Q2 2026 Synopsys Inc Earnings Call Transcript
Key Points
- Synopsys Inc (SNPS) exceeded guidance on revenue, non-GAAP operating margin, and non-GAAP EPS for Q2 2026, driven by strong execution and AI-driven demand.
- The company is raising its full-year 2026 revenue, operating margin, EPS, and free cash flow guidance based on strong momentum and market signals.
- Synopsys Inc (SNPS) is seeing robust demand for its EDA, IP, and multi-physics simulation solutions, particularly in AI-driven design and advanced node solutions.
- The integration with Ansys is progressing well, expanding Synopsys Inc (SNPS)'s reach into system-level design and multi-physics simulation.
- The company is focusing on high-value IP opportunities and expects sequential quarterly improvement in its IP segment throughout the second half of 2026.
- The Design IP segment revenue was down approximately 6% year over year, indicating challenges in this area despite sequential improvement.
- Total GAAP costs and expenses were higher than expected due to accelerated restructuring costs, impacting GAAP earnings per share.
- The company continues to face challenges in the design-start environment in China due to restrictions, affecting growth in that region.
- Synopsys Inc (SNPS) is still in the early stages of monetizing its multi-physics fusion technology, with commercial availability expected in the second half of 2026.
- The backlog ended at $11 billion, showing a quarter-over-quarter decline, which is attributed to the timing of renewals and could indicate potential volatility in future revenue.
Ladies and gentlemen, welcome to the Synopsys earnings conference call for the second-quarter fiscal year 2026.
(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. Welcome to Synopsys' second-quarter fiscal year 2026 earnings call.
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
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