Core Insights - Synopsys reported Q4 revenue of $2.26 billion, a 38% year-over-year increase, exceeding expectations of $2.24 billion [1] - Adjusted EPS for Q4 was $2.90, slightly above the market expectation of $2.88 [1] - The company anticipates FY2026 revenue between $9.56 billion and $9.66 billion, aligning with analyst expectations of $9.63 billion [1] Financial Performance - Q4 revenue breakdown: Design Automation contributed $1.85 billion, and Design IP contributed $407 million [1] - Adjusted operating profit grew 36% year-over-year to $822.6 million, surpassing the expected $803 million [1] - FY2025 revenue reached a record $7.1 billion, a 15% increase from FY2024's $6.1 billion [1] Future Outlook - The company expects Q1 revenue between $2.37 billion and $2.42 billion, above the analyst forecast of $2.36 billion [1] - Adjusted EPS for Q1 is projected between $3.52 and $3.58, exceeding the expected $3.46 [1] - Synopsys has a backlog of $11.4 billion, indicating strong future revenue potential [1] Strategic Developments - NVIDIA invested $2 billion in Synopsys to co-develop tools for product development [2] - Synopsys plans to lay off about 10% of its workforce to reinvest in AI-driven design and system-level solutions [2] - The acquisition of Ansys contributed $667.7 million to Q4 revenue, enhancing Synopsys's capabilities [2] Market Position - Synopsys competes in the electronic design automation market against Cadence Design Systems and Siemens [2] - The market is expected to grow as chip manufacturers develop AI and high-performance computing processors [2] - Mizuho Securities described Synopsys's Q4 performance as "better than expected," highlighting strong backlog as a positive indicator for future performance [3]