Synopsys(SNPS) - 2025 Q3 - Quarterly Results

Financial Performance - Revenue for Q3 FY2025 was $1.740 billion, a 14% increase year-over-year from $1.526 billion in Q3 FY2024[2] - GAAP net income for Q3 FY2025 was $242.5 million, or $1.50 per diluted share, down from $425.9 million, or $2.73 per diluted share in Q3 FY2024[6] - Non-GAAP net income for Q3 FY2025 was $548.9 million, or $3.39 per diluted share, compared to $535.5 million, or $3.43 per diluted share in Q3 FY2024[7] - Full-year 2025 revenue guidance is projected between $7.03 billion and $7.06 billion[5] - Q4 FY2025 revenue target is set between $2.230 billion and $2.260 billion[13] - GAAP EPS for Q4 FY2025 is expected to range from $(0.27) to $(0.16)[26] - Non-GAAP EPS for Q4 FY2025 is projected between $2.76 and $2.80[26] - Net income for the nine months ended July 31, 2025, was $884.8 million, a decrease of 22.4% from $1,140.2 million in the same period of 2024[40] Cash Flow and Assets - Operating cash flow for FY2025 is expected to be approximately $1.130 billion[13] - Cash provided by operating activities increased to $878.9 million, up from $844.2 million year-over-year[40] - Cash and cash equivalents decreased to $2,526,475,000 as of July 31, 2025, from $3,896,532,000 as of October 31, 2024[36] - Total assets increased significantly to $48,230,256,000 as of July 31, 2025, compared to $13,073,561,000 as of October 31, 2024[36] - Total liabilities rose to $20,616,070,000 as of July 31, 2025, from $4,050,355,000 as of October 31, 2024[36] - Cash, cash equivalents, and restricted cash from continuing operations at the end of the period were $2.5 billion, an increase from $1.8 billion in the prior year[40] Segment Performance - Revenue from the Design Automation segment for the three months ended July 31, 2025, was $1,312.1 million, representing a 23.5% increase from $1,062.6 million in 2024[43] - The Design IP segment generated revenue of $427.6 million for the three months ended July 31, 2025, a decrease of 7.7% from $463.1 million in 2024[43] - Adjusted operating income for the Design Automation segment rose to $583.8 million, a 32.3% increase compared to $440.9 million in the prior year[43] - Total adjusted segment operating income for the nine months ended July 31, 2025, was $1,810.3 million, up from $1,758.8 million in 2024[45] - The adjusted operating margin for the Design Automation segment improved to 44.5%, compared to 41.5% in the same quarter of the previous year[43] Strategic Initiatives - The Ansys acquisition, completed on July 17, 2025, is expected to enhance Synopsys' portfolio and customer base[3] - The company is taking a conservative view of Q4 due to underperformance in the Design IP segment[6] - The company plans to reallocate resources in its Design IP segment to focus on higher growth opportunities and harness AI efficiencies[31] - Synopsys is currently undergoing the Ansys Merger, which is expected to impact its operations and market position significantly[31] - Synopsys has adopted a non-GAAP tax rate of 16% for fiscal year 2025, based on an evaluation of historical and projected U.S. and international profit before tax[58] - The company focuses on engineering solutions from silicon to systems, enabling rapid innovation of AI-powered products[59] - Synopsys delivers industry-leading silicon design, IP, simulation, and analysis solutions, enhancing R&D capability and productivity for customers[59] Expenses - Research and development expenses for the three months ended July 31, 2025, were $625,301,000, up from $508,872,000 in the same period of 2024, reflecting a 22.9% increase[34] - Cash used in investing activities significantly increased to $16.4 billion, compared to $220.0 million in the previous year, primarily due to acquisitions[40] - Proceeds from debt in financing activities amounted to $14.3 billion, with net cash provided by financing activities totaling $14.2 billion[40] - Gross margin for the nine months ended July 31, 2025, was $3,830,432,000, compared to $3,621,184,000 for the same period in 2024, indicating a growth of about 5.8%[34]