Synopsys Posts Record Q3 Revenue of $2.48 Billion and Raises Full-Year Guidance

Synopsys reported fiscal third-quarter 2026 revenue of $2.477 billion, up roughly 42% year over year, beating the high end of its own guidance and marking a record quarter. The result included approximately $711 million from the Ansys business acquired earlier in the fiscal year. Non-GAAP earnings per share came in at $3.91, and non-GAAP operating margin was 41.6%.

GAAP EPS of $2.84 reflected a gain from the sale of the Processor IP Solutions business, which closed during the quarter. The company raised its full-year fiscal 2026 revenue outlook to $9.69 billion to $9.74 billion, including an expected Ansys contribution of roughly $2.98 billion, and lifted non-GAAP EPS guidance to $15.04 to $15.10. Operating cash flow and free cash flow expectations were raised to approximately $2.8 billion and $2.6 billion, respectively, with fourth-quarter revenue guided to $2.53 billion to $2.58 billion.

Baird upgraded shares to Outperform from Neutral and raised its price target to $560 from $558 following the results. On the strategic front, management said the AI assistant era in chip design is already giving way to autonomous engineering, with AI set to move from task assistance to orchestrating full design, verification, simulation and validation workflows. Seeking Alpha analysts described the quarter as Synopsys's fourth consecutive double-beat and maintained a Buy rating, noting the stock trades at roughly 24 times 15-month forward earnings, only a modest 3% premium to peers.

Shares outperformed broader competitors on the trading day following the report, recovering from a 14% decline over the prior period.