Financial Data and Key Metrics Changes - The company achieved record annual revenue of $7.05 billion, up approximately 15% year-over-year, with Q4 revenue of $2.25 billion, at the high end of guidance [5][14]. - The total backlog increased to $11.4 billion, up from $10.1 billion in the previous quarter [13]. - Non-GAAP operating margin for FY25 was 37.3%, with Q4 non-GAAP operating margin at 36.5% [14][15]. - GAAP earnings per share for Q4 and FY25 were $2.39 and $8.07 respectively, while non-GAAP earnings per share were $2.90 and $12.91, exceeding guidance [14][15]. Business Line Data and Key Metrics Changes - The design automation segment revenue, including EDA and Ansys, was $5.3 billion, up 26%, while excluding Ansys, it grew approximately 8% [15]. - The design IP segment revenue was $1.75 billion, down 8% due to challenges in the second half of the year [15]. - The hardware-assisted verification (HAV) business saw a record year with 12 competitive wins in Q4 [8]. Market Data and Key Metrics Changes - China faced significant challenges, with revenue down 18% for FY25, and down 22% excluding Ansys [14]. - The company noted stronger semiconductor demand in mobile and automotive sectors, while industrial markets remained subdued [6]. Company Strategy and Development Direction - The integration of Ansys is a key focus, with the company aiming to deliver joint solutions in the first half of 2026 [11][62]. - The company is targeting double-digit growth for Ansys revenue in FY26, driven by increased R&D investments in various industries [60]. - A strategic partnership with NVIDIA is expected to enhance design and engineering capabilities with AI and accelerated computing [7]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term growth potential despite current challenges, particularly in the IP business [41][76]. - The company is adopting a pragmatic approach to forecasting, particularly regarding the ongoing challenges in China [76]. - Management emphasized the importance of AI in driving future demand for engineering solutions, indicating a shift in how engineering is approached [6][48]. Other Important Information - The company plans to prepay $2.55 billion of its term loans in the first half of 2026, which is expected to be accretive to EPS [16][19]. - The guidance for FY26 includes total revenue of $9.56-$9.66 billion, with Ansys contributing approximately $2.9 billion at the midpoint [17]. Q&A Session Summary Question: What is the embedded organic growth rate in the 2026 guide? - Management indicated it is around 8%, factoring in the divestitures and muted growth expectations for the IP business [22][23]. Question: What are the expectations for EDA and IP growth in the guidance? - Management acknowledged that EDA growth is impacted by the China environment and a muted roadmap for certain customers, while IP is expected to have a transitional year [31][32]. Question: Can the IP business achieve mid-teens growth in FY27? - Management expressed confidence in the IP portfolio and ongoing customer engagements, indicating that growth could return to mid-teens in the future [82]. Question: What is the rationale behind the NVIDIA investment? - The investment was made to accelerate computational capabilities and modernize engineering solutions, leveraging the strengths of both companies [44][45]. Question: How is the integration of Ansys progressing? - Integration efforts are underway, with R&D teams working together to deliver joint solutions, while maintaining separate go-to-market strategies for different customer segments [61][62].

Financial Data and Key Metrics Changes - Synopsys achieved record annual revenue of $7.05 billion in FY25, up approximately 15% year-over-year, with Q4 revenue of $2.25 billion, aligning with guidance [12][13] - The company ended FY25 with a backlog of $11.4 billion, up from $10.1 billion in the previous quarter [12] - Non-GAAP operating margin for FY25 was 37.3%, with Q4 non-GAAP operating margin at 36.5% [14] - GAAP earnings per share for FY25 were $8.07, while non-GAAP EPS was $12.91, exceeding guidance due to lower expenses [14][15] Business Line Data and Key Metrics Changes - The design automation segment, including EDA and Ansys, generated $5.3 billion in revenue for FY25, up 26%, while excluding Ansys, it grew approximately 8% [15] - The design IP segment revenue was $1.75 billion, down 8% due to challenges in the second half of the year [15] - Ansys contributed $757 million to total revenue in FY25, with Q4 revenue of $668 million [13][14] Market Data and Key Metrics Changes - China faced significant challenges, with revenue down 18% in FY25, and excluding Ansys, down 22% [13][14] - The semiconductor demand is strong in mobile and automotive sectors, while industrial markets remain subdued [5][12] Company Strategy and Development Direction - Synopsys aims to leverage the Ansys acquisition to enhance its engineering solutions from silicon to systems, focusing on AI-driven design and multi-domain integration [4][6] - The company plans to deliver its first joint solutions with Ansys in the first half of 2026, targeting double-digit growth for Ansys revenue [11][56] - Strategic partnerships, such as with NVIDIA, are expected to enhance design and engineering capabilities [6][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the AI infrastructure build-out driving semiconductor demand, despite challenges in certain markets like China [5][12] - The company anticipates a transitional year for the IP business in FY26, with muted growth expected due to ongoing adjustments and market conditions [10][36] - Management emphasized a focus on operational excellence and financial discipline to drive sustainable growth and margin expansion [11][19] Other Important Information - Synopsys plans to prepay $2.55 billion of its term loans in the first half of 2026, which is expected to be accretive to EPS [16][18] - The company is adopting a normalized non-GAAP tax rate of 18% projected through 2028 [17] Q&A Session Summary Question: What is the embedded organic growth rate in the 2026 guide? - Management indicated that the organic growth rate is around 8%, factoring in the divestitures and muted growth for the IP business [22][23] Question: What are the growth expectations for EDA and IP in the guidance? - Management confirmed that EDA growth is impacted by the China environment and ongoing market dynamics, with IP expected to grow modestly [28][29] Question: Can you provide an update on the IP business and headwinds? - Management acknowledged challenges in the IP business but expressed confidence in long-term growth, emphasizing ongoing customer engagement and portfolio strength [35][36] Question: What is the rationale behind the NVIDIA investment? - The investment was driven by the potential for accelerated computational capabilities and modernization of engineering solutions, enhancing market reach [40][41] Question: How does the company plan to address the monetization challenges in EDA? - Management recognized the need for better monetization strategies and highlighted the importance of joint solutions with Ansys to capture value [78][80]

Core Viewpoint - The article discusses the emergence of Mobile HBM (High Bandwidth Memory) technology for mobile devices, highlighting the confusion surrounding its definition and potential applications in flagship smartphones by 2027 [1][4]. Summary by Sections HBM Characteristics - HBM utilizes 3D TSV stacking and ultra-wide I/O buses, making it suitable for high-performance processors like GPUs and TPUs [2][3]. - HBM modules can achieve bandwidths of up to 1024GB/s, with HBM3 and HBM3E offering speeds of 7-8Gbps/Pin and 10Gbps/Pin respectively [3]. Misunderstanding of Mobile HBM - The term "Mobile HBM" originated from a report by ETnews, which speculated on its use in the iPhone 20 anniversary model, leading to widespread misinterpretation [4][6]. - Many media outlets misrepresented "Mobile HBM" as a low-power version of HBM, which is not accurate [6]. LLW DRAM Insights - LLW DRAM, introduced by Samsung, is a low-power DRAM aimed at terminal AI applications, achieving a bandwidth of 128GB/s with a power consumption of only 1.2pJ/bit [6]. - The Vision Pro AR/VR headset utilizes a different packaging method that achieves high bandwidth without employing HBM's TSV stacking [6]. Clarification on Packaging Technologies - VFO and VCS are new packaging technologies that are small and thin but fundamentally different from HBM, lacking the official designation of "Mobile HBM" [7]. - The term "Mobile HBM" appears to be a coined term by ETnews, not recognized by industry standards or manufacturers [7].