Synopsys (NASDAQ: SNPS) raised its fiscal 2026 revenue target to $9.69 billion-$9.74 billion, a 37% increase from the prior year, as integration of the Ansys acquisition accelerates. The guidance reflects a $50 million upward revision at the midpoint, with the company attributing the growth to strong demand for its electronic design automation and simulation tools amid rising AI infrastructure needs.
The updated outlook follows a third-quarter 2026 performance that exceeded analyst estimates. Synopsys reported revenue of $2.477 billion, beating expectations of $2.44 billion, while non-GAAP diluted earnings per share reached $3.91, surpassing the $3.67 forecast. Non-GAAP operating margin expanded to 41.6%, up from 37.3% in fiscal 2025, driven by higher software licensing and services revenue.
Ansys contributed approximately $711 million to third-quarter revenue, positioning the company to deliver about $2.98 billion from the acquisition in fiscal 2026. Synopsys also raised its full-year non-GAAP EPS guidance to $15.04-$15.10, up from prior guidance of $14.73-$14.82, reflecting margin expansion to roughly 41.5% at the midpoint. Free cash flow is projected at $2.6 billion, while cash flow from operations is expected to reach $2.8 billion.
The company’s debt load has increased to approximately $10 billion following the Ansys deal, though management emphasized the strategic benefits of the acquisition in strengthening its position across EDA, IP, and simulation markets. Synopsys holds the top spot in digital design and verification, with over 1,400 tape-outs at 16nm and below, while maintaining the second-largest IP market share globally. Its simulation and analysis division leads in multiphysics analysis.
Synopsys will present further details at its Investor Day scheduled for September 30, 2026. The company closed regular trading at $410, down 1.4% in after-hours moves from the $404.25 level following the earnings release. The stock remains well below its 52-week high of $615.79, with a low of $366 recorded over the past year.
