# Synopsys, Inc. (SNPS) Q3 2025 Financial Results Summary
On September 9, 2025, Synopsys, Inc. (Nasdaq: SNPS) announced its financial results for the third quarter of fiscal year 2025.
## Financial Highlights
– **Revenue**:
– $1.740 billion, a **14% increase** compared to $1.526 billion in Q3 2024.
– **Net Income**:
– **GAAP**: $242.5 million (or $1.50 per diluted share), down **43%** from $425.9 million (or $2.73 per diluted share) in Q3 2024.
– **Non-GAAP**: $548.9 million (or $3.39 per diluted share), a slight decrease of **less than 1%** compared to $535.5 million (or $3.43 per diluted share) in Q3 2024.
– **Acquisition**: In Q3 2025, the company completed the acquisition of Ansys on July 17, 2025, which has been reflected in the most recent financial results.
– **Financial Performance**:
– **Gross Margin**: Increased to **78.0%**, rise from 80.9% in Q3 2024.
– **Operating Income**: Decreased to $165.3 million from $360.2 million (a decline of **54%**).
– **Business Segments**:
– **Design Automation**: Revenue of $1.312 billion, making up **75.4%** of total revenue, increased from $1.062 billion (up **23.5%** YoY).
– Adjusted operating margin was **44.5%**.
– **Design IP**: Revenue of $427.6 million, representing **24.6%** of total revenue, decreased from $463.1 million (down **7.7%** YoY).
– Adjusted operating margin fell to **20.1%**, down from 36.7% YoY.
## Future Outlook
– The company anticipates full-year 2025 revenue to be between **$7.03 billion and $7.06 billion**.
– For Q4 2025, Synopsys is expecting:
– Revenue between **$2.230 billion and $2.260 billion**.
– GAAP earnings per share expected between **$(0.27) and $(0.16)**.
– Non-GAAP earnings per share forecasted between **$2.76 and $2.80**.
## Additional Information
– **Operating Cash Flow**: Approximately **$1.130 billion** anticipated for Q4.
– **Free Cash Flow**: Expected to be around **$950 million**.
## Shareholder Actions
– No quarterly dividend was declared.
– The company did not report any share repurchase plans during this quarter.
## Conclusion
Synopsys faced challenges during Q3 2025, particularly with its Design IP segment performance, despite a solid increase in overall revenue. The Ansys acquisition is expected to enhance the company’s market position and contribute positively to future growth.
### SYNOPSYS, INC. Unaudited Condensed Consolidated Statements of Income (in thousands, except per share amounts)
| Three Months Ended | Nine Months Ended | |||
|---|---|---|---|---|
| July 31, 2025 | July 31, 2024 | July 31, 2025 | July 31, 2024 | |
| Revenue: | ||||
| Time-based products | $892,364 | $803,147 | $2,548,928 | $2,389,924 |
| Upfront products | $516,404 | $442,528 | $1,395,204 | $1,281,283 |
| Total products revenue | $1,408,768 | $1,245,675 | $3,944,132 | $3,671,207 |
| Maintenance and service | $330,969 | $280,074 | $855,186 | $820,243 |
| Total revenue | $1,739,737 | $1,525,749 | $4,799,318 | $4,491,450 |
| Cost of revenue: | ||||
| Products | $230,895 | $179,536 | $615,953 | $553,753 |
| Maintenance and service | $103,301 | $96,630 | $290,309 | $275,348 |
| Amortization of acquired intangible assets | $46,368 | $14,510 | $62,624 | $41,165 |
| Total cost of revenue | $380,564 | $290,676 | $968,886 | $870,266 |
| Gross margin | $1,359,173 | $1,235,073 | $3,830,432 | $3,621,184 |
| Operating expenses: | ||||
| Research and development | $625,301 | $508,872 | $1,732,496 | $1,527,542 |
| Sales and marketing | $259,480 | $211,491 | $683,700 | $640,117 |
| General and administrative | $280,550 | $150,437 | $584,133 | $396,464 |
| Amortization of acquired intangible assets | $28,573 | $4,062 | $36,569 | $12,152 |
| Total operating expenses | $1,193,904 | $874,862 | $3,036,898 | $2,576,275 |
| Operating income | $165,269 | $360,211 | $793,534 | $1,044,909 |
| Interest expense | $(146,502) | $(11,742) | $(251,977) | $(20,547) |
| Other income (expense), net | $170,543 | $43,526 | $335,061 | $166,617 |
| Income before income taxes | $189,310 | $391,995 | $876,618 | $1,190,979 |
| Provision (benefit) for income taxes | $(52,967) | $(30,712) | $(12,080) | $37,634 |
| Net income from continuing operations | $242,277 | $422,707 | $888,698 | $1,153,345 |
| Income (loss) from discontinued operations | — | $(17,813) | $(3,900) | $(13,155) |
| Net income | $242,277 | $404,894 | $884,798 | $1,140,190 |
| Less: Net income (loss) attributed to non-controlling interest | $(232) | $(3,161) | $1,274 | $(9,084) |
| Net income attributed to Synopsys | $242,509 | $408,055 | $883,524 | $1,149,274 |
| Net income (loss) attributed to Synopsys | ||||
| Continuing operations | $242,509 | $425,868 | $887,424 | $1,162,429 |
| Discontinued operations | — | $(17,813) | $(3,900) | $(13,155) |
| Net income | $242,509 | $408,055 | $883,524 | $1,149,274 |
| Net income (loss) per share attributed to Synopsys – basic | ||||
| Continuing operations | $1.51 | $2.78 | $5.67 | $7.60 |
| Discontinued operations | — | $(0.12) | $(0.03) | $(0.08) |
| Basic net income per share | $1.51 | $2.66 | $5.64 | $7.52 |
| Net income (loss) per share attributed to Synopsys – diluted | ||||
| Continuing operations | $1.50 | $2.73 | $5.61 | $7.46 |
| Discontinued operations | — | $(0.12) | $(0.02) | $(0.09) |
| Diluted net income per share | $1.50 | $2.61 | $5.59 | $7.37 |
| Shares used in computing per share amounts: | ||||
| Basic | 160,174 | 153,417 | 156,536 | 152,885 |
| Diluted | 161,682 | 156,131 | 158,176 | 155,863 |
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### SYNOPSYS, INC. Unaudited Condensed Consolidated Balance Sheets (in thousands, except par value amounts)
| July 31, 2025 | October 31, 2024 | |
|---|---|---|
| ASSETS: | ||
| Current assets: | ||
| Cash and cash equivalents | $2,526,475 | $3,896,532 |
| Short-term investments | $67,235 | $153,869 |
| Total cash, cash equivalents and short-term investments | $2,593,710 | $4,050,401 |
| Accounts receivable, net | $1,392,373 | $934,470 |
| Inventories | $382,056 | $361,849 |
| Prepaid and other current assets | $1,153,172 | $1,122,946 |
| Current assets held for sale | $74,317 | — |
| Total current assets | $5,595,628 | $6,469,666 |
| Property and equipment, net | $699,688 | $563,006 |
| Operating lease right-of-use assets, net | $693,368 | $565,917 |
| Goodwill | $26,945,723 | $3,448,850 |
| Intangible assets, net | $13,079,912 | $195,164 |
| Deferred income taxes | $97,061 | $1,247,258 |
| Other long-term assets | $1,118,876 | $583,700 |
| Total assets | $48,230,256 | $13,073,561 |
| LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY: | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $1,283,204 | $1,163,592 |
| Operating lease liabilities | $127,452 | $94,791 |
| Deferred revenue | $1,991,429 | $1,391,737 |
| Short-term debt | $22,117 | — |
| Current liabilities held for sale | $20,005 | — |
| Total current liabilities | $3,444,207 | $2,650,120 |
| Long-term operating lease liabilities | $672,729 | $574,065 |
| Long-term deferred revenue | $383,405 | $340,831 |
| Long-term debt | $14,318,016 | $15,601 |
| Other long-term liabilities | $1,797,713 | $469,738 |
| Total liabilities | $20,616,070 | $4,050,355 |
