Exhibit 99.1 PRESS RELEASE INVESTOR CONTACT: Tushar Jain Synopsys, Inc.
Exhibit 99.1 PRESS RELEASE INVESTOR CONTACT: Tushar Jain Synopsys, Inc. 650-584-4289 Synopsys-ir@synopsys.com EDITORIAL CONTACT: Cara Walker Synopsys, Inc. 650-584-5000 corp-pr@synopsys.com Synopsys Posts Financial Results for Third Quarter Fiscal Year 2026 Results Summary
• Quarterly revenue of $2.477 billion; reflects broad-based strength with outperformance in Design Automation
• Quarterly GAAP earnings per diluted share (EPS) of $2.84, and non-GAAP EPS of $3.91, exceeding high-end of prior guidance
Raising expectations for full-year total revenue to $9.715 billion at • the midpoint and full-year non-GAAP EPS guidance to $15.07 at the midpoint on continued AI-driven demand strength
SUNNYVALE, Calif.– Aug. 26, 2026– Synopsys, Inc.(Nasdaq: SNPS) today reported results for its third quarter of fiscal year 2026. Revenue for the third quarter of fiscal year 2026 was $2.477 billion, compared to $1.740 billion for the third quarter of fiscal year 2025. “AI is driving unprecedented complexity and increasing demand for the silicon IP and engineering solutions necessary to deliver next-generation AI compute, infrastructure and physical AI systems,” said Sassine Ghazi, president and CEO of Synopsys. “One year after the transformational acquisition of Ansys, we are executing with focus, extending our leadership and gaining momentum.” “Synopsys delivered an outstanding third quarter, with revenue and earnings per share exceeding the high end of our guidance range. Results were driven by broad-based strength across the business, led by EDA, a strong quarter from Ansys, and our design IP business returned to year-over-year growth,” said Shelagh Glaser, CFO of Synopsys. “Given our strong performance and expectations for double-digit growth in EDA, we are raising our full year revenue, non-GAAPoperating margin, EPS and cash flow guidance.” 1
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2026 was $545.8 million, or $2.84 per diluted share, compared to $242.5 million, or $1.50 per diluted share, for the third quarter of fiscal year 2025.
On a non-GAAP basis, net income for the third quarter of fiscal year 2026 was $752.5 million, or $3.91 per diluted share, compared to non-GAAP net income of $548.9 million, or $3.39 per diluted share, for the third quarter of fiscal year 2025.
For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see “GAAP to Non-GAAP Reconciliation” in the accompanying tables below.
Synopsys reports revenue and operating income in two segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, Ansys products, system integration products and services, digital, custom and field programmable gate array integrated circuit design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our logic libraries, embedded memories, wired interface IP, memory interface IP and security IP.
Synopsys also provided its consolidated financial targets for the fourth quarter and full fiscal year 2026. These targets assume no further changes to export control restrictions or the current U.S. government “Entity List” restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results to differ materially from these targets, see “Forward-Looking Statements” below.
Fourth Quarter and Full Fiscal Year 2026 Financial Targets (in millions, except per share amounts)
Fiscal year 2026 revenue includes $2.98 billion of expected Ansys revenue, and reflects the impact of (1) approximately $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses, and $40 million related to the recently completed divestiture of the Processor IP Solutions business.
(2) Free cash flow is calculated as cash provided from operating activities less capital expenditures.
For a reconciliation of Synopsys’ fourth quarter and fiscal year 2026 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAPbasis, a discussion of the financial targets that we are not able to reconcile without unreasonable efforts and a discussion of why management believes such measurements provide useful information to investors, see “GAAP to Non-GAAPReconciliation” in the accompanying tables below. Earnings Call Open to Investors Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be available in the investor relations portion of Synopsys’ corporate website at www.synopsys.com. Synopsys uses its website and social media channels as tools to disclose important information about Synopsys and to comply with its disclosure obligations under Regulation Fair Disclosure. A webcast replay will also be available on the corporate website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the fourth quarter and fiscal year 2026. 3
Availability of Final Financial Statements Synopsys will include final financial statements for the third quarter of fiscal year 2026 in its quarterly report on Form 10-Qto be filed with the Securities and Exchange Commission (SEC) and available at www.sec.gov on or before September 9, 2026. Continuing Operations On Sept. 30, 2024, Synopsys completed the sale of its Software Integrity business. Unless otherwise noted, Synopsys’ Software Integrity business has been presented as a discontinued operation in Synopsys’ consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis. Reconciliation of Third Quarter Fiscal Year 2026 Results The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAPnet income, earnings per diluted share, and tax rate for the periods indicated below. GAAP to Non-GAAPReconciliation of Third Quarter Fiscal Year 2026 Results (unaudited and in thousands, except per share amounts)
Three Months Ended July 31, 2026 ───────────────────────────────────────────────────────────────────────── GAAP operating margin 14.4 % Amortization of acquired intangible 16.2 % assets Stock-based compensation 9.4 % Restructuring charges 0.1 % Acquisition/divestiture related items 0.9 % Non-qualified deferred compensation plan 0.6 % Non-GAAP operating margin 41.6 %
The income tax adjustments are primarily due to differences in the tax (1) rate effect of certain deductions, such as the deduction for foreign-derived intangible income and credits.
Reconciliation of 2026 Targets The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAPtargets for the periods indicated below. GAAP to Non-GAAPReconciliation of Fourth Quarter Fiscal Year 2026 Targets (in thousands, except per share amounts)
Range for Three Months Ending October 31, 2026 ────────────────────────────────────────────────────────────────────────────── Low High Target GAAP $ 2,225,000 $ 2,300,000 expenses Adjustments: Amortization of acquired (400,000 ) (405,000 ) intangible assets Stock-based (230,000 ) (240,000 ) compensation Restructuring (145,000 ) (175,000 ) charges Target non-GAAP $ 1,450,000 $ 1,480,000 expenses Range for Three Months Ending October 31, 2026 Low High Target GAAP earnings per diluted share $ 0.60 $ 0.85 attributed to Synopsys Adjustments: Amortization of acquired 2.10 2.07 intangible assets Stock-based 1.24 1.19 compensation Restructuring 0.91 0.75 charges Tax adjustments (0.75 ) (0.70 ) Target non-GAAP earnings per diluted share $ 4.10 $ 4.16 attributed to Synopsys Shares used in non-GAAP calculation 193,000 193,000 (midpoint of target range)
GAAP to Non-GAAPReconciliation of Full Fiscal Year 2026 Targets (in thousands, except per share amounts)
Range for Fiscal Year Ending October 31, 2026 ────────────────────────────────────────────────────────────────────────────── Low High Target GAAP $ 8,667,091 $ 8,742,091 expenses Adjustments: Amortization of acquired (1,610,000 ) (1,615,000 ) intangible assets Stock-based (945,000 ) (955,000 ) compensation Restructuring (380,000 ) (410,000 ) charges Acquisition/dive… related items (62,091 ) (62,091 ) (1) Target non-GAAP $ 5,670,000 $ 5,700,000 expenses Range for Fiscal Year Ending October 31, 2026 Low High Target GAAP earnings per diluted share $ 3.84 $ 4.08 attributed to Synopsys Adjustments: Amortization of acquired 8.37 8.34 intangible assets Stock-based 4.95 4.90 compensation Restructuring 2.12 1.97 charges Acquisition/dive… related items (1.88 ) (1.88 ) (1) Tax adjustments (2.36 ) (2.31 ) Target non-GAAP earnings per diluted share $ 15.04 $ 15.10 attributed to Synopsys Shares used in non-GAAP calculation 193,000 193,000 (midpoint of target range)
Adjustments reflect actual expenses incurred by Synopsys as of July 31, (1) 2026, and do not fully reflect all potential adjustments for future periods for the reasons set forth in “GAAP to Non-GAAP Reconciliation” below.
GAAP to Non-GAAPReconciliation of Operating Margin at Midpoint of Full Fiscal Year 2026 Targets (1)
Fiscal Year Ending October 31, 2026 ────────────────────────────────────────────────────────────────────── At midpoint of revenue and expense guidance ranges GAAP operating margin 10.4 % Amortization of acquired intangible 16.6 % assets Stock-based compensation 9.8 % Restructuring charges 4.1 % Acquisition/divestiture related items 0.6 % (2) Target non-GAAP operating margin 41.5 %
These numbers represent the midpoint of targets in the prepared remarks (1) provided on August 26, 2026, and do not represent official guidance for fiscal year 2026.
Adjustments reflect actual expenses incurred by Synopsys as of July 31, (2) 2026 and do not fully reflect all potential adjustments for future periods for the reasons set forth in “GAAP to Non-GAAP Reconciliation” below.
This press release and the investor conference call contain forward-looking statements, including, but not limited to, statements concerning our short-term and long-term financial targets, expectations and objectives; our businesses, business segments, strategies, partnerships, initiatives and opportunities, including, among other things, the reallocation of resources in our Design IP segment to higher growth opportunities and planned restructuring activities; industry growth and technological trends, such as artificial intelligence, including our development and planned commercialization thereof; business and market outlook; the potential impact of the uncertain macroeconomic environment and global economic conditions on our financial results; the impact of current and future U.S. and foreign trade regulations, government actions and regulatory changes, such as export control restrictions and tariffs; the ANSYS, Inc. (Ansys) integration and its expected impact, including expected synergies and the timing thereof, our ability to create joint solutions as a combined company, and related accounting changes; planned and recently completed acquisitions or divestitures, and their anticipated timing and impact; our key customers, customer concentration, customer engagement, customer demand and market expansion; results and strategies related to our products, technology and services, including product development and our planned product releases and capabilities; the expected realization of our contracted but unsatisfied or partially unsatisfied performance obligations (backlog); planned stock repurchases; our expected tax rate; and the status, expected outcome or expected impact of litigation and/or regulatory investigations. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames or achievements to differ materially from those expressed or implied in such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: macroeconomic conditions and geopolitical uncertainty in the global economy; uncertainty in the growth of the semiconductor and electronics industries; the highly competitive industry we operate in; actions by the U.S. or foreign governments, such as the imposition of additional export restrictions or tariffs; consolidation among our customers and our dependence on a relatively small number of large customers; risks and compliance obligations relating to the global nature of our operations; failure to realize the benefits expected from the transactions we complete, including the acquisition of Ansys (the Ansys Merger) or unexpected difficulties or expenditures arising therefrom; risks related to inaccuracies in, or failures to achieve, our operational and business metrics or forecasts of growth; and more. Additional information on potential risks, uncertainties and other factors that could affect Synopsys’ results is included in filings we make with the SEC from time to time, including in the sections entitled “Risk Factors” in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in Synopsys’ most recent reports on Forms 10-K and 10-Q, each as may be amended from time to time. Synopsys’ financial results for its third quarter of fiscal year 2026 are not necessarily indicative of Synopsys’ operating results for any future periods.
Effectiveness of Information The targets included in this press release, the statements made during the earnings conference call, the information contained in the financial supplement and the corporate overview presentation, each of which are available in the investor relations portion of Synopsys’ corporate website at www.synopsys.com(collectively, the Earnings Materials), represent Synopsys’ expectations and beliefs as of August 26, 2026. Although these Earnings Materials are expected to remain available on Synopsys’ website through the time Synopsys announces its results for the fourth quarter and fiscal year 2026, their continued availability through such time does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys undertakes no duty, and does not intend, to update any forward-looking statement, including any targets, provided in the Earnings Materials, whether as a result of new information, future events or otherwise, unless required by law. SYNOPSYS, INC. Condensed Consolidated Statements of Income (Unaudited, in thousands, except per share amounts)
SYNOPSYS, INC. Condensed Consolidated Balance Sheets (Unaudited, in thousands, except par value amounts)
SYNOPSYS, INC. Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands)
CASH FLOWS FROM Nine Months Ended OPERATING July 31, ACTIVITIES: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net income $ 627,290 $ 884,798 Adjustments to reconcile net income to net cash provided by operating activities: Amortization and 1,362,021 211,307 depreciation Reduction of operating lease 109,254 80,789 right-of-use assets Amortization of capitalized costs to 70,835 38,920 obtain revenue contracts Stock-based 712,631 655,909 compensation Allowance for 21,847 23,559 credit losses Loss on sale of strategic — 3,635 investments Gain on sale of — (51,385 ) building (Gain) loss on divestitures, net of (380,527 ) 8,299 transaction costs Amortization of bridge financing — 41,996 costs Amortization of debt issuance 21,280 6,790 costs Deferred income (121,720 ) (326,610 ) taxes Other 21 (737 ) Net changes in operating assets and liabilities, net of effects from acquisitions and dispositions: Accounts 165,337 (27,989 ) receivable Inventories (133,944 ) (34,068 ) Prepaid and other current (70,709 ) 120,348 assets Other long-term (125,304 ) (427,793 ) assets Accounts payable and accrued 90,610 31,384 liabilities Operating lease (109,757 ) (78,360 ) liabilities Income taxes (56,728 ) (140,347 ) Deferred revenue 116,166 (19,932 ) Unrealized loss on settlement of — (121,643 ) interest rate treasury lock Net cash provided by 2,298,603 878,870 operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from maturities of 20,995 53,630 short-term investments Proceeds from sales of 68,761 148,809 short-term investments Purchases of short-term (18,524 ) (47,558 ) investments Proceeds from sales of — 3,470 strategic investments Purchases of strategic (1,402 ) (4,086 ) investments Purchases of property and (156,089 ) (134,908 ) equipment, net Proceeds from — 74,279 sale of building Acquisitions, net of cash — (16,681,257 ) acquired Proceeds from business 440,022 142,546 divestiture, net of cash divested Other — (611 ) Net cash provided by (used in) 353,763 (16,445,686 ) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt, net of — 14,329,340 issuance costs Repayment of (3,463,726 ) (2,579 ) debt Issuances of 124,585 138,101 common stock
Payments for taxes related to net share (262,761 ) (242,791 ) settlement of equity awards Common stock issuance for private 2,000,000 — placement Purchases of treasury stock (300,000 ) — Redemption of redeemable non-controlling — (30,000 ) interest Other — (463 ) Net cash provided by (used in) financing (1,901,902 ) 14,191,608 activities Effect of exchange rate changes on cash, (33,409 ) 8,649 cash equivalents and restricted cash Net change in cash, cash equivalents and 717,055 (1,366,559 ) restricted cash Cash, cash equivalents and restricted 2,893,721 3,898,729 cash, beginning of year Cash, cash equivalents and restricted $ 3,610,776 $ 2,532,170 cash, end of period
Synopsys provides segment information, namely revenue, adjusted segment operating income and adjusted segment operating margin, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 280, Segment Reporting. Synopsys’ chief operating decision maker (CODM) is our Chief Executive Officer. In evaluating our business segments, the CODM considers the income and expenses that the CODM believes are directly related to those segments. The CODM does not allocate certain operating expenses managed at a consolidated level to our business segments and, as a result, the reported operating income and operating margin do not include these unallocated expenses as shown in the table below. These unallocated expenses are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income: SYNOPSYS, INC. Business Segment Reporting (1) (Unaudited, in millions)
Total Adjusted Segment Operating Income Reconciliation (1) (Unaudited, in millions)
Synopsys manages the business on a long-term, annual basis, and (1) considers quarterly fluctuations of revenue and profitability as normal elements of our business. Amounts may not foot due to rounding.
(2) The adjustment includes non-GAAP expenses attributable to non-controlling interest and redeemable non-controlling interest.
The adjustment excludes the amortization of bridge financing costs entered into in connection with the Ansys (3) Merger that was recorded in interest expense, and certain divestiture related items that were recorded in other income (expense), net in our unaudited condensed consolidated statements of income.
GAAP to Non-GAAPReconciliation Synopsys continues to provide all information required in accordance with GAAP but acknowledges evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAPfinancial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys’ operating results in a manner that focuses on what Synopsys believes to be its core business operations and what Synopsys uses to evaluate its business operations and for internal budgeting and resource allocation purposes. This press release includes non-GAAPearnings per diluted share, non-GAAPnet income, non-GAAPoperating margin and non-GAAPtax rate for the periods presented. It also includes future estimates for non-GAAPexpenses, non- GAAPinterest and other income (expense), net, non-GAAPtax rate, non- GAAPoperating margin, non-GAAPearnings per diluted share and free cash flow. These non-GAAPfinancial measures may be different from non-GAAPfinancial measures used by other companies. When possible, Synopsys provides a reconciliation of non-GAAPfinancial measures to their most closely applicable GAAP financial measures. Synopsys is unable to provide a full reconciliation of certain fourth quarter and full fiscal year 2026 non-GAAPfinancial targets to the corresponding GAAP financial measures on a forward-looking basis because Synopsys 14
believes that it would not be possible for it to have the information necessary to quantitatively reconcile such measures with sufficient precision without unreasonable efforts due to, among other things, the potential variability and limited predictability of the excluded adjustment items necessary for a full reconciliation such as certain acquisition/divestiture related items, tax deduction variability, changes in the fair value of non-qualified deferred compensation plan, and gains (losses) on the sale of strategic investments. For the same reasons, Synopsys is unable to address the probable significance of the unavailable information.
Synopsys’ management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, as superior to, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, the corresponding GAAP financial measures. Synopsys’ management believes the presentation of non-GAAP financial measures, when shown in conjunction with the corresponding GAAP financial measures, provides useful information to investors allowing them to view financial and business trends relating to our financial condition and results of operations through the eyes of management. Synopsys’ management evaluates and makes decisions about our business operations using both GAAP financial measures and non-GAAP financial measures to help facilitate internal comparisons to Synopsys’ historical operating results and forecasted targets, planning and forecasting in subsequent periods and comparisons to competitors’ operating results.
The following are descriptions of the adjustments made to reconcile non-GAAP financial measures (other than free cash flow, which is defined in the footnote to the Financial Targets table above) to the most directly comparable GAAP financial measures:
(i) Amortization of acquired intangible assets.We incur expenses from the amortization of acquired intangible assets, which may include impairment charges from write-downs of acquired intangible assets. Acquired intangible assets include, among other things, core/developed technology, customer relationships, contract rights, trademarks and trade names, and other intangibles related to acquisitions. We amortize the intangible assets over their estimated useful lives. We do not enter into acquisitions on a predictable cycle. The amount of an acquisition’s purchase price allocated to intangible assets and their estimated useful lives can vary significantly and are unique to each acquisition. From time to time, we incur impairment charges due to write-downs of acquired intangible assets. We believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets, including impairment
charges, provides investors and others with a consistent basis for comparison across accounting periods. We also exclude this item because such expenses are non-cash in nature and we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our core operational performance and liquidity, and ability to invest in research and development and fund future acquisitions and capital expenditures.
(ii) Stock-based compensation. Stock-based compensation expenses consist primarily of expenses related to restricted stock units, stock options, employee stock purchase rights and other stock awards, including such expenses associated with acquisitions. We exclude stock-based compensation expense from our non-GAAP financial measures primarily because it is not an expense that typically requires or will require cash settlement by us. Further, the expense for the fair value of the stock-based instruments we utilize may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards and, therefore, is not used by management to assess the core profitability of our business operations.
(iii) Acquisition/divestiture related items. In connection with certain of our business combinations and/or divestitures, we incur significant expenses that we would not have otherwise incurred as part of our business operations. These expenses include, among other things, compensation expenses, professional fees and other direct expenses, concurrent restructuring activities and divestiture activities, including employee severance and other exit costs, bridge financing costs, costs related to integration activities, debt forgiveness, changes to the fair value of contingent consideration related to the acquired company, and amortization of the fair value difference of below-market value assets arising from arrangements entered into or acquired in conjunction with an acquisition. We also recognize the gains and losses from the divestitures of business, as well as the mark-up of equity or cost method investments to fair value upon obtaining control through acquisition. We exclude these items because they are related to acquisitions and divestitures and have no direct correlation to the core operation of our business. Further, because we do not acquire or divest businesses on a predictable cycle and the terms of each transaction can vary significantly and are unique to each transaction, we believe it is useful to exclude such expenses when looking for a consistent basis for comparison across accounting periods.
(iv) Restructuring charges.We initiate restructuring activities to align our costs to our operating plans and business strategies based on then-current economic conditions, and such activities have a specific and defined term. Restructuring costs generally include severance and other termination benefits related to voluntary retirement programs, involuntary headcount reductions and facilities closures. Such restructuring costs include elimination of operational redundancy, permanent reductions in workforce and facilities closures and, therefore, are not considered by us to be a part of the core operation of our business and are not used by management when assessing the core profitability and performance of our business operations.
(v) Gains (losses) on the sale of strategic investments. We exclude gains and losses on the sale of equity investments in privately held companies because we do not believe they are reflective of our core business and operating results.
(vi) Deferred compensation. We exclude changes in the fair value of our non- qualified deferred compensation plan because we do not use these to assess the core profitability of our business operations.
(vii) Income tax effect of non-GAAP pre-taxadjustments. Excluding the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes assists investors in understanding the tax provision associated with those adjustments and the effect on net income. Beginning in fiscal year 2026, we transitioned from an annual non-GAAP tax rate to a three-year normalized non-GAAP tax rate of 18.0%. We believe this will provide better consistency across reporting periods by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency and do not necessarily reflect our normal operations. This rate is based on our projected annual rate through fiscal year 2028, primarily due to the completion of the acquisition of Ansys in the third quarter of fiscal year 2025 and the enactment of the One Big Beautiful Bill Act (the OBBB), which affects taxable income starting in fiscal year 2026 over the next several years. In projecting this rate, we evaluated our historical and projected mix of U.S. and international profit before tax, excluding the impact of stock-based compensation, the amortization of purchased intangibles and other GAAP only adjustments described above. We also considered other factors, including our current tax structure, U.S. tax law changes, such as the OBBB which impacts Synopsys’ expensing of U.S. research expenditures commencing in fiscal year 2026, and changes to foreign derived intangible income commencing in fiscal year 2027.
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at .
©2026 Synopsys, Inc. All rights reserved. Synopsys, Ansys, the Synopsys and Ansys logos, and other Synopsys trademarks are available at https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners.
Full text with the tables
Exhibit 99.1 PRESS RELEASE INVESTOR CONTACT: Tushar Jain Synopsys, Inc.
650-584-4289 Synopsys-ir@synopsys.com EDITORIAL CONTACT: Cara Walker Synopsys,
Inc. 650-584-5000 corp-pr@synopsys.com Synopsys Posts Financial Results for
Third Quarter Fiscal Year 2026 Results Summary
• Quarterly revenue of $2.477 billion; reflects broad-based strength with
outperformance in Design Automation
• Quarterly GAAP earnings per diluted share (EPS) of $2.84, and non-GAAP
EPS of $3.91, exceeding high-end of prior guidance
Raising expectations for full-year total revenue to $9.715 billion at
• the midpoint and full-year non-GAAP EPS guidance to $15.07 at the
midpoint on continued AI-driven demand strength
SUNNYVALE, Calif.– Aug. 26, 2026– Synopsys, Inc.(Nasdaq: SNPS) today reported
results for its third quarter of fiscal year 2026. Revenue for the third quarter
of fiscal year 2026 was $2.477 billion, compared to $1.740 billion for the third
quarter of fiscal year 2025. “AI is driving unprecedented complexity and
increasing demand for the silicon IP and engineering solutions necessary to
deliver next-generation AI compute, infrastructure and physical AI systems,”
said Sassine Ghazi, president and CEO of Synopsys. “One year after the
transformational acquisition of Ansys, we are executing with focus, extending
our leadership and gaining momentum.” “Synopsys delivered an outstanding third
quarter, with revenue and earnings per share exceeding the high end of our
guidance range. Results were driven by broad-based strength across the business,
led by EDA, a strong quarter from Ansys, and our design IP business returned to
year-over-year growth,” said Shelagh Glaser, CFO of Synopsys. “Given our strong
performance and expectations for double-digit growth in EDA, we are raising our
full year revenue, non-GAAPoperating margin, EPS and cash flow guidance.” 1
GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for
the third quarter of fiscal year 2026 was $545.8 million, or $2.84 per
diluted share, compared to $242.5 million, or $1.50 per diluted share, for the
third quarter of fiscal year 2025.
Non-GAAPResults
On a non-GAAP basis, net income for the third quarter of fiscal year 2026 was
$752.5 million, or $3.91 per diluted
share, compared to non-GAAP net income of $548.9 million, or $3.39 per diluted
share, for the third quarter of fiscal year 2025.
For a reconciliation of net income, earnings per diluted share and other
measures on a GAAP and non-GAAP basis, see
“GAAP to Non-GAAP Reconciliation” in the accompanying tables below.
Business Segments
Synopsys reports revenue and operating income in two segments: (1) Design
Automation, which includes our advanced silicon design, verification products
and services, Ansys products, system integration products and services, digital,
custom and field programmable gate array integrated circuit design software,
verification software and hardware products, manufacturing software products and
other; and
(2) Design IP, which includes our logic libraries, embedded memories, wired
interface IP, memory interface IP and security IP.
Financial Targets
Synopsys also provided its consolidated financial targets for the fourth quarter
and full fiscal year 2026. These targets assume no further changes to
export control restrictions or the current U.S. government “Entity List”
restrictions. These targets constitute forward-looking statements and are based
on current expectations. For a discussion of factors that could cause actual
results
to differ materially from these targets, see “Forward-Looking Statements” below.
2
Fourth Quarter and Full Fiscal Year 2026 Financial Targets (in millions, except
per share amounts)
Range Range
for for
Three Fiscal
Mont… Year
Endi… Ending
Octo… Octob…
31, 31,
2026 2026
──────────────────────────────────────────────────────────────────────────────
Low High Low High
Reve… $ 2,530 $ 2,580 $ 9,690 $ 9,740
(1)
GAAP $ 2,225 $ 2,300 $ 8,667 $ 8,742
Expe…
Non-… $ 1,450 $ 1,480 $ 5,670 $ 5,700
Expe…
Non-…
Inte…
and
Other $ (119 ) $ (115 ) $ (485 ) $ (481 )
Inco…
(Exp…
net
Non-…
Tax 18 % 18 % 18 % 18 %
Rate
Outs…
Shar… 192 194 192 194
(ful…
dilu…
GAAP Midpt:
Oper… ~10.4%
Marg…
Non-… Midpt:
Oper… ~41.5%
Marg…
GAAP $ 0.60 $ 0.85 $ 3.84 $ 4.08
EPS
Non-… $ 4.10 $ 4.16 $ 15.04 $ 15.10
EPS
Oper…
Cash ~$2,8…
Flow
Free
Cash ~$2,6…
Flow
(2)
Capi… ~$225
Expe…
Fiscal year 2026 revenue includes $2.98 billion of expected Ansys
revenue, and reflects the impact of
(1) approximately $110 million of the divested Optical Solutions Group and
PowerArtist RTL businesses, and $40 million related to the recently
completed divestiture of the Processor IP Solutions business.
(2) Free cash flow is calculated as cash provided from operating activities
less capital expenditures.
For a reconciliation of Synopsys’ fourth quarter and fiscal year 2026 targets,
including expenses, earnings per diluted share and other measures on a GAAP and
non-GAAPbasis, a discussion of the financial targets that we are not able to
reconcile without unreasonable efforts and a discussion of why management
believes such measurements provide useful information to investors, see “GAAP to
Non-GAAPReconciliation” in the accompanying tables below. Earnings Call Open to
Investors Synopsys will hold a conference call for financial analysts and
investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be
available in the investor relations portion of Synopsys’ corporate website at
www.synopsys.com. Synopsys uses its website and social media channels as tools
to disclose important information about Synopsys and to comply with its
disclosure obligations under Regulation Fair Disclosure. A webcast replay will
also be available on the corporate website from approximately 5:30 p.m. Pacific
Time today through the time Synopsys announces its results for the fourth
quarter and fiscal year 2026. 3
Availability of Final Financial Statements Synopsys will include final financial
statements for the third quarter of fiscal year 2026 in its quarterly report on
Form 10-Qto be filed with the Securities and Exchange Commission (SEC) and
available at www.sec.gov on or before September 9, 2026. Continuing Operations
On Sept. 30, 2024, Synopsys completed the sale of its Software Integrity
business. Unless otherwise noted, Synopsys’ Software Integrity business has been
presented as a discontinued operation in Synopsys’ consolidated financial
statements for all periods presented herein and all financial results and
targets are presented herein on a continuing operations basis. Reconciliation of
Third Quarter Fiscal Year 2026 Results The following tables reconcile the
specific items excluded from GAAP in the calculation of non-GAAPnet income,
earnings per diluted share, and tax rate for the periods indicated below. GAAP
to Non-GAAPReconciliation of Third Quarter Fiscal Year 2026 Results (unaudited
and in thousands, except per share amounts)
Three Nine
Mont… Mont…
Ended Ended
July July
2026 31, 2025 2026 31, 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
net
inc…
from
con… $ 545,… $ 242,… $ 627,… $ 887,…
ope…
att…
to
Syn…
Adj…
Amo…
of
acq… 402,… 74,9… 1,21… 99,1…
int…
ass…
Sto… 231,… 267,… 712,… 655,…
com…
Res… 2,164 — 236,… —
cha…
Acq…
rel… (402… ) 120,… (363… ) 264,…
ite…
Loss
on
sale — 1,200 — 3,635
of
str…
inv…
Tax (26,… ) (157… ) (309… ) (315… )
adj…
Non…
net
inc…
from
con… $ 752,… $ 548,… $ 2,11… $ 1,59…
ope…
att…
to
Syn…
4
Three Nine
Mont… Mont…
Ended Ended
July July
2026 31, 2025 2026 31, 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
net
inc…
from
con…
ope… $ 2.84 $ 1.50 $ 3.27 $ 5.61
per
dil…
sha…
att…
to
Syn…
Adj…
Amo…
of
acq… 2.09 0.46 6.30 0.63
int…
ass…
Sto… 1.20 1.66 3.71 4.15
com…
Res… 0.01 — 1.23 —
cha…
Acq…
rel… (2.09 ) 0.74 (1.89 ) 1.67
ite…
Loss
on
sale — 0.01 — 0.02
of
str…
inv…
Tax (0.14 ) (0.98 ) (1.60 ) (2.00 )
adj…
Non…
net
inc…
from
con…
ope… $ 3.91 $ 3.39 $ 11.02 $ 10.08
per
dil…
sha…
att…
to
Syn…
Sha…
used
in
com…
net 192,… 161,… 191,… 158,…
inc…
per
dil…
sha…
amo…
GAAP to Non-GAAPOperating Margin Reconciliation (unaudited)
Three Months Ended
July 31, 2026
─────────────────────────────────────────────────────────────────────────
GAAP operating margin 14.4 %
Amortization of acquired intangible 16.2 %
assets
Stock-based compensation 9.4 %
Restructuring charges 0.1 %
Acquisition/divestiture related items 0.9 %
Non-qualified deferred compensation plan 0.6 %
Non-GAAP operating margin 41.6 %
GAAP to Non-GAAPTax Rate Reconciliation (unaudited)
Three Months Ended Nine Months Ended
July 31, 2026 July 31, 2026
──────────────────────────────────────────────────────────────────────────────
GAAP effective tax 20.2 % 19.8 %
rate
Stock-based (5.0 )% (4.6 )%
compensation
Restructuring charges (3.3 )% (3.3 )%
Income tax 6.1 % 6.1 %
adjustments (1)
Non-GAAP effective 18.0 % 18.0 %
tax rate
The income tax adjustments are primarily due to differences in the tax
(1) rate effect of certain deductions, such
as the deduction for foreign-derived intangible income and credits.
5
Reconciliation of 2026 Targets The following tables reconcile the specific items
excluded from GAAP in the calculation of non-GAAPtargets for the periods
indicated below. GAAP to Non-GAAPReconciliation of Fourth Quarter Fiscal Year
2026 Targets (in thousands, except per share amounts)
Range for Three
Months Ending
October 31, 2026
──────────────────────────────────────────────────────────────────────────────
Low High
Target GAAP $ 2,225,000 $ 2,300,000
expenses
Adjustments:
Amortization of
acquired (400,000 ) (405,000 )
intangible
assets
Stock-based (230,000 ) (240,000 )
compensation
Restructuring (145,000 ) (175,000 )
charges
Target non-GAAP $ 1,450,000 $ 1,480,000
expenses
Range for Three
Months Ending
October 31, 2026
Low High
Target GAAP
earnings per
diluted share $ 0.60 $ 0.85
attributed to
Synopsys
Adjustments:
Amortization of
acquired 2.10 2.07
intangible
assets
Stock-based 1.24 1.19
compensation
Restructuring 0.91 0.75
charges
Tax adjustments (0.75 ) (0.70 )
Target non-GAAP
earnings per
diluted share $ 4.10 $ 4.16
attributed to
Synopsys
Shares used in
non-GAAP
calculation 193,000 193,000
(midpoint of
target
range)
6
GAAP to Non-GAAPReconciliation of Full Fiscal Year 2026 Targets (in thousands,
except per share amounts)
Range for Fiscal
Year Ending
October 31, 2026
──────────────────────────────────────────────────────────────────────────────
Low High
Target GAAP $ 8,667,091 $ 8,742,091
expenses
Adjustments:
Amortization of
acquired (1,610,000 ) (1,615,000 )
intangible
assets
Stock-based (945,000 ) (955,000 )
compensation
Restructuring (380,000 ) (410,000 )
charges
Acquisition/dive…
related items (62,091 ) (62,091 )
(1)
Target non-GAAP $ 5,670,000 $ 5,700,000
expenses
Range for Fiscal
Year Ending
October 31, 2026
Low High
Target GAAP
earnings per
diluted share $ 3.84 $ 4.08
attributed to
Synopsys
Adjustments:
Amortization of
acquired 8.37 8.34
intangible
assets
Stock-based 4.95 4.90
compensation
Restructuring 2.12 1.97
charges
Acquisition/dive…
related items (1.88 ) (1.88 )
(1)
Tax adjustments (2.36 ) (2.31 )
Target non-GAAP
earnings per
diluted share $ 15.04 $ 15.10
attributed to
Synopsys
Shares used in
non-GAAP
calculation 193,000 193,000
(midpoint of
target
range)
Adjustments reflect actual expenses incurred by Synopsys as of July 31,
(1) 2026, and do not fully reflect all
potential adjustments for future periods for the reasons set forth in
“GAAP to Non-GAAP Reconciliation” below.
GAAP to Non-GAAPReconciliation of Operating Margin at Midpoint of Full Fiscal
Year 2026 Targets (1)
Fiscal Year Ending
October 31, 2026
──────────────────────────────────────────────────────────────────────
At midpoint of revenue and expense
guidance ranges
GAAP operating margin 10.4 %
Amortization of acquired intangible 16.6 %
assets
Stock-based compensation 9.8 %
Restructuring charges 4.1 %
Acquisition/divestiture related items 0.6 %
(2)
Target non-GAAP operating margin 41.5 %
These numbers represent the midpoint of targets in the prepared remarks
(1) provided on August 26, 2026, and
do not represent official guidance for fiscal year 2026.
Adjustments reflect actual expenses incurred by Synopsys as of July 31,
(2) 2026 and do not fully reflect all
potential adjustments for future periods for the reasons set forth in
“GAAP to Non-GAAP Reconciliation” below.
7
Forward-Looking Statements
This press release and the investor conference call contain forward-looking
statements, including, but not limited to, statements concerning our short-term
and
long-term financial targets, expectations and objectives; our businesses,
business segments, strategies, partnerships, initiatives and opportunities,
including, among other things, the reallocation of resources in our Design IP
segment to higher
growth opportunities and planned restructuring activities; industry growth and
technological trends, such as artificial intelligence, including our development
and planned commercialization thereof; business and market outlook; the
potential impact
of the uncertain macroeconomic environment and global economic conditions on our
financial results; the impact of current and future U.S. and foreign trade
regulations, government actions and regulatory changes, such as export control
restrictions
and tariffs; the ANSYS, Inc. (Ansys) integration and its expected impact,
including expected synergies and the timing thereof, our ability to create joint
solutions as a combined company, and related accounting changes; planned and
recently
completed acquisitions or divestitures, and their anticipated timing and impact;
our key customers, customer concentration, customer engagement, customer demand
and market expansion; results and strategies related to our products, technology
and
services, including product development and our planned product releases and
capabilities; the expected realization of our contracted but unsatisfied or
partially unsatisfied performance obligations (backlog); planned stock
repurchases; our expected
tax rate; and the status, expected outcome or expected impact of litigation
and/or regulatory investigations. These statements involve risks, uncertainties
and other factors that could cause our actual results, time frames or
achievements to differ
materially from those expressed or implied in such forward-looking statements.
Such risks, uncertainties and factors include, but are not limited to:
macroeconomic conditions and geopolitical uncertainty in the global economy;
uncertainty in the
growth of the semiconductor and electronics industries; the highly competitive
industry we operate in; actions by the U.S. or foreign governments, such as the
imposition of additional export restrictions or tariffs; consolidation among our
customers
and our dependence on a relatively small number of large customers; risks and
compliance obligations relating to the global nature of our operations; failure
to realize the benefits expected from the transactions we complete, including
the
acquisition of Ansys (the Ansys Merger) or unexpected difficulties or
expenditures arising therefrom; risks related to inaccuracies in, or failures to
achieve, our operational and business metrics or forecasts of growth; and more.
Additional
information on potential risks, uncertainties and other factors that could
affect Synopsys’ results is included in filings we make with the SEC from time
to time, including in the sections entitled “Risk Factors” in our latest
Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. The
financial information contained in this press release should be read in
conjunction with
the consolidated financial statements and notes thereto included in Synopsys’
most recent reports on Forms 10-K and 10-Q, each as may be amended from time to
time.
Synopsys’ financial results for its third quarter of fiscal year 2026 are not
necessarily indicative of Synopsys’ operating results for any future periods.
8
Effectiveness of Information The targets included in this press release, the
statements made during the earnings conference call, the information contained
in the financial supplement and the corporate overview presentation, each of
which are available in the investor relations portion of Synopsys’ corporate
website at www.synopsys.com(collectively, the Earnings Materials), represent
Synopsys’ expectations and beliefs as of August 26, 2026. Although these
Earnings Materials are expected to remain available on Synopsys’ website through
the time Synopsys announces its results for the fourth quarter and fiscal year
2026, their continued availability through such time does not mean that Synopsys
is reaffirming or confirming their continued validity. Synopsys undertakes no
duty, and does not intend, to update any forward-looking statement, including
any targets, provided in the Earnings Materials, whether as a result of new
information, future events or otherwise, unless required by law. SYNOPSYS, INC.
Condensed Consolidated Statements of Income (Unaudited, in thousands, except per
share amounts)
Three Nine
Months Months
Ended Ended
July July
31, 31,
Reve… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Time… $ 1,002… $ 892,364 $ 2,899,… $ 2,548…
prod…
Upfr… 665,2… 516,404 1,953,… 1,395…
prod…
Total
prod… 1,668… 1,408,… 4,852,… 3,944…
reve…
Main…
and 808,8… 330,969 2,308,… 855,1…
serv…
Total 2,476… 1,739,… 7,161,… 4,799…
reve…
Cost
of
reve…
Prod… 275,6… 230,895 750,921 615,9…
Main…
and 156,5… 103,301 451,849 290,3…
serv…
Amor…
of
acqu… 247,2… 46,368 743,850 62,624
inta…
asse…
Total
cost 679,3… 380,564 1,946,… 968,8…
of
reve…
Gross 1,797… 1,359,… 5,214,… 3,830…
marg…
Oper…
expe…
Rese…
and 719,7… 625,301 2,134,… 1,732…
deve…
Sales
and 385,8… 259,480 1,164,… 683,7…
mark…
Gene…
and 176,9… 280,550 532,129 584,1…
admi…
Amor…
of
acqu… 155,1… 28,573 466,442 36,569
inta…
asse…
9
Restr…
charg…
Total
opera…
expen…
Opera…
income
Inter…
expen…
Other
income
(expe…
net
Income
before
income
taxes
Provi…
(bene…
for
income
taxes
Net
income
from
conti…
opera…
Loss
from
disco…
opera…
net of
income
taxes
Net
income
Less:
Net
income
(loss)
attri…
to
non-c…
inter…
and
redee…
non-c…
inter… 2,164 — 236,340 —
Net 1,439,… 1,193,9… 4,534,… 3,036,8…
income 357,491 165,269 680,963 793,534
attri… (133,2… (146,502 (429,3… (251,977
to 459,665 170,543 530,601 335,061
Synop… 683,922 189,310 782,251 876,618
Net 138,216 (52,967 154,961 (12,080
income 545,706 242,277 627,290 888,698
(loss) — — — (3,900
attri… 545,706 242,277 ) 627,290 884,798 )
to (94 ) (232 ) (573 ) 1,274 )
Synop… 545,800 ) 242,509 ) 627,863 ) 883,524 )
──────────────────────────────────────────────────────────────────────────────
Conti… $ 545,800 $ 242,509 $ 627,863 $ 887,424
opera…
Disco… — — — (3,900 )
opera…
Net $ 545,800 $ 242,509 $ 627,863 $ 883,524
income
Net
income
(loss)
per
share
attri…
to
Synop…
-
basic:
Conti… $ 2.85 $ 1.51 $ 3.29 $ 5.67
opera…
Disco… — — — (0.03 )
opera…
Basic
net
income $ 2.85 $ 1.51 $ 3.29 $ 5.64
per
share
Net
income
(loss)
per
share
attri…
to
Synop…
-
dilut…
Conti… $ 2.84 $ 1.50 $ 3.27 $ 5.61
opera…
Disco… — — — (0.02 )
opera…
Dilut…
net
income $ 2.84 $ 1.50 $ 3.27 $ 5.59
per
share
Shares
used
in
compu…
per
share
amoun…
Basic 191,536 160,174 190,858 156,536
Dilut… 192,319 161,682 191,981 158,176
10
SYNOPSYS, INC. Condensed Consolidated Balance Sheets (Unaudited, in thousands,
except par value amounts)
July 31, 2026 October 31, 2025
──────────────────────────────────────────────────────────────────────────────
ASSETS:
Current assets:
Cash and cash equivalents $ 3,606,286 $ 2,888,030
Short-term investments 1,383 72,929
Total cash, cash
equivalents and 3,607,669 2,960,959
short-term investments
Accounts receivable, net 1,318,747 1,505,427
Inventories 479,129 365,190
Prepaid and other current 1,238,791 1,180,526
assets
Total current assets 6,644,336 6,012,102
Property and equipment, net 749,598 696,693
Operating lease 694,603 702,008
right-of-use assets, net
Goodwill 26,834,774 26,899,215
Intangible assets, net 11,458,656 12,679,591
Deferred income taxes 95,515 112,159
Other long-term assets 1,248,781 1,122,693
Total assets $ 47,726,263 $ 48,224,461
LIABILITIES AND
STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable and $ 1,480,598 $ 1,326,211
accrued liabilities
Operating lease liabilities 137,837 128,205
Deferred revenue 2,331,173 2,245,961
Short-term debt 1,020,247 22,117
Total current liabilities 4,969,855 3,722,494
Long-term operating lease 666,592 680,698
liabilities
Long-term deferred revenue 383,936 382,557
Long-term debt 9,017,113 13,462,398
Other long-term liabilities 1,537,388 1,649,299
Total liabilities 16,574,884 19,897,446
Stockholders’ equity:
Preferred stock, $0.01 par
value:
2,000 shares authorized; — —
none
outstanding
Common stock, $0.01 par
value: 400,000 shares
authorized; 191,605 and 1,916 1,860
185,994 shares outstanding,
respectively
Capital in excess of par 20,711,069 18,640,947
value
Retained earnings 10,943,350 10,315,487
Treasury stock, at cost:
433 and 1,222 shares, (193,292 ) (398,278 )
respectively
Accumulated other
comprehensive income (310,504 ) (232,414 )
(loss)
Total Synopsys 31,152,539 28,327,602
stockholders’ equity
Non-controlling interest (1,160 ) (587 )
Total stockholders’ equity 31,151,379 28,327,015
Total liabilities and
stockholders’ $ 47,726,263 $ 48,224,461
equity
11
SYNOPSYS, INC. Condensed Consolidated Statements of Cash Flows (Unaudited, in
thousands)
CASH FLOWS FROM Nine Months Ended
OPERATING July 31,
ACTIVITIES: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net income $ 627,290 $ 884,798
Adjustments to
reconcile net
income to
net cash
provided by
operating
activities:
Amortization and 1,362,021 211,307
depreciation
Reduction of
operating lease 109,254 80,789
right-of-use
assets
Amortization of
capitalized
costs to 70,835 38,920
obtain revenue
contracts
Stock-based 712,631 655,909
compensation
Allowance for 21,847 23,559
credit losses
Loss on sale of
strategic — 3,635
investments
Gain on sale of — (51,385 )
building
(Gain) loss on
divestitures,
net of (380,527 ) 8,299
transaction
costs
Amortization of
bridge financing — 41,996
costs
Amortization of
debt issuance 21,280 6,790
costs
Deferred income (121,720 ) (326,610 )
taxes
Other 21 (737 )
Net changes in
operating assets
and liabilities,
net of effects
from
acquisitions and
dispositions:
Accounts 165,337 (27,989 )
receivable
Inventories (133,944 ) (34,068 )
Prepaid and
other current (70,709 ) 120,348
assets
Other long-term (125,304 ) (427,793 )
assets
Accounts payable
and accrued 90,610 31,384
liabilities
Operating lease (109,757 ) (78,360 )
liabilities
Income taxes (56,728 ) (140,347 )
Deferred revenue 116,166 (19,932 )
Unrealized loss
on settlement of — (121,643 )
interest rate
treasury lock
Net cash
provided by 2,298,603 878,870
operating
activities
CASH FLOWS FROM
INVESTING
ACTIVITIES:
Proceeds from
maturities of 20,995 53,630
short-term
investments
Proceeds from
sales of 68,761 148,809
short-term
investments
Purchases of
short-term (18,524 ) (47,558 )
investments
Proceeds from
sales of — 3,470
strategic
investments
Purchases of
strategic (1,402 ) (4,086 )
investments
Purchases of
property and (156,089 ) (134,908 )
equipment, net
Proceeds from — 74,279
sale of building
Acquisitions,
net of cash — (16,681,257 )
acquired
Proceeds from
business 440,022 142,546
divestiture, net
of cash divested
Other — (611 )
Net cash
provided by
(used in) 353,763 (16,445,686 )
investing
activities
CASH FLOWS FROM
FINANCING
ACTIVITIES:
Proceeds from
debt, net of — 14,329,340
issuance
costs
Repayment of (3,463,726 ) (2,579 )
debt
Issuances of 124,585 138,101
common stock
12
Payments for taxes related to net
share (262,761 ) (242,791 )
settlement of equity awards
Common stock issuance for private 2,000,000 —
placement
Purchases of treasury stock (300,000 ) —
Redemption of redeemable
non-controlling — (30,000 )
interest
Other — (463 )
Net cash provided by (used in)
financing (1,901,902 ) 14,191,608
activities
Effect of exchange rate changes on
cash, (33,409 ) 8,649
cash equivalents and restricted cash
Net change in cash, cash equivalents
and 717,055 (1,366,559 )
restricted cash
Cash, cash equivalents and
restricted 2,893,721 3,898,729
cash, beginning of year
Cash, cash equivalents and
restricted $ 3,610,776 $ 2,532,170
cash, end of period
Synopsys provides segment information, namely revenue, adjusted segment
operating income and adjusted segment operating margin, in accordance with
Financial Accounting Standards Board Accounting Standards Codification Topic
280, Segment Reporting. Synopsys’ chief operating decision maker (CODM) is our
Chief Executive Officer. In evaluating our business segments, the CODM considers
the income and expenses that the CODM believes are directly related to those
segments. The CODM does not allocate certain operating expenses managed at a
consolidated level to our business segments and, as a result, the reported
operating income and operating margin do not include these unallocated expenses
as shown in the table below. These unallocated expenses are presented in the
table below to provide a reconciliation of the total adjusted operating income
from segments to our consolidated operating income: SYNOPSYS, INC. Business
Segment Reporting (1) (Unaudited, in millions)
Three Nine
Months Three Months Nine
Ended Months Ended Months
July Ended July Ended
31, July 31, 31, July 31,
2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Reven…
by
segme…
-
Design $ 2,003.0 $ 1,312.1 $ 5,826.6 $ 3,454.6
Autom…
% of 80.9 % 75.4 % 81.4 % 72.0 %
Total
-
Design $ 473.8 $ 427.6 $ 1,335.0 $ 1,344.7
IP
% of 19.1 % 24.6 % 18.6 % 28.0 %
Total
Adjus…
opera…
income
by
segme…
-
Design $ 905.0 $ 583.8 $ 2,641.6 $ 1,447.2
Autom…
-
Design $ 125.4 $ 86.0 $ 302.2 $ 363.1
IP
Adjus…
opera…
margin
by
segme…
-
Design 45.2 % 44.5 % 45.3 % 41.9 %
Autom…
-
Design 26.5 % 20.1 % 22.6 % 27.0 %
IP
13
Total Adjusted Segment Operating Income Reconciliation (1) (Unaudited, in
millions)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
July 31, July 31, July 31, July 31,
2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
total
operating $ 357.5 $ 165.3 $ 681.0 $ 793.5
income –
as
reported
Other
expenses
managed
at
consolid…
level
Amortiza…
of
acquired 402.4 74.9 1,210.3 99.2
intangib…
assets
Stock-ba…
compensa… 231.6 267.7 712.6 655.9
(2)
Restruct… 2.2 — 236.3 —
charges
Acquisit…
related 22.9 118.4 62.1 218.7
items
(3)
Non-qual…
deferred 13.9 43.4 41.5 42.9
compensa…
plan
Total
adjusted
segment $ 1,030.4 $ 669.8 $ 2,943.8 $ 1,810.3
operating
income
Synopsys manages the business on a long-term, annual basis, and
(1) considers quarterly fluctuations of revenue and
profitability as normal elements of our business. Amounts may not foot
due to rounding.
(2) The adjustment includes non-GAAP expenses attributable to
non-controlling interest and redeemable non-controlling interest.
The adjustment excludes the amortization of bridge financing costs
entered into in connection with the Ansys
(3) Merger that was recorded in interest expense, and certain divestiture
related items that were recorded in other income (expense), net in our
unaudited condensed consolidated statements of income.
GAAP to Non-GAAPReconciliation Synopsys continues to provide all information
required in accordance with GAAP but acknowledges evaluating its ongoing
operating results may not be as useful if an investor is limited to reviewing
only GAAP financial measures. Accordingly, Synopsys presents non-GAAPfinancial
measures in reporting its financial results to provide investors with an
additional tool to evaluate Synopsys’ operating results in a manner that focuses
on what Synopsys believes to be its core business operations and what Synopsys
uses to evaluate its business operations and for internal budgeting and resource
allocation purposes. This press release includes non-GAAPearnings per diluted
share, non-GAAPnet income, non-GAAPoperating margin and non-GAAPtax rate for the
periods presented. It also includes future estimates for non-GAAPexpenses, non-
GAAPinterest and other income (expense), net, non-GAAPtax rate, non-
GAAPoperating margin, non-GAAPearnings per diluted share and free cash flow.
These non-GAAPfinancial measures may be different from non-GAAPfinancial
measures used by other companies. When possible, Synopsys provides a
reconciliation of non-GAAPfinancial measures to their most closely applicable
GAAP financial measures. Synopsys is unable to provide a full reconciliation of
certain fourth quarter and full fiscal year 2026 non-GAAPfinancial targets to
the corresponding GAAP financial measures on a forward-looking basis because
Synopsys 14
believes that it would not be possible for it to have the information necessary
to quantitatively reconcile such measures with sufficient precision without
unreasonable efforts due to, among
other things, the potential variability and limited predictability of the
excluded adjustment items necessary for a full reconciliation such as certain
acquisition/divestiture related items, tax deduction variability, changes in the
fair value of non-qualified deferred compensation plan, and gains (losses) on
the sale of strategic investments. For the same reasons, Synopsys is unable to
address the probable significance of the unavailable information.
Synopsys’ management does not itself, nor does it suggest that investors should,
consider such non-GAAP
financial measures in isolation from, as superior to, or as a substitute for,
financial information prepared in accordance with GAAP. These non-GAAP financial
measures are meant to supplement, and be viewed in
conjunction with, the corresponding GAAP financial measures. Synopsys’
management believes the presentation of non-GAAP financial measures, when shown
in conjunction with the corresponding GAAP financial
measures, provides useful information to investors allowing them to view
financial and business trends relating to our financial condition and results of
operations through the eyes of management. Synopsys’ management evaluates and
makes
decisions about our business operations using both GAAP financial measures and
non-GAAP financial measures to help facilitate internal comparisons to Synopsys’
historical operating results and forecasted
targets, planning and forecasting in subsequent periods and comparisons to
competitors’ operating results.
The following are descriptions of the
adjustments made to reconcile non-GAAP financial measures (other than free cash
flow, which is defined in the footnote to the Financial Targets table above) to
the most directly comparable GAAP
financial measures:
(i) Amortization of acquired intangible assets.We incur expenses from the
amortization of acquired intangible assets, which
may include impairment charges from write-downs of acquired intangible assets.
Acquired intangible assets include, among other things, core/developed
technology, customer relationships, contract rights, trademarks and trade names,
and other
intangibles related to acquisitions. We amortize the intangible assets over
their estimated useful lives. We do not enter into acquisitions on a predictable
cycle. The amount of an acquisition’s purchase price allocated to intangible
assets
and their estimated useful lives can vary significantly and are unique to each
acquisition. From time to time, we incur impairment charges due to write-downs
of acquired intangible assets. We believe that the presentation of non-GAAP
financial measures that adjust for the amortization of intangible assets,
including impairment
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charges, provides investors and others with a consistent basis for comparison
across accounting periods. We also exclude this item because such expenses are
non-cash in nature and we believe the non-GAAP financial measures excluding this
item provide meaningful supplemental information regarding our core operational
performance and liquidity, and ability to invest in research and development and
fund future acquisitions and capital expenditures.
(ii) Stock-based compensation. Stock-based compensation expenses consist
primarily of expenses related to restricted stock units, stock options, employee
stock purchase rights and other stock awards, including such expenses associated
with acquisitions. We
exclude stock-based compensation expense from our non-GAAP financial measures
primarily because it is not an expense that typically requires or will require
cash settlement by us. Further, the expense for the
fair value of the stock-based instruments we utilize may bear little resemblance
to the actual value realized upon the vesting or future exercise of the related
stock-based awards and, therefore, is not used by management to assess the core
profitability of our business operations.
(iii) Acquisition/divestiture related items. In connection with certain of our
business combinations
and/or divestitures, we incur significant expenses that we would not have
otherwise incurred as part of our business operations. These expenses include,
among other things, compensation expenses, professional fees and other direct
expenses,
concurrent restructuring activities and divestiture activities, including
employee severance and other exit costs, bridge financing costs, costs related
to integration activities, debt forgiveness, changes to the fair value of
contingent
consideration related to the acquired company, and amortization of the fair
value difference of below-market value assets arising from arrangements entered
into or acquired in conjunction with an acquisition. We also recognize the gains
and losses
from the divestitures of business, as well as the mark-up of equity or cost
method investments to fair value upon obtaining control through acquisition. We
exclude these items because they are related to
acquisitions and divestitures and have no direct correlation to the core
operation of our business. Further, because we do not acquire or divest
businesses on a predictable cycle and the terms of each transaction can vary
significantly and are
unique to each transaction, we believe it is useful to exclude such expenses
when looking for a consistent basis for comparison across accounting periods.
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(iv) Restructuring charges.We initiate restructuring activities to align our
costs to our operating
plans and business strategies based on then-current economic conditions, and
such activities have a specific and defined term. Restructuring costs generally
include severance and other termination benefits related to voluntary retirement
programs,
involuntary headcount reductions and facilities closures. Such restructuring
costs include elimination of operational redundancy, permanent reductions in
workforce and facilities closures and, therefore, are not considered by us to be
a part of the
core operation of our business and are not used by management when assessing the
core profitability and performance of our business operations.
(v)
Gains (losses) on the sale of strategic investments. We exclude gains and losses
on the sale of equity investments in privately held companies because we do not
believe they are reflective of our core business and operating results.
(vi) Deferred compensation. We exclude changes in the fair value of our non-
qualified deferred compensation
plan because we do not use these to assess the core profitability of our
business operations.
(vii) Income tax effect of non-GAAP pre-taxadjustments. Excluding the income tax
effect of non-GAAP pre-tax
adjustments from the provision for income taxes assists investors in
understanding the tax provision associated with those adjustments and the effect
on net income. Beginning in fiscal year 2026, we transitioned from an annual
non-GAAP tax rate to a three-year normalized non-GAAP tax rate of 18.0%. We
believe this will provide better consistency across reporting periods by
eliminating the effects of
non-recurring and period-specific items, which can vary in size and frequency
and do not necessarily reflect our normal operations. This rate is based on our
projected annual rate through fiscal year 2028,
primarily due to the completion of the acquisition of Ansys in the third quarter
of fiscal year 2025 and the enactment of the One Big Beautiful Bill Act (the
OBBB), which affects taxable income starting in fiscal year 2026 over the next
several
years. In projecting this rate, we evaluated our historical and projected mix of
U.S. and international profit before tax, excluding the impact of stock-based
compensation, the amortization of purchased intangibles and other GAAP only
adjustments
described above. We also considered other factors, including our current tax
structure, U.S. tax law changes, such as the OBBB which impacts Synopsys’
expensing of U.S. research expenditures commencing in fiscal year 2026, and
changes to
foreign derived intangible income commencing in fiscal year 2027.
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About Synopsys
Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from
silicon to systems, enabling customers to rapidly innovate AI-powered products.
We deliver industry-leading silicon design, IP, simulation and analysis
solutions, and design services. We partner closely with our customers across a
wide range of industries to maximize their
R&D capability and productivity, powering innovation today that ignites the
ingenuity of tomorrow. Learn more at .
©2026 Synopsys, Inc. All rights reserved. Synopsys, Ansys, the Synopsys and
Ansys logos, and other Synopsys trademarks are available at
https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or
product names may be trademarks of their respective owners.
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