Synopsys (NASDAQ:SNPS) Issues Earnings Results

Synopsys (NASDAQ:SNPS) posted its quarterly earnings results on Wednesday. The semiconductor company reported $3.77 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.57 by $0.20, FiscalAI reports. The company had revenue of $2.41 billion during the quarter, compared to the consensus estimate of $2.39 billion. Synopsys had a net margin of 18.89% and a return on equity of 7.89%. The company’s revenue for the quarter was up 65.6% on a year-over-year basis. During the same period last year, the firm earned $3.03 EPS. Synopsys updated its FY 2026 guidance to 14.380-14.460 EPS and its Q2 2026 guidance to 3.110-3.170 EPS.

Here are the key takeaways from Synopsys’ conference call:

• Q1 outperformance: Revenue of $2.41B came in at the high end of guidance, non-GAAP EPS was $3.77 (above expectations), non-GAAP operating margin was 42.1%, backlog ended at $11.3B, and free cash flow was ~$822M — signaling strong execution and cash generation.
• Reiterated FY26 guidance with slight EPS raise and share buyback: Management reiterated full-year revenue and margin targets, raised non-GAAP EPS guidance by $0.06 to $14.38–$14.46, and the board authorized up to $2B in share repurchases while prioritizing investment and opportunistic buybacks.
• Ansys integration progressing: Ansys contributed ~$886M in Q1, cross-selling is underway, first wave of joint Synopsys+Ansys solutions is rolling out in H1 with monetization expected in FY27, and management is pursuing $400M run-rate revenue and $400M run-rate cost synergies over the coming years.
• Design IP is a transitional area with timing risk: Design IP revenue was $407M (down ~6% YoY), FY26 is described as transitional with muted growth and compressed IP margins, and management acknowledges schedule prioritization issues that pushed some IP delivery and monetization into the back half/Q4.
• China remains a headwind: While China grew ~21% overall due to Ansys inclusion, Synopsys-excluding-Ansys showed slight China revenue decline and management cited ongoing geopolitical/technology restrictions and increased domestic competition as pressures on demand and IP monetization in China.

Synopsys Trading Up 1.9%

Shares of NASDAQ SNPS traded up $8.45 during midday trading on Wednesday, reaching $449.17. 2,903,310 shares of the stock were exchanged, compared to its average volume of 2,393,293. The stock has a 50 day moving average price of $472.93 and a 200-day moving average price of $479.23. The company has a current ratio of 1.62, a quick ratio of 1.52 and a debt-to-equity ratio of 0.48. The company has a market capitalization of $86.04 billion, a P/E ratio of 56.22, a P/E/G ratio of 3.67 and a beta of 1.12. Synopsys has a 52-week low of $365.74 and a 52-week high of $651.73.

More Synopsys News

Here are the key news stories impacting Synopsys this week:

• Positive Sentiment: Q1 beat and strong results — Synopsys reported non?GAAP EPS of $3.77 and revenue of $2.409B, topping estimates and showing strong year?over?year growth; the quarter came at the high end of prior guidance. PR Newswire: Q1 Results
• Positive Sentiment: Very bullish guidance — management raised FY26 EPS guidance to $14.38–$14.46 and Q2 EPS guidance to $3.11–$3.17, well above Street estimates, which is driving optimism about near?term earnings power. Guidance/Press Release
• Positive Sentiment: Capital return boost — the board authorized up to $2.0B in additional share repurchases, which supports EPS and signals confidence from management. Buyback Announcement
• Positive Sentiment: Analyst and market interest — Morgan Stanley reiterated a Buy and noted strong earnings quality and IP trajectory; unusual call?option buying also points to bullish trader positioning. TipRanks: Morgan Stanley Buy
• Neutral Sentiment: Mixed near?term revenue signal — while EPS guidance was raised, quarterly revenue guidance landed roughly in line with expectations, suggesting upside is currently EPS?driven rather than revenue surprise. Guidance Details
• Negative Sentiment: China export restrictions and muted next?quarter outlook — Reuters flagged Synopsys forecasting a more muted quarter amid China export limits and macro uncertainty, which pressured the stock earlier and could cap upside if geopolitical risk persists. Reuters: China Export Restrictions
• Negative Sentiment: Leverage concerns from M&A — commentators note Synopsys carries large incremental debt (post?deal) that investors are watching closely; higher leverage raises sensitivity to execution and could limit valuation expansion. 24/7 Wall St.: Debt Concerns

Insider Buying and Selling

In other news, CFO Shelagh Glaser sold 3,657 shares of the company’s stock in a transaction dated Friday, December 19th. The shares were sold at an average price of $460.77, for a total transaction of $1,685,035.89. Following the completion of the transaction, the chief financial officer owned 17,842 shares of the company’s stock, valued at $8,221,058.34. This represents a 17.01% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, insider Janet Lee sold 250 shares of the stock in a transaction dated Monday, January 12th. The stock was sold at an average price of $530.00, for a total transaction of $132,500.00. Following the transaction, the insider owned 11,959 shares in the company, valued at approximately $6,338,270. The trade was a 2.05% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders have sold 4,157 shares of company stock worth $1,945,036. 0.62% of the stock is owned by company insiders.

Hedge Funds Weigh In On Synopsys

Several hedge funds and other institutional investors have recently modified their holdings of the company. Caitong International Asset Management Co. Ltd acquired a new stake in Synopsys during the 4th quarter worth approximately $28,000. Atlas Capital Advisors Inc. purchased a new stake in Synopsys during the fourth quarter worth approximately $32,000. Kemnay Advisory Services Inc. acquired a new stake in shares of Synopsys in the fourth quarter worth $35,000. Greenline Wealth Management LLC purchased a new position in shares of Synopsys in the 4th quarter valued at $37,000. Finally, WealthCollab LLC lifted its holdings in shares of Synopsys by 110.8% during the 3rd quarter. WealthCollab LLC now owns 78 shares of the semiconductor company’s stock valued at $38,000 after acquiring an additional 41 shares in the last quarter. 85.47% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

Several analysts have weighed in on the company. Weiss Ratings reissued a “hold (c)” rating on shares of Synopsys in a report on Thursday, January 22nd. Rosenblatt Securities reissued a “buy” rating and issued a $560.00 price objective on shares of Synopsys in a research note on Friday, February 20th. JPMorgan Chase & Co. raised their target price on shares of Synopsys from $600.00 to $650.00 and gave the company an “overweight” rating in a report on Thursday, December 11th. Morgan Stanley restated an “overweight” rating on shares of Synopsys in a research report on Wednesday. Finally, HSBC lowered shares of Synopsys from a “buy” rating to a “hold” rating and set a $455.00 price target on the stock. in a research report on Friday, February 20th. Nine analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of “Hold” and an average price target of $547.00.

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.