Synopsys (NASDAQ:SNPS) Releases Earnings Results, Beats Estimates By $0.18 EPS

Synopsys (NASDAQ:SNPS) released its quarterly earnings data on Wednesday. The semiconductor company reported $3.35 earnings per share for the quarter, beating the consensus estimate of $3.17 by $0.18, FiscalAI reports. The firm had revenue of $2.28 billion during the quarter, compared to the consensus estimate of $2.25 billion. Synopsys had a return on equity of 6.83% and a net margin of 13.76%.The firm’s quarterly revenue was up 41.9% on a year-over-year basis. During the same period in the previous year, the company posted $3.67 earnings per share. Synopsys updated its FY 2026 guidance to 14.720-14.800 EPS and its Q3 2026 guidance to 3.630-3.690 EPS.

Here are the key takeaways from Synopsys’ conference call:

• Synopsys reported a strong Q2 FY2026, with revenue of $2.276 billion, non-GAAP operating margin of 39.5%, and non-GAAP EPS of $3.35, all above guidance. Management also raised full-year revenue, margin, EPS, and free cash flow guidance.
• AI-related demand continues to drive the business, with strength across EDA, hardware-assisted verification, IP, and system-level simulation. Management said AI is increasing chip complexity and expanding opportunities across the full “silicon to systems” portfolio.
• The Design IP business appears to be recovering after hitting a Q1 bottom, with 12% sequential growth in Q2 and management expecting continued quarter-over-quarter improvement in the second half. Synopsys also highlighted stronger traction in higher-value, more customized IP deals, especially with hyperscalers.
• Synopsys said its AI-enabled product roadmap is gaining traction, including agentic AI and Multiphysics Fusion. Early customer trials point to meaningful productivity gains, and commercial ramp for Multiphysics Fusion is expected in the second half of 2026.
• The company continues to realize benefits from the Ansys integration, including cost synergies and broader cross-sell opportunities. Management said it expects to be about halfway through committed synergies by fiscal year-end and sees additional margin and revenue opportunities ahead.

Synopsys Trading Down 1.6%

Synopsys stock traded down $8.64 during trading on Wednesday, hitting $525.92. The company had a trading volume of 2,431,716 shares, compared to its average volume of 2,000,788. Synopsys has a 1-year low of $376.18 and a 1-year high of $651.73. The company has a current ratio of 1.36, a quick ratio of 1.26 and a debt-to-equity ratio of 0.33. The company’s 50 day simple moving average is $455.56 and its 200-day simple moving average is $452.78. The stock has a market cap of $100.75 billion, a price-to-earnings ratio of 81.66, a price-to-earnings-growth ratio of 4.30 and a beta of 1.25.

Synopsys News Roundup

Here are the key news stories impacting Synopsys this week:

• Positive Sentiment: Synopsys reported Q2 non-GAAP EPS of $3.35 and revenue of $2.276 billion, both above estimates, signaling that core demand remains healthy. Synopsys Posts Financial Results for Second Quarter Fiscal Year 2026
• Positive Sentiment: Synopsys raised full-year guidance, with non-GAAP EPS now expected to come in above prior expectations and revenue guidance also moving higher, which should support investor confidence in the company’s growth trajectory. Synopsys raises annual forecast on demand for AI chip design software
• Positive Sentiment: The company reached a cooperation agreement with activist investor Elliott Investment Management and added Jesse Cohn to its board, a move that may reassure investors by increasing pressure for margin improvement and better capital allocation. Synopsys reaches settlement with Elliott, says Jesse Cohn to join board
• Neutral Sentiment: Synopsys also provided third-quarter guidance above analyst estimates, reinforcing the view that the company expects stable near-term execution rather than a slowdown. Synopsys Posts Financial Results for Second Quarter Fiscal Year 2026
• Negative Sentiment: Despite the beat, some investors may be focusing on the year-over-year EPS decline versus last year and the stock’s already rich valuation, which could help explain why the shares have not reacted more strongly. Synopsys Stock Slips Despite Q2 Earnings Beat

Analyst Ratings Changes

A number of equities analysts recently issued reports on SNPS shares. HSBC lowered Synopsys from a “buy” rating to a “hold” rating and set a $455.00 target price for the company. in a research note on Friday, February 20th. Piper Sandler reduced their price objective on Synopsys from $520.00 to $430.00 and set a “neutral” rating for the company in a research note on Thursday, February 26th. Morgan Stanley reiterated an “equal weight” rating and set a $480.00 price objective (down from $550.00) on shares of Synopsys in a research note on Wednesday, February 25th. The Goldman Sachs Group set a $600.00 target price on Synopsys and gave the company a “buy” rating in a research report on Wednesday, February 25th. Finally, Needham & Company LLC restated a “buy” rating on shares of Synopsys in a research report on Thursday, February 26th. Eight investment analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat.com, Synopsys currently has an average rating of “Hold” and a consensus target price of $544.88.

Hedge Funds Weigh In On Synopsys

Several institutional investors have recently modified their holdings of the business. State Street Corp lifted its position in shares of Synopsys by 20.6% during the 3rd quarter. State Street Corp now owns 8,760,358 shares of the semiconductor company’s stock worth $4,322,273,000 after purchasing an additional 1,493,912 shares during the last quarter. Morgan Stanley lifted its position in shares of Synopsys by 2.5% during the 4th quarter. Morgan Stanley now owns 4,573,980 shares of the semiconductor company’s stock worth $2,148,491,000 after purchasing an additional 109,917 shares during the last quarter. Northern Trust Corp lifted its position in shares of Synopsys by 22.5% during the 3rd quarter. Northern Trust Corp now owns 1,986,970 shares of the semiconductor company’s stock worth $980,351,000 after purchasing an additional 364,541 shares during the last quarter. Aristotle Capital Management LLC lifted its position in shares of Synopsys by 1.8% during the 4th quarter. Aristotle Capital Management LLC now owns 1,893,563 shares of the semiconductor company’s stock worth $889,483,000 after purchasing an additional 33,825 shares during the last quarter. Finally, Invesco Ltd. lifted its position in shares of Synopsys by 17.2% during the 3rd quarter. Invesco Ltd. now owns 1,885,761 shares of the semiconductor company’s stock worth $930,416,000 after purchasing an additional 276,983 shares during the last quarter. Institutional investors and hedge funds own 85.47% of the company’s stock.

About Synopsys

Synopsys, Inc is a leading provider of electronic design automation (EDA) software and semiconductor intellectual property (IP) used to design, verify and manufacture integrated circuits and complex systems-on-chip (SoCs). Its product portfolio spans tools and technologies for front‑end design and synthesis, simulation and verification, physical implementation and signoff, and design-for-manufacturability, enabling chip designers to move from architecture through tape‑out.

In addition to core EDA offerings, Synopsys supplies a broad set of semiconductor IP building blocks — such as interface, memory and analog/mixed-signal cores — that customers integrate into SoCs to accelerate development.