Synopsys Inc 10-Q for FY2026 Q1

Synopsys Inc (SNPS)

10-Q 2026-02-25 For: 2026-01-31

Added on April 10, 2026

About this 10-Q

Synopsys Inc filed this 10-Q on February 25, 2026, covering the quarter ended January 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended January 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.41B; up 65.5% from $1.46B a year earlier
Net income: $64.96M; down 78.0% from net income of $295.68M a year earlier
Diluted EPS: $0.34; down 82.0% from $1.89 a year earlier

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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	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43
PART II.	Other Information	44
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 5.	Other Information	59
Item 6.	Exhibits	61
Signatures		63


	January 31, 2026		October 31, 2025

ASSETS
Current assets:
Cash and cash equivalents	$	2,129,572	$	2,888,030
Short-term investments	73,910		72,929
Total cash, cash equivalents and short-term investments	2,203,482		2,960,959
Accounts receivable, net	1,640,665		1,505,427
Inventories	393,221		365,190

Prepaid and other current assets	1,088,118		1,180,526
Current assets held for sale	48,152		—
Total current assets	5,373,638		6,012,102
Property and equipment, net	676,693		696,693
Operating lease right-of-use assets, net	713,594		702,008
Goodwill	26,880,889		26,899,215
Intangible assets, net	12,289,529		12,679,591

Deferred income taxes	117,386		112,159
Other long-term assets	1,186,199		1,122,693

Total assets	$	47,237,928	$	48,224,461
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,304,688	$	1,326,211
Operating lease liabilities	133,098		128,205

Deferred revenue	2,459,122		2,245,961
Short-term debt	22,117		22,117
Current liabilities held for sale	23,625		—
Total current liabilities	3,942,650		3,722,494
Long-term operating lease liabilities	691,249		680,698

Long-term deferred revenue	420,887		382,557
Long-term debt	10,022,093		13,462,398
Other long-term liabilities	1,613,051		1,649,299

Total liabilities	16,689,930		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; 191,449 and 185,994 shares outstanding, respectively	1,915		1,860
Capital in excess of par value	20,562,001		18,640,947
Retained earnings	10,380,445		10,315,487
Treasury stock, at cost: 589 and 1,222 shares, respectively	(191,851)		(398,278)
Accumulated other comprehensive income (loss)	(203,683)		(232,414)
Total Synopsys stockholders’ equity	30,548,827		28,327,602
Non-controlling interest	(829)		(587)
Total stockholders’ equity	30,547,998		28,327,015
Total liabilities and stockholders’ equity	$	47,237,928	$	48,224,461


	Three Months Ended January 31,
	2026		2025
Revenue:
Time-based products	$	951,541	$	828,238
Upfront products	741,530		368,124
Total products revenue	1,693,071		1,196,362
Maintenance and service	715,727		258,953
Total revenue	2,408,798		1,455,315
Cost of revenue:
Products	242,402		168,842
Maintenance and service	146,738		92,537
Amortization of acquired intangible assets	248,242		8,596
Total cost of revenue	637,382		269,975
Gross margin	1,771,416		1,185,340
Operating expenses:
Research and development	714,988		553,216
Sales and marketing	396,375		209,199
General and administrative	182,732		167,086
Amortization of acquired intangible assets	155,993		4,000
Restructuring charges	118,282		—
Total operating expenses	1,568,370		933,501
Operating income	203,046		251,839
Interest expense	(162,715)		(11,139)
Other income (expense), net	38,722		50,417
Income before income taxes	79,053		291,117
Provision (benefit) for income taxes	14,337		(6,294)


Net income	64,716		297,411
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest	(242)		1,728
Net income attributed to Synopsys	$	64,958	$	295,683






Net income per share attributed to Synopsys:


Basic	$	0.34	$	1.91




Diluted	$	0.34	$	1.89

Shares used in computing per share amounts:
Basic	189,593		154,408
Diluted	190,762		156,189


☒			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 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						64,958						64,958		(242)		64,716
Other comprehensive income (loss), net of tax effects										28,731		28,731				28,731


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	632	6		(337,811)				205,949				(131,856)				(131,856)
Stock-based compensation				258,724								258,724				258,724


Balance at January 31, 2026	191,449	$	1,915	$	20,562,001	$	10,380,445	$	(191,851)	$	(203,683)	$	30,548,827	$	(829)	$	30,547,998















				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 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						295,683						295,683		2,566		298,249
Other comprehensive income (loss), net of tax effects										(61,539)		(61,539)				(61,539)


Common stock issued, net of shares withheld for employee taxes	506	6		(275,413)				164,803				(110,604)				(110,604)
Stock-based compensation				185,754								185,754		709		186,463
Adjustments to 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 January 31, 2025	154,618	$	1,547	$	1,127,181	$	9,278,950	$	(860,967)	$	(241,919)	$	9,304,792	$	109	$	9,304,901


	Three Months Ended January 31,
	2025
	(in thousands)
Pro forma total revenue	$	2,217,683
Pro forma net income	$	56,366


	As of
	January 31, 2026		October 31, 2025
	(in thousands)
Contract assets, net	$	1,141,522	$	1,222,029
Unbilled receivables	$	43,124	$	45,528
Deferred revenue	$	2,880,009	$	2,628,518


	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in thousands)
Core/developed technology	$	7,236,330	$	1,040,891	$	6,195,439
Customer relationships	5,398,388		553,408		4,844,980
Contract rights intangible	596,819		275,391		321,428

Trademarks and trade names	962,325		34,643		927,682


Total	$	14,193,862	$	1,904,333	$	12,289,529


Fiscal year	(in thousands)
Remainder of fiscal 2026	$	1,211,259
2027	1,547,378
2028	1,385,619
2029	1,382,920
2030	1,376,990
2031 and thereafter	5,385,363

Total	$	12,289,529


	(in thousands)
Assets:


Prepaid and other assets	$	6,154
Property and equipment, net	2,082
Operating lease right-of-use assets, net	1,870
Goodwill	38,046

Total current assets held for sale	$	48,152
Liabilities:
Accounts payable and accrued liabilities	$	1,384
Operating lease liabilities	1,850
Deferred revenue	20,391
Total current liabilities held for sale	$	23,625


	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	$	40,825	$	—	$	—	$	—	$	40,825



U.S. Treasury, agency & T-bills	2,280		—		—		—		2,280
Total:	$	43,105	$	—	$	—	$	—	$	43,105
Short-term investments:
U.S. Treasury, agency & T-bills	$	5,014	$	20	$	—	$	—	$	5,034
Municipal bonds	22,903		79		(2)		—		22,980


Corporate debt securities	45,538		179		(1)		—		45,716


Other	180		—		—		—		180
Total:	$	73,635	$	278	$	(3)	$	—	$	73,910


	Amortized Cost		Fair Value
	(in thousands)
1 year or less	$	29,693	$	29,784
1-5 years	43,942		44,126


Total	$	73,635	$	73,910


	Three Months Ended January 31,
	2026		2025
EDA	45.6	%	67.3	%
Design IP	16.9	%	29.9	%
Ansys	36.8	%	—	%
Other	0.7	%	2.8	%
Total	100.0	%	100.0	%


	Fair values of derivative instruments designated as hedging instruments		Fair values of derivative instruments not designated as hedging instruments
	(in thousands)
Balance at January 31, 2026
Other current assets	$	11,625	$	163
Accrued liabilities	$	27,754	$	122
Balance at October 31, 2025
Other current assets	$	8,598	$	265
Accrued liabilities	$	9,504	$	593


	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 January 31, 2026
Foreign exchange contracts	Revenue	$	2,927	Revenue	$	1,190
Foreign exchange contracts	Operating expenses	(14,463)		Operating expenses	(1,518)
Interest rate contracts	Interest expense	—		Interest expenses	(1,332)
Total		$	(11,536)		$	(1,660)
Three months ended January 31, 2025
Foreign exchange contracts	Revenue	$	513	Revenue	$	(1,002)
Foreign exchange contracts	Operating expenses	(16,891)		Operating expenses	(2,586)
Total		$	(16,378)		$	(3,588)


	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			(78,336)
Total Senior Notes			9,921,664
Deferred payment on settlement of interest rate treasury lock			110,585
Other borrowings			11,961
Total			$	10,044,210
Reported as:
Short-term debt			$	22,117
Long-term debt			10,022,093
Total			$	10,044,210


			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	$	40,825	$	40,825	$	—	$	—



U.S. Treasury, agency & T-bills	2,280		—		2,280		—
Short-term investments:
U.S. Treasury, agency & T-bills	5,034		—		5,034		—
Municipal bonds	22,980		—		22,980		—


Corporate debt securities	45,716		—		45,716		—


Other	180		—		180		—
Prepaid and other current assets:
Foreign currency derivative contracts	11,788		—		11,788		—
Contingent consideration receivable	22,202		—		—		22,202
Other long-term assets:
Deferred compensation plan assets	464,876		464,876		—		—
Marketable equity securities	865		865		—		—
Total assets	$	616,746	$	506,566	$	87,978	$	22,202

Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts	$	27,876	$	—	$	27,876	$	—

Other long-term liabilities:
Deferred compensation plan liabilities	464,876		464,876		—		—
Total liabilities	$	492,752	$	464,876	$	27,876	$	—


	Principal Payments
Fiscal year	(in thousands)
Remainder of fiscal 2026	$	23,446
2027	1,024,775
2028	1,024,775
2029	24,775
2030	2,024,775
2031 and thereafter	6,000,000
Total	$	10,122,546


	Three Months Ended January 31,
	2026		2025
	(in thousands)
Operating lease expense (1)	$	37,206	$	25,052

Variable lease expense (2)	10,517		6,760
Total lease expense	$	47,723	$	31,812


	Lease Payments
Fiscal year	(in thousands)
Remainder of fiscal 2026	$	117,512
2027	160,939
2028	148,556
2029	139,066
2030	109,836
2031 and thereafter	251,209
Total future minimum lease payments	927,118
Less: Imputed interest	102,771
Total lease liabilities	$	824,347


	Lease Receipts
Fiscal year	(in thousands)
Remainder of fiscal 2026	$	14,162
2027	19,689
2028	20,280
2029	20,888
2030	17,867
2031 and thereafter	—
Total	$	92,886


	January 31,
	2026		2025		$ Change		% Change
	(dollars in millions)
Three months ended
Design Automation	$	2,001.8	$	1,020.2	$	981.6	96	%
Design IP	407.0		435.1		(28.1)		(6)	%
Total	$	2,408.8	$	1,455.3	$	953.5	66	%


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced programs	Maximum approximate dollar value of shares that may yet be purchased under the programs(1)
Month #1
November 1, 2025 through November 30, 2025	—	$	—	—	$	194,276,393
Month #2
December 1, 2025 through December 31, 2025	—	$	—	—	$	194,276,393
Month #3
January 1, 2026 through January 31, 2026	—	$	—	—	$	194,276,393
Total	—	$	—	—	$	194,276,393



	SYNOPSYS, INC.

Date: February 25, 2026	By:	/s/ SHELAGH GLASER
		Shelagh Glaser Chief Financial Officer (Principal Financial Officer)


Date: February 25, 2026						/s/ Sassine Ghazi
						Sassine Ghazi President and Chief Executive Officer (Principal Executive Officer)