Synopsys Shifts Fiscal Year, Eyes AI & Ansys for Growth

Ticker: SNPS · Form: 10-K · Filed: 2025-12-22T00:00:00.000Z

Sentiment: bullish

Topics: EDA, Semiconductor IP, AI-driven design, Simulation & Analysis, Acquisition, Cloud Computing, 5G

Related Tickers: SNPS, ANSS

TL;DR

**SNPS is making a smart bet on AI and Ansys, solidifying its lead in chip design and simulation, making it a strong long-term hold.**

AI Summary

SYNOPSYS INC (SNPS) reported a fiscal year ended October 31, 2025, marking a shift to a fixed fiscal year end. The company, a leader in engineering solutions from silicon to systems, is heavily focused on AI-powered product innovation. A significant strategic move is the acquisition of ANSYS, Inc. (Ansys), which is expected to expand its simulation and analysis (S&A) capabilities within the Design Automation segment. Synopsys continues to be a global leader in Electronic Design Automation (EDA) solutions, providing software and hardware for designing and testing integrated circuits, and is pioneering AI-driven chip design. The company's offerings also include a comprehensive portfolio of semiconductor IP solutions, which are pre-designed circuits to reduce development risk and speed time to market. The aggregate market value of voting and non-voting common equity held by non-affiliates was approximately $59.3 billion as of the last business day of the most recently completed second fiscal quarter. The company's strategy emphasizes addressing increasing chip complexity and demand for greater functionality, performance, and reduced power consumption, particularly in AI, 5G, automotive, and cloud computing infrastructure markets.

Why It Matters

Synopsys' strategic pivot towards AI-powered design and the integration of Ansys' simulation capabilities are critical for investors, positioning SNPS at the forefront of the rapidly evolving semiconductor and electronics industries. This move enhances its competitive edge against rivals by offering a more comprehensive 'silicon to systems' solution, crucial for customers facing intense pressure to innovate faster and cheaper. For employees, this signifies a focus on cutting-edge technology and potential for new skill development, while customers gain access to integrated tools that promise to accelerate product development and improve quality. The broader market benefits from accelerated innovation in critical sectors like AI, 5G, and automotive, driven by Synopsys' enhanced offerings.

Risk Assessment

Risk Level: medium — The company faces medium risk due to the inherent complexities and uncertainties associated with large acquisitions like Ansys, as highlighted in the 'Cautionary Note Regarding Forward-Looking Statements' which lists 'our acquisition of ANSYS, Inc. (the Ansys Merger), and its expected impact' as a key forward-looking statement. Additionally, the 'potential impact of the uncertain macroeconomic and global economic conditions on our financial results' and 'impact of current and future U.S. and foreign trade regulations' introduce significant external risks that could affect its global operations and revenue streams.

Analyst Insight

Investors should monitor the integration progress of the Ansys acquisition and its impact on Synopsys' financial performance and market share in the simulation and analysis segment. Pay close attention to the company's ability to capitalize on AI-driven design opportunities and navigate global trade regulations, as these factors will be crucial for sustained growth.

Financial Highlights

debt To Equity
X.X
revenue
$X
operating Margin
X%
total Assets
$X
total Debt
$X
net Income
$X
eps
$X
gross Margin
X%
cash Position
$X
revenue Growth
+X%

Revenue Breakdown

SegmentRevenueGrowth
Design Automation$X+X%
Design IP$X+X%

Key Numbers

Key Players & Entities

FAQ

What is Synopsys' primary business focus as of its 2025 10-K filing?

Synopsys, Inc. (SNPS) is primarily focused on providing engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. This includes leadership in Electronic Design Automation (EDA), semiconductor intellectual property (IP), and, with the Ansys acquisition, simulation and analysis (S&A).

How will the Ansys acquisition impact Synopsys' offerings?

The acquisition of ANSYS, Inc. (Ansys) will significantly expand Synopsys' capabilities in simulation and analysis (S&A) software, integrating these solutions into its Design Automation segment. This allows Synopsys to offer a more comprehensive platform for product development, from design concept to final-stage testing, particularly for AI-powered products.

What is the significance of Synopsys' shift to a fixed fiscal year end?

Synopsys changed its fiscal year end from the Saturday nearest to October 31 to a fixed date of October 31 each year, effective with fiscal year 2025. This change standardizes its reporting periods, with fiscal quarters ending on January 31, April 30, July 31, and October 31, which can improve consistency and comparability of financial statements.

What are the key market verticals driving demand for Synopsys' products?

Demand for Synopsys' products and services is significantly driven by market verticals including AI, 5G, automotive, and cloud computing infrastructure. These sectors require advanced chips and systems with greater functionality, performance, and reduced power consumption, which Synopsys' solutions help design.

What is Synopsys Cloud and its role in the company's strategy?

Synopsys Cloud is an offering that provides customers with additional options for accessing Synopsys' EDA products in their own cloud environments and as the industry's first EDA Software-as-a-Service solution, developed in partnership with Microsoft Azure. This aligns with increasing customer interest in cloud-based data storage and the scalability and flexibility of cloud computing.

What risks does Synopsys highlight regarding its future performance?

Synopsys highlights risks such as the expected impact of the Ansys Merger, the potential impact of uncertain macroeconomic and global economic conditions, and the effects of current and future U.S. and foreign trade regulations, including China export control restrictions. These factors could materially affect its financial results and operations.

How does Synopsys address the increasing complexity of chip design?

Synopsys addresses increasing chip design complexity by providing mission-critical EDA solutions, pioneering AI-driven chip design, and offering a wide range of products that automate tasks, manage large data, add intelligence to the design process, and facilitate reuse. Its solutions support advanced manufacturing techniques like multiple-patterning lithography and FinFET 3D transistors.

What was the aggregate market value of Synopsys' common equity held by non-affiliates?

As of the last business day of Synopsys' most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting common equity held by non-affiliates was approximately $59.3 billion. This excludes about 26.0 million shares held by executive officers, directors, and 5% or more owners.

Where can investors find Synopsys' SEC filings and investor information?

Investors can find Synopsys' Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other information on the Investor Relations page of its website (https://investor.synopsys.com/overview/default.aspx) and directly from the SEC's website (www.sec.gov).

What is Synopsys' approach to intellectual property (IP) solutions?

Synopsys offers a broad portfolio of semiconductor IP solutions, which are pre-designed, silicon-proven circuits like logic libraries, embedded memories, and interface IP. These solutions help engineers reduce development risk and speed time to market by providing ready-to-use components for larger chip designs.

Risk Factors

Industry Context

Synopsys operates in the highly dynamic semiconductor and electronic design markets, characterized by rapid technological advancements and intense competition. Key growth drivers include the increasing complexity of chips, the demand for greater functionality, and the proliferation of AI, 5G, automotive, and cloud computing applications. The industry is witnessing a significant push towards AI-powered design tools to enhance productivity and accelerate innovation cycles.

Regulatory Implications

Synopsys faces regulatory scrutiny related to export controls and international trade laws due to its global operations and the nature of its technology. Compliance with these regulations is critical to avoid penalties and maintain market access. Additionally, evolving data privacy regulations could impact how Synopsys handles customer data and develops its AI-driven solutions.

What Investors Should Do

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Key Dates

Glossary

EDA
Electronic Design Automation. Software and hardware tools used by engineers to design, verify, and manufacture integrated circuits (chips). (Synopsys is a global leader in EDA, forming a core part of its business and strategy.)
Semiconductor IP
Intellectual Property. Pre-designed, reusable blocks of circuitry (like logic libraries or processors) that chip designers incorporate into larger chip designs to save time and reduce risk. (Synopsys offers a comprehensive portfolio of IP, crucial for accelerating chip development and time-to-market.)
Simulation and Analysis (S&A)
Software used to model, test, and analyze the performance, behavior, and physical characteristics of designs before they are manufactured. (A key area for Synopsys, especially with the acquisition of Ansys, enabling comprehensive product development from concept to testing.)
Silicon to Systems
Refers to Synopsys' broad scope of offerings, covering the entire product development lifecycle from the fundamental chip (silicon) level to the complete electronic system. (Highlights Synopsys' end-to-end solution strategy and its ability to address complex customer needs.)
AI-driven chip design
The application of artificial intelligence techniques to automate and optimize various stages of the chip design process, improving efficiency and accelerating development. (Represents a key strategic focus and innovation area for Synopsys, aiming to enhance its EDA offerings.)

Year-Over-Year Comparison

While specific comparative figures are not detailed in this excerpt, the shift to a fixed fiscal year end (October 31) suggests a move towards standardized reporting. Investors should look for year-over-year growth in revenue, driven by strong demand in AI and other advanced computing sectors, and assess any changes in operating margins resulting from the Ansys acquisition and ongoing R&D investments. New risk factors related to the integration of Ansys and the continued evolution of AI in chip design are likely to be prominent.

Filing Stats: 4,318 words · 17 min read · ~14 pages · Grade level 16.5 · Accepted 2025-12-19 21:37:00

Key Financial Figures

Filing Documents

Business

Item 1. Business 3

Risk Factors

Item 1A. Risk Factors 15

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 29 Item 1C. Cybersecurity 29

Properties

Item 2. Properties 30

Legal Proceedings

Item 3. Legal Proceedings 31

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 31 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32

[Reserved]

Item 6. [Reserved] 33

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 34

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 51

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 54

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 111

Controls and Procedures

Item 9A. Controls and Procedures 111

Other Information

Item 9B. Other Information 111

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 112 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 113

Executive Compensation

Item 11. Executive Compensation 113

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 113

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence 113

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 113 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 114 Item 16. Form 10-K Summary 118

SIGNATURES

SIGNATURES 119 i Table of Contents Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K (this Form 10-K or this Annual Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and the Private Securities Litigation Reform Act of 1995. Any statements herein that are not statements of historical fact are forward-looking statements. Words such as "may," "will," "could," "would," "can," "should," "anticipate," "expect," "intend," "believe," "estimate," "project," "continue," "forecast," "likely," "potential," "seek," or the negatives of such terms and similar expressions are intended to identify forward-looking statements. This Form 10-K includes, among others, forward-looking statements regarding: our acquisition of ANSYS, Inc. (the Ansys Merger), and its expected impact; business and market outlook, opportunities, strategies, technological trends, such as artificial intelligence, and initiatives and opportunities, including among other things, our reallocation of resources in our Design IP segment to higher growth opportunities; the potential impact of the uncertain macroeconomic and global economic conditions on our financial results; the impact of current and future U.S. and foreign trade regulations, government actions and regulatory changes, such as export control restrictions and tariffs, including the anticipated impact of China export control restrictions; planned acquisitions or divestitures, and their expected impact; customer license renewals and the expected realization and timing of recognition of our contracted but unsatisfied or partially unsatisfied performance obligations (backlog); demand and market expansion for our products and our customers' products; our ability to successfully compete in the markets in which we serve; our license mix

Business

Item 1. Business Company and Segment Overview Synopsys, Inc. (Synopsys, we, our or us) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver trusted and comprehensive solutions spanning silicon design, silicon intellectual property (IP), simulation and analysis (S&A) as well as design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. We are a global leader in supplying the mission-critical EDA solutions that engineers use to design and test integrated circuits (ICs), also known as chips or silicon, and we are pioneering artificial intelligence (AI) driven chip design across the full-stack EDA suite to improve efficiency and accelerate the design, verification testing and manufacturing of advanced digital and analog chips. We provide software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them, including cloud-based digital and analog design flow to boost chip-design development productivity. We also provide technical services and support to help our customers develop advanced chips and electronic systems. Synopsys is also the global leader in engineering S&A software. Our Ansys solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction. These products enable customers to analyze designs on-premises and/or via the cloud, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing, validation and deployment. S&A products and services are part of our Design Automation segment. W

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