Synopsys, Inc. reported results for its third quarter of fiscal year 2025. Revenue for the third quarter of fiscal year 2025 was $1.740 billion, compared to $1.526 billion for the third quarter of fiscal year 2024.
"Q3 was a transformational quarter. Against a challenging geo-political backdrop, we closed the Ansys acquisition – expanding our portfolio, customer base and opportunity. Now more than ever, Synopsys is the mission-critical partner technology R&D needs to design and deliver AI-powered products," said Sassine Ghazi, president and CEO of Synopsys. "While I'm proud of how our team navigated external challenges in the quarter, our IP business underperformed expectations. We are taking action to enhance our competitive advantage and drive resilient, long-term growth."
"In Q3, strength in Design Automation was offset by weakness in Design IP," said Shelagh Glaser, CFO of Synopsys. "We are taking a more conservative view of Q4, while guiding another consecutive year of profitable growth."
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1 The operating results of Ansys have been included in our condensed consolidated financial statements for the three and nine months ended July 31, 2025 from the Acquisition Date, and were not material to our financial results for either of these periods. |
GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2025 was $242.5 million, or $1.50 per diluted share, compared to $425.9 million, or $2.73 per diluted share, for the third quarter of fiscal year 2024.
Non-GAAP Results
On a non-GAAP basis, net income for the third quarter of fiscal year 2025 was $548.9 million, or $3.39 per diluted share, compared to non-GAAP net income of $535.5 million, or $3.43 per diluted share, for the third quarter of fiscal year 2024.
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, simulation and analysis solutions (Ansys), 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 interface, foundation, security, and embedded processor IP, IP subsystems, and IP implementation services.
Continuing Operations
On September 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.
Financial Targets
Synopsys also provided its consolidated financial targets for the fourth quarter and full fiscal year 2025. These targets reflect a change in Synopsys' fiscal year from a 52/53-week period ending on the Saturday nearest to October 31 of each year to October 31 of each year. As a result of this change, there will be ten fewer days in the first half of fiscal year 2025 and two extra days in the second half of fiscal year 2025, which results in eight fewer days in the aggregate in Synopsys' fiscal year 2025 as compared to its fiscal year 2024. These targets also 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.
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Fourth Quarter and Full Fiscal Year 2025 Financial Targets |
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(in millions except per share amounts) |
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Range for Three Months Ending |
Range for Fiscal Year Ending |
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October 31, 2025 |
October 31, 2025 |
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Low |
High |
Low |
High |
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Revenue |
$ 2,230 |
$ 2,260 |
$ 7,030 |
$ 7,060 |
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GAAP Expenses |
$ 2,115 |
$ 2,139 |
$ 6,079 |
$ 6,103 |
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Non-GAAP Expenses |
$ 1,440 |
$ 1,450 |
$ 4,430 |
$ 4,440 |
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Non-GAAP Interest and Other Income (Expense), net |
$ (179) |
$ (181) |
$ (92) |
$ (94) |
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Non-GAAP Tax Rate |
16 % |
16 % |
16 % |
16 % |
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Outstanding Shares (fully diluted) |
187 |
188 |
165 |
166 |
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GAAP EPS |
$ (0.27) |
$ (0.16) |
$ 5.03 |
$ 5.16 |
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Non-GAAP EPS |
$ 2.76 |
$ 2.80 |
$ 12.76 |
$ 12.80 |
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Operating Cash Flow |
~$1,130 |
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Free Cash Flow(1) |
~$950 |
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Capital Expenditures |
~$180 |
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(1) Free cash flow is calculated as cash provided from operating activities less capital expenditures. |
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For a reconciliation of Synopsys' fourth quarter and fiscal year 2025 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAP basis and a discussion of the financial targets that we are not able to reconcile without unreasonable efforts, see "GAAP to Non-GAAP Reconciliation" in the accompanying tables below.
Earnings Call Open to Investors
Synopsys 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 on Synopsys' corporate website at investor.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 fourth quarter and fiscal year 2025.
Effectiveness of Information
The targets included in this press release, the statements made during the earnings conference call, the information contained in the financial supplement and the corporate overview presentation, each of which are available on Synopsys' corporate website at www.synopsys.com (collectively, the "Earnings Materials"), represent Synopsys' expectations and beliefs as of September 9, 2025. Although these Earnings Materials will remain available on Synopsys' website through the date of the earnings call for the fourth quarter and fiscal year 2025, their continued availability through such date does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys undertakes no duty and does not intend to update any forward-looking statement, whether as a result of new information or future events, or otherwise update, the targets given in this press release unless required by law.
Availability of Final Financial Statements
Synopsys will include final financial statements for the third quarter of fiscal year 2025 in its quarterly report on Form 10-Q to be filed on or before September 9, 2025.
