Core Viewpoint - The article discusses the advancements in SRAM technology presented by Intel and TSMC at the IEEE International Solid-State Circuits Conference (ISSCC), highlighting the use of new nanosheet transistor architecture to improve memory density and performance. Group 1: SRAM Technology Advancements - Intel and TSMC have achieved SRAM density of 38.1 megabits per square millimeter using storage cells of 0.021 square micrometers, with Intel improving density by 23% and TSMC by 12% [1][2] - The new nanosheet transistor architecture allows for better scalability of SRAM compared to previous FinFET designs, enabling more flexible current driving capabilities [2][3] - Intel's 18a technology introduces a backside power network, which helps reduce circuit area by allowing for a critical capacitor to be built beneath the SRAM cell [3][4] Group 2: Design Flexibility and Performance - Nanosheet devices provide greater flexibility in SRAM unit size, allowing for a reduction in unit area by up to 23% for Intel [3] - TSMC engineers have extended bit line lengths to connect more SRAM units, reducing the need for peripheral circuits and increasing overall density by nearly 10% [4] - Synopsys has developed a new SRAM design that achieves similar density to Intel and TSMC but operates at lower speeds, with a maximum speed of 2.3 GHz compared to TSMC's 4.2 GHz and Intel's 5.6 GHz [6][7] Group 3: Power Efficiency - Synopsys employs a dual-rail design that allows SRAM arrays and peripheral circuits to operate at different voltages, reducing power consumption while maintaining performance [5][6] - The voltage for SRAM cells can range from 540 millivolts to 1.4 volts, while peripheral voltage can be as low as 380 millivolts, optimizing power efficiency [6]

Core Insights - Synopsys reported Q1 2025 earnings that exceeded expectations, with non-GAAP EPS of $3.03, surpassing analyst estimates of $2.79 and management's guidance of $2.77 to $2.82 [1][2] - Revenue for the quarter was $1.455 billion, slightly above the anticipated $1.451 billion, despite a year-over-year decline of 3.7% [1][2] Financial Performance - Non-GAAP EPS decreased by 10.4% year-over-year from $3.38 to $3.03 [3] - Revenue declined from $1.511 billion in Q1 2024 to $1.455 billion in Q1 2025 [3] - Net income (non-GAAP) was $473.2 million, down 9.9% from $525.5 million in Q1 2024 [3] - Operating income fell by 28.6% from $352.6 million to $251.8 million [3] Business Overview - Synopsys is a leader in electronic design automation (EDA) and silicon IP, crucial for integrated circuit design and testing [4] - The company is focusing on integrating AI and machine learning into its products, enhancing workflow efficiency [5] Segment Performance - The EDA segment revenue grew to $1.020 billion from $985.3 million, indicating a strengthening presence in chip design [6] - The Design IP segment revenue declined to $435.1 million from $525.7 million, highlighting potential future challenges [7] Future Outlook - Management maintained its full-year 2025 guidance, projecting revenue between $6.745 billion and $6.805 billion, with non-GAAP EPS expected between $14.88 and $14.96 [9] - The company is confident in navigating market dynamics and the robustness of its strategy [9] Challenges - Ongoing macroeconomic conditions and geopolitical risks, particularly in China, are acknowledged as challenges [8] - Regulatory pressures in the semiconductor industry are also noted as potential areas of impact [8]

Core Insights - Synopsys reported revenue of $1.46 billion for the quarter ended January 2025, reflecting an 11.8% decline year-over-year, with EPS at $3.03 compared to $3.56 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $1.45 billion by 0.16%, while the EPS surpassed the consensus estimate of $2.81 by 7.83% [1] Revenue Breakdown - Maintenance and service revenue was $258.95 million, below the average estimate of $264.09 million, marking a year-over-year decline of 12.8% [4] - Total products revenue reached $1.20 billion, slightly above the average estimate of $1.19 billion, with a year-over-year decrease of 11.5% [4] - Design IP revenue was $435.10 million, exceeding the average estimate of $425.91 million, but showing a 17.2% decline year-over-year [4] - Design Automation revenue was $1.02 billion, matching the average estimate, with a year-over-year increase of 3.5% [4] - Upfront products revenue was $368.12 million, below the average estimate of $395.06 million, reflecting a 17.8% year-over-year decline [4] - Time-based products revenue was $828.24 million, surpassing the average estimate of $783.55 million, with an 8.4% decline year-over-year [4] Stock Performance - Synopsys shares have returned -13% over the past month, compared to a -2.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - Synopsys reported quarterly earnings of $3.03 per share, exceeding the Zacks Consensus Estimate of $2.81 per share, but down from $3.56 per share a year ago, representing an earnings surprise of 7.83% [1] - The company posted revenues of $1.46 billion for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 0.16%, but down from $1.65 billion year-over-year [2] - Over the last four quarters, Synopsys has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Synopsys shares have declined approximately 5.7% since the beginning of the year, while the S&P 500 has gained 1.3% [3] - The current Zacks Rank for Synopsys is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $3.37 on revenues of $1.6 billion, and for the current fiscal year, it is $14.90 on revenues of $6.77 billion [7] - The outlook for the Computer - Software industry, where Synopsys operates, is currently in the bottom 42% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - For Q1 fiscal 2025, revenue was $1,455.3 million, a decrease of $55.7 million or 4% compared to $1,511.0 million in Q1 fiscal 2024[135]. - Operating income decreased by $100.8 million or 29%, totaling $251.8 million in Q1 fiscal 2025 compared to $352.6 million in Q1 fiscal 2024[136]. - Net income from continuing operations attributed to the company was $295.7 million, down from $437.5 million in the same period last year[136]. - Total revenue for the three months ended January 31, 2025, was $1,455.3 million, a decrease of $55.7 million or 4% compared to $1,511.0 million in the same period of fiscal 2024[168]. - The decrease in total revenues was primarily due to the impact of an extra week in the first quarter of fiscal 2024, which contributed approximately $63.2 million in revenue[171]. Merger and Acquisition - The company is in the process of acquiring Ansys, valued at approximately $35.0 billion, with the merger expected to close in the first half of calendar year 2025[140]. - The merger agreement includes a cash-and-stock transaction where Ansys shareholders will receive $197.00 in cash and 0.3450 shares of Synopsys common stock[142]. - The company has entered into a term loan facility credit agreement allowing borrowing up to $4.3 billion to finance part of the cash consideration for the Ansys merger[146]. - The company expects to fund the anticipated $19 billion cash consideration payment for the Ansys Merger through a combination of cash and debt, with $14.9 billion in fully-committed debt financing in place[199]. - The Bridge Commitment provides an aggregate principal amount of up to $10.6 billion, intended for financing a portion of the cash consideration for the Ansys Merger and related expenses[211]. - The Bridge Commitment was reduced by $1.1 billion to $10.6 billion following the closing of the Software Integrity Divestiture on October 3, 2024[212]. - The Term Loan Agreement allows borrowing up to $4.3 billion at the closing of the Ansys Merger, with no outstanding balance as of January 31, 2025[213][214]. - The Term Loan Agreement includes two tranches: $1.45 billion maturing in two years and $2.85 billion maturing in three years[214]. Revenue Segmentation - Design Automation segment revenue increased by $34.9 million or 4% to $1,020.2 million, while Design IP segment revenue decreased by $90.6 million or 17% to $435.1 million[168]. - Maintenance revenue increased by $15.8 million or 16% to $117.2 million, while professional service and other revenue decreased by $20.3 million or 13% to $141.8 million[177]. - Time-based products revenue for the three months ended January 31, 2025, was $828.2 million, an increase of $23.1 million or 3% compared to $805.1 million in the same period of fiscal 2024[174]. - Upfront products revenue decreased by $74.3 million or 17% to $368.1 million, primarily due to a decrease in the sale of IP and hardware products[175]. Expenses and Costs - Total cost of revenue and operating expenses increased by $45.1 million or 4%, primarily due to higher legal and consulting fees related to the Ansys merger[141]. - Total cost of revenue for the three months ended January 31, 2025, was $270.0 million, a decrease of $9.2 million (3%) compared to $279.2 million in the same period of 2024[180]. - Research and development expenses increased to $553.2 million, up $27.7 million (5%) from $525.5 million in the prior year, representing 38% of total revenue[184]. - Sales and marketing expenses decreased to $209.2 million, down $9.6 million (4%) from $218.8 million in the same period of 2024[186]. - General and administrative expenses rose to $167.1 million, an increase of $35.8 million (27%) compared to $131.3 million in the prior year, primarily due to legal and consulting fees related to the Ansys Merger[187]. Cash Flow and Financing - Cash used in operating activities improved to $67.5 million for the three months ended January 31, 2025, a decrease of $20.3 million compared to $87.8 million in the same period of 2024[205]. - Cash used in financing activities decreased by $22.4 million compared to the first quarter of fiscal 2024, primarily due to lower taxes paid for net share settlements and offset by a $30.0 million redemption of redeemable non-controlling interest in the first quarter of fiscal 2025[210]. - Interest income increased significantly to $35.7 million, up $22.6 million (173%) from $13.1 million in the same period of 2024[190]. - As of January 31, 2025, the company held $3.8 billion in cash, cash equivalents, and short-term investments, with $800.8 million domiciled in foreign jurisdictions[197][198]. - The applicable margin for loans under the Revolving Credit Agreement ranges from 0.785% to 0.975%, based on the company's consolidated leverage ratio[220]. - As of January 31, 2025, the company had an outstanding balance of $14.2 million under a 12-year credit agreement in China, with borrowings at a floating rate[223]. - The company was in compliance with the financial covenants as of January 31, 2025[222]. Market Outlook - The company anticipates a challenging near-term growth environment in China due to macroeconomic factors and global trade restrictions[149]. - The company expects growth across its geographies in fiscal 2025, despite some customers postponing decisions and decreasing spending due to macroeconomic uncertainty[149]. - The company anticipates additional changes to U.S. export regulations but does not expect them to materially impact its business at this time[152]. Discontinued Operations - The Software Integrity business was sold to entities controlled by funds affiliated with Clearlake Capital Group and Francisco Partners, classified as discontinued operations[153]. Fiscal Year Change - The fiscal year end has changed to October 31, effective with fiscal 2025, impacting revenue and operating results[158].

Revenue Performance - Revenue for Q1 FY 2025 was $1.455 billion, a decrease of 3.7% compared to $1.511 billion in Q1 FY 2024[3] - Total revenue for the three months ended January 31, 2025, was $1,455,315, a decrease of 3.7% compared to $1,510,989 for the same period in 2024[34] - Total products revenue decreased to $1,196,362, down 4.1% from $1,247,429 year-over-year[34] - Full fiscal year 2025 revenue targets range from $6.745 billion to $6.805 billion[13] - For Q2 FY 2025, revenue is targeted between $1.585 billion and $1.615 billion[13] Net Income and Earnings Per Share - GAAP net income for Q1 FY 2025 was $295.7 million, or $1.89 per diluted share, down from $437.5 million, or $2.82 per diluted share in Q1 FY 2024[7] - Non-GAAP net income for Q1 FY 2025 was $473.2 million, or $3.03 per diluted share, compared to $525.5 million, or $3.38 per diluted share in Q1 FY 2024[8] - Net income attributed to Synopsys for the three months ended January 31, 2025, was $295,683, a decline of 34.2% from $449,112 in the prior year[34] - Net income for the three months ended January 31, 2025, was $297.4 million, a decrease of 33.4% compared to $446.2 million for the same period in 2024[40] - GAAP earnings per diluted share for Q2 FY 2025 are projected to be between $2.21 and $2.33[13] - Non-GAAP earnings per diluted share for Q2 FY 2025 are projected to be between $3.37 and $3.42[13] - GAAP earnings per diluted share attributed to Synopsys is projected to be between $10.09 and $10.31 for the fiscal year ending October 31, 2025[29] - Target non-GAAP earnings per diluted share attributed to Synopsys is expected to be between $14.88 and $14.96 for the same fiscal year[29] Segment Performance - Total revenue for the Design Automation segment was $1,020.2 million, representing 70.1% of total revenue, an increase from 65.2% in the prior year[44] - Adjusted operating income for the Design Automation segment increased to $404.7 million, with an adjusted operating margin of 39.7%, up from 36.5% in the previous year[44] - The Design IP segment generated $435.1 million in revenue, accounting for 29.9% of total revenue, down from 34.8% in the prior year[44] - Total adjusted segment operating income decreased to $531.2 million from $605.2 million year-over-year[45] Cash Flow and Assets - Cash and cash equivalents decreased to $3,653,880 as of January 31, 2025, from $3,896,532 at October 31, 2024[36] - Total current assets decreased to $6,323,616 as of January 31, 2025, compared to $6,469,666 at October 31, 2024[36] - Total liabilities decreased to $3,736,188 as of January 31, 2025, from $4,050,355 at October 31, 2024[36] - Net cash used in operating activities was $(67.5) million, an improvement from $(87.8) million in the same quarter last year[40] - Cash, cash equivalents, and restricted cash from continuing operations at the end of the period totaled $3,657.8 million, compared to $1,116.2 million a year earlier[40] - The company reported a net cash used in investing activities of $(22.0) million, compared to $(54.4) million in the prior year[40] Strategic Initiatives and Guidance - The company reaffirmed its full-year 2025 guidance, expecting double-digit revenue growth[6] - The company completed the sale of its Software Integrity business on September 30, 2024, and results are presented on a continuing operations basis[6] - The company is pursuing the acquisition of ANSYS, Inc., which is expected to impact its long-term financial objectives[30] - The company anticipates potential impacts from macroeconomic conditions, including inflation and geopolitical pressures, on its financial results[31] Other Financial Metrics - Stock-based compensation expenses were $186.5 million, an increase from $165.5 million in the previous year[45] - The company adopted a non-GAAP tax rate of 16% for fiscal year 2025 to provide better consistency across interim reporting periods[59]

Core Insights - Synopsys reported Q1 fiscal year 2025 revenue of $1.455 billion, a decrease from $1.511 billion in Q1 fiscal year 2024, indicating a year-over-year decline of approximately 3.7% [1][8] - The company achieved non-GAAP earnings of $473.2 million, or $3.03 per diluted share, compared to $525.5 million, or $3.38 per diluted share in the same quarter last year, reflecting a decrease of about 9.9% in net income [4][8] - Synopsys reaffirmed its full-year guidance, expecting double-digit revenue growth, supported by strong design activity at advanced nodes driven by AI innovations [1][8] Financial Performance - GAAP net income for Q1 fiscal year 2025 was $295.7 million, or $1.89 per diluted share, down from $437.5 million, or $2.82 per diluted share in Q1 fiscal year 2024, representing a decline of approximately 32.4% [3][24] - Total revenue breakdown shows Design Automation segment revenue at $1.020 billion (70.1% of total), up from $985.3 million (65.2% of total) year-over-year, while Design IP segment revenue fell to $435.1 million (29.9% of total) from $525.7 million (34.8% of total) [31][32] Business Segments - The Design Automation segment demonstrated growth in adjusted operating income, reaching $404.7 million with a margin of 39.7%, compared to $359.5 million and a margin of 36.5% in the previous year [31][32] - Conversely, the Design IP segment's adjusted operating income decreased to $126.5 million with a margin of 29.1%, down from $245.7 million and a margin of 46.7% in the prior year [31][32] Future Outlook - Synopsys provided financial targets for Q2 and full fiscal year 2025, projecting revenue between $1.585 billion and $1.615 billion for Q2, and between $6.745 billion and $6.805 billion for the full year [6][7] - The company anticipates maintaining a non-GAAP tax rate of 16% and expects operating cash flow to be approximately $1.8 billion for the fiscal year [7][8]

Financial Results - Synopsys, Inc. is set to release its financial results for Q1 fiscal year 2025 on February 26, 2025, after market close [1] - Analysts anticipate earnings of $2.79 per share, a decrease from $3.56 per share in the same quarter last year [1] - Projected quarterly revenue is $1.45 billion, down from $1.65 billion a year earlier [1] Stock Performance - Synopsys shares declined by 2.6%, closing at $457.95 [2] Analyst Ratings - Rosenblatt analyst Blair Abernethy maintains a Buy rating with a price target of $660 [3] - Morgan Stanley analyst Lee Simpson has an Overweight rating, reducing the price target from $625 to $590 [3] - Baird analyst Joe Vruwink keeps an Outperform rating, cutting the price target from $644 to $630 [3] - Berenberg analyst Nay Soe Naing initiated coverage with a Buy rating and a price target of $660 [3] - JP Morgan analyst Harlan Sur maintains an Overweight rating, increasing the price target from $655 to $685 [3]

Core Viewpoint - Synopsys is expected to report a decline in both earnings and revenue for the first quarter of fiscal 2025, with non-GAAP earnings per share projected between $2.77 and $2.82, and revenues anticipated between $1.435 billion and $1.465 billion, reflecting year-over-year declines of 21% and 11.9% respectively [2][3]. Financial Performance Expectations - Non-GAAP earnings per share are estimated at $2.81, indicating a 21% decline year-over-year [2]. - Revenue expectations are set between $1.435 billion and $1.465 billion, with a consensus estimate of $1.45 billion, suggesting an 11.9% decline from the previous year [3]. Factors Influencing Performance - The rising demand for Synopsys' product portfolio, particularly in high-performance cloud computing and AI solutions, is expected to positively impact performance [4][5]. - Increased adoption of Synopsys.ai among chip manufacturers is anticipated to contribute to top-line growth [5]. - The surge in global design activity and user engagement, along with contract wins and the use of the Fusion Platform, is likely to enhance fiscal first-quarter performance [6]. - The growing use of AI, IoT, 5G, and cloud technology is expected to drive demand for Synopsys' solutions [7]. Challenges - Ongoing macroeconomic challenges and tightening budgets among corporations may partially offset the positive impacts of growth drivers [8].

In its upcoming report, Synopsys (SNPS) is predicted by Wall Street analysts to post quarterly earnings of $2.81 per share, reflecting a decline of 21.1% compared to the same period last year. Revenues are forecasted to be $1.45 billion, representing a year-over-year decrease of 11.9%.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Ahead of a company's ea ...