Synopsys raised its full-year outlook after reporting a 42.4% year-over-year revenue increase to $2.477 billion for the third quarter, surpassing analyst expectations of $2.44 billion. Adjusted earnings per share reached $3.91, exceeding the $3.67 estimate. The company’s shares fell 2% in premarket trading following the results.
The fourth-quarter forecast calls for adjusted earnings of $4.10 to $4.16 per share and revenue of $2.53 billion to $2.58 billion, both above consensus estimates. For the full fiscal year 2026, Synopsys now projects adjusted earnings of $15.04 to $15.10 per share and revenue between $9.69 billion and $9.74 billion, up from prior guidance and analyst expectations.
Growth was broad-based, driven by strong performance in Design Automation, contributions from Ansys, and a rebound in Design IP revenue. The company highlighted accelerating AI adoption as a key demand driver, increasing complexity in chip design and boosting demand for its engineering and silicon IP products.
Synopsys noted that its financial targets assume no changes to current U.S. export controls or Entity List restrictions. The company is scheduled to host an investor day on September 30, which Bank of America analysts described as a potential catalyst for higher confidence and potential multiple recovery, despite muted backlog support in the near term.
