Results Summary
Quarterly revenue of $2.276 billion, above prior guidance; quarterly GAAP earnings per diluted share (EPS) of $0.09, and non-GAAP EPS of $3.35
Raising expectations for full-year total revenue to $9.665 billion at the midpoint, driven by strong performance across the business and an EPS-neutral Ansys channel-related accounting impact, partly offset by the impending close of the Processor IP Solutions business
Raising full-year non-GAAP EPS guidance to $14.76 at the midpoint on expanded operating margin driven by strong cost discipline and accelerating synergies
SUNNYVALE, Calif., May 27, 2026 /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its second quarter of fiscal year 2026. Revenue for the second quarter of fiscal year 2026 was $2.276 billion, compared to $1.604 billion for the second quarter of fiscal year 2025.
"Synopsys delivered a strong second quarter with solid execution and strength across the business," said Sassine Ghazi, Synopsys president and CEO. "AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power - driving demand across our portfolio. Our momentum, leadership roadmap, and deep customer engagements are a strong foundation for sustained growth and margin expansion as we solve our customers' toughest engineering challenges."
"Second quarter revenue and non-GAAP EPS exceeded guidance. Our continued focus on execution and financial discipline sets us up for a strong second half," said Shelagh Glaser, CFO of Synopsys. "We are raising our targets for revenue, operating margin, EPS, and free cash flow for the year, as we drive greater efficiency across the business."
The company plans to host an Investor Day on Sept. 30, during which management will provide additional detail regarding the company's long-term financial targets and strategy to capitalize on its sizable opportunity as the leader in engineering solutions from silicon to systems.
GAAP ResultsOn a U.S. generally accepted accounting principles (GAAP) basis, net income for the second quarter of fiscal year 2026 was $17.1 million, or $0.09 per diluted share, compared to $349.2 million, or $2.24 per diluted share, for the second quarter of fiscal year 2025.
Non-GAAP ResultsOn a non-GAAP basis, net income for the second quarter of fiscal year 2026 was $643.7 million, or $3.35 per diluted share, compared to non-GAAP net income of $572.7 million, or $3.67 per diluted share, for the second quarter of fiscal year 2025.
For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Business Segments Synopsys reports revenue and operating income in two segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, Ansys products, system integration products and services, digital, custom and field programmable gate array IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors.
Financial TargetsSynopsys also provided its consolidated financial targets for the third quarter and full fiscal year 2026. These targets assume no further changes to export control restrictions or the current U.S. government "Entity List" restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see "Forward-Looking Statements" below.
Third Quarter and Full Fiscal Year 2026 Financial Targets
(in millions, except per share amounts)
Range for Three Months Ending
Range for Fiscal Year Ending
July 31, 2026
October 31, 2026
Low
High
Low
High
Revenue (1)
$ 2,410
$ 2,460
$ 9,625
$ 9,705
GAAP Expenses
$ 2,075
$ 2,125
$ 8,469
$ 8,599
Non-GAAP Expenses
$ 1,440
$ 1,470
$ 5,675
$ 5,725
Non-GAAP Interest and Other Income (Expense), net
$ (121)
$ (117)
$ (495)
$ (485)
Non-GAAP Tax Rate
18 %
18 %
18 %
18 %
Outstanding Shares (fully diluted)
192
194
192
194
GAAP EPS
$ 0.84
$ 0.98
$ 2.49
$ 2.91
Non-GAAP EPS
$ 3.63
$ 3.69
$ 14.72
$ 14.80
Operating Cash Flow
~$2,300
Free Cash Flow (2)
~$2,000
Capital Expenditures
~$300
(1) Fiscal year 2026 revenue includes $2.96 billion of expected Ansys revenue (including $60 million related to an accounting impact for Ansys channel partners), and reflects the impact of approximately $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses, and $40 million related to the expected
divestiture of the Processor IP Solutions business.
(2) Free cash flow is calculated as cash provided from operating activities less capital expenditures.
Fiscal Year 2026 Revenue Target Raise Breakdown
(in millions)
For Fiscal Year Ending
October 31, 2026
Prior Guidance Mid-Point
Business Performance
Ansys Channel
Accounting Impact
Processor IP SolutionsDivestiture
New Guidance
Mid-Point
Revenue
$9,610
+ $35
+ $60
($40)
$9,665
For a reconciliation of Synopsys' third quarter and fiscal year 2026 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAP basis, a discussion of the financial targets that we are not able to reconcile without unreasonable efforts and a discussion of why management believes such measurements provide useful information to investors, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Earnings Call Open to InvestorsSynopsys will hold a conference call for financial analysts and investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be available in the investor relations portion of Synopsys' corporate website at www.synopsys.com. Synopsys uses its website as a tool to disclose important information about Synopsys and comply with its disclosure obligations under Regulation Fair Disclosure. A webcast replay will also be available on the corporate website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the third quarter of fiscal year 2026.
Availability of Final Financial StatementsSynopsys will include final financial statements for the second quarter of fiscal year 2026 in its quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission (SEC) and available at www.sec.gov on or before June 9, 2026.
Continuing Operations On Sept. 30, 2024, Synopsys completed the sale of its Software Integrity business. Unless otherwise noted, Synopsys' Software Integrity business has been presented as a discontinued operation in the Synopsys' consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis.
Reconciliation of Second Quarter Fiscal Year 2026 ResultsThe following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income, earnings per diluted share, and tax rate for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Second Quarter Fiscal Year 2026 Results
(unaudited and in thousands, except per share amounts)
Three Months Ended
Six Months Ended
April 30,
April 30,
2026
2025
2026
2025
GAAP net income from continuing operations attributed to Synopsys
$ 17,105
$ 349,232
$ 82,063
$ 644,915
Adjustments:
Amortization of acquired intangible assets
403,631
11,656
807,866
24,252
Stock-based compensation
222,303
201,723
481,027
388,002
Restructuring charges
115,894
—
234,176
—
Acquisition/divestiture related items
23,649
69,514
39,241
144,343
Loss on sale of strategic investments
—
2,435
—
2,435
Tax adjustments
(138,848)
(61,862)
(282,170)
(158,076)
Non-GAAP net income from continuing operations attributed to Synopsys
$ 643,734
$ 572,698
$ 1,362,203
$ 1,045,871
Three Months Ended
Six Months Ended
April 30,
April 30,
2026
2025
2026
2025
GAAP net income from continuing operations per diluted share attributed to Synopsys
$ 0.09
$ 2.24
$ 0.43
$ 4.13
Adjustments:
Amortization of acquired intangible assets
2.10
0.07
4.22
0.16
Stock-based compensation
1.16
1.29
2.51
2.48
Restructuring charges
0.60
—
1.22
—
Acquisition/divestiture related items
0.12
0.45
0.20
0.92
Loss on sale of strategic investments
—
0.02
—
0.02
Tax adjustments
(0.72)
(0.40)
(1.47)
(1.02)
Non-GAAP net income from continuing operations per diluted share attributed to Synopsys
$ 3.35
$ 3.67
$ 7.11
$ 6.69
Shares used in computing net income per diluted share amounts:
192,144
156,088
191,580
156,218
GAAP to Non-GAAP Tax Rate Reconciliation
(unaudited)
Three Months Ended
Six Months Ended
April 30, 2026
April 30, 2026
GAAP effective tax rate
12.5 %
17.0 %
Stock-based compensation
9.7 %
4.7 %
Restructuring charges
(2.1) %
(2.1) %
Income tax adjustments (1)
(2.1) %
(1.6) %
Non-GAAP effective tax rate
18.0 %
18.0 %
(1) The tax adjustments are primarily due to differences in the tax rate effect of certain deductions, such as the deduction for foreign-derived intangible income and credits.
Reconciliation of 2026 TargetsThe following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP targets for the periods indicated below.
GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2026 Targets
(in thousands, except per share amounts)
Range for Three Months Ending
July 31, 2026
Low
High
Target GAAP expenses
$ 2,075,000
$ 2,125,000
Adjustments:
Amortization of acquired intangible assets
(400,000)
(405,000)
Stock-based compensation
(230,000)
(240,000)
Restructuring charges
(5,000)
(10,000)
Target non-GAAP expenses
$ 1,440,000
$ 1,470,000
Range for Three Months Ending
July 31, 2026
Low
High
Target GAAP earnings per diluted share attributed to Synopsys
$ 0.84
$ 0.98
Adjustments:
Amortization of acquired intangible assets
2.10
2.07
Stock-based compensation
1.24
1.19
Restructuring charges
0.05
0.03
Tax adjustments
(0.60)
(0.58)
Target non-GAAP earnings per diluted share attributed to Synopsys
$ 3.63
$ 3.69
Shares used in non-GAAP calculation (midpoint of target range)
193,000
193,000
GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2026 Targets
