Why Is Synopsys (SNPS) Up 4.1% Since Last Earnings Report?

Core Viewpoint - Synopsys reported a mixed earnings performance for Q2 2024, missing revenue and earnings estimates, but showing year-over-year growth in earnings and revenues driven by strong demand in the semiconductor sector [2][12]. Financial Performance - Non-GAAP EPS for Q2 2024 was $3, slightly below the Zacks Consensus Estimate of $3.03, but improved by 26% year-over-year [2]. - Total revenues for Q2 2024 were $1.45 billion, a 15% increase year-over-year, but missed the consensus estimate of $1.51 billion [12]. - The Electronic Design Automation (EDA) segment generated revenues of $1.01 billion, accounting for 69.3% of total revenues, up 3.8% year-over-year [5]. - Design IP revenues were $399.8 million, representing 27.5% of total revenues [5]. - Non-GAAP operating margin expanded to 37.3%, an increase of 290 basis points year-over-year [6]. Segment Performance - Time-Based Product revenues (53.7% of total revenues) increased by 8.9% to $781.7 million, while Upfront Product revenues (27.2%) rose by 18.3% to $396.4 million [13]. - Maintenance and Service revenues (19%) saw a significant increase of 31.8% to $276.6 million compared to the previous year [13]. - The adjusted operating margin for the EDA segment rose by 150 basis points to 39.6%, while the Design IP segment's margin improved to 31.2% from 24.3% year-over-year [15]. Balance Sheet & Cash Flow - As of the end of the reported quarter, total long-term debt was $17 million, remaining stable compared to the previous quarter [7]. - Cash and short-term investments increased to $1.66 billion from $1.27 billion as of January 31, 2024 [16]. - Cash flows from operating activities, including discontinued operations, were $477 million in Q2, down from $703 million in the same quarter last year [17]. Guidance Update - For Q3 2024, Synopsys expects revenues between $1.51 billion and $1.54 billion, with non-GAAP EPS projected between $3.25 and $3.30 [8]. - For the full fiscal year 2024, revenue guidance has been revised to a range of $6.09 billion to $6.15 billion, down from the previous range of $6.57 billion to $6.63 billion [18]. Market Reaction - In the past month, Synopsys shares have increased by approximately 4.1%, outperforming the S&P 500 [11]. - The stock currently holds an average Growth Score of C, but lags in Momentum and Value Scores with grades of F [9][19].