Synopsys Lifts Full-Year Revenue Outlook to $9.715 Billion
The chip-design software maker posted third-quarter revenue of $2.477 billion and non-GAAP earnings of $3.91 a share, above the high end of its prior range.
Synopsys, Inc. (SNPS), the semiconductor engineering-software company, raised its full-year revenue outlook to $9.715 billion at the midpoint after third-quarter results that the company said exceeded the high end of its prior guidance.
Revenue for the three months ended July 31, 2026, was $2.477 billion, compared with $1.740 billion a year earlier. That year-over-year increase of 42% matched the 42% pace recorded in the second quarter, after 66% growth in the first quarter. Sequentially, the quarter reversed a dip: revenue had been $2.276 billion in the second quarter after $2.409 billion in the first.
GAAP earnings were $545.8 million, or $2.84 a share, versus $242.5 million, or $1.50 a share, a year earlier. Non-GAAP earnings were $752.5 million, or $3.91 a share, versus $548.9 million, or $3.39 a share. Both non-GAAP and GAAP earnings per share recovered from the second quarter, when non-GAAP EPS was $3.35 and GAAP EPS was $0.09.
President and CEO Sassine Ghazi said AI is driving complexity and demand for silicon IP and engineering solutions for next-generation AI compute, infrastructure and physical AI systems, and that one year after the Ansys acquisition the company is executing with focus. Chief Financial Officer Shelagh Glaser said results were driven by broad-based strength across the business, led by EDA, a strong quarter from Ansys, and a return to year-over-year growth in design IP.
Design Automation, which includes EDA, Ansys, system integration and manufacturing software, generated $2.003 billion, or 80.9% of revenue, versus $1.312 billion and 75.4% a year earlier. Adjusted operating income in the segment was $905.0 million and adjusted operating margin was 45.2%, up from 44.5% a year earlier.
Design IP, covering logic libraries, embedded memories, wired and memory interface IP and security IP, generated $473.8 million, or 19.1% of revenue, versus $427.6 million and 24.6% a year earlier. Adjusted operating income was $125.4 million and adjusted operating margin was 26.5%, up from 20.1% a year earlier.
Non-GAAP operating margin for the quarter was 41.6%. Glaser said the company is raising full-year revenue, non-GAAP operating margin, EPS and cash-flow guidance given strong performance and expectations for double-digit growth in EDA. Full-year non-GAAP EPS guidance was raised to $15.07 at the midpoint from $14.76 after the second quarter. The full-year revenue midpoint had been $9.665 billion after the second quarter and $9.61 billion after the first. Fiscal 2026 revenue targets include $2.98 billion of expected Ansys revenue and reflect about $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses and $40 million related to the recently completed Processor IP Solutions divestiture.
For the three months ending October 31, 2026, Synopsys targets revenue of $2.530 billion to $2.580 billion, implying sequential growth from $2.477 billion. Non-GAAP EPS for that quarter is targeted at $4.10 to $4.16 a share. Full-year non-GAAP EPS is targeted at $15.04 to $15.10 a share, with a non-GAAP operating margin midpoint of about 41.5%. Full-year operating cash flow is targeted at about $2.80 billion and free cash flow at about $2.60 billion. Targets assume no further changes to export-control restrictions or current U.S. Entity List restrictions.
Cash and cash equivalents were $3.606 billion at July 31, 2026. Long-term debt was $9.017 billion.