Synopsys (SNPS) Stock: Q4 Earnings Beat Drives After-Hours Rally

TLDR

• Synopsys posted Q4 earnings of $2.90 per share, topping the $2.78 analyst consensus
• Revenue hit $2.26 billion in Q4, up 37.8% year-over-year and in line with estimates
• Fiscal 2026 revenue guidance set at $9.6 billion, including $2.9 billion from Ansys
• The company finished fiscal 2025 with record revenue of $7.1 billion, up 15%
• Stock jumped up to 6% after hours following the earnings announcement

Synopsys delivered a quarterly earnings beat Wednesday that sent shares higher in extended trading. The software provider exceeded Wall Street’s profit expectations while matching revenue forecasts.

The company reported adjusted earnings of $2.90 per share for its fiscal fourth quarter. Analysts had expected $2.78 per share. Revenue reached $2.26 billion, matching the consensus estimate and marking a 37.8% jump from last year’s fourth quarter.

Shares rose as much as 6% after the report. They later pared gains to 2.5% in after-hours trading. The stock closed regular trading up 2.1% at $475.83.

Synopsys, Inc., SNPS

CEO Sassine Ghazi said the results capped “a year that redefined our company as the leader in engineering solutions from silicon to systems.” Fiscal 2025 revenue hit a record $7.1 billion. That’s up 15% from $6.1 billion in fiscal 2024.

The fourth quarter earnings of $2.90 per share declined from $3.40 in the year-ago quarter. The comparison reflects changes in business mix and recent acquisition activity.

Strong Backlog Points to Growth

CFO Shelagh Glaser emphasized the company’s $11.4 billion backlog. She said Synopsys expects another revenue record in fiscal 2026 while integrating Ansys and driving operational efficiency.

First quarter fiscal 2026 earnings are projected at $3.41 per share on revenue of $2.4 billion. Full-year guidance calls for $14 per share in earnings on $9.6 billion in revenue.

The outlook incorporates $2.9 billion in revenue from the Ansys acquisition. The engineering simulation software company added $667.7 million in Q4 revenue. For the full fiscal year, Ansys contributed $756.6 million.

Synopsys also factored in $110 million from divested businesses. The company sold its Optical Solutions Group and PowerArtist RTL operations.

Nvidia Partnership Gains Traction

Earlier this month, Synopsys revealed that Nvidia purchased a $2 billion stake in the company. The investment is part of a joint development agreement for design tools.

Mizuho analysts called the results “better than feared.” They highlighted the $11.4 billion backlog as a positive indicator. When adjusted for divestitures, the fiscal 2026 guidance met or beat expectations.

The stock has struggled this year despite the positive quarter. Shares are down roughly 2% year-to-date and off 7.1% over the past 12 months. The company enters fiscal 2026 with $2.26 billion in quarterly revenue and the previously mentioned $11.4 billion backlog.

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