Synopsys Posts Financial Results for Third Quarter Fiscal Year 2026

Rhea-AI Summary

Synopsys (Nasdaq: SNPS) reported third quarter fiscal 2026 revenue of $2.477 billion, up from $1.740 billion a year earlier, with broad-based strength led by Design Automation and contributions from Ansys. GAAP net income from continuing operations was $545.8 million, or $2.84 per diluted share, versus $1.50 in the prior-year quarter. Non-GAAP net income was $752.5 million, or $3.91 per diluted share, up from $3.39.

The company reported a third quarter non-GAAP operating margin of 41.6%, compared with a GAAP operating margin of 14.4%, reflecting adjustments for amortization of acquired intangibles, stock-based compensation, restructuring and acquisition/divestiture items. Synopsys raised its full-year 2026 outlook, targeting revenue of $9.690–$9.740 billion and non-GAAP EPS of $15.04–$15.10, with an expected non-GAAP operating margin of about 41.5% and operating cash flow of approximately $2.8 billion.

Positive

• Revenue +42% YoY to $2.477 billion in Q3 FY26
• GAAP EPS from continuing operations increased to $2.84 from $1.50
• Non-GAAP EPS rose to $3.91 from $3.39 YoY
• Q3 non-GAAP operating margin at 41.6%
• Full-year FY26 revenue guidance raised to $9.690–$9.740 billion
• Full-year non-GAAP EPS guidance raised to $15.04–$15.10
• FY26 operating cash flow targeted at ~$2.8 billion; free cash flow ~$2.6 billion
• FY26 revenue guide includes $2.98 billion expected contribution from Ansys

Negative

• GAAP operating margin for Q3 FY26 only 14.4% vs 41.6% non-GAAP
• Significant FY26 non-GAAP interest and other expense projected at ~-$485 million
• Large FY26 adjustments for amortization of acquired intangibles of up to $1.615 billion
• Restructuring charges year-to-date FY26 total $236.3 million, with up to $410 million targeted for full year

News Explained

The release reports third-quarter results, while Synopsys says final financial statements will be included in its Form 10-Q on or before September 9, 2026; its full-year targets assume no further changes to export-control or current U.S. Entity List restrictions.

Market Context

Recent Form 4 activity recorded 17,997 shares sold and zero bought. This earnings report adds strong...

Analysis

Recent Form 4 activity recorded 17,997 shares sold and zero bought. This earnings report adds stronger operating results and higher targets, while export-control restrictions and the insider activity remain relevant risk factors to monitor.

Key Figures

Quarterly revenue: $2.477 billion Prior-year quarterly revenue: $1.740 billion GAAP EPS: $2.84 per diluted share +5 more

8 metrics

Quarterly revenue $2.477 billion Q3 fiscal 2026

Prior-year quarterly revenue $1.740 billion Q3 fiscal 2025 comparison

GAAP EPS $2.84 per diluted share Q3 fiscal 2026

Non-GAAP EPS $3.91 per diluted share Q3 fiscal 2026; exceeded prior guidance high end

Full-year revenue guidance midpoint $9.715 billion Fiscal 2026, raised expectations

Full-year non-GAAP EPS guidance midpoint $15.07 Fiscal 2026, raised expectations

GAAP net income $545.8 million Q3 fiscal 2026

Non-GAAP net income $752.5 million Q3 fiscal 2026

Previous Earnings Reports

5 past events · Latest: May 27 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
May 27	2Q26 earnings report	Positive	-8.6%	Revenue increased and full-year revenue and EPS guidance were raised.
Feb 25	1Q26 earnings report	Positive	-5.2%	Quarterly results were reported alongside reiterated full-year revenue guidance.
Dec 10	FY25 earnings report	Positive	+0.3%	Record fiscal-year revenue and backlog were reported with fiscal 2026 guidance.
Sep 9	3Q25 earnings report	Neutral	-35.8%	Design Automation strength was offset by weakness in Design IP.
May 28	2Q25 earnings report	Positive	-1.6%	Revenue surpassed guidance while full-year revenue guidance was reaffirmed.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Tag-specific earnings history showed four negative 24-hour reactions in five events, with an average move of -10.18%.

Key Terms

gaap, non-gaap, entity list, forward-looking statements, +1 more

5 terms

gaap financial

"Quarterly GAAP earnings per diluted share (EPS) of $2.84"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

non-gaap financial

"and non-GAAP EPS of $3.91, exceeding high-end of prior guidance"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

entity list regulatory

"current U.S. government "Entity List" restrictions"

A government 'entity list' is an official roster of companies, organizations, or individuals that are subject to extra trade controls because they are considered a risk to national security, foreign policy, or law enforcement. For investors it matters because being listed can block access to key technologies, suppliers, or customers—like putting a business behind a temporary 'no-trade' sign—potentially cutting revenue, raising compliance costs, and increasing legal and operational risks.

forward-looking statements regulatory

"These targets constitute forward-looking statements and are based on current expectations."

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

free cash flow financial

"Free cash flow is calculated as cash provided from operating activities"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

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Results Summary

• Quarterly revenue of $2.477 billion; reflects broad-based strength with outperformance in Design Automation
• Quarterly GAAP earnings per diluted share (EPS) of $2.84, and non-GAAP EPS of $3.91, exceeding high-end of prior guidance
• Raising expectations for full-year total revenue to $9.715 billion at the midpoint and full-year non-GAAP EPS guidance to $15.07 at the midpoint on continued AI-driven demand strength

SUNNYVALE, Calif., Aug. 26, 2026 /PRNewswire/ -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its third quarter of fiscal year 2026. Revenue for the third quarter of fiscal year 2026 was $2.477 billion, compared to $1.740 billion for the third quarter of fiscal year 2025.

"AI is driving unprecedented complexity and increasing demand for the silicon IP and engineering solutions necessary to deliver next-generation AI compute, infrastructure and physical AI systems," said Sassine Ghazi, president and CEO of Synopsys. "One year after the transformational acquisition of Ansys, we are executing with focus, extending our leadership and gaining momentum."

"Synopsys delivered an outstanding third quarter, with revenue and earnings per share exceeding the high end of our guidance range. Results were driven by broad-based strength across the business, led by EDA, a strong quarter from Ansys, and our design IP business returned to year-over-year growth," said Shelagh Glaser, CFO of Synopsys. "Given our strong performance and expectations for double-digit growth in EDA, we are raising our full year revenue, non-GAAP operating margin, EPS and cash flow guidance."

GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2026 was $545.8 million, or $2.84 per diluted share, compared to $242.5 million, or $1.50 per diluted share, for the third quarter of fiscal year 2025.

Non-GAAP Results
On a non-GAAP basis, net income for the third quarter of fiscal year 2026 was $752.5 million, or $3.91 per diluted share, compared to non-GAAP net income of $548.9 million, or $3.39 per diluted share, for the third quarter of fiscal year 2025.

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, Ansys products, system integration products and services, digital, custom and field programmable gate array integrated circuit design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our logic libraries, embedded memories, wired interface IP, memory interface IP and security IP.

Financial Targets
Synopsys also provided its consolidated financial targets for the fourth quarter and full fiscal year 2026. These targets 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.

Fourth Quarter and Full Fiscal Year 2026 Financial Targets
(in millions, except per share amounts)
	Range for Three Months Ending			Range for Fiscal Year Ending
	October 31, 2026			October 31, 2026
	Low	High		Low	High
Revenue (1)	$         2,530	$         2,580		$         9,690	$         9,740
GAAP Expenses	$         2,225	$         2,300		$         8,667	$         8,742
Non-GAAP Expenses	$         1,450	$         1,480		$         5,670	$         5,700
Non-GAAP Interest and Other Income (Expense), net	$           (119)	$           (115)		$           (485)	$           (481)
Non-GAAP Tax Rate	18 %	18 %		18 %	18 %
Outstanding Shares (fully diluted)	192	194		192	194
GAAP Operating Margin				Midpt: ~10.4%
Non-GAAP Operating Margin				Midpt: ~41.5%
GAAP EPS	$           0.60	$           0.85		$           3.84	$           4.08
Non-GAAP EPS	$           4.10	$           4.16		$         15.04	$         15.10
Operating Cash Flow				~$2,800
Free Cash Flow (2)				~$2,600
Capital Expenditures				~$225
(1) Fiscal year 2026 revenue includes $2.98 billion of expected Ansys revenue, and reflects the impact of approximately $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses, and $40 million related to the recently completed divestiture of the Processor IP Solutions business.
(2) Free cash flow is calculated as cash provided from operating activities less capital expenditures.

For a reconciliation of Synopsys' fourth quarter and fiscal year 2026 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAP basis, a discussion of the financial targets that we are not able to reconcile without unreasonable efforts and a discussion of why management believes such measurements provide useful information to investors, 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 in the investor relations portion of Synopsys' corporate website at www.synopsys.com. Synopsys uses its website and social media channels as tools to disclose important information about Synopsys and to 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 2026.

Availability of Final Financial Statements
Synopsys will include final financial statements for the third quarter of fiscal year 2026 in its quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission (SEC) and available at www.sec.gov on or before September 9, 2026.

Continuing Operations 
On Sept. 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 Synopsys' consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis.

Reconciliation of Third Quarter Fiscal Year 2026 Results
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income, earnings per diluted share, and tax rate for the periods indicated below.

GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2026 Results
(unaudited and in thousands, except per share amounts)
	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2026		2025		2026		2025
GAAP net income from continuing operations attributed to Synopsys	$         545,800		$    242,509		$    627,863		$    887,424
Adjustments:
Amortization of acquired intangible assets	402,426		74,941		1,210,292		99,193
Stock-based compensation	231,604		267,723		712,631		655,725
Restructuring charges	2,164		—		236,340		—
Acquisition/divestiture related items	(402,556)		120,012		(363,315)		264,355
Loss on sale of strategic investments	—		1,200		—		3,635
Tax adjustments	(26,945)		(157,477)		(309,115)		(315,553)
Non-GAAP net income from continuing operations attributed to Synopsys	$         752,493		$    548,908		$  2,114,696		$  1,594,779
	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2026		2025		2026		2025
GAAP net income from continuing operations per diluted share attributed to Synopsys	$              2.84		$        1.50		$        3.27		$        5.61
Adjustments:
Amortization of acquired intangible assets	2.09		0.46		6.30		0.63
Stock-based compensation	1.20		1.66		3.71		4.15
Restructuring charges	0.01		—		1.23		—
Acquisition/divestiture related items	(2.09)		0.74		(1.89)		1.67
Loss on sale of strategic investments	—		0.01		—		0.02
Tax adjustments	(0.14)		(0.98)		(1.60)		(2.00)
Non-GAAP net income from continuing operations per diluted share attributed to Synopsys	$              3.91		$        3.39		$       11.02		$       10.08
Shares used in computing net income per diluted share amounts:	192,319		161,682		191,981		158,176

GAAP to Non-GAAP Operating Margin Reconciliation
(unaudited)
	Three Months Ended
	July 31, 2026
GAAP operating margin	14.4 %
Amortization of acquired intangible assets	16.2 %
Stock-based compensation	9.4 %
Restructuring charges	0.1 %
Acquisition/divestiture related items	0.9 %
Non-qualified deferred compensation plan	0.6 %
Non-GAAP operating margin	41.6 %

GAAP to Non-GAAP Tax Rate Reconciliation
(unaudited)
	Three Months Ended	Nine Months Ended
	July 31, 2026	July 31, 2026
GAAP effective tax rate	20.2 %	19.8 %
Stock-based compensation	(5.0) %	(4.6) %
Restructuring charges	(3.3) %	(3.3) %
Income tax adjustments (1)	6.1 %	6.1 %
Non-GAAP effective tax rate	18.0 %	18.0 %
(1) The income tax adjustments are primarily due to differences in the tax rate effect of certain deductions, such as the deduction for foreign-derived intangible income and credits.

Reconciliation of 2026 Targets
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP targets for the periods indicated below.

GAAP to Non-GAAP Reconciliation of Fourth Quarter Fiscal Year 2026 Targets
(in thousands, except per share amounts)
		Range for Three Months Ending
		October 31, 2026
		Low		High
Target GAAP expenses		$      2,225,000		$      2,300,000
Adjustments:
Amortization of acquired intangible assets		(400,000)		(405,000)
Stock-based compensation		(230,000)		(240,000)
Restructuring charges		(145,000)		(175,000)
Target non-GAAP expenses		$      1,450,000		$      1,480,000
		Range for Three Months Ending
		October 31, 2026
		Low		High
Target GAAP earnings per diluted share attributed to Synopsys		$             0.60		$             0.85
Adjustments:
Amortization of acquired intangible assets		2.10		2.07
Stock-based compensation		1.24		1.19
Restructuring charges		0.91		0.75
Tax adjustments		(0.75)		(0.70)
Target non-GAAP earnings per diluted share attributed to Synopsys		$             4.10		$             4.16
Shares used in non-GAAP calculation (midpoint of target range)		193,000		193,000

 

GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2026 Targets
(in thousands, except per share amounts)
		Range for Fiscal Year Ending
		October 31, 2026
		Low		High
Target GAAP expenses		$      8,667,091		$      8,742,091
Adjustments:
Amortization of acquired intangible assets		(1,610,000)		(1,615,000)
Stock-based compensation		(945,000)		(955,000)
Restructuring charges		(380,000)		(410,000)
Acquisition/divestiture related items (1)		(62,091)		(62,091)
Target non-GAAP expenses		$      5,670,000		$      5,700,000
		Range for Fiscal Year Ending
		October 31, 2026
		Low		High
Target GAAP earnings per diluted share attributed to Synopsys		$             3.84		$             4.08
Adjustments:
Amortization of acquired intangible assets		8.37		8.34
Stock-based compensation		4.95		4.90
Restructuring charges		2.12		1.97
Acquisition/divestiture related items (1)		(1.88)		(1.88)
Tax adjustments		(2.36)		(2.31)
Target non-GAAP earnings per diluted share attributed to Synopsys		$           15.04		$           15.10
Shares used in non-GAAP calculation (midpoint of target range)		193,000		193,000
(1)  Adjustments reflect actual expenses incurred by Synopsys as of July 31, 2026, and do not fully reflect all potential adjustments for future periods for the reasons set forth in "GAAP to Non-GAAP Reconciliation" below.

 

GAAP to Non-GAAP Reconciliation of Operating Margin at Midpoint of Full Fiscal Year 2026 Targets (1)
	Fiscal Year Ending
	October 31, 2026
At midpoint of revenue and expense guidance ranges
GAAP operating margin	10.4 %
Amortization of acquired intangible assets	16.6 %
Stock-based compensation	9.8 %
Restructuring charges	4.1 %
Acquisition/divestiture related items (2)	0.6 %
Target non-GAAP operating margin	41.5 %
(1) These numbers represent the midpoint of targets in the prepared remarks provided on August 26, 2026, and do not represent official guidance for fiscal year 2026.
(2) Adjustments reflect actual expenses incurred by Synopsys as of July 31, 2026 and do not fully reflect all potential adjustments for future periods for the reasons set forth in "GAAP to Non-GAAP Reconciliation" below.

Forward-Looking Statements
This press release and the investor conference call contain forward-looking statements, including, but not limited to, statements concerning our short-term and long-term financial targets, expectations and objectives; our businesses, business segments, strategies, partnerships, initiatives and opportunities, including, among other things, the reallocation of resources in our Design IP segment to higher growth opportunities and planned restructuring activities; industry growth and technological trends, such as artificial intelligence, including our development and planned commercialization thereof; business and market outlook; the potential impact of the uncertain macroeconomic environment and global economic conditions on our financial results; the impact of current and future U.S. and foreign trade regulations, government actions and regulatory changes, such as export control restrictions and tariffs; the ANSYS, Inc. (Ansys) integration and its expected impact, including expected synergies and the timing thereof, our ability to create joint solutions as a combined company, and related accounting changes; planned and recently completed acquisitions or divestitures, and their anticipated timing and impact; our key customers, customer concentration, customer engagement, customer demand and market expansion; results and strategies related to our products, technology and services, including product development and our planned product releases and capabilities; the expected realization of our contracted but unsatisfied or partially unsatisfied performance obligations (backlog); planned stock repurchases; our expected tax rate; and the status, expected outcome or expected impact of litigation and/or regulatory investigations. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames or achievements to differ materially from those expressed or implied in such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: macroeconomic conditions and geopolitical uncertainty in the global economy; uncertainty in the growth of the semiconductor and electronics industries; the highly competitive industry we operate in; actions by the U.S. or foreign governments, such as the imposition of additional export restrictions or tariffs; consolidation among our customers and our dependence on a relatively small number of large customers; risks and compliance obligations relating to the global nature of our operations; failure to realize the benefits expected from the transactions we complete, including the acquisition of Ansys (the Ansys Merger) or unexpected difficulties or expenditures arising therefrom; risks related to inaccuracies in, or failures to achieve, our operational and business metrics or forecasts of growth; and more. Additional information on potential risks, uncertainties and other factors that could affect Synopsys' results is included in filings we make with the SEC from time to time, including in the sections entitled "Risk Factors" in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in Synopsys' most recent reports on Forms 10-K and 10-Q, each as may be amended from time to time. Synopsys' financial results for its third quarter of fiscal year 2026 are not necessarily indicative of Synopsys' operating results for any future periods.

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 in the investor relations portion of Synopsys' corporate website at www.synopsys.com (collectively, the Earnings Materials), represent Synopsys' expectations and beliefs as of August 26, 2026. Although these Earnings Materials are expected to remain available on Synopsys' website through the time Synopsys announces its results for the fourth quarter and fiscal year 2026, their continued availability through such time 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, including any targets, provided in the Earnings Materials, whether as a result of new information, future events or otherwise, unless required by law.

SYNOPSYS, INC.
Condensed Consolidated Statements of Income
(Unaudited, in thousands, except per share amounts)
	Three Months Ended				Nine Months Ended
	July 31,				July 31,
	2026		2025		2026		2025
Revenue:
Time-based products	$        1,002,792		$          892,364		$        2,899,957		$        2,548,928
Upfront products	665,223		516,404		1,953,005		1,395,204
Total products revenue	1,668,015		1,408,768		4,852,962		3,944,132
Maintenance and service	808,807		330,969		2,308,643		855,186
Total revenue	2,476,822		1,739,737		7,161,605		4,799,318
Cost of revenue:
Products	275,622		230,895		750,921		615,953
Maintenance and service	156,514		103,301		451,849		290,309
Amortization of acquired intangible assets	247,252		46,368		743,850		62,624
Total cost of revenue	679,388		380,564		1,946,620		968,886
Gross margin	1,797,434		1,359,173		5,214,985		3,830,432
Operating expenses:
Research and development	719,737		625,301		2,134,849		1,732,496
Sales and marketing	385,889		259,480		1,164,262		683,700
General and administrative	176,979		280,550		532,129		584,133
Amortization of acquired intangible assets	155,174		28,573		466,442		36,569
Restructuring charges	2,164		—		236,340		—
Total operating expenses	1,439,943		1,193,904		4,534,022		3,036,898
Operating income	357,491		165,269		680,963		793,534
Interest expense	(133,234)		(146,502)		(429,313)		(251,977)
Other income (expense), net	459,665		170,543		530,601		335,061
Income before income taxes	683,922		189,310		782,251		876,618
Provision (benefit) for income taxes	138,216		(52,967)		154,961		(12,080)
Net income from continuing operations	545,706		242,277		627,290		888,698
Loss from discontinued operations, net of income taxes	—		—		—		(3,900)
Net income	545,706		242,277		627,290		884,798
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest	(94)		(232)		(573)		1,274
Net income attributed to Synopsys	$          545,800		$          242,509		$          627,863		$          883,524
Net income (loss) attributed to Synopsys:
Continuing operations	$          545,800		$          242,509		$          627,863		$          887,424
Discontinued operations	—		—		—		(3,900)
Net income	$          545,800		$          242,509		$          627,863		$          883,524
Net income (loss) per share attributed to Synopsys - basic:
Continuing operations	$             2.85		$             1.51		$             3.29		$             5.67
Discontinued operations	—		—		—		(0.03)
Basic net income per share	$             2.85		$             1.51		$             3.29		$             5.64
Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations	$             2.84		$             1.50		$             3.27		$             5.61
Discontinued operations	—		—		—		(0.02)
Diluted net income per share	$             2.84		$             1.50		$             3.27		$             5.59
Shares used in computing per share amounts:
Basic	191,536		160,174		190,858		156,536
Diluted	192,319		161,682		191,981		158,176

SYNOPSYS, INC.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except par value amounts)
		July 31, 2026		October 31, 2025
ASSETS:
Current assets:
Cash and cash equivalents		$        3,606,286		$        2,888,030
Short-term investments		1,383		72,929
Total cash, cash equivalents and short-term investments		3,607,669		2,960,959
Accounts receivable, net		1,318,747		1,505,427
Inventories		479,129		365,190
Prepaid and other current assets		1,238,791		1,180,526
Total current assets		6,644,336		6,012,102
Property and equipment, net		749,598		696,693
Operating lease right-of-use assets, net		694,603		702,008
Goodwill		26,834,774		26,899,215
Intangible assets, net		11,458,656		12,679,591
Deferred income taxes		95,515		112,159
Other long-term assets		1,248,781		1,122,693
Total assets		$      47,726,263		$      48,224,461
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and accrued liabilities		$        1,480,598		$        1,326,211
Operating lease liabilities		137,837		128,205
Deferred revenue		2,331,173		2,245,961
Short-term debt		1,020,247		22,117
Total current liabilities		4,969,855		3,722,494
Long-term operating lease liabilities		666,592		680,698
Long-term deferred revenue		383,936		382,557
Long-term debt		9,017,113		13,462,398
Other long-term liabilities		1,537,388		1,649,299
Total liabilities		16,574,884		19,897,446
Stockholders' equity:
Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding		—		—
Common stock, $0.01 par value: 400,000 shares authorized; 191,605 and 185,994 shares outstanding, respectively		1,916		1,860
Capital in excess of par value		20,711,069		18,640,947
Retained earnings		10,943,350		10,315,487
Treasury stock, at cost: 433 and 1,222 shares, respectively		(193,292)		(398,278)
Accumulated other comprehensive income (loss)		(310,504)		(232,414)
Total Synopsys stockholders' equity		31,152,539		28,327,602
Non-controlling interest		(1,160)		(587)
Total stockholders' equity		31,151,379		28,327,015
Total liabilities and stockholders' equity		$      47,726,263		$      48,224,461

SYNOPSYS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
	Nine Months Ended July 31,
	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$          627,290		$          884,798
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation	1,362,021		211,307
Reduction of operating lease right-of-use assets	109,254		80,789
Amortization of capitalized costs to obtain revenue contracts	70,835		38,920
Stock-based compensation	712,631		655,909
Allowance for credit losses	21,847		23,559
Loss on sale of strategic investments	—		3,635
Gain on sale of building	—		(51,385)
(Gain) loss on divestitures, net of transaction costs	(380,527)		8,299
Amortization of bridge financing costs	—		41,996
Amortization of debt issuance costs	21,280		6,790
Deferred income taxes	(121,720)		(326,610)
Other	21		(737)
Net changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable	165,337		(27,989)
Inventories	(133,944)		(34,068)
Prepaid and other current assets	(70,709)		120,348
Other long-term assets	(125,304)		(427,793)
Accounts payable and accrued liabilities	90,610		31,384
Operating lease liabilities	(109,757)		(78,360)
Income taxes	(56,728)		(140,347)
Deferred revenue	116,166		(19,932)
Unrealized loss on settlement of interest rate treasury lock	—		(121,643)
Net cash provided by operating activities	2,298,603		878,870
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of short-term investments	20,995		53,630
Proceeds from sales of short-term investments	68,761		148,809
Purchases of short-term investments	(18,524)		(47,558)
Proceeds from sales of strategic investments	—		3,470
Purchases of strategic investments	(1,402)		(4,086)
Purchases of property and equipment, net	(156,089)		(134,908)
Proceeds from sale of building	—		74,279
Acquisitions, net of cash acquired	—		(16,681,257)
Proceeds from business divestiture, net of cash divested	440,022		142,546
Other	—		(611)
Net cash provided by (used in) investing activities	353,763		(16,445,686)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt, net of issuance costs	—		14,329,340
Repayment of debt	(3,463,726)		(2,579)
Issuances of common stock	124,585		138,101
Payments for taxes related to net share settlement of equity awards	(262,761)		(242,791)
Common stock issuance for private placement	2,000,000		—
Purchases of treasury stock	(300,000)		—
Redemption of redeemable non-controlling interest	—		(30,000)
Other	—		(463)
Net cash provided by (used in) financing activities	(1,901,902)		14,191,608
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(33,409)		8,649
Net change in cash, cash equivalents and restricted cash	717,055		(1,366,559)
Cash, cash equivalents and restricted cash, beginning of year	2,893,721		3,898,729
Cash, cash equivalents and restricted cash, end of period	$        3,610,776		$        2,532,170

Synopsys provides segment information, namely revenue, adjusted segment operating income and adjusted segment operating margin, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 280, Segment Reporting. Synopsys' chief operating decision maker (CODM) is our Chief Executive Officer. In evaluating our business segments, the CODM considers the income and expenses that the CODM believes are directly related to those segments. The CODM does not allocate certain operating expenses managed at a consolidated level to our business segments and, as a result, the reported operating income and operating margin do not include these unallocated expenses as shown in the table below. These unallocated expenses are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income:

SYNOPSYS, INC.
Business Segment Reporting (1)
(Unaudited, in millions)
	Three Months Ended July 31, 2026		Three Months Ended July 31, 2025		Nine Months Ended July 31, 2026		Nine Months Ended July 31, 2025
Revenue by segment
- Design Automation	$           2,003.0		$            1,312.1		$             5,826.6		$             3,454.6
% of Total	80.9 %		75.4 %		81.4 %		72.0 %
- Design IP	$              473.8		$               427.6		$             1,335.0		$             1,344.7
% of Total	19.1 %		24.6 %		18.6 %		28.0 %
Adjusted operating income by segment
- Design Automation	$              905.0		$               583.8		$             2,641.6		$             1,447.2
- Design IP	$              125.4		$                 86.0		$                302.2		$                363.1
Adjusted operating margin by segment
- Design Automation	45.2 %		44.5 %		45.3 %		41.9 %
- Design IP	26.5 %		20.1 %		22.6 %		27.0 %

 

Total Adjusted Segment Operating Income Reconciliation (1)
(Unaudited, in millions)
	Three Months Ended July 31, 2026		Three Months Ended July 31, 2025		Nine Months Ended July 31, 2026		Nine Months Ended July 31, 2025
GAAP total operating income – as reported	$                357.5		$                165.3		$                681.0		$                793.5
Other expenses managed at consolidated level
Amortization of acquired intangible assets	402.4		74.9		1,210.3		99.2
Stock-based compensation (2)	231.6		267.7		712.6		655.9
Restructuring charges	2.2		—		236.3		—
Acquisition/divestiture related items (3)	22.9		118.4		62.1		218.7
Non-qualified deferred compensation plan	13.9		43.4		41.5		42.9
Total adjusted segment operating income	$               1,030.4		$                669.8		$               2,943.8		$              1,810.3
(1) Synopsys manages the business on a long-term, annual basis, and considers quarterly fluctuations of revenue and profitability as normal elements of our business. Amounts may not foot due to rounding.
(2) The adjustment includes non-GAAP expenses attributable to non-controlling interest and redeemable non-controlling interest.
(3) The adjustment excludes the amortization of bridge financing costs entered into in connection with the Ansys Merger that was recorded in interest expense, and certain divestiture related items that were recorded in other income (expense), net in our unaudited condensed consolidated statements of income.

GAAP to Non-GAAP Reconciliation
Synopsys continues to provide all information required in accordance with GAAP but acknowledges evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its core business operations and what Synopsys uses to evaluate its business operations and for internal budgeting and resource allocation purposes. This press release includes non-GAAP earnings per diluted share, non-GAAP net income, non-GAAP operating margin and non-GAAP tax rate for the periods presented. It also includes future estimates for non-GAAP expenses, non-GAAP interest and other income (expense), net, non-GAAP tax rate, non-GAAP operating margin, non-GAAP earnings per diluted share and free cash flow. These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

When possible, Synopsys provides a reconciliation of non-GAAP financial measures to their most closely applicable GAAP financial measures. Synopsys is unable to provide a full reconciliation of certain fourth quarter and full fiscal year 2026 non-GAAP financial targets to the corresponding GAAP financial measures on a forward-looking basis because Synopsys believes that it would not be possible for it to have the information necessary to quantitatively reconcile such measures with sufficient precision without unreasonable efforts due to, among other things, the potential variability and limited predictability of the excluded adjustment items necessary for a full reconciliation such as certain acquisition/divestiture related items, tax deduction variability, changes in the fair value of non-qualified deferred compensation plan, and gains (losses) on the sale of strategic investments. For the same reasons, Synopsys is unable to address the probable significance of the unavailable information. 

Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, as superior to, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, the corresponding GAAP financial measures. Synopsys' management believes the presentation of non-GAAP financial measures, when shown in conjunction with the corresponding GAAP financial measures, provides useful information to investors allowing them to view financial and business trends relating to our financial condition and results of operations through the eyes of management. Synopsys' management evaluates and makes decisions about our business operations using both GAAP financial measures and non-GAAP financial measures to help facilitate internal comparisons to Synopsys' historical operating results and forecasted targets, planning and forecasting in subsequent periods and comparisons to competitors' operating results.

The following are descriptions of the adjustments made to reconcile non-GAAP financial measures (other than free cash flow, which is defined in the footnote to the Financial Targets table above) to the most directly comparable GAAP financial measures:

(i) Amortization of acquired intangible assets. We incur expenses from the amortization of acquired intangible assets, which may include impairment charges from write-downs of acquired intangible assets. Acquired intangible assets include, among other things, core/developed technology, customer relationships, contract rights, trademarks and trade names, and other intangibles related to acquisitions. We amortize the intangible assets over their estimated useful lives. We do not enter into acquisitions on a predictable cycle. The amount of an acquisition's purchase price allocated to intangible assets and their estimated useful lives can vary significantly and are unique to each acquisition. From time to time, we incur impairment charges due to write-downs of acquired intangible assets. We believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets, including impairment charges, provides investors and others with a consistent basis for comparison across accounting periods. We also exclude this item because such expenses are non-cash in nature and we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our core operational performance and liquidity, and ability to invest in research and development and fund future acquisitions and capital expenditures.

(ii) Stock-based compensation. Stock-based compensation expenses consist primarily of expenses related to restricted stock units, stock options, employee stock purchase rights and other stock awards, including such expenses associated with acquisitions. We exclude stock-based compensation expense from our non-GAAP financial measures primarily because it is not an expense that typically requires or will require cash settlement by us. Further, the expense for the fair value of the stock-based instruments we utilize may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards and, therefore, is not used by management to assess the core profitability of our business operations.

(iii) Acquisition/divestiture related items. In connection with certain of our business combinations and/or divestitures, we incur significant expenses that we would not have otherwise incurred as part of our business operations. These expenses include, among other things, compensation expenses, professional fees and other direct expenses, concurrent restructuring activities and divestiture activities, including employee severance and other exit costs, bridge financing costs, costs related to integration activities, debt forgiveness, changes to the fair value of contingent consideration related to the acquired company, and amortization of the fair value difference of below-market value assets arising from arrangements entered into or acquired in conjunction with an acquisition. We also recognize the gains and losses from the divestitures of business, as well as the mark-up of equity or cost method investments to fair value upon obtaining control through acquisition. We exclude these items because they are related to acquisitions and divestitures and have no direct correlation to the core operation of our business. Further, because we do not acquire or divest businesses on a predictable cycle and the terms of each transaction can vary significantly and are unique to each transaction, we believe it is useful to exclude such expenses when looking for a consistent basis for comparison across accounting periods.

(iv) Restructuring charges. We initiate restructuring activities to align our costs to our operating plans and business strategies based on then-current economic conditions, and such activities have a specific and defined term. Restructuring costs generally include severance and other termination benefits related to voluntary retirement programs, involuntary headcount reductions and facilities closures. Such restructuring costs include elimination of operational redundancy, permanent reductions in workforce and facilities closures and, therefore, are not considered by us to be a part of the core operation of our business and are not used by management when assessing the core profitability and performance of our business operations.

(v) Gains (losses) on the sale of strategic investments. We exclude gains and losses on the sale of equity investments in privately held companies because we do not believe they are reflective of our core business and operating results.

(vi) Deferred compensation. We exclude changes in the fair value of our non-qualified deferred compensation plan because we do not use these to assess the core profitability of our business operations.

(vii) Income tax effect of non-GAAP pre-tax adjustments. Excluding the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes assists investors in understanding the tax provision associated with those adjustments and the effect on net income.  Beginning in fiscal year 2026, we transitioned from an annual non-GAAP tax rate to a three-year normalized non-GAAP tax rate of 18.0%. We believe this will provide better consistency across reporting periods by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency and do not necessarily reflect our normal operations. This rate is based on our projected annual rate through fiscal year 2028, primarily due to the completion of the acquisition of Ansys in the third quarter of fiscal year 2025 and the enactment of the One Big Beautiful Bill Act (the OBBB), which affects taxable income starting in fiscal year 2026 over the next several years. In projecting this rate, we evaluated our historical and projected mix of U.S. and international profit before tax, excluding the impact of stock-based compensation, the amortization of purchased intangibles and other GAAP only adjustments described above. We also considered other factors, including our current tax structure, U.S. tax law changes, such as the OBBB which impacts Synopsys' expensing of U.S. research expenditures commencing in fiscal year 2026, and changes to foreign derived intangible income commencing in fiscal year 2027.

About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com. 

©  2026 Synopsys, Inc. All rights reserved. Synopsys, Ansys, the Synopsys and Ansys logos, and other Synopsys trademarks are available at https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners.

INVESTOR CONTACT:
Tushar Jain
Synopsys, Inc.
650-584-4289
Synopsys-ir@synopsys.com

EDITORIAL CONTACT:
Cara Walker
Synopsys, Inc.
650-584-5000
corp-pr@synopsys.com

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SOURCE Synopsys, Inc.

FAQ

How did Synopsys (SNPS) perform in Q3 fiscal 2026?

Synopsys reported Q3 FY26 revenue of $2.477 billion and GAAP EPS of $2.84. According to Synopsys, non-GAAP EPS was $3.91, with broad-based strength led by Design Automation and a strong contribution from Ansys and design IP.

What is Synopsys’ updated full-year 2026 revenue and EPS guidance (SNPS)?

Synopsys now targets FY26 revenue of $9.690–$9.740 billion and non-GAAP EPS of $15.04–$15.10. According to Synopsys, this raised outlook reflects continued AI-driven demand, including $2.98 billion expected revenue contribution from Ansys.

What margins is Synopsys (SNPS) guiding for fiscal 2026?

Synopsys expects a FY26 GAAP operating margin of about 10.4% and non-GAAP operating margin around 41.5% at guidance midpoints. According to Synopsys, the gap mainly reflects amortization of acquired intangibles, stock-based compensation, restructuring and acquisition-related adjustments.

How much cash flow does Synopsys (SNPS) expect to generate in fiscal 2026?

Synopsys targets FY26 operating cash flow of approximately $2.8 billion and free cash flow of about $2.6 billion. According to Synopsys, this cash flow outlook incorporates expected capital expenditures near $225 million for the fiscal year.

What role does Ansys play in Synopsys’ 2026 outlook (SNPS)?

Ansys is expected to contribute about $2.98 billion to Synopsys’ FY26 revenue guidance. According to Synopsys, this figure is included within the $9.690–$9.740 billion total revenue target and follows the acquisition completed a year earlier.

How did Synopsys’ non-GAAP EPS change year over year in Q3 2026 (SNPS)?

Non-GAAP EPS increased to $3.91 in Q3 FY26 from $3.39 in Q3 FY25. According to Synopsys, non-GAAP net income from continuing operations rose to $752.5 million, supported by higher revenue across products, maintenance and services.

What are Synopsys’ projected expenses for Q4 and full-year 2026 (SNPS)?

For Q4 FY26, Synopsys targets GAAP expenses of $2.225–$2.300 billion and non-GAAP expenses of $1.450–$1.480 billion. According to Synopsys, full-year GAAP expenses are guided at $8.667–$8.742 billion, with non-GAAP expenses of $5.670–$5.700 billion.