Synopsys Inc. is set to report third-quarter earnings on Wednesday after the market close, with analysts expecting revenue of $2.44 billion and earnings per share of $3.67, reflecting year-over-year growth of 40% and 8.3%, respectively.
The results will highlight the integration of Ansys, the simulation-software provider acquired for $35 billion, which contributed approximately 29% of Synopsys' second-quarter revenue. The acquisition expanded Synopsys' addressable market to $31 billion and positioned the company as a leader in engineering solutions spanning silicon to systems, according to management.
Synopsys.ai, the company's agentic electronic design automation tools, saw 20 customers evaluating the suite during the prior quarter. Analysts anticipate operating margins to remain near 40%, underscoring the efficiency of the integration so far. In the fiscal second quarter, Synopsys topped earnings expectations by 6.4% and revenue forecasts by 1.3%, with sequential growth from $3.35 in EPS and $2.28 billion in revenue.
The earnings report follows a period of stability in analyst estimates, with 18 of 24 covering analysts rating Synopsys shares a buy. The consensus price target stands at $560.17, implying a 37% upside from the current stock price of $408.79, though shares remain well below the 52-week high of $615.79 reached earlier in the year.
Synopsys will host an investor day on September 30 to update medium-term operating targets and outline the next phase of the Ansys integration. The company's focus on AI-driven tools and post-acquisition execution will be closely scrutinized amid heightened expectations for growth and margin preservation.
