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📄 Source: Seeking Alpha

⚡ Q/Q Change Highlights

Revenue $2.409B (+65.5% YoY) — first full quarter incl. ANSYS (vs $2.0B+ ex-ANSYS run-rate in Q4 FY25); beat cons (~$2.39B) by ~$18M
Non-GAAP EPS $3.77 (beat ~$0.21) vs $3.30 prior qtr; GAAP EPS $0.34 — hit by ~$118M restructuring + $404M intangible amortization
Design IP revenue fell to $407M (16.9% of revenue) vs $435M a year ago — IP weak spot; Design Automation $2.0B (83.1%)
FY26 targets set: revenue $9.56–9.66B; non-GAAP EPS $14.38–14.46; FCF ~$1.9B
Long-term debt cut to ~$10B (from $13.5B) via $3.45B repayment; $2.0B private placement
Q2 guide: revenue $2.225–2.275B; non-GAAP EPS $3.11–3.17

🎙️ SNPS — Feb 25, 2026

📄 Original Transcript

SNPS (Prior-Quarter Earnings Call Transcript (2026-02-25).):

NOTE:The full verbatim Synopsys Q1 FY2026 earnings call transcript is behind a paywall (Seeking Alpha / GuruFocus). This file compiles the verbatim call opening plus the complete financial data from the official Q1 FY2026 earnings release (PRNewswire, Feb 25, 2026) and transcript-derived highlights.

Verbatim Opening:

Operator

Ladies and gentlemen, welcome to the Synopsys Earnings Conference Call for the First Quarter Fiscal Year 2026. [Operator Instructions]. Today's call will last one hour. As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Tushar Jain, Head of Investor Relations. Please go ahead.

Tushar Jain— Head of Investor Relations

Good afternoon, everyone. With us today are Sassine Ghazi, President and CEO of Synopsys, and Shelagh Glaser, CFO. Before we begin, I'd like to remind everyone that during the course of this conference call, Synopsys will discuss forecasts, targets and other forward-looking statements regarding the company and its financial results. While these statements represent our best current judgment about future results and performance as of today, our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect. In addition to any risks that we highlight during this call, important factors that may affect our future results are described in our most recent SEC reports and today's earnings press release.

Q1 FY2026 Financial Results (per earnings release)

Revenue for Q1 FY2026 was $2.409 billion, compared to $1.455 billion in Q1 FY2025 (+65.5% YoY, boosted by ANSYS consolidation). Beat consensus ($2.39B est.) by ~$18M.
GAAP net income attributed to Synopsys: $64,958K (GAAP EPS $0.34 diluted), vs $295,683K ($1.89) in Q1 FY2025 — impacted by restructuring charges ($118M) and amortization of acquired intangibles.
Non-GAAP net income: $718,469K; Non-GAAP diluted EPS $3.77 (vs $3.03 in Q1 FY2025); beat consensus of $3.11-3.21 by ~$0.21.
Non-GAAP expenses: $1,690M; non-GAAP tax rate 18%.
Segment revenue: Design Automation $2,001.8M (83.1% of total, vs $1,020.2M / 70.1% a year ago); Design IP $407.0M (16.9%, vs $435.1M / 29.9%).
Adjusted operating income by segment: Design Automation $947.6M (47.3% margin); Design IP $66.1M (16.2% margin).
Balance sheet: cash + short-term investments $2,203M (vs $2,961M a year ago); total assets $47.2B; long-term debt $10.0B (down from $13.5B); equity $30.5B.
Cash flow: Q1 operating cash flow $857M (vs -$67M a year ago); financed a $2.0B private placement of stock; repaid $3.45B of debt.
Q1 FY2026 was the first full quarter reflecting the ANSYS acquisition (closed July 2025).

Q2 and Full-Year FY2026 Targets (per earnings release)

Q2 FY26: Revenue $2,225M-$2,275M; GAAP EPS $0.23-$0.43; Non-GAAP EPS $3.11-$3.17; Non-GAAP expenses $1,380M-$1,410M; OI&E ~($115)M; tax rate 18%; diluted shares ~193M.
FY26: Revenue $9,560M-$9,660M; GAAP EPS $2.21-$2.62; Non-GAAP EPS $14.38-$14.46; Non-GAAP expenses $5,690M-$5,750M; operating cash flow ~$2.2B; free cash flow ~$1.9B; capital expenditures ~$300M; tax rate 18%.

Key Call Themes (from transcript summaries)

Strong start to fiscal 2026 with revenue and non-GAAP EPS ahead of guidance; ANSYS integration advancing.
AI-driven design (agentic EDA), hardware-assisted verification, and Design IP recovery were focal points.
Full-year FY2026 revenue target of $9.56-9.66B and raised-margin outlook discussed; stock closed ~-2.5% on the day of the print (Feb 25, 2026: $440.72 → $429.88).

Source: Compiled from Synopsys Q1 FY2026 earnings release (Feb 25, 2026) and Seeking Alpha transcript summary; full verbatim transcript paywalled.

📝 Summary

SNPS (Synopsys) — Q1 FY2026 (Feb 25, 2026). Stock -2.5% on the print ($440.72 → $429.88) — beat on revenue/EPS but restructuring charges, ANSYS noise, and a conservative IP quarter weighed; first full quarter of ANSYS consolidation.

Results

Revenue: $2.409B (cons ~$2.39B), +65.5% YoY (ANSYS consolidation); total products $1.693B + maintenance/service $716M
GM / OM / EPS: non-GAAP net income $718M → non-GAAP EPS $3.77 (cons ~$3.11–3.21); GAAP net income $65M → GAAP EPS $0.34 (restructuring $118M, amortization $404M, stock comp $259M); non-GAAP tax rate 18%
Key segments: Design Automation $2,001.8M (83.1%; adj OM 47.3%); Design IP $407.0M (16.9%; adj OM 16.2%)
Balance sheet: cash + ST investments $2.2B (down from $3.0B); long-term debt $10.0B (from $13.5B — early repayment); equity $30.5B; goodwill $26.9B (ANSYS)
Cash flow: Q1 OCF $857M (vs -$67M a year ago); $2.0B private placement of stock; $3.45B debt repayment
Drivers: AI-driven design, hardware-assisted verification strength; ANSYS integration advancing (channel/gross-basis accounting adds revenue + expense noise); agentic EDA early momentum

Guidance

Next quarter (Q2 FY26): revenue $2,225–2,275M; GAAP EPS $0.23–0.43; non-GAAP EPS $3.11–3.17; non-GAAP expenses $1,380–1,410M; tax 18%; diluted shares ~193M
Full year FY26: revenue $9,560–9,660M; GAAP EPS $2.21–2.62; non-GAAP EPS $14.38–14.46; non-GAAP expenses $5,690–5,750M; OCF ~$2.2B; FCF ~$1.9B; capex ~$300M

Capex

FY26 capex ~$300M (guided); FCF ~$1.9B; debt reduced to ~$10B (early term-loan paydown); $2.0B private placement completed

Key Q&A

Q (IP softness): Why is Design IP down YoY and what's the trajectory?
A: IP revenue timing/ANSYS mix; Design IP remains the soft spot but hardware-assisted verification and AI design (30+ full-flow wins momentum) are the growth levers; EDA strength is broad-based.
Q (ANSYS): How is the ANSYS integration and channel accounting impacting results?
A: ANSYS adds scale to revenue (gross-basis accounting adds equal revenue/expense, neutral to EPS); integration on track; cost synergies and cross-sell are the value story for FY26-FY27.
Q (Margins): Why are GAAP margins compressed this quarter?
A: Restructuring charges (~$118M) tied to the ANSYS integration and portfolio actions; non-GAAP margins remain healthy (non-GAAP EPS +24% YoY).
Q (Capital structure): Why the debt paydown and equity raise?
A: Deleveraging to optimize the balance sheet post-ANSYS; private placement supports investment while reducing net debt.

Notes

First full ANSYS quarter — revenue jumped +65% YoY, but the quality of the print (restructuring noise, IP weakness, gross-basis accounting) kept the stock flat-to-lower (-2.5%).
FY26 framework ($9.56–9.66B rev, $14.38–14.46 non-GAAP EPS, ~$1.9B FCF) is the anchor; Design IP recovery and ANSYS synergy realization are the swing factors into Q2 FY26 (May 27, 2026).
EDA/AI-driven design (hardware-assisted verification, agentic EDA) is the structural growth story; IP segment is the watch item.
Caveat: This is Q1 FY26 (Feb 25, 2026) — prior quarter to the existing Q2 FY26 file (May 27, 2026). Full transcript paywalled; compiled from earnings release + transcript summary.