Synopsys FY26 Q3: revenue up 42.4%, EPS beats, full-year outlook raised
Synopsys beat its own targets and raised full-year guidance, so this quarter reads Bullish. Revenue of $2.477 billion rose 42.4% year over year, non-GAAP EPS of $3.91 cleared the high end of guidance, and free cash flow was $746.3 million. The catch: gross margin slipped to 72.6% from 78.1%, because Ansys-related amortization and mix now sit in cost of revenue.
1 · Expected vs. Actual
Free preview belowGAAP EPS of $2.84 compares with $1.50 a year ago, and non-GAAP EPS of $3.91 compares with $3.39 while exceeding the high end of prior guidance. The $1.07 gap between them is mostly $402.4 million of acquired-intangible amortization and $231.6 million of stock-based compensation. GAAP net income of $545.8 million more than doubled from $242.5 million.
Revenue was $2.477 billion, up 42.4% from $1.740 billion a year earlier. Design Automation did the heavy lifting at $2.003 billion, or 80.9% of the total, while Design IP was $473.8 million versus $427.6 million and returned to year-over-year growth. On the product line split, product revenue was $1.668 billion and maintenance and service revenue $808.8 million, up from $331.0 million a year ago.
Management raised full-year revenue to a range of $9.690 billion to $9.740 billion and full-year non-GAAP EPS to $15.04 to $15.10, with non-GAAP operating margin at roughly 41.5% at the midpoint. For the fourth quarter it guides revenue of $2.530 billion to $2.580 billion and non-GAAP EPS of $4.10 to $4.16. The fourth-quarter revenue midpoint of $2.555 billion sits about 2.1% below the $2.609 billion consensus estimate.
Log in to read 5 analyses a week for free
Create a free account to read 5 full earnings analyses each week — all five steps: expected vs. actual, guidance tracker, money flow, balance sheet and risks. Members get unlimited access.
Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
Answers are based on the earnings release and the analysis above. Free accounts get 3 questions a week; members get 30 a day.