Synopsys (NASDAQ:SNPS) Announces Quarterly Earnings Results

Synopsys (NASDAQ:SNPS) announced its quarterly earnings data on Wednesday. The semiconductor company reported $3.77 earnings per share for the quarter, topping analysts’ consensus estimates of $3.57 by $0.20, FiscalAI reports. The firm had revenue of $2.41 billion during the quarter, compared to analyst estimates of $2.39 billion. Synopsys had a net margin of 18.89% and a return on equity of 7.89%. The business’s quarterly revenue was up 65.6% on a year-over-year basis. During the same period in the previous year, the business posted $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 Stock Up 1.9%

SNPS traded up $8.45 during trading on Wednesday, hitting $449.17. 2,903,310 shares of the company’s stock traded hands, compared to its average volume of 2,393,293. The stock has a market capitalization of $86.04 billion, a price-to-earnings ratio of 56.22, a PEG ratio of 3.67 and a beta of 1.12. The company’s 50 day simple moving average is $472.93 and its two-hundred day simple moving average is $479.23. Synopsys has a 12-month low of $365.74 and a 12-month high of $651.73. The company has a current ratio of 1.62, a quick ratio of 1.52 and a debt-to-equity ratio of 0.48.

Analysts Set New Price Targets

Several research firms recently issued reports on SNPS. Rosenblatt Securities reissued a “buy” rating and issued a $560.00 target price on shares of Synopsys in a research note on Friday, February 20th. JPMorgan Chase & Co. boosted their target price on Synopsys from $600.00 to $650.00 and gave the company an “overweight” rating in a research note on Thursday, December 11th. Zacks Research upgraded Synopsys from a “strong sell” rating to a “hold” rating in a report on Monday, November 10th. Citigroup began coverage on shares of Synopsys in a report on Monday, November 24th. They issued a “buy” rating and a $580.00 price target on the stock. Finally, KeyCorp boosted their price objective on shares of Synopsys from $575.00 to $600.00 and gave the company an “overweight” rating in a research report on Thursday, December 11th. Nine research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of “Hold” and an average target price of $547.00.

Trending Headlines about Synopsys

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 Transactions at Synopsys

In related news, CFO Shelagh Glaser sold 3,657 shares of the firm’s stock in a transaction that occurred on Friday, December 19th. The shares were sold at an average price of $460.77, for a total value of $1,685,035.89. Following the sale, the chief financial officer owned 17,842 shares in the company, valued at approximately $8,221,058.34. This trade represents a 17.01% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, insider Janet Lee sold 250 shares of the stock in a transaction dated Monday, January 12th. The shares were sold at an average price of $530.00, for a total value of $132,500.00. Following the completion of the transaction, the insider directly owned 11,959 shares in the company, valued at approximately $6,338,270. This represents a 2.05% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders sold 4,157 shares of company stock valued at $1,945,036. 0.62% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the company. State Street Corp lifted its stake in shares of Synopsys by 20.6% during the 3rd quarter. State Street Corp now owns 8,760,358 shares of the semiconductor company’s stock worth $4,322,273,000 after acquiring an additional 1,493,912 shares during the last quarter. Farallon Capital Management LLC purchased a new stake in Synopsys in the fourth quarter worth $469,344,000. Primecap Management Co. CA increased its stake in Synopsys by 743.6% in the fourth quarter. Primecap Management Co. CA now owns 734,800 shares of the semiconductor company’s stock worth $345,150,000 after purchasing an additional 647,700 shares during the period. Amundi lifted its position in shares of Synopsys by 53.9% during the fourth quarter. Amundi now owns 1,700,906 shares of the semiconductor company’s stock worth $798,950,000 after purchasing an additional 596,018 shares during the last quarter. Finally, Marshall Wace LLP boosted its stake in shares of Synopsys by 184.2% during the fourth quarter. Marshall Wace LLP now owns 755,948 shares of the semiconductor company’s stock valued at $355,084,000 after purchasing an additional 489,952 shares during the period. Hedge funds and other institutional investors own 85.47% of the company’s stock.

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.