Results Summary
- Quarterly revenue of $1.455 billion, exceeding midpoint of guidance.
- Quarterly GAAP earnings per diluted share of $1.89; non-GAAP earnings per diluted share of $3.03, exceeding guidance.
- Reaffirming full-year 2025 guidance.
SUNNYVALE, Calif., Feb. 26, 2025 -- Synopsys, Inc. (Nasdaq: SNPS) today reported results for its first quarter of fiscal year 2025. Revenue for the first quarter of fiscal year 2025 was $1.455 billion, compared to $1.511 billion for the first quarter of fiscal year 2024.
"In Q1, Synopsys' relentless focus on execution and innovation was evident across the business. We launched industry-leading silicon IP and hardware-assisted verification solutions while expanding generative AI capabilities in EDA," said Sassine Ghazi, president and CEO of Synopsys. "We are continuing to see strong design activity at advanced nodes, fueled by the AI-driven reinvention of compute. As the pace and complexity of technology innovation increases, new silicon-to-systems design paradigms are essential, and Synopsys is well-positioned to deliver."
"We delivered a solid start to the year, with non-GAAP earnings above guidance, and revenue in the upper end of our guided range," said Shelagh Glaser, CFO of Synopsys. "These results are a product of our resilient business model, strong operational execution, and leading technology that is mission-critical to customers. We are reaffirming our full-year guidance including expectations for double-digit revenue growth."
Continuing Operations
On September 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 the Synopsys' consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis.
GAAP Results
On a U.S. generally accepted accounting principles (GAAP) basis, net income for the first quarter of fiscal year 2025 was $295.7 million, or $1.89 per diluted share, compared to $437.5 million, or $2.82 per diluted share, for the first quarter of fiscal year 2024.
Non-GAAP Results
On a non-GAAP basis, net income for the first quarter of fiscal year 2025 was $473.2 million, or $3.03 per diluted share, compared to non-GAAP net income of $525.5 million, or $3.38 per diluted share, for the first quarter of fiscal year 2024.
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, system integration products and services, digital, custom and field programmable gate array IC design software, verification software and hardware products, manufacturing software products and other and (2) Design IP, which includes our interface, foundation, security, and embedded processor IP, IP subsystems, and IP implementation services.
Financial Targets
Synopsys also provided its consolidated financial targets for the second quarter and full fiscal year 2025. These targets reflect a change in Synopsys' fiscal year from a 52/53-week period ending on the Saturday nearest to October 31 of each year to October 31 of each year. As a result of this change, there will be ten fewer days in the first half of fiscal year 2025 and two extra days in the second half of fiscal year 2025, which results in eight fewer days in the aggregate in Synopsys' fiscal year 2025 as compared to its fiscal year 2024. These targets also 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.
Second Quarter and Full Fiscal Year 2025 Financial Targets (1) | |||||
(in millions except per share amounts) | |||||
Range for Three Months Ending | Range for Fiscal Year Ending | ||||
April 30, 2025 | October 31, 2025 | ||||
Low | High | Low | High | ||
Revenue | $ 1,585 | $ 1,615 | $ 6,745 | $ 6,805 | |
GAAP Expenses | $ 1,191 | $ 1,211 | $ 4,972 | $ 5,029 | |
Non-GAAP Expenses | $ 985 | $ 995 | $ 4,045 | $ 4,085 | |
Non-GAAP Interest and Other Income (Expense), net | $ 24 | $ 26 | $ 94 | $ 98 | |
Non-GAAP Tax Rate | 16 % | 16 % | 16 % | 16 % | |
Outstanding Shares (fully diluted) | 156 | 158 | 157 | 159 | |
GAAP EPS | $ 2.21 | $ 2.33 | $ 10.09 | $ 10.31 | |
Non-GAAP EPS | $ 3.37 | $ 3.42 | $ 14.88 | $ 14.96 | |
Operating Cash Flow | ~$1,800 | ||||
Free Cash Flow(2) | ~$1,600 | ||||
Capital Expenditures | ~$170 | ||||
(1) Targets do not reflect the impact of any future financing transactions related to the Ansys Merger (as defined below) or targets for the combined company. | |||||
(2) Free cash flow is calculated as cash provided from operating activities less capital expenditures. | |||||
For a reconciliation of Synopsys' second quarter and fiscal year 2025 targets, including expenses, earnings per diluted share and other measures on a GAAP and non-GAAP basis and a discussion of the financial targets that we are not able to reconcile without unreasonable efforts, see "GAAP to Non-GAAP Reconciliation" 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 on Synopsys' corporate website at investor.synopsys.com. Synopsys uses its website as a tool to disclose important information about Synopsys and 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 second quarter of fiscal year 2025 in May 2025.
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 on Synopsys' corporate website at www.synopsys.com (collectively, the "Earnings Materials"), represent Synopsys' expectations and beliefs as of February 26, 2025. Although these Earnings Materials will remain available on Synopsys' website through the date of the earnings call for the second quarter of fiscal year 2025, their continued availability through such date 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, whether as a result of new information or future events, or otherwise update, the targets given in this press release unless required by law.
Availability of Final Financial Statements
Synopsys will include final financial statements for the first quarter of fiscal year 2025 in its quarterly report on Form 10-Q to be filed on or before March 12, 2025.
About Synopsys
Catalyzing the era of pervasive intelligence, Synopsys, Inc. (Nasdaq: SNPS) delivers trusted and comprehensive silicon to systems design solutions, from electronic design automation to silicon IP and system verification and validation. We partner closely with semiconductor and systems 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 www.synopsys.com.
Reconciliation of First Quarter Fiscal Year 2025 Results
The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income, earnings per diluted share, and tax rate for the periods indicated below.
GAAP to Non-GAAP Reconciliation of First Quarter Fiscal Year 2025 Results(1) | |||
(unaudited and in thousands, except per share amounts) | |||
Three Months Ended | |||
January 31, | |||
2025 | 2024 | ||
GAAP net income from continuing operations attributed to Synopsys | $ 295,683 | $ 437,450 | |
Adjustments: | |||
Amortization of acquired intangible assets | 12,596 | 15,601 | |
Stock-based compensation | 186,279 | 165,141 | |
Acquisition/divestiture related items | 74,829 | 31,932 | |
Gain on sale of strategic investments | — | (55,077) | |
Tax adjustments | (96,214) | (69,567) | |
Non-GAAP net income from continuing operations attributed to Synopsys | $ 473,173 | $ 525,480 | |
Three Months Ended | |||
January 31, | |||
2025 | 2024 | ||
GAAP net income from continuing operations per diluted share attributed to Synopsys | $ 1.89 | $ 2.82 | |
Adjustments: | |||
Amortization of acquired intangible assets | 0.08 | 0.10 | |
Stock-based compensation | 1.19 | 1.06 | |
Acquisition/divestiture related items | 0.48 | 0.21 | |
Gain on sale of strategic investments | — | (0.35) | |
Tax adjustments | (0.61) | (0.46) | |
Non-GAAP net income from continuing operations per diluted share attributed to Synopsys | $ 3.03 | $ 3.38 | |
Shares used in computing net income per diluted share amounts: | 156,189 | 155,334 | |
(1) Synopsys' first quarter of fiscal year 2025 and 2024 ended on January 31, 2025 and February 3, 2024, respectively. For presentation purposes, | |||
GAAP to Non-GAAP Tax Rate Reconciliation | |
(unaudited) | |
Three Months Ended | |
January 31, 2025 | |
GAAP effective tax rate | (2.2) % |
Stock-based compensation | 4.3 % |
Acquisition/divestiture related items (1) | 12.6 % |
Tax adjustments (2) | 1.3 % |
Non-GAAP effective tax rate | 16.0 % |
(1) The adjustment is primarily due to the capital loss on the sale of Synopsys' This News is brought to you by Qube Mark, your trusted source for the latest updates and insights in marketing technology. Stay tuned for more groundbreaking innovations in the world of technology. | |
