Synopsys(NASDAQ) SNPS

Synopsys, Inc. makes software for designing advanced computer chips. These tools help engineers build and test electronics for global companies. They also provide ready-made designs that speed up technology development.

Tools for Tiny Circuits

• Design Automation: Software for automating chip design and testing; generated $2.0 billion in revenue for the third quarter of fiscal 2026.
• Design IP: Pre-designed parts for electronics like memory, interface, and security; generated $473.8 million in revenue for the third quarter of fiscal 2026.
• Professional Services: Consulting and training that help customers resolve software defects and identify security risks.

Reshaping the Strategic Focus

• Completed the acquisition of Ansys on July 17, 2025, to add simulation and analysis capabilities.
• Divested the Processor IP business on June 1, 2026, resulting in a pre-tax gain of $425.4 million.
• Sold the Optical Solutions Group to focus resources on higher growth opportunities.
• Signed a common stock purchase agreement with NVIDIA Corporation in the first quarter of fiscal 2026.
• Initiated a reorganization plan in November 2025 to optimize the global workforce and site strategy.

Steady Business in Any Economy?

Synopsys maintains a backlog of $10.9 billion as of July 31, 2026, which provides significant visibility into future earnings. Its subscription-based model recognizes revenue over two to three years, helping to stabilize financial results during periods of economic uncertainty.

Key Financial Metrics

• Revenue was $2.5 billion in the third quarter of fiscal 2026, up 42% year over year.
• Ansys revenue contributed $622.2 million to the third quarter of fiscal 2026.
• Operating income reached $357.5 million in the third quarter of fiscal 2026, up from $165.3 million.
• Cash and short-term investments totaled $3.6 billion as of July 31, 2026.
• Backlog reached $10.9 billion as of July 31, 2026, with 49% expected as revenue within 12 months.

Bottom Line

Synopsys has transitioned from a specialized software provider into a broad partner for complex electronics engineering. The integration of simulation tools and a focus on artificial intelligence position the company to support advanced technology development across multiple industries.