Live Earnings: Will Synopsys Breakout Tonight?
Live Updates
Key Numbers
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Design Automation: $1.31B (+23% YoY), margins 44.5% (+300 bps).
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Design IP: $428M (–8% YoY), margins 20.1% (–1660 bps).
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GAAP EPS: $1.50 (down from $2.73 LY).
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Balance sheet: $14.3B debt post-Ansys; cash/investments down to $2.6B.
What Changed This Quarter
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First EPS miss after a string of beats.
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FY25 outlook cut for both revenue and EPS.
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Segment divergence widened: DA strong, IP slumping.
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Balance sheet reset with leverage from Ansys acquisition.
Management Commentary
“Q3 was a transformational quarter…we closed the Ansys acquisition, expanding our portfolio. Our IP business underperformed expectations. We are taking action to enhance our competitive advantage and drive resilient, long-term growth.” — Sassine Ghazi, CEO
“Strength in Design Automation was offset by weakness in Design IP. We are taking a more conservative view of Q4, while guiding another year of profitable growth.” — Shelagh Glaser, CFO
Signals near-term turbulence in IP demand, while reaffirming Synopsys’ longer-term growth and integration of Ansys.
Stock takes a hit on missed earnings
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Stock (After-Hours): ▼ –4.1%
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Earnings vs. Consensus
| Metric | Reported | Consensus | Beat/Miss |
|---|---|---|---|
| Revenue | $1.74B | ~$1.77B | ❌ Miss |
| EPS (Non-GAAP) | $3.39 | ~$3.75 | ❌ Miss |
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Guidance flag: FY25 revenue/EPS trimmed to $7.03–$7.06B / $12.76–$12.80, below Street.
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Weak IP sales pulled results below expectations despite Ansys close. Guidance cut + margin pressure overshadowed design automation strength.
Earnings History and How the Stock Performed
| Quarter | EPS Surprise | 1-Day Move | 7-Day Move | 14-Day Move |
|---|---|---|---|---|
| Q2 2025 | +7.94% | +1.5% | +4.2% | +6.1% |
| Q1 2025 | +8.60% | +2.2% | +3.8% | +5.0% |
| Q4 2024 | +3.03% | +1.7% | +2.9% | +3.7% |
| Q3 2024 | +4.26% | +2.0% | +3.5% | +4.9% |
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Synopsys (NASDAQ: SNPS) | SNPS Price Prediction reports fiscal Q3 2025 results after the close. The company has delivered steady beats and is seen as a key AI infrastructure enabler through its electronic design automation (EDA) tools and IP portfolio. With shares trading above $600, investors are looking for sustained double-digit growth and clarity on regulatory developments around the Ansys acquisition.
Estimates Snapshot
- Revenue: $1.77 billion
- EPS (Normalized): $3.75
- FY 2025 Revenue: $7.45 billion
- FY 2025 EPS: $14.58
- FY 2026 Revenue: $10.48 billion
- FY 2026 EPS: $16.66
Consensus implies 16% revenue growth and 9% EPS growth YoY for the quarter (vs. $1.53B / $3.43 last year). For FY25, revenue growth is expected at 22% and EPS at 10%.
Key Areas to Watch
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AI-enabled design momentum – Synopsys highlighted multiple wins in Q2, including 40+ chiplet heterogeneous designs and customer adoption of DSO.ai/VSO.ai across flagship CPU and GPU cores.
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Agentic AI workflows – Management previewed “agent engineer” technology to reengineer workflows, potentially reshaping monetization.
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China headwinds – Sales mix has declined from 12% to 10%, and management reiterated FY25 will see YoY declines in China amid export restrictions.
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Design IP strength – IP revenue rose 21% last quarter, with strong demand for SerDes PHY, PCIe 7.0, and UALink engagements.
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Ansys acquisition – All approvals except China secured; closure expected in H1 2025, though investors remain cautious.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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