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, ...

Financial Performance - Revenue for Q2 fiscal 2025 was $1.604 billion, an increase of $149.6 million or 10% compared to Q2 fiscal 2024[157] - Operating income for Q2 fiscal 2025 was $376.4 million, an increase of $44.4 million or 13% year-over-year[163] - Total revenue for the six months ended April 30, 2025, was $3.059 billion, an increase of $93.9 million or 3% compared to the same period in fiscal 2024[163] - Total revenue for the three months ended April 30, 2025, was $1,604.3 million, representing a 10% increase from $1,454.7 million in the same period of 2024[195] - Design Automation segment revenue increased by 6% to $1,122.3 million for the three months ended April 30, 2025, compared to $1,054.9 million in the prior year[195] - Design IP segment revenue grew by 21% to $482.0 million for the three months ended April 30, 2025, up from $399.8 million in the same period of 2024[195] - Upfront products revenue for the three months ended April 30, 2025, was $510.7 million, a 29% increase from $396.4 million in the same period of 2024[201] - Time-based products revenue for the three months ended April 30, 2025, was $828.3 million, a 6% increase from $781.7 million in the same period of 2024[200] - Maintenance revenue for the three months ended April 30, 2025, increased to $117.8 million, up 6% from $110.9 million in 2024, while total maintenance and service revenue decreased by 4% to $265.2 million[203] - Adjusted operating income for the Design Automation Segment rose to $458.8 million for the three months ended April 30, 2025, reflecting a 10% increase from $418.2 million in 2024[223] - Adjusted operating income for the Design IP Segment increased to $150.5 million for the three months ended April 30, 2025, a 21% rise from $124.8 million in 2024[224] Costs and Expenses - Total cost of revenue and operating expenses for Q2 fiscal 2025 was $1.2 billion, an increase of $105.2 million or 9% primarily due to employee-related costs[163] - Total cost of revenue for the three months ended April 30, 2025, was $318.3 million, a 6% increase from $300.4 million in 2024[205] - Research and development expenses for the three months ended April 30, 2025, rose to $554.0 million, a 12% increase from $493.1 million in 2024[210] - Sales and marketing expenses for the three months ended April 30, 2025, were $215.0 million, a 2% increase from $209.8 million in 2024[212] - General and administrative expenses for the three months ended April 30, 2025, increased to $136.5 million, a 19% rise from $114.8 million in 2024[214] - The increase in cost of revenue was primarily due to $23.2 million in employee-related costs and $9.0 million in hardware-related costs[208] Net Income and Other Income - Net income from continuing operations attributed to Synopsys for Q2 fiscal 2025 was $299.1 million, compared to $644.9 million for the same period in fiscal 2024[158] - Total other income for the three months ended April 30, 2025, was $114.1 million, a 592% increase from $16.5 million in the same period of 2024[221] - Interest income increased to $89.9 million for the three months ended April 30, 2025, up 675% from $11.6 million in the same period of 2024[221] Acquisition and Financing - The pending acquisition of Ansys is valued at approximately $35.0 billion, based on Synopsys' stock price as of December 21, 2023[165] - The Ansys Merger is expected to close in the first half of calendar year 2025, pending regulatory approvals[168] - Synopsys plans to issue $10.1 billion in Senior Notes to fund a portion of the cash consideration for the Ansys Merger[171] - The pending Ansys Merger is expected to require a cash consideration payment of $19 billion, funded through a combination of cash on hand and debt financing[230] - The company issued $10 billion aggregate principal amount of Senior Notes in March 2025, with net proceeds of approximately $9.9 billion intended for the Ansys Merger and related expenses[255] Cash Flow and Investments - Cash provided by operating activities decreased to $207.9 million for the six months ended April 30, 2025, down from $388.8 million in 2024[236] - Cash provided by investing activities improved to $54.0 million for the six months ended April 30, 2025, compared to cash used of $166.2 million in the same period of 2024[239] - As of April 30, 2025, the company held $14.3 billion in cash, cash equivalents, and short-term investments[228] Market and Economic Conditions - The company has consistently grown revenue since 2005, despite global economic uncertainties, due to strong customer relationships and execution[161] - The company is actively monitoring geopolitical pressures and changes in U.S. and global trade policy, but these have not materially impacted business results to date[175] - The company anticipates growth across its geographies in fiscal 2025, except for China, which is facing a challenging economic environment[174] - The U.S. Export Regulations have not materially impacted the company's business, although future changes are anticipated[178] - The company’s time-based model provides stability, but the long-term implications of macroeconomic and geopolitical events remain uncertain[177] Debt and Credit Facilities - The company has an unsecured $850.0 million committed multicurrency revolving credit facility and an unsecured uncommitted incremental revolving loan facility of up to $150.0 million, with a maturity date of December 14, 2027[250] - As of April 30, 2025, the company had no outstanding balance under the Revolving Credit Agreement[250] - The applicable margin for Adjusted Term SOFR Rate based loans ranges from 0.785% to 0.975%, based on the company's consolidated leverage ratio[251] - As of April 30, 2025, the company had approximately $9.9 billion of Senior Notes outstanding, which have fixed annual interest rates, thus avoiding economic interest rate exposure[259] - The financial covenant requires the company to maintain a maximum consolidated leverage ratio, and it was in compliance as of April 30, 2025[253] - Interest under the Revolving Credit Agreement will accrue at a floating rate based on the Adjusted Term SOFR Rate or the ABR, with margins based on credit ratings ranging from 0.080% to 0.175%[252] Other Financial Metrics - Contracted but unsatisfied performance obligations (backlog) as of April 30, 2025, were $8.1 billion, with approximately 42% expected to be recognized as revenue over the next 12 months[196] - Interest expense for the three months ended April 30, 2025, was $(94.3) million, a significant increase of 1,228% compared to $(7.1) million in 2024[219] - The effective tax rate decreased due to a capital loss on the sale of ownership in OpenLight in the first quarter of 2025[226] - As of April 30, 2025, $194.3 million remained available for future stock repurchases under the stock repurchase program, which has been suspended in connection with the Ansys Merger[231] - The company had a $14.1 million outstanding balance under a 12-year credit agreement in China as of April 30, 2025[254] - The company has a deferred payment agreement with an outstanding balance of $122.5 million related to the 2025 Rate Lock agreements as of April 30, 2025[256] - The company’s exposure to market risk had not changed materially since November 2, 2024[258]

Financial Performance - Revenue for Q2 FY 2025 was $1.604 billion, a 10.2% increase from $1.455 billion in Q2 FY 2024[2] - GAAP net income for Q2 FY 2025 was $349.2 million, or $2.24 per diluted share, compared to $299.1 million, or $1.92 per diluted share in Q2 FY 2024[6] - Non-GAAP net income for Q2 FY 2025 was $572.7 million, or $3.67 per diluted share, up from $466.9 million, or $3.00 per diluted share in Q2 FY 2024[7] - The company reported a net income of $345,110,000 for the three months ended April 30, 2025, compared to $289,089,000 for the same period in 2024, marking a year-over-year increase of 19.4%[35] - Net income for the six months ended April 30, 2025, was $642.5 million, a decrease of 12.6% compared to $735.3 million for the same period in 2024[40] Revenue Guidance - The company reaffirmed its full-year 2025 revenue guidance, projecting revenue between $6.745 billion and $6.805 billion[12] - For Q3 FY 2025, revenue is expected to range from $1.755 billion to $1.785 billion[12] Operating Performance - Non-GAAP operating margin guidance for FY 2025 remains unchanged, reflecting confidence in business demand[5] - Operating income for the six months ended April 30, 2025, was $628,265,000, a decrease from $684,698,000 in the same period of 2024[35] - Revenue from the Design Automation segment for the six months ended April 30, 2025, was $2.14 billion, representing a 5.0% increase from $2.04 billion in the same period of 2024[46] - Adjusted operating income for the Design IP segment was $277.1 million for the six months ended April 30, 2025, down 25.2% from $370.5 million in the prior year[46] - The adjusted operating margin for the Design Automation segment improved to 40.3% from 38.1% year-over-year[46] Cash and Assets - Cash and cash equivalents increased significantly to $14,119,095,000 as of April 30, 2025, compared to $3,896,532,000 on October 31, 2024[38] - Total current assets rose to $16,879,029,000 as of April 30, 2025, up from $6,469,666,000 on October 31, 2024[38] - Cash, cash equivalents, and restricted cash at the end of the period totaled $14.12 billion, significantly up from $1.51 billion at the end of the previous year[42] Expenses and Liabilities - Research and development expenses for the three months ended April 30, 2025, were $553,979,000, compared to $493,136,000 in the same period of 2024, reflecting an increase of 12.3%[35] - Total liabilities as of April 30, 2025, were $13,840,912,000, significantly higher than $4,050,355,000 on October 31, 2024[38] - Cash flows from operating activities provided $207.9 million, down 46.5% from $388.8 million in the prior year[42] Strategic Focus - The company continues to focus on AI and software-defined systems as key growth drivers in a complex design environment[3] - The company anticipates the completion of the acquisition of ANSYS, Inc., which is expected to impact future financial results positively[31] - Synopsys delivers comprehensive silicon to systems design solutions, partnering with semiconductor and systems customers to enhance R&D capabilities[63] Tax and Non-GAAP Measures - The effective tax rate for Q2 FY 2025 was 11.9% on a GAAP basis, while the non-GAAP effective tax rate was 16.0%[24] - The company adopts a non-GAAP tax rate of 16% for fiscal year 2025 to provide consistency across reporting periods and align with expected geographic earnings mix[61] - The company continues to focus on non-GAAP financial measures to provide a clearer view of its core business operations and future performance expectations[50] Acquisitions and Divestitures - The company completed the sale of its Software Integrity business on September 30, 2024, which is now classified as a discontinued operation[5] - The company incurs significant expenses related to acquisitions and divestitures, including compensation expenses and professional fees, which are excluded from core operations for consistent comparison across periods[57] - Restructuring charges include severance and termination benefits, aimed at aligning costs with business strategies, and are not considered part of core operations[59] - Gains and losses from the sale of strategic investments in privately held companies are excluded as they do not reflect core business results[60] Financing Activities - Proceeds from debt issuance amounted to $10.03 billion, indicating significant financing activity during the period[42]

Corporate Overview for Investors May 2025 Forward-Looking Statements This presentation contains forward-looking statements, including, but not limited to, statements regarding Synopsys, Inc.'s (Synopsys, we or our) short-term and long-term financial targets, expectations and objectives including, among others, our long-term financial objectives, which include the anticipated effects of our pending acquisition of ANSYS, Inc. (the Ansys Merger); our products, technology and services; business and market outlo ...

Results Summary Quarterly revenue of $1.604 billion, exceeding midpoint of guidance. Quarterly GAAP earnings per diluted share of $2.24; non-GAAP earnings per diluted share of $3.67, exceeding guidance. Reaffirming full-year 2025 revenue guidance, and non-GAAP operating margin guidance. SUNNYVALE, Calif., May 28, 2025 /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its second quarter of fiscal year 2025. Revenue for the second quarter of fiscal year 2025 was $1.604 billion, compared ...

Synopsys (SNPS) is scheduled to report second-quarter fiscal 2025 results on May 28, after market close.Synopsys expects non-GAAP earnings per share between $3.37 and $3.42. The Zacks Consensus Estimate for fiscal second-quarter earnings is pinned at $3.39 per share, which indicates an increase of 13% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar).The company anticipates revenues between $1.585 billion and $1.615 billion for the fiscal second quarter. The Zacks Cons ...

Wall Street analysts forecast that Synopsys (SNPS) will report quarterly earnings of $3.39 per share in its upcoming release, pointing to a year-over-year increase of 13%. It is anticipated that revenues will amount to $1.6 billion, exhibiting an increase of 10.1% compared to the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Before a co ...

Synopsys, Inc. (NASDAQ: SNPS ) is a highly interesting company that is currently in a situation that is attracting a lot of attention. On the one hand, there is the upcoming merger with Ansys (My primary area of concentration will be on identifying companies of exceptional caliber, with a proven ability to reinvest capital for impressive returns. Targeting those with a market capitalization of less than $10 billion, affords ample opportunities for growth. The ideal scenario is for these companies to demonst ...

Synopsys Production-Ready EDA Flows and Broadest IP Portfolio Deliver Leading PPA for Intel Foundry's Advanced Processes and Packaging TechnologiesHighlights Production-ready Synopsys digital and analog EDA flows for Intel 18A and Intel 18A-P technologies pave the way for broad adoption and accelerate development of high-performance designs; engaged in early design technology co-optimization for Intel 14A-E Optimized EDA reference flow with a unified exploration-to-signoff platform accelerates 2.5D/3D mult ...

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