Q4 2025 Synopsys Inc Earnings Call Transcript
Key Points
- Synopsys Inc (SNPS) achieved a record annual revenue of $7.05 billion in 2025, with a strong backlog of over $11 billion.
- The integration of Ansys is progressing well, contributing significantly to revenue diversification and customer base expansion.
- The company is guiding for a substantial revenue increase to $9.61 billion in FY26, driven by the addition of Ansys and strategic partnerships like the one with NVIDIA.
- Synopsys Inc (SNPS) continues to lead in AI-driven chip design, with nearly 5,000 active users among Tier 1 semiconductor customers.
- The company reported a strong free cash flow of approximately $1.35 billion in 2025, exceeding expectations due to accelerated collections.
- China's market remains challenging, with a reported 18% decline in revenue from the region in 2025, impacting overall growth.
- The Design IP segment experienced an 8% revenue decline due to a challenging second half and headwinds in the market.
- Synopsys Inc (SNPS) anticipates muted growth for the IP business in 2026, citing it as a transitional year.
- The company is undergoing workforce reductions as part of restructuring efforts, which could impact employee morale and productivity.
- Despite strong revenue growth, the EDA business is projected to grow below its long-term target, partly due to the challenging environment in China.
Ladies and gentlemen, welcome to the Synopsys earnings conference call for the fourth quarter and fiscal year 2025. (Operator Instructions)
Today's call will last one hour. As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Tushar Jain, Head of Investor Relations. Please go ahead.
Good afternoon everyone. With us today are Sassine Ghazi, President and CEO of Synopsys; and Shelagh Glaser, CFO. Before we begin, I'd like to remind everyone that during the course of this conference call, Synopsys will discuss forecasts, targets and other forward-looking statements regarding the company and its financial results. While these statements represent our best current judgment about future results and performance as of today, our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect.
In addition to any risks that we highlight during this call, important factors that may
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