Synopsys (NASDAQ:SNPS) Posts Quarterly Earnings Results, Beats Expectations By $0.24 EPS

Synopsys (NASDAQ:SNPS) issued its earnings results on Wednesday. The semiconductor company reported $3.91 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.67 by $0.24, FiscalAI reports. The company had revenue of $2.48 billion for the quarter, compared to the consensus estimate of $2.44 billion. Synopsys had a return on equity of 6.31% and a net margin of 11.43%.The firm’s quarterly revenue was up 42.4% on a year-over-year basis. During the same quarter last year, the company earned $3.39 EPS. Synopsys updated its Q4 2026 guidance to 4.100-4.160 EPS and its FY 2026 guidance to 15.040-15.100 EPS.

Here are the key takeaways from Synopsys’ conference call:

• Synopsys raised full-year guidance after Q3 revenue of $2.477 billion, non-GAAP operating margin of 41.6%, and EPS of $3.91 all exceeded the high end of its targets. Full-year revenue is now expected at $9.69 billion–$9.74 billion, with non-GAAP EPS of $15.04–$15.10.
• EDA revenue grew 8.5% year over year despite a difficult comparison, supported by strong software demand and record hardware-assisted verification revenue. Management expects organic EDA growth to accelerate to double digits in Q4 and for the full fiscal year.
• Ansys continued to perform strongly one year after the acquisition, while Synopsys said cost synergies are ahead of schedule and term loans have been repaid earlier than planned. The companies launched Multiphysics Fusion, with early customers reporting up to 10x faster design closure, although meaningful revenue contribution is not expected until 2027.
• Design IP returned to growth, rising approximately 11% year over year, driven by AI infrastructure demand. Synopsys highlighted more than 100 cumulative die-to-die design wins, 25 LPDDR6 wins year to date, and a developing “Factory Two” strategy focused on customized IP, royalties, and custom silicon partnerships.
• Management views agentic AI as complementary to, rather than disruptive to, commercial EDA because autonomous workflows require Synopsys’s sign-off tools and underlying design infrastructure. More than 30 customer engagements are underway, with potential upside from increased software consumption and new subscription or usage-based pricing models.

Synopsys Trading Up 13.4%

Shares of NASDAQ SNPS opened at $464.89 on Friday. Synopsys has a 1-year low of $366.00 and a 1-year high of $615.79. The company has a debt-to-equity ratio of 0.33, a current ratio of 1.43 and a quick ratio of 1.32. The business’s 50 day moving average is $416.90 and its two-hundred day moving average is $440.11. The stock has a market capitalization of $89.02 billion, a P/E ratio of 82.14, a PEG ratio of 2.41 and a beta of 1.23.

Wall Street Analysts Forecast Growth

Several research firms have weighed in on SNPS. Citigroup upped their price target on Synopsys from $600.00 to $610.00 and gave the stock a “buy” rating in a research note on Thursday, May 28th. Berenberg Bank set a $633.00 price objective on shares of Synopsys in a research report on Wednesday, May 27th. Morgan Stanley lowered their target price on shares of Synopsys from $525.00 to $500.00 and set an “equal weight” rating on the stock in a report on Wednesday, August 19th. Robert W. Baird upgraded shares of Synopsys from a “neutral” rating to an “outperform” rating and upped their target price for the stock from $558.00 to $560.00 in a research report on Thursday. Finally, Benchmark reaffirmed a “buy” rating and set a $570.00 target price on shares of Synopsys in a research note on Thursday. Twelve equities research analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, Synopsys currently has a consensus rating of “Moderate Buy” and a consensus price target of $561.28.

Key Synopsys News

Here are the key news stories impacting Synopsys this week:

• Positive Sentiment: Quarterly results exceeded expectations. Synopsys reported revenue of $2.477 billion, up 42.4% year over year, while non-GAAP EPS of $3.91 surpassed the $3.67 consensus estimate. Design Automation was the main growth driver, with additional support from Design IP and Ansys. Synopsys Posts Financial Results for Third Quarter Fiscal Year 2026
• Positive Sentiment: Management raised its outlook. The company increased fiscal 2026 revenue guidance to a midpoint of approximately $9.715 billion and non-GAAP EPS guidance to $15.07. Fourth-quarter EPS guidance of $4.10–$4.16 was also above the consensus estimate of $3.78. Synopsys raises annual forecasts on AI-driven chip design software demand
• Positive Sentiment: AI is strengthening the long-term growth narrative. Synopsys said rising chip complexity, AI infrastructure investment and customer interest in autonomous engineering workflows are accelerating EDA demand. The Ansys acquisition is also creating cross-selling and simulation opportunities, particularly for fiscal 2027. SNPS Q3 Earnings Call Highlights EDA Acceleration, Outlook Raised
• Positive Sentiment: Analyst and investor support added momentum. Goldman Sachs, Needham, Benchmark and Rosenblatt reaffirmed Buy ratings, with price targets ranging from $570 to $600. Elliott Investment Management reportedly built a multibillion-dollar position, betting Synopsys can narrow its valuation discount to peers. Synopsys Earns Buy Rating as Strong Execution and Higher 2026 Guidance Support $600 Price Target
• Neutral Sentiment: Analyst reactions were not unanimous. While several firms remain bullish, some analysts offered mixed responses to the results and outlook, suggesting expectations and valuation remain important factors for future performance. Analysts show mixed reactions after Synopsys’ Q3 results and outlook
• Negative Sentiment: Valuation and integration execution remain risks. Synopsys trades at a high earnings multiple, and investors will continue watching whether Ansys synergies, stronger cash generation and AI-related demand translate into sustainable profitability. Recent insider transactions cited in one report were sales rather than purchases.

Insider Activity at Synopsys

In other news, CFO Shelagh Glaser sold 3,394 shares of the business’s stock in a transaction that occurred on Friday, June 12th. The stock was sold at an average price of $450.02, for a total transaction of $1,527,367.88. Following the transaction, the chief financial officer owned 14,358 shares of the company’s stock, valued at approximately $6,461,387.16. The trade was a 19.12% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sassine Ghazi sold 14,603 shares of the stock in a transaction on Monday, June 15th. The shares were sold at an average price of $458.96, for a total value of $6,702,192.88. Following the sale, the chief executive officer owned 75,020 shares in the company, valued at $34,431,179.20. The trade was a 16.29% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. 0.56% of the stock is owned by company insiders.

Institutional Trading of Synopsys

A number of institutional investors have recently bought and sold shares of the stock. Caitong International Asset Management Co. Ltd bought a new position in Synopsys during the fourth quarter valued at $28,000. Atlas Capital Advisors Inc. bought a new stake in shares of Synopsys in the 4th quarter worth about $32,000. Kemnay Advisory Services Inc. bought a new stake in shares of Synopsys in the 4th quarter worth about $35,000. Greenline Wealth Management LLC bought a new stake in shares of Synopsys in the 4th quarter worth about $37,000. Finally, WealthCollab LLC boosted its stake in shares of Synopsys by 110.8% during the 3rd quarter. WealthCollab LLC now owns 78 shares of the semiconductor company’s stock worth $38,000 after purchasing an additional 41 shares during the period. 85.47% of the stock is currently owned by institutional investors.

Synopsys Company Profile

Synopsys, Inc is a leading provider of electronic design automation (EDA) software and semiconductor intellectual property (IP) used to design, verify and manufacture integrated circuits and complex systems-on-chip (SoCs). Its product portfolio spans tools and technologies for front?end design and synthesis, simulation and verification, physical implementation and signoff, and design-for-manufacturability, enabling chip designers to move from architecture through tape?out.

In addition to core EDA offerings, Synopsys supplies a broad set of semiconductor IP building blocks — such as interface, memory and analog/mixed-signal cores — that customers integrate into SoCs to accelerate development.