | 481,027 | 388,002 | |||
Restructuring charges | 115,894 | — | 234,176 | — | |||
Acquisition/divestiture related items | 23,649 | 69,514 | 39,241 | 144,343 | |||
Loss on sale of strategic investments | — | 2,435 | — | 2,435 | |||
Tax adjustments | (138,848) | (61,862) | (282,170) | (158,076) | |||
Non-GAAP net income from continuing operations attributed to | $ 643,734 | $ 572,698 | $ 1,362,203 | $ 1,045,871 | |||
Three Months Ended | Six Months Ended | ||||||
April 30, | April 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
GAAP net income from continuing operations per diluted share | $ 0.09 | $ 2.24 | $ 0.43 | $ 4.13 | |||
Adjustments: | |||||||
Amortization of acquired intangible assets | 2.10 | 0.07 | 4.22 | 0.16 | |||
Stock-based compensation | 1.16 | 1.29 | 2.51 | 2.48 | |||
Restructuring charges | 0.60 | — | 1.22 | — | |||
Acquisition/divestiture related items | 0.12 | 0.45 | 0.20 | 0.92 | |||
Loss on sale of strategic investments | — | 0.02 | — | 0.02 | |||
Tax adjustments | (0.72) | (0.40) | (1.47) | (1.02) | |||
Non-GAAP net income from continuing operations per diluted | $ 3.35 | $ 3.67 | $ 7.11 | $ 6.69 | |||
Shares used in computing net income per diluted share amounts: | 192,144 | 156,088 | 191,580 | 156,218 | |||
GAAP to Non-GAAP Tax Rate Reconciliation | ||
(unaudited) | ||
Three Months Ended | Six Months Ended | |
April 30, 2026 | April 30, 2026 | |
GAAP effective tax rate | 12.5 % | 17.0 % |
Stock-based compensation | 9.7 % | 4.7 % |
Restructuring charges | (2.1) % | (2.1) % |
Income tax adjustments (1) | (2.1) % | (1.6) % |
Non-GAAP effective tax rate | 18.0 % | 18.0 % |
(1) The tax adjustments are primarily due to differences in the tax rate effect of certain deductions, such as the | ||
Reconciliation of 2026 Targets
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP targets for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2026 Targets | ||||
(in thousands, except per share amounts) | ||||
Range for Three Months Ending | ||||
July 31, 2026 | ||||
Low | High | |||
Target GAAP expenses | $ 2,075,000 | $ 2,125,000 | ||
Adjustments: | ||||
Amortization of acquired intangible assets | (400,000) | (405,000) | ||
Stock-based compensation | (230,000) | (240,000) | ||
Restructuring charges | (5,000) | (10,000) | ||
Target non-GAAP expenses | $ 1,440,000 | $ 1,470,000 | ||
Range for Three Months Ending | ||||
July 31, 2026 | ||||
Low | High | |||
Target GAAP earnings per diluted share attributed to Synopsys | $ 0.84 | $ 0.98 | ||
Adjustments: | ||||
Amortization of acquired intangible assets | 2.10 | 2.07 | ||
Stock-based compensation | 1.24 | 1.19 | ||
Restructuring charges | 0.05 | 0.03 | ||
Tax adjustments | (0.60) | (0.58) | ||
Target non-GAAP earnings per diluted share attributed to Synopsys | $ 3.63 | $ 3.69 | ||
Shares used in non-GAAP calculation (midpoint of target range) | 193,000 | 193,000 | ||
GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2026 Targets | ||||
(in thousands, except per share amounts) | ||||
