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Synopsys
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NASDAQ: SNPS Technology IT 🔎 Screen
S&P 500 Nasdaq 100
$61.3B
Market Cap
56.4
P/E
2.63
PEG
3.3%
ROCE
7.2%
ROE
0.50
D/E
13.0%
OPM
+41.5%
% from 52W High
15
α RS
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Currency-adjusted total returns for SNPS including FX impact
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📈 Price History
Ratio Health
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— Average
— Poor
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About

Synopsys, Inc. provides design IP solutions in the semiconductor and electronics industries.

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📈 Growth Pattern
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⭐ Superinvestors Holding SNPS
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Manager Shares Value % of Fund Period
Jim Simons Renaissance Technologies LLC 304.2K $120.6M 0.19% Mar 2026
Cathie Wood ARK Investment Management 76.1K $30.2M 0.23% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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Good quarter Investor Presentation One-Pager? Q2 2026
Revenue
$2.276B
+42% YoY
Non-GAAP Net Income
$643.7M
+12% YoY
Non-GAAP Operating Margin
39.5%
N/A
What Went Right
  • Revenue and non-GAAP EPS exceeded guidance, driven by strong AI-driven demand across EDA, IP, and Ansys portfolios.
  • IP business bottomed in Q1 and grew 12% sequentially in Q2, with confidence in sequential improvement for the rest of the year.
  • Ansys integration is progressing well, with cost synergies on track to be halfway realized by year-end, and early Multiphysics Fusion trials showing up to 3x productivity gains.
What to Watch
  • IP revenue still declined 6% YoY, and full-year IP growth is expected to remain muted despite sequential recovery.
  • GAAP net income was low at $0.09 per share due to accelerated restructuring costs related to the 10% headcount reduction.
  • China market remains challenged due to export control restrictions, and management is not assuming any upside from that region in guidance.
Management Guidance
  • Q3 fiscal 2026 revenue guidance: $2.41B to $2.46B.
  • Q3 non-GAAP EPS guidance: $3.63 to $3.69.
  • Full-year fiscal 2026 revenue raised to $9.625B-$9.705B, non-GAAP EPS raised to $14.72-$14.80, and free cash flow raised to ~$2.0B.
Investor Lens
The thesis is strengthened after this call. Synopsys delivered a beat-and-raise quarter with solid execution across all segments, demonstrating the essential role of its portfolio in the AI supply chain. The IP recovery, accelerating cost synergies from the Ansys acquisition, and early monetization signals from GPU-accelerated EDA and agentic AI all point to sustainable growth and margin expansion, while management's confidence in raising guidance and the upcoming investor day add further conviction.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Strong beat and raise; AI tailwinds drive broad-based momentum
Revenue
Total revenue came in at $2.276B, up 42% YoY (including Ansys). Design Automation segment revenue was $1.822B (including Ansys EDA grew slightly over 8% YoY), and Design IP revenue was $454M (down 6% YoY but up 12% sequentially). Strength was broad-based with particular demand in AI-driven EDA, hardware-assisted verification, and system-level Ansys simulation.
Profitability
Non-GAAP net income was $643.7M, up 12% YoY from $572.7M, yielding non-GAAP EPS of $3.35, which exceeded the guidance range. GAAP net income was $17.1M ($0.09 per share) due to accelerated restructuring costs.
Margins
Non-GAAP operating margin was 39.5%, above guidance, driven by cost discipline and early synergy realization. Management raised full-year operating margin guidance to 41% at the midpoint, up 50 bps from prior guidance.
Balance Sheet
Cash and short-term investments stood at $2.48B, with total debt of approximately $10B. Free cash flow in Q2 was ~$575M, and full-year free cash flow guidance was raised to ~$2.0B. The company also executed a $250M accelerated share repurchase in March.
Key Risks
Management flagged continued challenges in China due to export controls, with no improvement expected. The IP business, while recovering, still faces a muted year overall. GAAP results were impacted by elevated restructuring costs as part of the Ansys synergy program.
Outlook
For Q3 fiscal 2026, revenue is expected between $2.41B and $2.46B with non-GAAP EPS of $3.63 to $3.69. Full-year revenue guidance was raised to $9.625B-$9.705B and non-GAAP EPS to $14.72-$14.80, reflecting strong first-half performance and increased confidence.
Generated by AI · Q2 2026 results · Not investment advice
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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