Synopsys Q4 Earnings Surpass Estimates, Revenues Rise Y/Y

Core Insights - Synopsys reported non-GAAP earnings of $2.90 per share for Q4 fiscal 2025, exceeding the Zacks Consensus Estimate by 3.94%, although down 14.7% year-over-year [1] - Revenues for Q4 fiscal 2025 increased by 37.8% year-over-year to $2.25 billion, surpassing the Zacks Consensus Estimate by 0.17% [2] Revenue Breakdown - Time-Based Product revenues reached $940.7 million, accounting for 41.7% of total revenues, up 12.7% year-over-year [3] - Upfront Product revenues rose 18.1% to $615.4 million, representing 27.3% of total revenues [3] - Maintenance and Service revenues surged to $698.8 million, significantly up from $280.1 million in the previous year [3] - Design Automation revenues totaled $1.85 billion, making up 81.9% of total revenues, and increased by 65.2% from the prior year [4] - Design IP revenues decreased to $407.2 million from $517.8 million a year ago [4] Geographic Performance - North America generated $1.05 billion (46% of total revenues), while Europe contributed $361.4 million (16%) [5] - Revenues from Korea, China, and other regions were $236.9 million, $235.6 million, and $373.7 million, respectively [5] Profitability Metrics - The non-GAAP operating margin for Q4 was 36.5%, a slight decrease from the previous year [5] - Design Automation's adjusted operating margin improved to 41.5%, while the Design IP segment's adjusted margin fell to 13.8% [6] Financial Position - Synopsys ended Q4 fiscal 2025 with $2.96 billion in cash and short-term investments, up from $2.59 billion in the prior quarter [7] - Total long-term debt stood at $13.46 billion, with operating cash flow of $640 million generated in Q4 [7] Future Guidance - For fiscal 2026, Synopsys anticipates revenues between $9.56 billion and $9.66 billion, including $2.9 billion from Ansys [8] - Non-GAAP EPS is projected to be between $14.32 and $14.40, with expenses expected in the range of $5.69 billion to $5.75 billion [8] - For Q1 fiscal 2026, revenues are expected to be between $2.365 billion and $2.415 billion, with non-GAAP EPS projected between $3.52 and $3.58 [10]