Synopsys Inc. reported first‑quarter fiscal 2026 results that surpassed expectations, with revenue of $2.409 billion—up 65.6% from the same period a year earlier—and non‑GAAP earnings per share of $3.77, beating the consensus estimate of $3.56 by $0.21 per share.
The strong performance was driven by the Design Automation segment, which generated roughly $2.0 billion in revenue and achieved an operating margin of 47.3%, up from 41% a year earlier. The Design IP segment contributed $407 million in revenue, with its operating margin contracting to 16.2% from 29.1% in the prior year, reflecting pricing pressure and a shift in product mix.
Management lowered its full‑year GAAP EPS guidance to a range of $2.21–$2.62 from the previous $2.49–$2.90, citing merger‑related fees and the ongoing integration of Ansys. The company reaffirmed its revenue target of $9.56–$9.66 billion, noting that the Ansys acquisition has added significant upside but also increased debt and interest expense.
The $35 billion acquisition of Ansys, completed on July 17, 2025, has accelerated Synopsys’s expansion into system‑level design and simulation. The integration has added $13.5 billion of acquisition‑related debt, of which $4.3 billion was repaid during the quarter, but the company continues to invest in aligning the two businesses and realizing synergies.
"Synopsys enters 2026 with an expanded portfolio, leadership positions across the business, and the most compelling roadmap in our history," said President and CEO Sassine Ghazi. "First‑quarter results reflect strong execution and financial discipline across the business. We achieved revenue at the upper end of our guided range and non‑GAAP EPS above guidance," added CFO Shelagh Glaser. Ghazi also noted, "We're positioning the company to capture an expanded market opportunity as we solve customers' toughest engineering challenges from silicon to systems," and highlighted the progress of the Ansys integration.
The results underscore the company’s ability to generate high‑margin growth from AI‑driven demand while managing the costs of a large acquisition. The narrowed GAAP EPS guidance signals that integration expenses and debt servicing will temper profitability in the near term, but the continued revenue upside and margin expansion in high‑growth segments suggest a positive long‑term trajectory for Synopsys.
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