10-QPeriod: Q3 FY2026

SYNOPSYS INC Quarterly Report for Q3 Ended Jul 31, 2026

Filed August 26, 2026For Securities:SNPS

Summary

Synopsys, Inc. reported strong financial results for the third quarter of fiscal year 2026, with revenue surging 42% year-over-year to $2.5 billion. This growth was driven by the full quarter inclusion of Ansys' results and broad-based organic strength across the business, particularly in Electronic Design Automation (EDA). Total cost of revenue and operating expenses increased by 35% to $2.1 billion, largely due to higher amortization expenses related to acquired intangible assets from the Ansys merger and increased employee-related costs. Despite these increases, the company demonstrated robust profitability, with net income attributed to Synopsys reaching $545.8 million, a significant increase from the prior year period. The company maintains a strong liquidity position with $3.6 billion in cash, cash equivalents, and short-term investments, and has a substantial backlog of $10.9 billion, indicating strong future revenue potential.

Key Highlights

  • 1Revenue increased by 42% to $2.5 billion for the third quarter of fiscal 2026, compared to the same period in fiscal 2025.
  • 2Net income attributed to Synopsys was $545.8 million for the third quarter of fiscal 2026, a substantial increase from $242.5 million in the prior year.
  • 3Gross margin improved to 72.6% for the three months ended July 31, 2026, up from 66.6% in the prior year period.
  • 4The company holds a significant backlog of $10.9 billion as of July 31, 2026, providing visibility into future revenue.
  • 5Total assets decreased slightly to $47.7 billion from $48.2 billion at the end of the previous fiscal year, primarily due to a decrease in goodwill and intangible assets.
  • 6Total liabilities decreased significantly to $16.6 billion from $19.9 billion at the end of the previous fiscal year, driven by a reduction in long-term debt.
  • 7The company maintains a strong cash position with $3.6 billion in cash, cash equivalents, and short-term investments as of July 31, 2026.

Frequently Asked Questions

The primary driver of the significant revenue growth was the full quarter inclusion of Ansys' financial results following its acquisition in July 2025. This was complemented by broad-based organic strength across Synopsys' other business segments, particularly in Electronic Design Automation (EDA).

The Ansys acquisition has led to increased costs, notably higher amortization expenses related to acquired intangible assets and increased employee-related costs. While these have impacted the cost of revenue and operating expenses, the company has managed to grow net income due to the substantial revenue increase.

Synopsys reported a substantial backlog of $10.9 billion as of July 31, 2026. Approximately 49% of this backlog is expected to be recognized as revenue over the next 12 months, with the majority of the remainder expected to be recognized within the following three years, indicating strong visibility into future revenue streams.

Synopsys has actively managed its debt. Following the acquisition, the company issued $10 billion in Senior Notes and had a $4.3 billion Term Loan. During the reported period, the Term Loan was fully repaid. Total liabilities decreased significantly, reflecting debt management strategies.