Synopsys (NASDAQ:SNPS) Announces Quarterly Earnings Results, Beats Estimates By $0.20 EPS

Synopsys (NASDAQ:SNPS) released its quarterly earnings data on Wednesday. The semiconductor company reported $3.77 EPS for the quarter, topping the consensus estimate of $3.57 by $0.20, FiscalAI reports. The company had revenue of $2.41 billion for the quarter, compared to the consensus estimate of $2.39 billion. Synopsys had a return on equity of 7.89% and a net margin of 18.89%.Synopsys’s quarterly revenue was up 65.6% on a year-over-year basis. During the same period last 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 Price Performance

Shares of SNPS traded up $8.45 during mid-day trading on Wednesday, hitting $449.17. 2,903,310 shares of the company were exchanged, compared to its average volume of 2,393,293. The stock has a market cap of $86.04 billion, a price-to-earnings ratio of 56.22, a price-to-earnings-growth ratio of 3.67 and a beta of 1.12. Synopsys has a 1-year low of $365.74 and a 1-year high of $651.73. The company has a 50 day moving average of $472.93 and a 200-day moving average of $479.23. The company has a debt-to-equity ratio of 0.48, a quick ratio of 1.52 and a current ratio of 1.62.

Insider Activity at Synopsys

In related 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 sale, the chief financial officer owned 17,842 shares of the company’s stock, valued at approximately $8,221,058.34. This represents a 17.01% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Janet Lee sold 250 shares of the company’s stock in a transaction on 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 sale, the insider owned 11,959 shares of the company’s stock, valued at approximately $6,338,270. The trade was a 2.05% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 4,157 shares of company stock valued at $1,945,036 over the last quarter. 0.62% of the stock is owned by company insiders.

Hedge Funds Weigh In On Synopsys

Large investors have recently made changes to their positions in the stock. Centaurus Financial Inc. boosted its position in shares of Synopsys by 2.2% during the third quarter. Centaurus Financial Inc. now owns 1,364 shares of the semiconductor company’s stock worth $673,000 after buying an additional 30 shares during the period. Resources Management Corp CT ADV raised its holdings in shares of Synopsys by 1.2% in the 2nd quarter. Resources Management Corp CT ADV now owns 2,639 shares of the semiconductor company’s stock valued at $1,353,000 after buying an additional 31 shares during the period. Synergy Financial Group LTD lifted its stake in Synopsys by 6.2% during the 4th quarter. Synergy Financial Group LTD now owns 599 shares of the semiconductor company’s stock worth $281,000 after acquiring an additional 35 shares in the last quarter. Vise Technologies Inc. boosted its holdings in Synopsys by 1.5% during the 3rd quarter. Vise Technologies Inc. now owns 2,707 shares of the semiconductor company’s stock valued at $1,336,000 after acquiring an additional 40 shares during the period. Finally, WealthCollab LLC boosted its holdings in 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 during the period. 85.47% of the stock is currently owned by institutional investors and hedge funds.

Synopsys News Roundup

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

Wall Street Analysts Forecast Growth

Several analysts have issued reports on the company. Morgan Stanley reaffirmed an “overweight” rating on shares of Synopsys in a research report on Wednesday. Wall Street Zen raised Synopsys from a “sell” rating to a “hold” rating in a research report on Saturday, December 13th. Wells Fargo & Company lifted their target price on Synopsys from $445.00 to $500.00 and gave the company an “equal weight” rating in a research note on Thursday, December 11th. Piper Sandler lowered shares of Synopsys from an “overweight” rating to a “neutral” rating and decreased their price target for the company from $602.00 to $520.00 in a research report on Tuesday, January 13th. Finally, The Goldman Sachs Group set a $600.00 price target on shares of Synopsys and gave the company a “buy” rating in a report on Wednesday. Nine analysts have rated the stock with a Buy rating, seven have issued a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus target price 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.