How did Synopsys perform in Q2 fiscal 2025?

Revenue was $1.604 billion, up about 10% year over year and above the midpoint of guidance. GAAP diluted EPS was $2.24 and non-GAAP diluted EPS was $3.67, both ahead of the prior-year figures and guidance.

Did Synopsys change its full-year guidance?

No. Management reaffirmed full-year fiscal 2025 revenue guidance of $6.745–$6.805 billion and non-GAAP operating margin guidance. Q3 revenue is guided to $1.755–$1.785 billion, with non-GAAP EPS of $3.82–$3.87.

What is the impact of the pending Ansys acquisition on the financials?

Synopsys has raised roughly $10 billion in debt, which is reflected in the April 30, 2025 balance sheet and in interest expense of $94.3 million in the quarter. The targets exclude the effects of the merger and any related financing. The filing also flags the risk that the merger fails to close or is subject to conditions from regulators.

Why did the fiscal year change matter?

Synopsys moved its fiscal year end to October 31 from a 52/53-week year ending on the Saturday nearest October 31. This removes ten days from the first half of FY2025 and adds two days to the second half, for a net reduction of eight days in FY2025 compared with FY2024, which affects year-over-year comparisons.

What risks should investors watch?

Key risks include the Ansys merger's completion and regulatory approvals, export controls and tariffs, geopolitical and macroeconomic conditions, and dependence on a relatively small number of large customers. The sharp drop in Design IP operating margin in the first half, from 40.0% to 30.2%, also warrants attention.

SNPS 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed May 28, 2025. Cited figures are marked; the original filing is the authoritative source.

Synopsys (SNPS) reported Q2 fiscal 2025 results (quarter ended April 30, 2025) with revenue of $1.604 billion^a, up about 10% from $1.455 billion a year earlier, and above the midpoint of its guidance.

GAAP diluted EPS was $2.24^b (vs. $1.92), and non-GAAP diluted EPS was $3.67 (vs. $3.00), also ahead of guidance. Growth was led by Design Automation (revenue up about 6%) and especially Design IP (up about 21%), while GAAP net income was supported by a sharp rise in interest expense tied to debt raised for the pending Ansys acquisition. Cash and short-term investments jumped to about $14.3 billion at quarter-end, against roughly $10.0 billion of long-term debt, reflecting the Ansys financing.

Management reaffirmed full-year fiscal 2025 revenue guidance of $6.745^c–$6.805 billion and non-GAAP operating margin guidance, and set Q3 revenue guidance of $1.755–$1.785 billion with non-GAAP EPS of $3.82–$3.87. The company also changed its fiscal year end to October 31 from the prior 52/53-week convention, which shortens the first half of FY2025 by ten days and the full year by eight days in aggregate. These targets exclude any effects of the pending Ansys merger, and the filing notes that Q2 financial statements will be finalized in the Form 10-Q due by June 9, 2025.

For investors, the key items are steady top-line execution, a strong Q2 beat, and a balance sheet now heavily weighted toward debt and cash from the Ansys financing. The main risks flagged are the completion and regulatory approval of the Ansys merger, export controls and tariffs, and customer concentration. Note that the Design IP segment's operating margin fell sharply in the first half, from 40.0%^d to 30.2%, which the release does not explain in detail.

02—Key points

Key Highlights

Q2 FY2025 revenue of $1.604B, up ~10% YoY from $1.455B and above guidance midpoint
GAAP diluted EPS of $2.24 (vs. $1.92 prior year); non-GAAP diluted EPS of $3.67 (vs. $3.00), exceeding guidance
Design IP revenue rose ~21% YoY to $482.0M, while Design Automation grew ~6% to $1,122.3M
FY2025 revenue (~$6.745–6.805B) and non-GAAP operating margin guidance reaffirmed; Q3 non-GAAP EPS guided to $3.82–$3.87
Balance sheet transformed by Ansys-related financing: cash and short-term investments ~$14.3B vs. ~$10.0B long-term debt at April 30, 2025
Interest expense rose to $94.3M in Q2 from $7.1M, reflecting debt raised for the pending Ansys merger
Fiscal year-end changed to October 31; FY2025 has eight fewer days in aggregate versus FY2024

03—Questions

Frequently Asked Questions

How did Synopsys perform in Q2 fiscal 2025?
Revenue was $1.604 billion, up about 10% year over year and above the midpoint of guidance. GAAP diluted EPS was $2.24 and non-GAAP diluted EPS was $3.67, both ahead of the prior-year figures and guidance.
Did Synopsys change its full-year guidance?
No. Management reaffirmed full-year fiscal 2025 revenue guidance of $6.745–$6.805 billion and non-GAAP operating margin guidance. Q3 revenue is guided to $1.755–$1.785 billion, with non-GAAP EPS of $3.82–$3.87.
What is the impact of the pending Ansys acquisition on the financials?
Synopsys has raised roughly $10 billion in debt, which is reflected in the April 30, 2025 balance sheet and in interest expense of $94.3 million in the quarter. The targets exclude the effects of the merger and any related financing. The filing also flags the risk that the merger fails to close or is subject to conditions from regulators.
Why did the fiscal year change matter?
Synopsys moved its fiscal year end to October 31 from a 52/53-week year ending on the Saturday nearest October 31. This removes ten days from the first half of FY2025 and adds two days to the second half, for a net reduction of eight days in FY2025 compared with FY2024, which affects year-over-year comparisons.
What risks should investors watch?
Key risks include the Ansys merger's completion and regulatory approvals, export controls and tariffs, geopolitical and macroeconomic conditions, and dependence on a relatively small number of large customers. The sharp drop in Design IP operating margin in the first half, from 40.0% to 30.2%, also warrants attention.

04—Continue

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