Synopsys Q4 Earnings Beat; Guidance Mixed
Synopsys Q4 earnings topped estimates on Ansys consolidation, and higher FY 2026 guidance should shift market focus to integration and margins.
KEY TAKEAWAYS
- Q4 revenue $2.3 billion and non-GAAP EPS $2.90 exceeded company guidance.
- FY 2026 guidance implies $9.6 billion midpoint, including $2.9 billion of Ansys revenue.
- Record backlog $11.4 billion underscores multi-year visibility but raises organic growth questions.
HIGH POTENTIAL TRADES SENT DIRECTLY TO YOUR INBOX
Add your email to receive our free daily newsletter. No spam, unsubscribe anytime.
Synopsys, Inc. (SNPS) reported fourth-quarter earnings that exceeded expectations on Dec. 10, 2025, driven by the first full-period consolidation of Ansys following its acquisition. The company issued fiscal 2026 guidance reflecting the Ansys acquisition and recent divestitures, while management highlighted mixed margin trends.
Quarter Results and Guidance
Synopsys reported fourth-quarter revenue of $2.3 billion, surpassing the midpoint of its guidance. The company said non-GAAP earnings per share (EPS) for the quarter and full fiscal year exceeded guidance ranges, with non-GAAP EPS at $2.90 for the quarter and $12.91 for the year. GAAP net income for the quarter was $449 million, with GAAP EPS of $2.39, down sharply from $1.1 billion and $7.14 a year earlier, despite a 37.8% year-over-year revenue increase. Full-year revenue reached a record $7.1 billion.
For fiscal 2026, Synopsys guided revenue to a range of $9.6 billion to $9.7 billion, with non-GAAP EPS between $14.32 and $14.40. This outlook includes $2.9 billion of expected Ansys revenue and reflects a roughly $110 million revenue headwind from divested Optical Solutions Group and PowerArtist RTL businesses. First-quarter guidance calls for revenue of $2.4 billion and non-GAAP EPS between $3.52 and $3.58.
Ansys Integration and Backlog
Following the closing of the Ansys Merger, Ansys contributed $757 million to Synopsys’ fiscal 2025 revenue. The company is integrating the business, with contracted backlog at year-end totaling $11.4 billion. Synopsys’ forward-looking materials link the larger fiscal 2026 revenue target to integration plans, expected synergies, and joint-solution opportunities.
Chief Financial Officer Shelagh Glaser said management expects to "set another revenue record in 2026 while fully integrating Ansys, driving further operational efficiency, and capitalizing on our expanded opportunity."
The combination of acquisitive scale, an explicit Ansys revenue component, and a modest divestiture headwind, alongside weaker GAAP profitability despite revenue growth, focuses attention on integration execution and margin trajectory. The investor presentation reiterated that current results are not necessarily indicative of future periods and provided segment and margin metrics consistent with the press release.
