01—Abstract
Summary
Summary of the 8-K filed February 25, 2026. Cited figures are marked; the original filing is the authoritative source.
Synopsys reported first-quarter fiscal 2026 results (quarter ended January 31, 2026) with revenue of $2.409 billiona, up sharply from $1.455 billion a year earlier, driven largely by the Ansys acquisition.
Revenue landed at the high end of prior guidance. GAAP net income attributable to Synopsys was $65.0 millionb, or $0.34 per diluted share, versus $1.89 a year ago, weighed down by $404 million of acquired-intangible amortization, $259 million of stock-based compensation, and $118 million of restructuring charges. Non-GAAP EPS was $3.77, above prior guidance and up from $3.03.
Management reiterated full-year fiscal 2026 revenue guidance of $9.56c-$9.66 billion (about $9.61 billion at the midpoint, including roughly $2.9 billion from Ansys) and raised no targets, while guiding Q2 non-GAAP EPS to $3.11-$3.17. Balance-sheet activity was significant. Long-term debt fell to $10.0 billion from $13.5 billion at fiscal year-end, following $3.45 billion of debt repayment funded partly by a $2.0 billion private placement of stock.
Operating cash flow was $857 milliond for the quarter, and the company's board replenished its share repurchase program with up to $2.0 billion of authorization. The authorization is discretionary and can be suspended or terminated at any time. For investors, the key tensions are the large GAAP-to-non-GAAP gap driven by acquisition-related amortization, the rising segment mix toward Design Automation (83% of revenue), and the deleveraging and buyback capacity now available.
Guidance assumes no further changes to export controls or Entity List restrictions. Final first-quarter financials will be filed in the Form 10-Q on or before March 12, 2026.
02—Key points
Key Highlights
- Q1 FY2026 revenue of $2.409 billion, up about 66% year over year from $1.455 billion, reflecting Ansys consolidation; revenue was at the high end of prior guidance.
- GAAP EPS of $0.34 versus $1.89 a year ago; non-GAAP EPS of $3.77 versus $3.03, above prior guidance.
- GAAP operating income of $203 million, down from $252 million, with $404 million of acquired-intangible amortization and $118 million of restructuring charges.
- Full-year FY2026 revenue guidance reiterated at $9.56-$9.66 billion (about $9.61 billion midpoint, including about $2.9 billion from Ansys); non-GAAP EPS guidance of $14.38-$14.46.
- Long-term debt reduced to $10.0 billion from $13.5 billion at fiscal year-end after $3.45 billion of repayments, supported by a $2.0 billion private placement of stock.
- Board replenished the stock repurchase program with up to $2.0 billion of authorization; the program is discretionary and can be suspended or terminated at any time.
- Design Automation segment revenue rose to $2.0 billion (83% of total) with a 47.3% adjusted operating margin, while Design IP revenue declined to $407 million with margin falling to 16.2%.
03—Questions
Frequently Asked Questions
Why did GAAP earnings fall so sharply while non-GAAP earnings rose?
GAAP net income was depressed by roughly $404 million of amortization of acquired intangibles from the Ansys acquisition, $259 million of stock-based compensation, and $118 million of restructuring charges. Synopsys excludes these items from non-GAAP results, so the non-GAAP figure ($3.77 per share) reflects its view of core operations. Investors should weigh both measures, since the excluded costs are recurring in nature.
Did Synopsys change its full-year guidance?
No. Management reiterated full-year fiscal 2026 revenue guidance of $9.56-$9.66 billion and provided second-quarter targets, including non-GAAP EPS of $3.11-$3.17. The company stated that it does not intend to update forward-looking targets unless required by law.
What does the $2.0 billion buyback authorization mean for shareholders?
It is a replenishment of the existing program that authorizes but does not obligate Synopsys to repurchase up to $2.0 billion of common stock. The CEO, CFO, or Board can suspend or end it at any time, so the timing and amount of actual repurchases are uncertain.
How is the balance sheet changing after the Ansys deal?
Long-term debt fell to $10.0 billion from $13.5 billion at the end of fiscal 2025, after the company repaid $3.45 billion of debt in the quarter. The repayment was partly funded by a $2.0 billion private placement of stock, which lifted capital in excess of par value to $20.6 billion. Cash and short-term investments declined to $2.2 billion.
What risks could affect the outlook?
Guidance assumes no further changes to U.S. export controls or Entity List restrictions, which the filing identifies as a risk. Other risks cited include macroeconomic and geopolitical uncertainty, customer concentration, competition, and the expected realization of Ansys integration synergies. Design IP revenue and margin declined year over year, which bears watching.
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