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Executive Summary

Synopsys reported strong first-quarter fiscal 2026 results with revenue of $2.409 billion, up 65.5% year-over-year, and non-GAAP EPS of $3.77, exceeding guidance. The company also announced a $2.0 billion stock repurchase program. Despite a year-over-year decline in GAAP net income due to acquisition-related costs, non-GAAP profitability improved significantly, driven by AI-fueled demand and the integration of Ansys.

Key Financial Metrics

Key Facts

• Q1 FY26 revenue was $2.409 billion, up 65.5% YoY from $1.455 billion.
• Non-GAAP EPS was $3.77, above guidance and up 24.5% YoY from $3.03.
• GAAP net income was $65.0 million, down from $295.7 million YoY, primarily due to $118.3 million in restructuring charges and amortization from the Ansys acquisition.
• Design Automation segment revenue grew 96.2% YoY to $2.002 billion, now representing 83.1% of total revenue.
• The company reiterated full-year revenue guidance of $9.61 billion at the midpoint and authorized a $2.0 billion stock buyback.

Financial Impact

Revenue increased by $954 million YoY, with non-GAAP net income up $245.3 million. The $2.0 billion buyback represents approximately 4% of the current market cap.

Segment Breakdown

Risk Factors

• The year-over-year decline in GAAP net income and operating income ($203.0M vs $251.8M) indicates integration and restructuring costs are a near-term headwind.
• The Design IP segment revenue declined 6.5% YoY to $407.0 million, which could be a concern if the trend continues.
• Future performance is dependent on the successful integration of Ansys and sustained AI-driven R&D spending by customers.

Market Snapshot

Investment Themes

Documents Analyzed

This report is based on 11 SEC documents filed with EDGAR.

US Market Status