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Synopsys (SNPS) shares have experienced a pullback in recent times, with shares now trading 19.7% below its 52-week high of $629.38 achieved on Sept. 30. Over the past three months, Synopsys shares have plunged 16.9%, underperforming the broader Zacks Computer & Technology Sector's decline of 1.1% and the Zacks Computer – Software industry's fall of 2.7%. Synopsys is currently facing several challenges, including a rise in cost of revenues and operating expenses. In the third quarter of fiscal 2024, these c ...

Optimized EDA and IP Solutions Deliver Enhanced Compute Performance, Power and Engineering Productivity for TSMC N2 and A16 Processes Highlights Production-ready AI-driven EDA flows, powered by Synopsys.ai, on N2 deliver exceptional quality of results and accelerate design node migration for industry leaders Developing new backside power delivery capabilities on TSMC's A16 to enable efficient power distribution and system performance Joint TSMC, Synopsys and Ansys multi-physics flow supporting CoWoS interpo ...

Core Viewpoint - Synopsys has entered into a definitive agreement to sell its Optical Solutions Group (OSG) to Keysight Technologies, with the transaction subject to customary closing conditions and regulatory approvals, including the pending acquisition of Ansys by Synopsys, expected to close in the first half of 2025 [2][4]. Group 1: Transaction Details - The sale of OSG is a strategic move to facilitate the regulatory approval process for Synopsys' acquisition of Ansys [2][4]. - The financial terms of the transaction have not been disclosed, and it is not expected to materially impact Synopsys' financials [4]. Group 2: OSG Overview - Synopsys' Optical Solutions Group provides advanced design tools for optical engineers, including products like CODE V, LightTools, LucidShape, RSoft Photonic Device Tools, and the new ImSym platform [3]. - These tools are designed to enhance the speed and quality of optical product development, supporting high-accuracy simulations and visualizations [3]. Group 3: Keysight's Perspective - Keysight Technologies aims to expand its software simulation portfolio through this acquisition, enhancing capabilities in optics and photonics [4]. - The integration of OSG is expected to address critical design challenges in multi-physics simulations, benefiting customers across various industries [4].

Synopsys Inc. (SNPS) has seen a sharp decline of more than 18% in its stock price over the past three months, underperforming both its industry and the broader technology sector. During this period, the Zacks Computer – Software industry declined 4.2%, and the Zacks Computer and Technology sector fell by 6.7%. Several factors have contributed to this decline, including mounting fears over a potential U.S. recession and a slowdown in the company's growth within its key design automation segment. Despite thes ...

"In today's competitive markets for imaging products, the ability to comprehensively and accurately prototype imaging systems virtually is a game-changer," said Emilie Viasnoff, head of Optical Solutions at Synopsys. "ImSym embodies our commitment to innovation by offering a comprehensive, intuitive, and physics-based software solution for imaging system design and validation. After decades at the forefront of software for optical design, we are proud to expand our trusted solutions into the virtual prototy ...

1 22 1 and H+ t II E H appen u t 10 n Sundry Photography The Synopsys Investment Thesis When I heard about the proposed merger of Synopsys Inc. (NASDAQ:SNPS) and Ansys Inc. (ANSS) , I was very interested as I consider both companies to be of high quality. Therefore, I wanted to see what upside potential I see over the next 5 years and what factors were likely to drive returns. And here I found the shortcoming of the high multiple, which together with the likely rising number of shares outstanding will defin ...

Core Insights - Synopsys is a leading supplier in the semiconductor industry, particularly in electronic design automation (EDA) software, controlling a significant market share alongside competitors [2][3] - The company has underperformed compared to the broader semiconductor industry, with a total return of 10% this year, while the Invesco PHLX Semiconductor ETF has returned over 26% [1] Business Segments - Synopsys operates in three segments: Design Automation (EDA), Design IP (IP cores), and Software Integrity, with EDA contributing 63% of revenues, Design IP 26%, and Software Integrity 9% in fiscal 2023 [3] - The Software Integrity business is currently being sold and is reported under "discontinued operations" [3] Market Position - The EDA market is highly concentrated, with three firms controlling 75% to 80% of the market, providing Synopsys with a competitive advantage and high operating margins [5] - EDA software and IP cores contribute a small percentage (2% to 3%) of the overall value added in the semiconductor industry, but are essential for chip design [3][4] Financial Performance - In fiscal Q3 2024, Synopsys reported adjusted EPS of $3.43, a 27% increase year-over-year, and sales of $1.53 billion, exceeding expectations by $10 million and reflecting a 13% increase [6] - The company raised its full-year adjusted EPS guidance to a midpoint of $13.10, slightly above analyst expectations [7] Industry Trends - Concerns were raised about the impact of Intel's layoffs on Synopsys, as Intel is a major customer; however, there are indications that this could lead to increased outsourcing of EDA services to Synopsys [8][9] - Synopsys is positioned to adapt to industry trends, as indicated by the CEO's comments on partnerships and solutions relevant to the evolving data center market [11]

Core Viewpoint - Synopsys reported better-than-expected earnings for Q3 FY2024, with non-GAAP EPS of $3.43, exceeding the Zacks Consensus Estimate of $3.28, and a year-over-year increase of 27% driven by higher revenues and improved cost management [1] Financial Performance - Revenues increased by 13% year over year to $1.53 billion, aligning with the Zacks Consensus Estimate, supported by growth across multiple business segments [1] - License-type revenue breakdown: Time-Based Product revenues (52.6% of total) decreased by 2.9% to $803.1 million, Upfront Product revenues (29%) rose by 51.2% to $442.5 million, and Maintenance and Service revenues (18.4%) increased by 19.5% to $280.1 million [3] - Segment-wise, Electronic Design Automation (EDA) revenues (66.9% of total) were $1.02 billion, up 4.9% year over year, while Design IP revenues (30.4% of total) amounted to $463.1 million [4] Geographic Performance - Revenue distribution: North America (44% of total) generated $672.6 million, Europe (9%) contributed $144.6 million, Korea (13%) brought in $194.8 million, China (17%) accounted for $266.7 million, and Other regions (16%) generated $247 million [5] Profitability Metrics - Non-GAAP operating margin was 40%, expanding by 360 basis points year over year [5] - EDA's adjusted operating margin increased by 70 basis points to 41.5%, while the Design IP segment's margin improved significantly to 36.7% from 23.6% in the previous year [6] Balance Sheet & Cash Flow - As of July 31, 2024, Synopsys had cash and short-term investments of $1.99 billion, up from $1.66 billion as of April 30, 2024 [7] - Total long-term debt decreased to $15.6 million from $17 million in the previous quarter [7] - Cash flow from operating activities, including discontinued operations, was $844.2 million for the first nine months, compared to $1.37 billion in the same period last year [7] Guidance - For FY2024, Synopsys expects revenues between $6.105 billion and $6.135 billion, with non-GAAP earnings projected in the range of $13.07-$13.12 [8] - For Q4 FY2024, expected revenues are between $1.614 billion and $1.644 billion, with non-GAAP EPS estimated between $3.27 and $3.32 [9]

Core Insights - Synopsys reported earnings per share of $3.43, exceeding the analyst estimate of $3.28 [1] - The company achieved revenue of $1.53 billion, which is 0.39% higher than the analyst estimate of $1.52 billion [1]