Q3 2026 Synopsys Inc Earnings Call Transcript
Key Points
- Synopsys Inc (SNPS) delivered outstanding Q3 results with revenue, non-GAAP operating margin, and EPS all exceeding the high end of guidance, leading to raised full-year guidance.
- EDA growth is expected to accelerate to double digits in Q4 and for the full year, driven by strong demand from AI and high-performance compute customers.
- The launch of multiphysics Fusion, the first joint Synopsys-ANSYS solution, has been validated by major customers like NVIDIA, Cisco, MediaTek, and Samsung Foundry, offering up to 10x faster design closure.
- Design IP returned to growth, with strong performance in interface IP (95% win rate in PCIe 7), LPDDR6 (25 design wins), and die-to-die IP (on pace to double year-over-year).
- ANSYS continues to perform strongly, with a large deal for GPU-accelerated CFD and early success in AI-driven simulation, contributing to the company's growth.
- Backlog modestly declined quarter-over-quarter due to the divestiture of the processor IP solutions business, which closed in Q3.
- The company faces tough year-over-year comparisons, with Q3 EDA growth of 8.5% against a 16% growth in the prior year quarter.
- Multiphysics Fusion is not expected to contribute to EDA growth until 2027, indicating a delay in realizing revenue from this key product.
- The non-AI segment of the business has only recently stabilized after a slowdown in design starts, with no acceleration yet in that area.
- The company is incurring increased charges for its restructuring program as it accelerates cost synergies, which may impact short-term profitability.
Ladies and gentlemen, welcome to the Synopsys earnings conference call for the third-quarter fiscal year. (Operator Instructions) as a reminder, today's call is being recorded.
At this time, I would like to turn the conference over to Tushar Jain, Vice President. Please go ahead.
Good afternoon, everyone. Welcome to Synopsys' third-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 we expect. In addition to any risks that we highlight during this call, important
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
