Sunnyvale, California, August 28, 2026, 11:51 (EDT)
- Shares of Synopsys were down 3.4% at $448.92 as of 11:33 EDT.
- The drop wiped roughly $3.1 billion from the company’s market value.
- Following the Ansys acquisition, fiscal third-quarter revenue increased 42% to $2.477 billion.
- Midpoint for full-year revenue guidance raised to $9.715 billion.
Synopsys, Inc. (NASDAQ: SNPS) dropped 3.4% on Friday, wiping out approximately $3.1 billion in market capitalization following a surge on Thursday after earnings. Despite the pullback, the shares stayed about 9.5% higher than before the results were announced.
The retreat reversed roughly 29% of Thursday’s projected $10.6 billion increase. Investors continue to factor in improved execution, while weighing the expenses involved in integrating Ansys.
At 11:33 EDT, shares were at $448.92. A total of 644,406 shares changed hands. Synopsys’s market value was roughly $86.4 billion.
Revenue for the fiscal third quarter rose 42% to $2.477 billion from $1.740 billion. GAAP net income more than doubled at $545.8 million. Non-GAAP earnings were $3.91 per share Synopsys results.
Management increased its full-year revenue guidance to a range of $9.690 billion to $9.740 billion, with the midpoint at $9.715 billion. The forecast for non-GAAP EPS was also raised, now reaching a midpoint of $15.07.
| Investor measure | Latest figure | Comparison or signal |
|---|---|---|
| Fiscal Q3 revenue | $2.477 billion | Climbed 42% from a year ago |
| GAAP net income | $545.8 million | Increased 125% year-on-year |
| Non-GAAP EPS | $3.91 | Topped high end of previous guidance |
| FY2026 revenue midpoint | $9.715 billion | Forecast raised |
| FY2026 free cash flow | About $2.6 billion | Represents 26.8% of the revenue midpoint |
| Ansys revenue in FY2026 | About $2.98 billion | Makes up 30.7% of the revenue midpoint |
Ansys accounts for roughly 31% of projected annual revenue, making its integration key to the valuation. Design Automation was the main driver for the quarter, and Design IP saw growth resume.
Chief Executive Sassine Ghazi said that AI is driving up demand for silicon IP and engineering tools. Chief Financial Officer Shelagh Glaser pointed to strong performance across EDA, Ansys, and Design IP.
Synopsys forecasts operating cash flow at approximately $2.8 billion and free cash flow at roughly $2.6 billion for the year. The company plans capital expenditures of around $225 million financial supplement.
The cash objective represents around 26.8% of the revenue midpoint. However, adjusted profit levels continue to greatly exceed GAAP outcomes. The company projects a 41.5% non-GAAP operating margin, compared to roughly 10.4% under GAAP.
The variance arises from amortization, stock compensation, and restructuring costs. As a result, investors require not just revenue growth but also careful management of integration expenses. Non-GAAP EPS guidance for the fourth quarter stands at $4.10–$4.16.
Analysts maintain a positive outlook. Out of the coverage, twenty analysts have a buy rating on the shares, while one suggests selling. The consensus price target stands at $544.97 on average, indicating a potential upside of roughly 21% from Friday’s closing level analyst consensus.
Risks: Expenses related to integrating Ansys may weigh on GAAP margins and affect cash conversion. The need for semiconductor design follows cyclical trends. The trailing earnings multiple of about 79 times offers limited tolerance for any slip in execution.
The next hurdle is cash generation. Meeting the $2.6 billion free-cash-flow projection would help sustain Thursday’s valuation increase. Falling short could suggest Friday’s pullback may not be short-lived.
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