SNPS US S&P 500NASDAQ-100Russell 1000 Earnings call
Synopsys (SNPS) · Q2 2026 results and valuation
Share price: $462.12 · 2026-11-11
Synopsys provides engineering solutions for the design, verification, and manufacturing of integrated circuits and electronic systems. The company offers electronic design automation (EDA) software, simulation and analysis tools, and semiconductor intellectual property to customers in industries such as automotive, aerospace, and high-tech. Source: 10-K annual report (2025-12-22)
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q3 2026 · published 26 Aug 2026 and 27 May 2026
Operating income up 196.9% on the previous quarter. Management sounded very upbeat, though noticeably less so answering analysts.
1 · Numbers
+196.9%
Operating income vs Q1 2026
Outlook given
Operating income 357.5M vs 120.4M
Revenue +8.8%
Against the same quarter last year (Q2 2025) it is +116.3%, so it is not just seasonal.
Why Against the same quarter last year (+116.3%), operating income rose primarily due to robust EDA software performance, record hardware-assisted verification solutions, and the acquisition of Ansys, which contributed to overall revenue growth and improved operating efficiency.
2 · How management spoke
Very upbeat
More upbeat than 95% of company calls
Answers to analysts: upbeat, but clearly less so than the script.
Last call it was different: script and answers matched.
3 · What stood out
Synopsys raised its free cash flow guidance to approximately $2.6 billion, an increase of $600 million over previous guidance due to higher cash collections and lower CapEx.
Valuation
Is Synopsys undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2025-10-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 15.2% growth a year (3-year revenue growth), the model's fair value is $210.48 a share — the stock trades 120% above it. Today's price assumes 24.9% growth a year.
Current price
$462.12
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+24.9% for 10 yrs
Fair value / share
$210.48
Buy below
$157.86
Price vs fair value
Overvalued 120%
Price vs buy-below price
Overvalued 193%
Read between the lines
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Guidance
Synopsys reported Q3 revenue of $2.477 billion, a non-GAAP operating margin of 41.6%, and non-GAAP EPS of $3.91, all of which beat the high end of their guidance range.
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Guidance
The company raised its free cash flow guidance to approximately $2.6 billion, an increase of $600 million over previous guidance due to higher cash collections and lower CapEx.
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Guidance
Synopsys expects EDA growth to accelerate to double digits in Q4 and for the full year.
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Figure
Synopsys reported more than 30 active customer engagements for its agentic AI platform.
Source quote
“We're seeing strong customer interest in our agentic AI platform with more than 30 active customer engagements underway.”
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Guidance
Synopsys raised its full-year revenue, non-GAAP operating margin, EPS, and cash flow guidance due to Q3 strength and momentum into Q4.
4 more
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Figure
Revenue from Korea is trending up toward 20% this year, indicating growth in that specific regional market.
Source quote
“Revenue generated from Korea appears to be trending up, close to 20% this year.”
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Key theme
AI demand is fueling the need for IP and design solutions to address unprecedented design complexity in next-generation AI compute, infrastructure, and physical AI systems.
Source quote
“Unprecedented design complexity driven by the demands of AI is fueling the need for the IP and design solutions necessary to deliver next-generation AI compute, infrastructure and physical AI systems.”
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Figure
Growth accelerated beyond the previously expected 30% figure due to increased customer investments in building efficient custom silicon.
Source quote
“So the 30% back then was the figure we thought was a stretch, but it absolutely accelerated given all the investments our customers are making to build these efficient custom silicon.”
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Key theme
The company stated that these chips will not happen without its interface IP, highlighting the essential role of its technology in the manufacturing process.
Source quote
“These chips will not happen without our interface IP.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Management sounded noticeably less positive answering analysts than in its prepared script — a bigger drop than in 91% of calls. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.
Sentences that drove the tone
“Design IP has returned to growth and Ansys is performing strongly while beginning to create new growth opportunities across the combined portfolio.”
“Starting with Design Automation, which achieved healthy growth in Q3, underpinned by strength in EDA, including record hardware revenue.”
“Yes, we are very excited about the overall performance in EDA and the acceleration to wrap up the year with double-digit growth, exactly what we have committed to in terms...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-07-31)
| Metric | Q2 2026period end 2026-07-31 | Q1 2026period end 2026-04-30 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 2.48B | 2.28B | +8.8% | 1.74B | +42.4% |
| Gross profit | 1.80B | 1.65B | +9.2% | 1.36B | +32.2% |
| Operating income | 357.5M | 120.4M | +196.9% | 165.3M | +116.3% |
| Net income | 545.8M | 17.1M | +3090.9% | 242.5M | +125.1% |
| EPS | 2.84 | 0.09 | +3055.6% | 1.50 | +89.3% |
| P/E today 78.8 | 68.0 | 110.4 | −42.4 | 49.8 | +18.2 |
Topics
Most discussed now
- Design IP has returned to growth and Ansys is performing strongly while beginning to create new growth opportunities across the...
- The combination has strengthened Synopsys' competitive position, expanded its opportunity and enabled us to deliver differentiated…
- Synopsys is in a unique position given Synopsys' scale and the knowledge, the skills, the market position to deliver on...
- What it means even if it's coming from an EDA budget, the joint solution will capture an upside in revenue...
Faded since Q1 2026
- Fading AI scaling semiconductor demand architectural diversity, and complexity of both chips and the systems they power, driving increased demand…
- Fading An accounting impact associated with recognizing ANSYS channel revenue on a gross basis added $12.5 million to revenue...
- Fading As Synopsys further aligns and improve its operations, it has deepened its understanding and experience with ANSYS' significant channel…
- Fading Because it is the trusted multiphysics simulation for these markets.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Other events · SEC 8-K
Synopsys, Inc. entered into an accelerated share repurchase agreement with JPMorgan Chase Bank to repurchase an aggregate of $1 billion of its common stock.
- Results of operations · SEC 8-K
Synopsys reported third-quarter revenue of $2.477 billion, up from $1.740 billion in the third quarter of fiscal year 2025.
- Director or officer change · SEC 8-K
Synopsys, Inc. announced that Janet Lee will step down as General Counsel and Corporate Secretary on December 31, 2026, or upon the appointment of her successor.
- Material agreement; Director or officer change; Regulation FD disclosure · SEC 8-K
Synopsys appointed Jesse Cohn as an independent director to its board of directors, which will expand to 11 members.
- Results of operations · SEC 8-K
Synopsys reported revenue of $2.276 billion for the second quarter of fiscal year 2026, compared to $1.604 billion in the same period of the previous year.
- Director or officer change; Shareholder vote results · SEC 8-K
Synopsys stockholders voted on five proposals at the April 16, 2026, Annual Meeting, including the election of ten directors and the approval of an Equity Incentive Plan.
- Other events · SEC 8-K
Synopsys, Inc. entered into an accelerated share repurchase agreement with The Bank of Nova Scotia to repurchase an aggregate of $250 million of its common stock.
- Results of operations; Other events · SEC 8-K
Synopsys reported first-quarter revenue of $2.409 billion, compared to $1.455 billion in the first quarter of fiscal year 2025.
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-11.
Cash & runway
Cash & equivalents
$3.61B
2026-07-31
Short-term investments
$1.4M
total $3.61B
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: +19.6% YoY, +0.0% QoQ.
| Quarter | Shares |
|---|---|
| Q1 2025 | 154.4M |
| Q2 2025 | 154.9M |
| Q3 2025 | 160.2M |
| Q1 2026 | 189.6M |
| Q2 2026 | 191.5M |
| Q3 2026 | 191.5M |
Shares outstanding: 191.6M (2026-08-24)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 58 filings; 50 filings parsed.
Sold by insiders
124.7K shares
$54.8M · 14 transactions
Bought by insiders
0 shares
0 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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Q4
EDA growth accelerating to double digits
Source quote
“We expect this momentum to continue with EDA growth accelerating to double digits in Q4 and for the full year.”
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2027
add-on capabilities beginning to contribute to EDA growth
Source quote
“We expect these add-on capabilities to begin contributing to EDA growth in 2027.”
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Q4
expected sequential growth in the IP business
Source quote
“We continue to expect the IP business to grow sequentially in Q4.”
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fourth quarter
total revenue between $2.53 billion and $2.58 billion
Source quote
“Now to targets for the fourth quarter: total revenue between $2.53 billion and $2.58 billion, total GAAP costs and expenses between $2.225 billion and $2.3 billion, total non-GAAP cost and expenses between $1.45 billion and $1.48 billion, GAAP earnings of $0.60 to $0.85 per share, and non-GAAP earnings of $4.10 to $4.16 per share.”
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September
Investor Day
Source quote
“We look forward to seeing many of you at our September Investor Day to discuss the compelling long-term opportunity we have as a mission-critical partner for our customers.”