Today, Synopsys (NASDAQ: SNPS ) is the unequivocal leader in the electronic design automation (EDA) market, developing software solutions for the automation of chip design. An important part of the company's business is licensing IP blocks, such as USB interfaces and memory controllers, which becomeHi there! I’m Narek, and I’ve been in the investment world for over six years. I started out as an equity analyst at European banks, digging into reports and learning how to spot value in the markets. I’ve worked ...

Sassine Ghazi, CEO of semiconductor design software firm Synopsys, explains the company's plans to have artificial intelligence take over parts of designing computer chips at the company's annual user conference in Santa Clara, California, on March 19, 2025.Synopsys pulled its guidance for the full fiscal year on Thursday, citing a letter it received from the U.S. Commerce Department on restrictions of sales of its products in China. The stock dropped about 3%.The announcement comes one day after Synopsys C ...

Shares in semiconductor design products company Synopsys (SNPS -1.89%) spiked higher by 5.5% in early trading today before settling back later in the day. The move came after the U.S. Federal Trade Commission (FTC) gave conditional approval for its intended $35 billion acquisition of simulation and analysis software company Ansys (ANSS -0.57%).For reference, the European Commission has already approved the acquisition. Synopsys is now awaiting approval from China before potentially closing the deal in the s ...

SUNNYVALE, Calif., May 29, 2025 /PRNewswire/ -- Today, Synopsys, Inc. (Nasdaq: SNPS) has suspended its financial guidance for the third quarter of fiscal year 2025 and full fiscal year 2025. The company issued the below statement:On May 29, 2025, following the announcement of Synopsys' financial results of its second fiscal quarter ended April 30, 2025, Synopsys received a letter from the Bureau of Industry and Security of the U.S. Department of Commerce informing Synopsys of new export restrictions related ...

Synopsys (SNPS) shares rose 3.7% during Wednesday’s extended trading session after the company reported better-than-expected results for the second quarter of fiscal 2025. The company reported non-GAAP earnings of $3.67 per share for the second quarter, surpassing the Zacks Consensus Estimate of $3.39 and the guided range of $3.37-$3.42. The bottom line increased 22.3% due to a year-over-year increase in revenues.SNPS’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters the aver ...

Core Insights - Synopsys reported revenue of $1.6 billion for the quarter ended April 2025, reflecting a year-over-year increase of 10.3% and an EPS of $3.67, up from $3.00 in the same quarter last year [1] - The reported revenue met the Zacks Consensus Estimate, with a slight surprise of +0.16%, while the EPS exceeded expectations by +8.26% [1] Revenue Breakdown - Maintenance and service revenue was $265.26 million, below the estimated $279.24 million, representing a year-over-year decline of -4.1% [4] - Total products revenue reached $1.34 billion, slightly above the $1.32 billion estimate, marking a year-over-year increase of +13.7% [4] - Design IP revenue was $482 million, surpassing the average estimate of $443.37 million, with a year-over-year growth of +20.6% [4] - Design Automation revenue was $1.12 billion, below the estimated $1.16 billion, showing a year-over-year increase of +6.4% [4] - Upfront products revenue was $510.68 million, exceeding the estimate of $415.15 million, with a significant year-over-year increase of +28.8% [4] - Time-based products revenue was $828.33 million, falling short of the $904.12 million estimate, but still reflecting a year-over-year growth of +6% [4] Stock Performance - Synopsys shares have returned +11.1% over the past month, outperforming the Zacks S&P 500 composite's +7.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Synopsys (SNPS) came out with quarterly earnings of $3.67 per share, beating the Zacks Consensus Estimate of $3.39 per share. This compares to earnings of $3 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.26%. A quarter ago, it was expected that this maker of software used to test and develop chips would post earnings of $2.81 per share when it actually produced earnings of $3.03, delivering a surprise of 7.83%.Over the las ...

Financial Data and Key Metrics Changes - The company reported a strong second quarter with revenue of $1.6 billion, up 10% year over year, exceeding the midpoint of guidance [5][14][16] - Non-GAAP operating margin was 38%, and non-GAAP EPS was $3.67, reflecting strong execution and a resilient business model [14][16] - Backlog increased to $8.1 billion, up $400 million quarter on quarter [14][16] Business Line Data and Key Metrics Changes - Design Automation segment revenue was $1.12 billion, up 6% year over year, with an adjusted operating margin of 40.9% [17] - Design IP segment revenue increased by 21% year over year to $482 million, with an adjusted operating margin of 31.2% [17][10] Market Data and Key Metrics Changes - The company observed strength in Europe and South Korea, which offset headwinds from China [16] - The AI and HPC sectors remained robust, while non-AI end market demand was subdued [6][16] Company Strategy and Development Direction - The company is focused on addressing challenges in design complexity and costs driven by megatrends in AI, software-defined systems, and silicon proliferation [6][12] - The pending acquisition of Ensys is aimed at enhancing AI-powered silicon to systems design solutions [7][12] - The company is investing to maintain and extend its leadership position in AI for chip design [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a slowdown in China but reiterated confidence in full-year guidance due to strong execution in other regions [22][28] - The company is optimistic about the second half of the year, supported by strong demand in AI and HPC sectors [20][19] Other Important Information - The company is actively negotiating with SAMR for regulatory clearance in China regarding the Ensys acquisition [7][45] - Non-GAAP EPS targets have been increased to reflect Q2 outperformance, partly offset by net interest expenses from bond issuance [19] Q&A Session Summary Question: What is the expected impact of declining sales in China? - Management confirmed that they are anticipating a decline in China year over year but reiterated full-year guidance based on strong performance in other regions [26][28] Question: Can you clarify the bond payment structure? - The CFO confirmed that the first payment will include a catch-up for the first half month due to the bond's settlement timing [29] Question: What is the revenue mix in China? - Management stated that they do not split revenue by region but indicated it is similar to the rest of the world [35] Question: How is the largest customer’s R&D spend affecting growth? - Management noted that while there may be fluctuations, committed agreements generally protect EDA software revenue [42] Question: What is the plan if the ANSYS deal does not close? - Management emphasized that they are focused on completing the transaction and are confident based on received approvals [45][66] Question: What is the outlook for design activity in non-AI markets? - Management indicated signs of stabilization and new energy in industrial and automotive markets, with increased design activity expected [50] Question: How is pricing power being affected? - Management stated that pricing is based on the value delivered to customers, and they see opportunities to improve pricing as challenges increase for chip design [81] Question: What is the confidence level for achieving double-digit revenue growth? - Management expressed confidence in achieving industry-leading double-digit revenue growth, even with potential challenges in China [107]

Financial Data and Key Metrics Changes - The company reported revenue of $1.6 billion, representing a 10% year-over-year increase, exceeding the midpoint of guidance [4][14][15] - Non-GAAP operating margin was 38%, and non-GAAP EPS was $3.67, which was above the guided range [14][15] - Backlog increased by $400 million quarter-over-quarter to $8.1 billion [14][15] Business Line Data and Key Metrics Changes - Design Automation segment revenue was $1.12 billion, up 6% year-over-year, with an adjusted operating margin of 40.9% [16] - Design IP segment revenue increased by 21% year-over-year to $482 million, with an adjusted operating margin of 31.2% [16][10] Market Data and Key Metrics Changes - Strong demand was noted in Europe and South Korea, which offset headwinds from China [15] - The company observed a slowdown in China, which is expected to decline year-over-year, while other regions showed resilience [5][15][27] Company Strategy and Development Direction - The company is focused on leveraging megatrends in AI, software-defined systems, and silicon proliferation to drive growth [5][14] - The pending acquisition of Ensys is aimed at enhancing AI-powered silicon design solutions [6][12] - The company is investing to maintain its leadership position in AI for chip design [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a "tale of two markets," with robust demand in AI and HPC sectors, while non-AI end market demand remains subdued [5][4] - The company reiterated its full-year guidance despite challenges in China, citing strong execution in other regions [27][78] Other Important Information - Free cash flow was approximately $220 million, with cash and short-term investments totaling $14.3 billion and debt of $10.1 billion [16][17] - The company is confident in achieving industry-leading double-digit revenue growth despite potential challenges in China [102] Q&A Session Summary Question: What is the expected impact of declining sales in China? - Management confirmed that they are anticipating a decline in China year-over-year but reiterated full-year guidance based on strong performance in other regions [27][78] Question: Can you clarify the bond payment structure? - Management indicated that the first bond payment would include a catch-up for the first half month, transitioning to a regular semiannual payment schedule [28][29] Question: How is the revenue mix in China divided among software, IP, and hardware? - The company does not disclose revenue by region but indicated that the mix is similar to that of other regions [32] Question: What is the outlook for R&D spending among major customers? - Management noted that while there may be fluctuations, committed agreements generally remain stable, and opportunities arise when customers push their roadmaps [40][60] Question: What is the status of the pending ANSYS acquisition? - Management expressed confidence in closing the acquisition in the first half of the year, citing positive negotiations with regulators [42][63] Question: How is the company addressing the need for more system design capabilities? - The company is focused on completing the ANSYS acquisition, which is seen as essential for enhancing system design capabilities [42] Question: What are the expectations for R&D investment in the semiconductor industry? - Management observed a pickup in R&D investment in automotive and industrial sectors, indicating a positive trend for future growth [88][89] Question: How does the company view pricing power in the current environment? - Management stated that pricing is based on the value delivered to customers, and there is an opportunity to improve pricing as challenges in chip design increase [79][80]

Shares of Synopsys (SNPS -9.91%) fell on Wednesday. The company's stock dropped 10% as of market close. The move down came as the S&P 500 (^GSPC -0.56%) lost 0.6% and the Nasdaq Composite (^IXIC -0.51%) lost 0.6%.The chip design company's stock fell after news broke that the Trump administration told the company to stop selling its services to China.Chip crackdownThe Bureau of Industry and Security, which operated under the U.S. Commerce Department, sent letters to Synopsis, as well as two other companies, ...