Synopsys (NASDAQ:SNPS) Posts Earnings Results, Beats Expectations By $0.20 EPS

Synopsys (NASDAQ:SNPS) released its quarterly earnings results on Wednesday. The semiconductor company reported $3.35 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.15 by $0.20, FiscalAI reports. Synopsys had a net margin of 13.76% and a return on equity of 6.83%. The business had revenue of $2.28 billion for the quarter, compared to analyst estimates of $2.25 billion. During the same quarter in the previous year, the business earned $3.67 earnings per share. The firm’s revenue was up 41.9% compared to the same quarter last year. Synopsys updated its FY 2026 guidance to 14.720-14.800 EPS and its Q3 2026 guidance to 3.630-3.690 EPS.

Here are the key takeaways from Synopsys’ conference call:

• Synopsys reported a strong Q2 FY2026, with revenue of $2.276 billion, non-GAAP operating margin of 39.5%, and non-GAAP EPS of $3.35, all above guidance. Management also raised full-year revenue, margin, EPS, and free cash flow guidance.
• AI-related demand continues to drive the business, with strength across EDA, hardware-assisted verification, IP, and system-level simulation. Management said AI is increasing chip complexity and expanding opportunities across the full “silicon to systems” portfolio.
• The Design IP business appears to be recovering after hitting a Q1 bottom, with 12% sequential growth in Q2 and management expecting continued quarter-over-quarter improvement in the second half. Synopsys also highlighted stronger traction in higher-value, more customized IP deals, especially with hyperscalers.
• Synopsys said its AI-enabled product roadmap is gaining traction, including agentic AI and Multiphysics Fusion. Early customer trials point to meaningful productivity gains, and commercial ramp for Multiphysics Fusion is expected in the second half of 2026.
• The company continues to realize benefits from the Ansys integration, including cost synergies and broader cross-sell opportunities. Management said it expects to be about halfway through committed synergies by fiscal year-end and sees additional margin and revenue opportunities ahead.

Synopsys Stock Performance

SNPS stock opened at $525.92 on Thursday. The company has a quick ratio of 1.26, a current ratio of 1.36 and a debt-to-equity ratio of 0.33. The company has a market capitalization of $100.75 billion, a price-to-earnings ratio of 81.66, a P/E/G ratio of 4.38 and a beta of 1.25. Synopsys has a 12 month low of $376.18 and a 12 month high of $651.73. The firm has a 50 day moving average of $457.56 and a two-hundred day moving average of $453.69.

Key Synopsys News

Here are the key news stories impacting Synopsys this week:

• Positive Sentiment: Synopsys beat Q2 estimates with revenue of $2.276 billion and non-GAAP EPS of $3.35, while also raising its full-year revenue and EPS outlook on strong demand for AI-driven chip design software. Reuters article
• Positive Sentiment: The company said backlog remains large and highlighted momentum from AI infrastructure spending and successful progress on Ansys integration, which supports confidence in future growth. Yahoo Finance article
• Positive Sentiment: Synopsys also reached a governance agreement with activist investor Elliott, adding Jesse Cohn to the board, a move that may increase pressure for margin improvement and capital discipline. WSJ article
• Neutral Sentiment: Despite the beat-and-raise report, several market reports noted the stock slipped anyway, suggesting investors may be taking profits or waiting for more clarity on valuation and merger integration before rewarding the results. Barron’s article
• Negative Sentiment: The market’s muted reaction implies concern that much of the AI growth and guidance strength may already be priced into SNPS after a sharp run-up, limiting upside despite the solid quarter. Yahoo Finance article

Institutional Trading of Synopsys

Several large investors have recently added to or reduced their stakes in the business. Sunbelt Securities Inc. grew its position in Synopsys by 1,250.0% in the fourth quarter. Sunbelt Securities Inc. now owns 243 shares of the semiconductor company’s stock worth $114,000 after acquiring an additional 225 shares in the last quarter. Axxcess Wealth Management LLC grew its position in Synopsys by 39.4% in the fourth quarter. Axxcess Wealth Management LLC now owns 4,581 shares of the semiconductor company’s stock worth $2,152,000 after acquiring an additional 1,295 shares in the last quarter. Corient Private Wealth LLC grew its position in Synopsys by 31.0% in the fourth quarter. Corient Private Wealth LLC now owns 35,155 shares of the semiconductor company’s stock worth $16,513,000 after acquiring an additional 8,322 shares in the last quarter. Mercer Global Advisors Inc. ADV grew its position in Synopsys by 1.3% in the fourth quarter. Mercer Global Advisors Inc. ADV now owns 7,534 shares of the semiconductor company’s stock worth $3,539,000 after acquiring an additional 96 shares in the last quarter. Finally, Vident Advisory LLC grew its position in Synopsys by 35.6% in the fourth quarter. Vident Advisory LLC now owns 36,721 shares of the semiconductor company’s stock worth $17,249,000 after acquiring an additional 9,633 shares in the last quarter. 85.47% of the stock is owned by institutional investors.

Analyst Upgrades and Downgrades

SNPS has been the topic of a number of research analyst reports. Wells Fargo & Company boosted their price objective on shares of Synopsys from $450.00 to $505.00 and gave the company an “equal weight” rating in a research report on Thursday, May 14th. The Goldman Sachs Group set a $600.00 price objective on shares of Synopsys and gave the company a “buy” rating in a research report on Wednesday, February 25th. HSBC downgraded shares of Synopsys from a “buy” rating to a “hold” rating and set a $455.00 price objective on the stock. in a research report on Friday, February 20th. Piper Sandler lowered their price objective on shares of Synopsys from $520.00 to $430.00 and set a “neutral” rating on the stock in a research report on Thursday, February 26th. Finally, Needham & Company LLC reaffirmed a “buy” rating on shares of Synopsys in a research report on Thursday, February 26th. Eight research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock presently has an average rating of “Hold” and an average target price of $544.88.

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.