01—Abstract
Summary
Summary of the 10-Q filed August 26, 2026. Cited figures are marked; the original filing is the authoritative source.
Synopsys, Inc. reported strong financial results for the third quarter of fiscal year 2026, with revenue surging 42% year-over-year to $2.5 billiona.
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 billionb, 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 millionc, 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.
02—Key points
Key Highlights
- Revenue increased by 42% to $2.5 billion for the third quarter of fiscal 2026, compared to the same period in fiscal 2025.
- Net 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.
- Gross margin improved to 72.6% for the three months ended July 31, 2026, up from 66.6% in the prior year period.
- The company holds a significant backlog of $10.9 billion as of July 31, 2026, providing visibility into future revenue.
- Total 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.
- Total 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.
- The company maintains a strong cash position with $3.6 billion in cash, cash equivalents, and short-term investments as of July 31, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Synopsys kept $0.22.
- Revenue$2.48B100.0%
- Cost of revenue−$679.4M27.4%
- Gross profit$1.80B72.6%
- Operating costs−$1.44B58.1%
- Operating income$357.5M14.4%
- Interest, other & tax$188.3M7.6%
- Net income$545.8M22.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed August 26, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $2.48B$1.74B | +42.4% |
| Cost of Revenue | $679.39M$380.56M | +78.5% |
| Gross Profit | $1.80B$1.36B | +32.2% |
| R&D Expenses | $719.74M$625.30M | +15.1% |
| Operating Expenses | $1.44B$1.19B | +20.6% |
| Operating Income | $357.49M$165.27M | +116.3% |
| Net Income | $545.80M$242.51M | +125.1% |
| EPS (Basic) | $2.85$1.51 | +88.7% |
| EPS (Diluted) | $2.84$1.50 | +89.3% |
| Shares Outstanding (Basic) | 191.54M160.17M | +19.6% |
| Shares Outstanding (Diluted) | 192.32M161.68M | +18.9% |
05—Questions
Frequently Asked Questions
What is the primary driver of the significant revenue growth in the third quarter of fiscal 2026?
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).
How has the acquisition of Ansys impacted Synopsys' cost structure?
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.
What is the company's outlook regarding its backlog and future revenue?
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.
How has Synopsys managed its debt following the Ansys acquisition?
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.
06—Continue