Synopsys announced its financial results for the fourth fiscal quarter.
According to Zhitong Finance APP, Synopsys, a provider of chip design software, $Synopsys (SNPS.US)$ reported its fourth-quarter financial results. Q4 revenue reached USD 2.26 billion, a year-over-year increase of 38%, surpassing the expected USD 2.24 billion. Adjusted earnings per share were USD 2.90, compared to the consensus estimate of USD 2.88.
Of this total, the Design Automation business contributed $1.85 billion, while the Design Intellectual Property business accounted for $407 million. Adjusted operating profit grew by 36% year-over-year to $822.6 million, exceeding the anticipated $803 million.
Looking ahead, the company forecasts fiscal year 2026 revenue between $9.56 billion and $9.66 billion, versus analysts' expectations of $9.63 billion. For the first quarter, Synopsys expects revenue in the range of $2.37 billion to $2.42 billion, higher than the consensus estimate of $2.36 billion. The company also projects adjusted earnings per share for the first quarter to be between $3.52 and $3.58, above the expected $3.46.
The California-based provider of electronic design automation software and semiconductor intellectual property products achieved record annual revenue of $7.1 billion in fiscal year 2025, an increase of approximately 15% from $6.1 billion in fiscal year 2024.
Shares of Synopsys surged over 9% in after-hours trading and are currently up nearly 3%.
Synopsys Chief Financial Officer Sheraad Glazer stated that the company's backlog at year-end amounted to $11.4 billion: "We expect to set another revenue record in 2026 while fully integrating Ansys, further improving operational efficiency, and leveraging our expanding opportunities."
Synopsys’ software is used by semiconductor companies to design and verify chips. The company has benefited from a surge in investments in artificial intelligence and advanced computing, fields that require increasingly complex chip architectures. It has also gained from its partnership with $NVIDIA (NVDA.US)$ 、 $Intel (INTC.US)$ and $Qualcomm (QCOM.US)$ NVIDIA.
Earlier this month, Synopsys announced that NVIDIA had acquired a stake in the company for $2 billion, with both parties committing to jointly develop tools for product development. Jensen Huang, CEO of NVIDIA, stated in an interview on December 1: "This will extend the compute market into the design and engineering fields for the first time."
Last month, Synopsys announced plans to cut approximately 10% of its workforce, stating that the move would allow it to reinvest in growth areas such as AI-driven design and system-level solutions. The company completed its acquisition of simulation software maker Ansys in July, which contributed $667.7 million in revenue during the fourth quarter. The deal, announced in early 2023, faced stringent antitrust scrutiny in multiple markets, including the UK.
Competing in the electronic design automation market against Cadence Design Systems and Siemens, the company anticipates growth as chip manufacturers race to develop processors for artificial intelligence and high-performance computing.
Following the earnings release, Mizuho Securities described Synopsys' fourth-quarter results for fiscal year 2025 as "better than expected" and noted that its guidance for fiscal year 2026 aligns with market expectations. Mizuho pointed out that consensus estimates may have factored in the impact of asset divestitures, meaning that if adjusted based on comparable metrics, the company’s guidance has already met or exceeded market expectations. Mizuho emphasized that Synopsys' “robust backlog of $11.4 billion” is a positive indicator for future performance. Meanwhile, Goldman Sachs reiterated its 'Buy' rating on Synopsys and assigned a price target of $560.
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Editor/jayden