Synopsys (NASDAQ:SNPS) Posts Quarterly Earnings Results, Beats Expectations By $0.24 EPS

Synopsys (NASDAQ:SNPS) issued its quarterly earnings data on Wednesday. The semiconductor company reported $3.91 EPS for the quarter, beating analysts’ consensus estimates of $3.67 by $0.24, FiscalAI reports. The firm had revenue of $2.48 billion for the quarter, compared to analysts’ expectations of $2.44 billion. Synopsys had a net margin of 8.91% and a return on equity of 5.83%. The firm’s revenue was up 42.4% on a year-over-year basis. During the same period in the prior year, the company earned $3.39 EPS. Synopsys updated its Q4 2026 guidance to 4.100-4.160 EPS and its FY 2026 guidance to 15.040-15.100 EPS.

Here are the key takeaways from Synopsys’ conference call:

• Synopsys raised full-year guidance after Q3 revenue of $2.477 billion, non-GAAP operating margin of 41.6%, and EPS of $3.91 all exceeded the high end of its targets. Full-year revenue is now expected at $9.69 billion–$9.74 billion, with non-GAAP EPS of $15.04–$15.10.
• EDA revenue grew 8.5% year over year despite a difficult comparison, supported by strong software demand and record hardware-assisted verification revenue. Management expects organic EDA growth to accelerate to double digits in Q4 and for the full fiscal year.
• Ansys continued to perform strongly one year after the acquisition, while Synopsys said cost synergies are ahead of schedule and term loans have been repaid earlier than planned. The companies launched Multiphysics Fusion, with early customers reporting up to 10x faster design closure, although meaningful revenue contribution is not expected until 2027.
• Design IP returned to growth, rising approximately 11% year over year, driven by AI infrastructure demand. Synopsys highlighted more than 100 cumulative die-to-die design wins, 25 LPDDR6 wins year to date, and a developing “Factory Two” strategy focused on customized IP, royalties, and custom silicon partnerships.
• Management views agentic AI as complementary to, rather than disruptive to, commercial EDA because autonomous workflows require Synopsys’s sign-off tools and underlying design infrastructure. More than 30 customer engagements are underway, with potential upside from increased software consumption and new subscription or usage-based pricing models.

Synopsys Trading Up 0.3%

Shares of NASDAQ SNPS traded up $1.21 during midday trading on Wednesday, reaching $410.00. 2,588,088 shares of the stock were exchanged, compared to its average volume of 1,986,989. The stock has a 50 day moving average price of $417.74 and a 200-day moving average price of $439.85. The company has a current ratio of 1.43, a quick ratio of 1.32 and a debt-to-equity ratio of 0.33. The company has a market capitalization of $78.51 billion, a P/E ratio of 94.91, a P/E/G ratio of 2.32 and a beta of 1.23. Synopsys has a 52-week low of $366.00 and a 52-week high of $615.79.

Key Stories Impacting Synopsys

Here are the key news stories impacting Synopsys this week:

• Positive Sentiment: Fiscal Q3 revenue rose 42% year over year to $2.477 billion, exceeding the $2.44 billion consensus estimate. Non-GAAP EPS was $3.91, ahead of the $3.67 estimate and $3.39 reported a year earlier. Synopsys Q3 financial results
• Positive Sentiment: Synopsys raised fiscal 2026 guidance to a revenue midpoint of $9.715 billion and non-GAAP EPS midpoint of $15.07. Fourth-quarter EPS guidance of $4.10–$4.16 also exceeds the $3.78 analyst consensus. Synopsys raises annual forecasts
• Positive Sentiment: Management cited continued AI-driven demand for chip-design software, with particular strength in Design Automation, which generated $2.003 billion of quarterly revenue. The outlook suggests AI infrastructure and semiconductor investment remain important growth drivers. Synopsys Q3 key metrics
• Positive Sentiment: Nvidia’s reported $2 billion investment in Synopsys reinforces the strategic partnership around AI-powered engineering and simulation, potentially expanding Synopsys’ role in next-generation chip development. Nvidia’s Synopsys investment
• Neutral Sentiment: Fourth-quarter revenue guidance of $2.53–$2.58 billion is broadly in line with the approximately $2.6 billion consensus, so the earnings beat was driven more by profitability than by a major revenue outlook increase. Synopsys Q3 results details
• Negative Sentiment: The stock’s muted reaction reflects valuation and expectation risk: Synopsys trades at a high earnings multiple, while its shares remain below their 50-day and 200-day moving averages, leaving investors demanding continued upside surprises.
• Negative Sentiment: Recent disclosed insider activity showed sales by the CEO and CFO, with no reported insider purchases in the period cited. While not directly tied to the earnings release, this may add modest sentiment pressure. Synopsys insider activity and results

Analyst Ratings Changes

Several analysts have recently commented on SNPS shares. Robert W. Baird set a $558.00 price target on shares of Synopsys in a research report on Thursday, May 28th. KeyCorp restated an “overweight” rating on shares of Synopsys in a research report on Wednesday, August 19th. Stifel Nicolaus upped their target price on Synopsys from $550.00 to $600.00 and gave the company a “buy” rating in a research note on Thursday, May 28th. Weiss Ratings reiterated a “hold (c-)” rating on shares of Synopsys in a report on Monday, June 8th. Finally, Needham & Company LLC reissued a “buy” rating and set a $580.00 price target on shares of Synopsys in a research report on Thursday, May 28th. Eleven equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $563.59.

Insider Buying and Selling

In other news, CFO Shelagh Glaser sold 3,394 shares of the stock in a transaction dated Friday, June 12th. The shares were sold at an average price of $450.02, for a total transaction of $1,527,367.88. Following the transaction, the chief financial officer directly owned 14,358 shares in the company, valued at $6,461,387.16. This represents a 19.12% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Sassine Ghazi sold 14,603 shares of the stock in a transaction on Monday, June 15th. The stock was sold at an average price of $458.96, for a total value of $6,702,192.88. Following the completion of the transaction, the chief executive officer directly owned 75,020 shares in the company, valued at $34,431,179.20. This trade represents a 16.29% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. 0.56% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Synopsys

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