Key facts
- Synopsys increased its annual revenue forecast to $9.69-$9.74 billion.
- Annual adjusted earnings per share are now projected at $15.04-$15.10.
- Third-quarter revenue reached $2.48 billion, beating analyst estimates.
- Third-quarter adjusted earnings per share were $3.91, exceeding expectations.
- The company's design IP business saw revenue growth in the third quarter.
Synopsys, a provider of chip design software, has raised its annual revenue and profit forecasts, driven by increased demand fueled by the artificial intelligence boom. The company anticipates fiscal 2026 revenue between $9.69 billion and $9.74 billion, surpassing analysts' expectations of $9.68 billion. This upward revision reflects significant investments in advanced semiconductor systems by chipmakers and tech giants like Amazon and Alphabet, who are expanding their in-house chip development.
The company's design IP business, which licenses pre-designed chip interfaces, has returned to year-over-year revenue growth. CFO Shelagh Glaser highlighted that AI is the primary driver, enabling customers to build more complex chips within shorter timeframes using Synopsys's tools. The company expects continued sequential growth in this segment.
Synopsys now projects annual adjusted earnings per share in the range of $15.04 to $15.10, an increase from its previous forecast of $14.72 to $14.80, and above the analyst consensus of $14.76. In the third fiscal quarter ended July 31, Synopsys reported revenue of $2.48 billion, exceeding the estimated $2.44 billion, and adjusted earnings per share of $3.91, topping estimates of $3.67. Despite the positive financial results and raised outlook, Synopsys shares saw a decline of approximately 2% in extended trading.