The chip design software specialist outperformed consensus estimates, but a sequential decline in activity and the burden of the Ansys integration weighed on the stock.
Synopsys shares fell about 8% the day after its quarterly results, despite reporting figures that exceeded consensus. The American semiconductor design software provider, which has also become a major player in industrial simulation following the acquisition of Ansys, posted Q2 revenue of $2.28bn, compared to the $2.25bn expected. Adjusted EPS reached $3.35, also topping expectations, which reached around $3.15.
While y-o-y revenue growth reached nearly 42%, the comparison with the previous quarter cooled market sentiment. Revenue declined by 5.5% sequentially, while adjusted EPS also decreased compared to Q1 and remains lower than last year, down 8.7%. On a GAAP basis, profitability was significantly squeezed by the amortization of acquired assets, restructuring costs, and integration expenses related to Ansys.
In an industry that was driven by the increasing complexity of artificial intelligence chips, Synopsys nevertheless retains several structural growth drivers. The $2bn investment made by Nvidia in December 2025 is accompanied by a multi-year strategic partnership, aiming to integrate Nvidia's accelerated computing and artificial intelligence technologies, notably CUDA-X and Omniverse, into Synopsys' electronic design automation tools to accelerate the simulation, verification, and design of complex products.
While this alliance could strengthen Synopsys' position with semiconductor, automotive, and aerospace manufacturers, the market is still waiting for more tangible evidence of organic growth. The Design IP business remains down y-o-y (-5.8%) and post-Ansys debt still exceeds $10bn. The Investor Day scheduled for September could become a key event to clarify the potential for synergies and the post-acquisition trajectory.
Synopsys Inc. specializes in the development and marketing of software programs aimed mainly at manufacturers of semi-conductors, computers and electronic equipment. Net sales break down by activity as follows:
- sale of software and hardware (78%): sale of software for the automation of integrated circuit design, pre-designed circuits for semiconductors, software and hardware for the validation of electronic systems, etc.;
- provision of services (22%): consulting, maintenance and technical assistance services in the areas of software security, quality and compliance.
Net sales are distributed geographically as follows: the United States (43.9%), Korea (13.4%), Europe (12.6%), China (11.5%) and other (18.6%).
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