SNPS 10-Q

Synopsys Inc (SNPS)

10-Q 2026-08-26 For: 2026-07-31

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Added on August 26, 2026

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Delaware						56-1546236
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (par value of $0.01 per share)	SNPS	Nasdaq Global Select Market



		Page
PART I.	Financial Information	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	50
PART II.	Other Information	51
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	53
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 5.	Other Information	67
Item 6.	Exhibits	68
Signatures		69


	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 short-term investments	3,607,669		2,960,959
Accounts receivable, net	1,318,747		1,505,427
Inventories	479,129		365,190

Prepaid and other current assets	1,238,791		1,180,526

Total current assets	6,644,336		6,012,102
Property and equipment, net	749,598		696,693
Operating lease right-of-use assets, net	694,603		702,008
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 accrued liabilities	$	1,480,598	$	1,326,211
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 liabilities	666,592		680,698

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 185,994 shares outstanding, respectively	1,916		1,860
Capital in excess of par value	20,711,069		18,640,947
Retained earnings	10,943,350		10,315,487
Treasury stock, at cost: 433 and 1,222 shares, respectively	(193,292)		(398,278)
Accumulated other comprehensive income (loss)	(310,504)		(232,414)
Total Synopsys stockholders’ equity	31,152,539		28,327,602
Non-controlling interest	(1,160)		(587)
Total stockholders’ equity	31,151,379		28,327,015
Total liabilities and stockholders’ equity	$	47,726,263	$	48,224,461


	Three Months Ended July 31,				Nine Months Ended July 31,
	2026		2025		2026		2025
Revenue:
Time-based products	$	1,002,792	$	892,364	$	2,899,957	$	2,548,928
Upfront products	665,223		516,404		1,953,005		1,395,204
Total products revenue	1,668,015		1,408,768		4,852,962		3,944,132
Maintenance and service	808,807		330,969		2,308,643		855,186
Total revenue	2,476,822		1,739,737		7,161,605		4,799,318
Cost of revenue:
Products	275,622		230,895		750,921		615,953
Maintenance and service	156,514		103,301		451,849		290,309
Amortization of acquired intangible assets	247,252		46,368		743,850		62,624
Total cost of revenue	679,388		380,564		1,946,620		968,886
Gross margin	1,797,434		1,359,173		5,214,985		3,830,432
Operating expenses:
Research and development	719,737		625,301		2,134,849		1,732,496
Sales and marketing	385,889		259,480		1,164,262		683,700
General and administrative	176,979		280,550		532,129		584,133
Amortization of acquired intangible assets	155,174		28,573		466,442		36,569
Restructuring charges	2,164		—		236,340		—
Total operating expenses	1,439,943		1,193,904		4,534,022		3,036,898
Operating income	357,491		165,269		680,963		793,534
Interest expense	(133,234)		(146,502)		(429,313)		(251,977)
Other income (expense), net	459,665		170,543		530,601		335,061
Income before income taxes	683,922		189,310		782,251		876,618
Provision (benefit) for income taxes	138,216		(52,967)		154,961		(12,080)
Net income from continuing operations	545,706		242,277		627,290		888,698
Loss from discontinued operations, net of income taxes	—		—		—		(3,900)
Net income	545,706		242,277		627,290		884,798
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest	(94)		(232)		(573)		1,274
Net income attributed to Synopsys	$	545,800	$	242,509	$	627,863	$	883,524

Net income (loss) attributed to Synopsys:
Continuing operations	$	545,800	$	242,509	$	627,863	$	887,424
Discontinued operations	—		—		—		(3,900)
Net income	$	545,800	$	242,509	$	627,863	$	883,524

Net income (loss) per share attributed to Synopsys - basic:
Continuing operations	$	2.85	$	1.51	$	3.29	$	5.67
Discontinued operations	—		—		—		(0.03)
Basic net income per share	$	2.85	$	1.51	$	3.29	$	5.64

Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations	$	2.84	$	1.50	$	3.27	$	5.61
Discontinued operations	—		—		—		(0.02)
Diluted net income per share	$	2.84	$	1.50	$	3.27	$	5.59

Shares used in computing per share amounts:
Basic	191,536		160,174		190,858		156,536
Diluted	192,319		161,682		191,981		158,176


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


				Capital in Excess of Par Value		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Synopsys Stockholders’ Equity		Non-controlling Interest		Total Stockholders’ Equity
	Common Stock
	Shares	Amount
Balance at April 30, 2026	191,444	$	1,928	$	20,565,562	$	10,397,550	$	(242,827)	$	(244,082)	$	30,478,131	$	(1,066)	$	30,477,065
Net income						545,800						545,800		(94)		545,706
Other comprehensive income (loss), net of tax effects										(66,422)		(66,422)				(66,422)
Purchases of treasury stock	(51)	(13)		13				(37,500)				(37,500)				(37,500)
Equity forward contract, net				37,500								37,500				37,500


Common stock issued, net of shares withheld for employee taxes	212	1		(123,610)				87,035				(36,574)				(36,574)
Stock-based compensation				231,604								231,604				231,604


Balance at July 31, 2026	191,605	$	1,916	$	20,711,069	$	10,943,350	$	(193,292)	$	(310,504)	$	31,152,539	$	(1,160)	$	31,151,379

Balance at October 31, 2025	185,994	$	1,860	$	18,640,947	$	10,315,487	$	(398,278)	$	(232,414)	$	28,327,602	$	(587)	$	28,327,015
Net income						627,863						627,863		(573)		627,290
Other comprehensive income (loss), net of tax effects										(78,090)		(78,090)				(78,090)
Purchases of treasury stock	(691)	(7)		7				(300,000)				(300,000)				(300,000)


Common stock issued for private placement	4,822	48		1,999,952								2,000,000				2,000,000
Common stock issued for prior acquisition	1	1		189				478				668				668
Common stock issued, net of shares withheld for employee taxes	1,479	14		(642,657)				504,508				(138,135)				(138,135)
Stock-based compensation				712,631								712,631				712,631


Balance at July 31, 2026	191,605	$	1,916	$	20,711,069	$	10,943,350	$	(193,292)	$	(310,504)	$	31,152,539	$	(1,160)	$	31,151,379

				Capital in Excess of Par Value		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income (Loss)		Total Synopsys Stockholders’ Equity		Non-controlling Interest		Total Stockholders’ Equity
	Common Stock
	Shares	Amount
Balance at April 30, 2025	155,146	$	1,552	$	1,219,021	$	9,624,282	$	(689,001)	$	(240,136)	$	9,915,718	$	(113)	$	9,915,605
Net income						242,509						242,509		(232)		242,277
Other comprehensive income (loss), net of tax effects										8,241		8,241				8,241


Common stock issued upon the acquisition of Ansys	29,955	300		17,105,238								17,105,538				17,105,538
Assumption of equity awards in connection with the acquisition of Ansys				130,963								130,963				130,963
Common stock issued, net of shares withheld for employee taxes	359	3		(173,074)				116,910				(56,161)				(56,161)
Stock-based compensation				267,723								267,723				267,723


Balance at July 31, 2025	185,460	$	1,855	$	18,549,871	$	9,866,791	$	(572,091)	$	(231,895)	$	27,614,531	$	(345)	$	27,614,186

Balance at October 31, 2024	154,112	$	1,541	$	1,211,206	$	8,984,105	$	(1,025,770)	$	(180,380)	$	8,990,702	$	2,504	$	8,993,206
Net income						883,524						883,524		2,112		885,636
Other comprehensive income (loss), net of tax effects										(51,515)		(51,515)				(51,515)


Common stock issued upon the acquisition of Ansys	29,955	300		17,105,238								17,105,538				17,105,538
Assumption of equity awards in connection with the acquisition of Ansys				130,963								130,963				130,963
Common stock issued, net of shares withheld for employee taxes	1,393	14		(558,370)				453,679				(104,677)				(104,677)
Stock-based compensation				655,200								655,200		709		655,909
Adjustments for redeemable non-controlling interest						(838)						(838)				(838)
Deconsolidation of non-controlling interest upon the sale of subsidiary				5,634								5,634		(5,670)		(36)
Balance at July 31, 2025	185,460	$	1,855	$	18,549,871	$	9,866,791	$	(572,091)	$	(231,895)	$	27,614,531	$	(345)	$	27,614,186


	(in thousands)
Cash for outstanding Ansys Common Stock(1)	$	17,613,185
Fair value of Synopsys Common Stock issued for outstanding Ansys Common Stock(2)	17,105,538


Fair value of assumed Ansys equity awards attributable to pre-combination services(3)	130,963
Settlement of pre-existing relationships	8,794
Total purchase consideration	34,858,480
Less: cash acquired	(931,740)
Total purchase consideration, net of cash acquired	$	33,926,740
Allocations
Total current assets	$	902,619
Property and equipment	106,227
Goodwill	23,460,868
Intangible assets	12,990,000
Other long-term assets	263,919
Deferred revenue	(637,076)
Other current liabilities	(339,997)
Long-term deferred revenue	(34,070)
Long-term deferred tax liabilities	(2,618,474)
Other long-term liabilities	(167,276)
	$	33,926,740


	Fair value		Useful Lives
	(in thousands)		(in years)
Core/developed technology(1)	$	6,500,000	6 - 9
Customer relationships(2)	5,100,000		9
Contract rights intangible(3)	440,000		2
Trademarks and trade names(4)	950,000		23
Total identified intangible assets	$	12,990,000


	As of
	July 31, 2026		October 31, 2025
	(in thousands)
Contract assets, net	$	1,230,279	$	1,222,029
Unbilled receivables	$	31,864	$	45,528
Deferred revenue	$	2,715,109	$	2,628,518


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in thousands)
Core/developed technology	$	7,306,475	$	1,509,115	$	5,797,360
Customer relationships	5,409,466		862,710		4,546,756
Contract rights intangible	608,243		400,733		207,510

Trademarks and trade names	962,925		55,895		907,030


Total	$	14,287,109	$	2,828,453	$	11,458,656


Fiscal year	(in thousands)
Remainder of fiscal 2026	$	401,849
2027	1,542,106
2028	1,383,126
2029	1,380,166
2030	1,374,666
2031 and thereafter	5,376,743

Total	$	11,458,656


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses Less Than 12 Continuous Months		Gross Unrealized Losses 12 Continuous Months or Longer		Estimated Fair Value(1)
	(in thousands)
Cash equivalents:
Money market funds	$	42,537	$	—	$	—	$	—	$	42,537



U.S. Treasury, agency & T-bills	599		—		—		—		599
Total:	$	43,136	$	—	$	—	$	—	$	43,136
Short-term investments:
U.S. Treasury, agency & T-bills	$	1,202	$	—	$	—	$	—	$	1,202






Other	181		—		—		—		181
Total:	$	1,383	$	—	$	—	$	—	$	1,383


	Fair values of derivative instruments designated as hedging instruments		Fair values of derivative instruments not designated as hedging instruments
	(in thousands)
Balance at July 31, 2026
Other current assets	$	15,541	$	45
Accrued liabilities	$	35,714	$	273
Balance at October 31, 2025
Other current assets	$	8,598	$	265
Accrued liabilities	$	9,504	$	593


	Three Months Ended July 31,				Nine Months Ended July 31,
	2026		2025		2026		2025
EDA	51.8	%	68.0	%	49.5	%	67.4	%
Design IP	19.1	%	24.6	%	18.6	%	28.0	%
Ansys	28.7	%	5.1	%	31.4	%	1.9	%
Other	0.4	%	2.3	%	0.5	%	2.7	%
Total	100.0	%	100.0	%	100.0	%	100.0	%


	Location of gains (losses) recognized in OCI on derivatives	Amount of gains (losses) recognized in OCI on derivatives (effective portion)		Location of gains (losses) reclassified from OCI	Amount of gains (losses) reclassified from OCI (effective portion)
	(in thousands)
Three months ended July 31, 2026
Foreign exchange contracts	Revenue	$	6,497	Revenue	$	4,166
Foreign exchange contracts	Operating expenses	(4,573)		Operating expenses	(4,132)
Interest rate contracts	Interest expense	—		Interest expenses	(1,331)
Total		$	1,924		$	(1,297)
Three months ended July 31, 2025
Foreign exchange contracts	Revenue	$	4,751	Revenue	$	1,056
Foreign exchange contracts	Operating expenses	847		Operating expenses	(8)
Interest rate contracts	Interest expense	—		Interest expense	(1,331)
Total		$	5,598		$	(283)
Nine months ended July 31, 2026
Foreign exchange contracts	Revenue	$	17,144	Revenue	$	6,441
Foreign exchange contracts	Operating expenses	(32,519)		Operating expenses	(8,996)
Interest rate contracts	Interest expense	—		Interest expenses	(3,994)
Total		$	(15,375)		$	(6,549)
Nine months ended July 31, 2025
Foreign exchange contracts	Revenue	$	17,953	Revenue	$	1,336
Foreign exchange contracts	Operating expenses	(1,295)		Operating expenses	(5,664)
Interest rate contracts	Interest expense	(93,216)		Interest expense	(2,219)
Total		$	(76,558)		$	(6,547)


	Effective Interest Rate		Amount (in thousands)
Fixed-rate 4.550% Senior Notes due on April 1, 2027	4.840	%	$	1,000,000
Fixed-rate 4.650% Senior Notes due on April 1, 2028	4.850	%	1,000,000
Fixed-rate 4.850% Senior Notes due on April 1, 2030	4.980	%	2,000,000
Fixed-rate 5.000% Senior Notes due on April 1, 2032	5.150	%	1,500,000
Fixed-rate 5.150% Senior Notes due on April 1, 2035	5.270	%	2,400,000
Fixed-rate 5.700% Senior Notes due on April 1, 2055	5.800	%	2,100,000


Total			10,000,000
Unamortized discount and issuance costs			(73,089)
Total Senior Notes			9,926,911
Deferred payment on settlement of interest rate treasury lock			99,526
Other borrowings			10,923
Total			$	10,037,360
Reported as:
Short-term debt			$	1,020,247
Long-term debt			9,017,113
Total			$	10,037,360


			Fair Value Measurement Using
Description	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	42,537	$	42,537	$	—	$	—



U.S. Treasury, agency & T-bills	599		—		599		—
Short-term investments:
U.S. Treasury, agency & T-bills	1,202		—		1,202		—






Other	181		—		181		—
Prepaid and other current assets:
Foreign currency derivative contracts	15,586		—		15,586		—
Contingent consideration receivable	22,202		—		—		22,202
Other long-term assets:
Deferred compensation plan assets	471,484		471,484		—		—
Marketable equity securities	684		684		—		—
Total assets	$	554,475	$	514,705	$	17,568	$	22,202

Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	35,987	$	—	$	35,987	$	—

Other long-term liabilities:
Deferred compensation plan liabilities	471,484		471,484		—		—
Total liabilities	$	507,471	$	471,484	$	35,987	$	—


	Principal Payments
Fiscal year	(in thousands)
Remainder of fiscal 2026	$	11,057
2027	1,024,848
2028	1,024,848
2029	24,848
2030	2,024,848
2031 and thereafter	6,000,000
Total	$	10,110,449


	Three Months Ended July 31,				Nine Months Ended July 31,
	2026		2025		2026		2025
	(in thousands)
Operating lease expense (1)	$	37,288	$	29,398	$	111,739	$	80,513

Variable lease expense (2)	11,365		8,686		33,987		22,243
Total lease expense	$	48,653	$	38,084	$	145,726	$	102,756


	Lease Payments
Fiscal year	(in thousands)
Remainder of fiscal 2026	$	36,884
2027	167,769
2028	158,965
2029	146,812
2030	119,446
2031 and thereafter	270,382
Total future minimum lease payments	900,258
Less: Imputed interest	95,829
Total lease liabilities	$	804,429


	Lease Receipts
Fiscal year	(in thousands)
Remainder of fiscal 2026	$	4,861
2027	19,689
2028	20,280
2029	20,888
2030	17,867

Total	$	83,585


Net income from continuing operations attributed to Synopsys	$	545.8	$	242.5	$	627.9	$	887.4
Net loss from discontinued operations attributed to Synopsys	$	—	$	—	$	—	$	(3.9)
Diluted net income (loss) per share attributed to Synopsys:
Continuing operations	$	2.84	$	1.50	$	3.27	$	5.61
Discontinued operations	$	—	$	—	$	—	$	(0.02)


	July 31,
	2026		2025		$ Change		% Change
	(dollars in millions)
Three months ended
Design Automation	$	2,003.0	$	1,312.1	$	690.9	53	%
Design IP	473.8		427.6		46.2		11	%
Total	$	2,476.8	$	1,739.7	$	737.1	42	%
Nine months ended
Design Automation	$	5,826.6	$	3,454.6	$	2,372.0	69	%
Design IP	1,335.0		1,344.7		(9.7)		(1)	%
Total	$	7,161.6	$	4,799.3	$	2,362.3	49	%


Period	Total number of shares purchased(1)	Average price paid per share(1)		Total number of shares purchased as part of publicly announced programs(1)	Maximum approximate dollar value of shares that may yet be purchased under the programs(2)
Month #1
May 1, 2026 through May 31, 2026	—	$	—	—	$	1,700,000,097
Month #2
June 1, 2026 through June 30, 2026	51,437	$	729.05	51,437	$	1,700,000,097
Month #3
July 1, 2026 through July 31, 2026	—	$	—	—	$	1,700,000,097
Total	51,437	$	729.05	51,437	$	1,700,000,097



	SYNOPSYS, INC.

Date: August 26, 2026	By:	/s/ SHELAGH GLASER
		Shelagh Glaser Chief Financial Officer (Principal Financial Officer)