Does this 8-K change Synopsys's previously reported financial results?

No. The filing explicitly states it does not modify or update Synopsys's consolidated financial statements in its FY2024 10-K or its Q1 FY2025 10-Q. It supplements and supersedes only the pro forma information disclosed in the April 2024 S-4/A amendment.

What is the financial impact of the deal on Synopsys's EPS?

On a pro forma basis, FY2024 diluted EPS falls to $3.81 from Synopsys's historical $9.25, and the three months ended January 31, 2025 show pro forma diluted EPS of $0.76 versus $1.89 historically. The decline reflects roughly 30 million new shares, about $1.1 billion of acquisition-related amortization, and about $0.8 billion of incremental interest expense. The pro forma figures exclude synergies and integration costs.

How will the acquisition be financed and how will leverage change?

The $17.3B cash component will be funded by about $10.0B of assumed new senior debt at a 5.4% blended rate, a $4.3B term loan, and existing cash. Pro forma total debt is roughly $14.3B, of which about $0.6B is expected to be repaid from the Optical Solutions sale proceeds. Management has flagged debt covenants and de-leveraging as a risk factor.

Is the deal still expected to close, and what could derail it?

The companies expect closing in the first half of 2025, subject to required regulatory approvals and customary conditions. Risks include conditions imposed by regulators, the Optical Solutions divestiture being a required remedy, financing availability, and the possibility of Merger Agreement termination. The filing gives no assurance of timing or outcome.

Does the ANSYS audit report raise any concerns?

Deloitte issued an unqualified opinion on ANSYS's FY2024 statements. The one critical audit matter concerns judgment in allocating revenue between the term license and PCS on subscription lease licenses, a 50/50 split that drives the timing of revenue recognition. This is a judgment area rather than a finding of error, but it is a relevant accounting sensitivity for investors to monitor.

SNPS 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.

Synopsys (SNPS) filed this 8-K to supply the required financial statements for its pending acquisition of ANSYS, Inc. It includes ANSYS's audited FY2024 financial statements (Exhibit 99.1, Deloitte & Touche, unqualified opinion) and an unaudited pro forma condensed combined financial information package (Exhibit 99.2).

The filing is informational and does not change Synopsys's previously reported 10-K or 10-Q results. The pro forma data supersedes prior pro forma figures from the April 2024 S-4/A amendment. ANSYS reported FY2024 revenue of $2.54 billion^a (up 12% from $2.27 billion), operating income of $718 million, and net income of $576 million, with diluted EPS of $6.55.

Revenue growth was driven by subscription lease licenses, which rose to $949 million^b from $786 million. The auditor flagged revenue allocation on time-based subscription licenses as a critical audit matter, since 50% of the standalone selling price is assigned to the term license and 50% to post-contract support. ANSYS ended 2024 with $1.45 billion in cash and $755 million in term loan debt.

The pro forma data reflects a deal of roughly $32.4 billion^c in estimated merger consideration: about $17.3 billion in cash ($197.00 per ANSYS share) and about $15.1 billion in Synopsys stock (0.3450 SNPS shares per ANSYS share, roughly 30.3 million shares). Financing assumes $10.0 billion of new debt at a 5.4% blended rate plus a $4.3 billion term loan. Estimated goodwill is about $21.1 billion and identified intangibles are about $12.6 billion, which will drive substantial new amortization.

Pro forma FY2024 net income from continuing operations is about $685 million^d, with a pro forma diluted EPS of $3.81, compared with Synopsys's historical $9.25 diluted EPS. The Optical Solutions divestiture to Keysight for $584 million is assumed to close alongside the merger. The deal is expected to close in the first half of 2025, subject to regulatory approvals.

02—Key points

Key Highlights

ANSYS FY2024 revenue of $2.54B (+12% YoY); net income of $576M (+15% YoY); diluted EPS of $6.55
Subscription lease license revenue grew 21% to $949M, now about 37% of ANSYS revenue; the revenue-allocation methodology was flagged as a critical audit matter
Estimated merger consideration of about $32.4B: $17.3B cash ($197.00/share) plus about 30.3M Synopsys shares, with a fixed 0.3450 exchange ratio
Pro forma financing assumes $10.0B of new debt at 5.4% plus a $4.3B term loan, raising pro forma interest expense by roughly $783M annually and sharply increasing leverage
Pro forma purchase accounting implies about $21.1B of goodwill and $12.6B of intangibles, creating large non-cash amortization that depresses pro forma GAAP EPS to $3.81 (vs. $9.25 historical)
Required divestiture of Optical Solutions Group to Keysight for $583.8M gross proceeds, used to prepay $573.7M of term loan debt; the PowerArtist RTL sale is also pending

03—Questions

Frequently Asked Questions

Does this 8-K change Synopsys's previously reported financial results?
No. The filing explicitly states it does not modify or update Synopsys's consolidated financial statements in its FY2024 10-K or its Q1 FY2025 10-Q. It supplements and supersedes only the pro forma information disclosed in the April 2024 S-4/A amendment.
What is the financial impact of the deal on Synopsys's EPS?
On a pro forma basis, FY2024 diluted EPS falls to $3.81 from Synopsys's historical $9.25, and the three months ended January 31, 2025 show pro forma diluted EPS of $0.76 versus $1.89 historically. The decline reflects roughly 30 million new shares, about $1.1 billion of acquisition-related amortization, and about $0.8 billion of incremental interest expense. The pro forma figures exclude synergies and integration costs.
How will the acquisition be financed and how will leverage change?
The $17.3B cash component will be funded by about $10.0B of assumed new senior debt at a 5.4% blended rate, a $4.3B term loan, and existing cash. Pro forma total debt is roughly $14.3B, of which about $0.6B is expected to be repaid from the Optical Solutions sale proceeds. Management has flagged debt covenants and de-leveraging as a risk factor.
Is the deal still expected to close, and what could derail it?
The companies expect closing in the first half of 2025, subject to required regulatory approvals and customary conditions. Risks include conditions imposed by regulators, the Optical Solutions divestiture being a required remedy, financing availability, and the possibility of Merger Agreement termination. The filing gives no assurance of timing or outcome.
Does the ANSYS audit report raise any concerns?
Deloitte issued an unqualified opinion on ANSYS's FY2024 statements. The one critical audit matter concerns judgment in allocating revenue between the term license and PCS on subscription lease licenses, a 50/50 split that drives the timing of revenue recognition. This is a judgment area rather than a finding of error, but it is a relevant accounting sensitivity for investors to monitor.

04—Continue

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