Core Insights - Synopsys (SNPS) reported non-GAAP earnings of $3.77 per share for Q1 fiscal 2026, exceeding the Zacks Consensus Estimate by 5.6% and reflecting a year-over-year increase of 24.4% [1][10] - Revenues for the first quarter surged 65.5% year over year to $2.41 billion, also surpassing the Zacks Consensus Estimate by 0.8% [2][10] Financial Performance - Time-Based Product revenues reached $951.5 million, accounting for 39.5% of total revenues, marking a 14.9% increase year over year [3] - Upfront Product revenues rose 101.4% to $741.5 million, representing 30.8% of total revenues [3] - Maintenance and Service revenues increased significantly to $715.7 million, up from $258.9 million in the previous year [3] - Design Automation revenues, which include EDA, Ansys, and Other, totaled $2 billion, up 96.2% from the prior year, constituting 83.1% of total revenues [4] - Design IP revenues were $407 million, down from $435.1 million a year ago, representing 16.9% of total revenues [4] Geographic Breakdown - North America generated $1.12 billion (47% of total revenues), while Europe contributed $467 million (19%) [5] - Revenues from Korea, China, and Other regions were $246.6 million (10%), $211.1 million (9%), and $360.4 million (15%), respectively [5] Margins and Cash Flow - The non-GAAP operating margin for the quarter was 42.1%, an increase of 560 basis points year over year [5] - Design Automation's adjusted operating margin improved to 47.3%, while the Design IP segment's adjusted margin contracted to 16.2% [6] - Synopsys ended Q1 fiscal 2026 with $2.20 billion in cash and short-term investments, down from $2.96 billion in the prior quarter [7] Guidance - For fiscal 2026, Synopsys expects revenues between $9.56 billion and $9.66 billion, including $2.9 billion from Ansys [8] - The Zacks Consensus Estimate for fiscal 2026 revenues is $9.63 billion, indicating a year-over-year growth of 36.5% [8] - Non-GAAP EPS is projected to be between $14.38 and $14.46, reflecting an increase from the previous range [9] - For Q2 fiscal 2026, revenues are expected to be between $2.225 billion and $2.275 billion, with a year-over-year growth of 40.3% [11]

Core Insights - Synopsys reported $2.41 billion in revenue for the quarter ended January 2026, marking a year-over-year increase of 65.5% and exceeding the Zacks Consensus Estimate by 0.75% [1] - The earnings per share (EPS) for the same period was $3.77, up from $3.03 a year ago, representing a surprise of 5.71% over the consensus estimate of $3.57 [1] Revenue Breakdown - Maintenance and service revenue reached $715.73 million, surpassing the average estimate of $660.32 million, with a year-over-year change of +176.4% [4] - Total products revenue was $1.69 billion, slightly below the average estimate of $1.73 billion, reflecting a year-over-year increase of +41.5% [4] - Design IP revenue was $407 million, compared to the average estimate of $420.17 million, showing a year-over-year decline of -6.5% [4] - Design Automation revenue was $2 billion, exceeding the average estimate of $1.76 billion, with a significant year-over-year increase of +96.2% [4] - Upfront products revenue was $741.53 million, above the average estimate of $601 million, representing a year-over-year change of +101.4% [4] - Time-based products revenue was $951.54 million, below the average estimate of $1.1 billion, with a year-over-year increase of +14.9% [4] Stock Performance - Synopsys shares have returned -12.3% over the past month, contrasting with the Zacks S&P 500 composite's -0.3% change, indicating potential underperformance in the near term [3]

Core Viewpoint - HSBC downgraded Synopsys from Buy to Hold, setting a price target of $455 due to anticipated challenges in fiscal 2026 driven by geopolitical uncertainty and Intel's foundry operations affecting the Electronic Design Automation (EDA) business [1] Group 1: Financial Performance and Projections - Fiscal 2026 is expected to be a transitional year for Synopsys, influenced by external factors that may impact revenue [1] - The EDA segment represented over 60% of total revenue in fiscal 2025, highlighting its significance to the company's financial health [1] Group 2: Growth Outlook - Growth in the Design IP segment is expected to be muted compared to the company's long-term mid-teens growth outlook as management shifts focus towards artificial intelligence opportunities [2] - The lack of clear near-term catalysts contributed to the decision to lower the rating to Hold [2]

Core Viewpoint - Faruqi & Faruqi, LLP is investigating potential claims against Synopsys, Inc. due to allegations of misleading statements and failure to disclose critical information regarding the company's financial performance and business operations [2][4]. Financial Performance - On September 9, 2025, Synopsys reported third quarter 2025 financial results, revealing quarterly revenue of $1.740 billion, which missed prior guidance of $1.755 billion to $1.785 billion [5]. - The net income for the quarter was $242.5 million, representing a 43% decline year-over-year from $425.9 million reported in the third quarter of 2024 [5]. - The Design IP segment accounted for approximately 25% of total revenue, generating $426.6 million, a 7.7% decline year-over-year [5]. - Management guidance indicated that Design IP revenues are expected to decline by at least 5% on a full-year basis for fiscal 2025 [5]. Stock Market Reaction - Following the financial results announcement, Synopsys's stock price fell by $216.59, or 35.8%, closing at $387.78 per share on September 10, 2025, with unusually heavy trading volume [6]. Legal Proceedings - A federal securities class action has been filed against Synopsys, with a deadline of December 30, 2025, for investors to seek the role of lead plaintiff [2][7]. - The complaint alleges that the company and its executives violated federal securities laws by making false and misleading statements regarding the impact of their focus on artificial intelligence customers on the Design IP business [4].

Core Viewpoint - A class action lawsuit has been filed against Synopsys, Inc. and certain senior executives for securities fraud following a significant stock drop due to potential violations of federal securities laws [1]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Northern District of California, captioned Kim v. Synopsys, Inc., et al., No. 3:25-cv-09410 [3]. - Investors have until December 30, 2025, to request to be appointed to lead the case [3]. Group 2: Company Performance - Synopsys provides design automation software products, with its Design IP segment being the fastest-growing, increasing from 25% of revenue in 2022 to 31% in 2024 [4]. - The company reported a revenue of $425.9 million for its Design IP segment in Q3 2025, reflecting a 7.7% decline year-over-year, and a net income of $242.5 million, a 43% year-over-year decline [6]. Group 3: Market Reaction - Following the release of disappointing Q3 2025 results, Synopsys stock fell from $604.37 per share to $387.78 per share, a decline of nearly 36% [6]. - The company indicated that its Design IP customers were requiring more customization, which was affecting the economics of its business model [5].

Core Viewpoint - A class action lawsuit has been filed against Synopsys, Inc. and certain senior executives for securities fraud following a significant stock drop due to potential violations of federal securities laws [1]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Northern District of California, titled Kim v. Synopsys, Inc., et al., No. 3:25-cv-09410, with claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 [3]. - Investors have until December 30, 2025, to request to be appointed to lead the case [3]. Group 2: Company Performance - Synopsys provides design automation software products, with its Design IP segment being the fastest-growing, increasing from 25% of revenue in 2022 to 31% in 2024 [4]. - The company reported a revenue of $425.9 million for its Design IP segment in Q3 2025, reflecting a 7.7% decline year-over-year, and a net income of $242.5 million, down 43% year-over-year [6]. Group 3: Market Reaction - Following the release of Q3 2025 financial results, Synopsys stock fell nearly 36%, from $604.37 per share on September 9, 2025, to $387.78 per share on September 10, 2025 [6]. - The decline was attributed to customers requiring more customization for IP components, which negatively impacted the economics of the Design IP business [5].

Core Viewpoint - A class action lawsuit has been filed against Synopsys, Inc. and certain senior executives for securities fraud following a significant stock drop due to potential violations of federal securities laws [1]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Northern District of California, titled Kim v. Synopsys, Inc., et al., No. 3:25-cv-09410 [3]. - Investors have until December 30, 2025, to request to be appointed to lead the case [3]. Group 2: Company Performance - Synopsys provides design automation software products, with its Design IP segment being the fastest-growing, increasing from 25% of revenue in 2022 to 31% in 2024 [4]. - The company reported a revenue of $425.9 million for its Design IP segment in Q3 2025, reflecting a 7.7% year-over-year decline, and a net income of $242.5 million, a 43% year-over-year decline [6]. Group 3: Market Reaction - Following the release of disappointing Q3 2025 results, Synopsys stock fell from $604.37 per share to $387.78 per share, a decline of nearly 36% [6]. - The company indicated that its Design IP customers were requiring more customization, which was affecting the economics of its business model [5].

Core Viewpoint - Faruqi & Faruqi, LLP is investigating potential claims against Synopsys, Inc. due to allegations of misleading statements and failure to disclose critical information regarding the company's financial performance and business operations [2][4]. Financial Performance - On September 9, 2025, Synopsys reported third quarter 2025 financial results, revealing quarterly revenue of $1.740 billion, which was below the prior guidance of $1.755 billion to $1.785 billion [5]. - The net income for the quarter was $242.5 million, representing a 43% decline year-over-year from $425.9 million reported in the third quarter of 2024 [5]. - The Design IP segment accounted for approximately 25% of total revenue, generating $426.6 million, which is a 7.7% decline year-over-year [5]. - Management guidance indicated that Design IP revenues are expected to decline by at least 5% on a full-year basis for fiscal 2025 [5]. Stock Market Reaction - Following the financial results announcement, Synopsys's stock price fell by $216.59, or 35.8%, closing at $387.78 per share on September 10, 2025, with unusually high trading volume [6]. Legal Context - A federal securities class action has been filed against Synopsys, with a deadline of December 30, 2025, for investors to seek the role of lead plaintiff [2][4]. - The complaint alleges that the company and its executives violated federal securities laws by making false and misleading statements regarding the impact of their focus on artificial intelligence customers on the Design IP business [4].

Core Viewpoint - A class action lawsuit has been filed against Synopsys, Inc. and certain senior executives for securities fraud following a significant stock drop due to potential violations of federal securities laws [1]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Northern District of California, captioned Kim v. Synopsys, Inc., et al., No. 3:25-cv-09410 [3]. - Investors have until December 30, 2025, to request to be appointed to lead the case [3]. Group 2: Company Performance and Allegations - Synopsys provides design automation software products, with its Design IP segment being the fastest-growing, increasing from 25% of revenue in 2022 to 31% in 2024 [4]. - The company claimed that customers relied on its IP to minimize integration risk and speed time to market, while also stating strength in Europe and South Korea [5]. - Contrary to these claims, it is alleged that Design IP customers required more customization, negatively impacting the economics of the Design IP business and jeopardizing the business model [5]. Group 3: Financial Impact - On September 9, 2025, Synopsys reported Q3 2025 results, revealing a 7.7% year-over-year decline in revenue for the Design IP segment, totaling $425.9 million, and a 43% year-over-year decline in net income, amounting to $242.5 million [6]. - Following the release of these results, Synopsys stock fell nearly 36%, from $604.37 per share to $387.78 per share [6].

Core Viewpoint - The Gross Law Firm is notifying shareholders of Synopsys, Inc. regarding a class action lawsuit due to alleged misleading statements and omissions related to the company's business performance during a specified period [1][3]. Group 1: Allegations - The complaint alleges that Synopsys issued materially false and/or misleading statements and failed to disclose critical information during the class period from December 4, 2024, to September 9, 2025 [3]. - Specific allegations include that the company's increased focus on artificial intelligence customers was negatively impacting the economics of its Design IP business [3]. - It is claimed that certain decisions regarding road maps and resources were unlikely to yield intended results, which had a material negative impact on financial results [3]. Group 2: Class Action Details - Shareholders who purchased shares of Synopsys during the class period are encouraged to register for the class action, with a deadline for lead plaintiff appointment set for December 30, 2025 [4]. - Once registered, shareholders will be enrolled in a portfolio monitoring software to receive updates throughout the case lifecycle [4]. - Participation in the case incurs no cost or obligation for shareholders [4]. Group 3: Law Firm Background - The Gross Law Firm is a nationally recognized class action law firm dedicated to protecting the rights of investors affected by deceit and illegal business practices [5]. - The firm aims to ensure companies adhere to responsible business practices and seeks recovery for investors who suffered losses due to misleading statements or omissions [5].