Companies /Technology

Synopsys Inc

NASDAQ: SNPS Software - Infrastructure
$442.61
▼ $22.28 (−4.79%) today
Markets closed · 8:15pm ET

Q2 2025 Earnings

Reported May 28, 2025, 4:39pm ET · SEC source
$3.67
Beat +8.03%
EPS · est. $3.40
$1.6B
Beat +0.29%
Revenue · est. $1.6B
+10.0%
Beating market
SNPS vs S&P since report
4 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−4%0+4%+8%May 28May 29report 4:39pm ETearnings+0.1%−2.9%
−4%0+4%+8%May 28May 29earnings+0.1%−2.9%
SNPS −2.9%S&P 500 +0.1%
−4%0+4%+8%May 28May 29report 4:39pm ETearnings−0.3%−2.9%
−4%0+4%+8%May 28May 29earnings−0.3%−2.9%
SNPS −2.9%NASDAQ −0.3%
−4%0+4%+8%May 27Jun 5report 4:39pm ETearnings+0.5%+2.6%
−4%0+4%+8%May 27Jun 5earnings+0.5%+2.6%
SNPS +2.6%S&P 500 +0.5%
−4%0+4%+8%May 27Jun 5report 4:39pm ETearnings+0.4%+2.6%
−4%0+4%+8%May 27Jun 5earnings+0.4%+2.6%
SNPS +2.6%NASDAQ +0.4%
−1.61%
Day of report
+1.98%
Next session
+5.98%
One week
+14.68%
30 days

S&P 500 over the same 30 days: +4.68%.

Did SNPS Beat Earnings? Q2 2025 Results

Synopsys posted a <a href="https://247wallst.com/investing/2026/02/26/synopsys-beats-on-eps-and-revenue-as-ai-fueled-chip-design-demand-remains-strong/">strong fiscal second quarter</a>, delivering non-GAAP EPS of $3.67 against a consensus estimate of $3.40 — an 8.03% beat — while revenue of $1.60 billion edged past expectations by 0.29% and grew 10.2% year-over-year from $1.45 billion in the year-ago period. The results were powered by accelerating demand across both business segments, with Design IP revenue climbing to $482 million from $399.80 million, reflecting rising appetite for Synopsys's interface, security, and embedded processor IP as AI complexity and silicon proliferation drive increasingly intricate chip design requirements. Design Automation, the company's larger segment at 70% of revenue, also expanded to $1.12 billion with improving margins. What began as a confident earnings report, however, quickly turned turbulent: within 24 hours of reaffirming full-year revenue guidance of $6.75 billion to $6.80 billion and non-GAAP EPS of $15.11 to $15.19, Synopsys withdrew that outlook entirely after receiving a U.S. Commerce Department letter imposing new export restrictions on chip design software sales to China, which represents roughly 10% of quarterly revenue.

Key Takeaways
  • Mega trends of AI, software-defined systems, and silicon proliferation driving demand
  • Increasing design complexity and costs driving need for Synopsys tools
  • Rising compute performance and energy demands boosting EDA and IP requirements
  • Strong Design IP revenue growth reflecting expanding IP portfolio demand
  • Non-GAAP operating margin improvement

“We delivered a strong quarter, which demonstrates the mission-critical nature of our products and the resiliency of our business. The mega trends of AI, software-defined systems, and silicon proliferation continue to drive our growth. These trends are increasing design complexity and costs, while also increasing compute performance and energy demands. Synopsys is a trusted partner in addressing these challenges and a leader in applying AI to help customers innovate faster.”

Synopsys CEO, on the earnings call

Forward Guidance & Outlook

Synopsys reaffirmed full fiscal year 2025 guidance with revenue of $6.745 billion to $6.805 billion and non-GAAP EPS of $15.11 to $15.19. For Q3 FY2025, the company targets revenue of $1.755 billion to $1.785 billion, non-GAAP EPS of $3.82 to $3.87, and a 16% non-GAAP tax rate. Full-year operating cash flow is targeted at approximately $1.5 billion, free cash flow at approximately $1.3 billion, and capital expenditures at approximately $170 million. Guidance assumes no further changes to U.S. export control restrictions or Entity List designations. The company noted its fiscal year 2025 has eight fewer days than fiscal year 2024 due to a calendar change.

SNPS YoY Financials

Q2 2025 vs Q2 2024 · SEC filings Q2 2024 Q2 2025
$0$500.0M$1.0B$1.5B$1.5B$1.6BRevenue$1.1B$1.3BGross Profit$333.1M$376.4MOperating Income$292.1M$349.2MNet Income
$0$500.0M$1.0B$1.5BRevenueGross ProfitOperating IncomeNet Income

SNPS Revenue by Segment

Design Automation$1.1B
Design IP$482.0M

Figures from SEC filings and company reports. Not investment advice.