Form 8-K

8-K — SYNOPSYS INC

Accession: 0001193125-26-241911

Filed: 2026-05-27

Period: 2026-05-27

CIK: 0000883241

SIC: 7372 (SERVICES-PREPACKAGED SOFTWARE)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — d126227d8k.htm (Primary)

EX-99.1 (d126227dex991.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: d126227d8k.htm · Sequence: 1

8-K

SYNOPSYS INC false 0000883241 0000883241 2026-05-27 2026-05-27

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): May 27, 2026

SYNOPSYS, INC.

(Exact name of registrant as specified in charter)

Delaware

000-19807

56-1546236

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

675 Almanor Ave

Sunnyvale, California 94085

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: (650) 584-5000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock (par value of $0.01 per share)

SNPS

Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition.

On May 27, 2026, Synopsys, Inc. (“Synopsys”, “we”, “our”, or “us”) issued a press release announcing the financial results of its second fiscal quarter ended April 30, 2026. A copy of the press release is furnished and attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto and incorporated by reference herein, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission by Synopsys whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

Exhibit

Number

Exhibit Title

99.1

Press release dated May 27, 2026 containing Synopsys, Inc.’s results of operations for its second fiscal quarter ended April 30, 2026.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

SYNOPSYS, INC.

Dated: May 27, 2026

By:

/S/ JANET LEE

Janet Lee

General Counsel and Corporate Secretary

EX-99.1

Filename: d126227dex991.htm · Sequence: 2

EX-99.1

Exhibit 99.1

PRESS RELEASE

INVESTOR CONTACT:

Tushar Jain

Synopsys, Inc.

650-584-4289

Synopsys-ir@synopsys.com

EDITORIAL CONTACT:

Cara Walker

Synopsys, Inc.

650-584-5000

corp-pr@synopsys.com

Synopsys Posts Financial Results for Second Quarter Fiscal Year 2026

Announces Plan for September 2026 Investor Day

Results Summary

•

Quarterly revenue of $2.276 billion, above prior guidance; quarterly GAAP earnings per diluted share (EPS)

of $0.09, and non-GAAP EPS of $3.35

•

Raising expectations for full-year total revenue to $9.665 billion at the midpoint, driven by strong

performance across the business and an EPS-neutral Ansys channel-related accounting impact, partly offset by the impending close of the Processor IP Solutions business

•

Raising full-year non-GAAP EPS guidance to $14.76 at the midpoint on

expanded operating margin driven by strong cost discipline and accelerating synergies

SUNNYVALE, Calif. –

May 27, 2026 – Synopsys, Inc. (Nasdaq: SNPS) today reported results for its second quarter of fiscal year 2026. Revenue for the second quarter of fiscal year 2026 was $2.276 billion, compared to

$1.604 billion for the second quarter of fiscal year 2025.

“Synopsys delivered a strong second quarter with solid execution and strength

across the business,” said Sassine Ghazi, Synopsys president and CEO. “AI is scaling semiconductor demand, architectural diversity and complexity of chips and the systems they power—driving demand across our portfolio. Our

momentum, leadership roadmap, and deep customer engagements are a strong foundation for sustained growth and margin expansion as we solve our customers’ toughest engineering challenges.”

“Second quarter revenue and non-GAAP EPS exceeded guidance.

Our continued focus on execution and financial discipline sets us up for a strong second half,” said Shelagh Glaser, CFO of Synopsys. “We are raising our targets for revenue, operating margin, EPS, and free cash flow for the year, as we

drive greater efficiency across the business.”

The company plans to host an Investor Day on Sept. 30, during which management will provide

additional detail regarding the company’s long-term financial targets and strategy to capitalize on its sizable opportunity as the leader in engineering solutions from silicon to systems.

GAAP Results

On a U.S. generally accepted accounting

principles (GAAP) basis, net income for the second quarter of fiscal year 2026 was $17.1 million, or $0.09 per diluted share, compared to $349.2 million, or $2.24 per diluted share, for the second quarter of fiscal year 2025.

Non-GAAP Results

On a non-GAAP basis, net income for the second quarter of fiscal year 2026 was $643.7 million, or $3.35 per

diluted share, compared to non-GAAP net income of $572.7 million, or $3.67 per diluted share, for the second quarter of fiscal year 2025.

For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see

“GAAP to Non-GAAP Reconciliation” in the accompanying tables below.

Business Segments

Synopsys reports revenue and operating income in two segments: (1) Design Automation, which includes our advanced silicon design, verification products

and services, Ansys products, system integration products and services, digital, custom and field programmable gate array IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design

IP, which includes our logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors.

Financial

Targets

Synopsys also provided its consolidated financial targets for the third quarter and full fiscal year 2026. These targets assume no further

changes to export control restrictions or the current U.S. government “Entity List” restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause

actual results to differ materially from these targets, see “Forward-Looking Statements” below.

Third Quarter and Full Fiscal Year 2026 Financial Targets

(in millions, except per share amounts)

Range for Three Months

Ending

July 31, 2026

Range for Fiscal Year

Ending

October 31, 2026

Low

High

Low

High

Revenue (1)

2,410

2,460

9,625

9,705

GAAP Expenses

2,075

2,125

8,469

8,599

Non-GAAP Expenses

1,440

1,470

5,675

5,725

Non-GAAP Interest and Other Income (Expense), net

(121

)

(117

)

(495

)

(485

)

Non-GAAP Tax Rate

Outstanding Shares (fully diluted)

192

194

192

194

GAAP EPS

0.84

0.98

2.49

2.91

Non-GAAP EPS

3.63

3.69

14.72

14.80

Operating Cash Flow

~$2,300

Free Cash Flow (2)

~$2,000

Capital Expenditures

~$300

(1)

Fiscal year 2026 revenue includes $2.96 billion of expected Ansys revenue (including $60 million

related to an accounting impact for Ansys channel partners), and reflects the impact of approximately $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses, and $40 million related to the expected divestiture

of the Processor IP Solutions business.

(2)

Free cash flow is calculated as cash provided from operating activities less capital expenditures.

Fiscal Year 2026 Revenue Target Raise Breakdown

(in millions)

For Fiscal Year Ending

October 31, 2026

Prior Guidance

Mid-Point

Business

Performance

Ansys Channel

Accounting

Impact

Processor IP

Solutions

Divestiture

New Guidance

Mid-Point

Revenue

9,610

+ $

)

9,665

For a reconciliation of Synopsys’ third quarter and fiscal year 2026 targets, including expenses, earnings per diluted

share and other measures on a GAAP and non-GAAP basis, a discussion of the financial targets that we are not able to reconcile without unreasonable efforts and a discussion of why management believes such

measurements provide useful information to investors, see “GAAP to Non-GAAP Reconciliation” in the accompanying tables below.

Earnings Call Open to Investors

Synopsys will hold a conference call for financial analysts and investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be available in

the investor relations portion of Synopsys’ corporate website at www.synopsys.com. Synopsys uses its website as a tool to disclose important information about Synopsys and comply with its disclosure obligations under Regulation Fair

Disclosure. A webcast replay will also be available on the corporate website from approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the third quarter of fiscal year 2026.

Availability of Final Financial Statements

Synopsys will

include final financial statements for the second quarter of fiscal year 2026 in its quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission (SEC) and available at www.sec.gov on

or before June 9, 2026.

Continuing Operations

On Sept. 30, 2024, Synopsys completed the sale of its Software Integrity business. Unless otherwise noted, Synopsys’ Software Integrity business has been

presented as a discontinued operation in the Synopsys’ consolidated financial statements for all periods presented herein and all financial results and targets are presented herein on a continuing operations basis.

Reconciliation of Second Quarter Fiscal Year 2026 Results

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP net income,

earnings per diluted share, and tax rate for the periods indicated below.

GAAP to Non-GAAP Reconciliation of Second Quarter Fiscal Year 2026 Results

(unaudited and in thousands, except per share amounts)

Three Months Ended

Six Months Ended

April 30,

2026

2025

2026

2025

GAAP net income from continuing operations attributed to Synopsys

17,105

349,232

82,063

644,915

Adjustments:

Amortization of acquired intangible assets

403,631

11,656

807,866

24,252

Stock-based compensation

222,303

201,723

481,027

388,002

Restructuring charges

115,894

—

234,176

—

Acquisition/divestiture related items

23,649

69,514

39,241

144,343

Loss on sale of strategic investments

—

2,435

—

2,435

Tax adjustments

(138,848

)

(61,862

)

(282,170

)

(158,076

)

Non-GAAP net income from continuing operations attributed

to Synopsys

643,734

572,698

1,362,203

1,045,871

Three Months Ended

Six Months Ended

April 30,

2026

2025

2026

2025

GAAP net income from continuing operations per diluted share attributed to Synopsys

0.09

2.24

0.43

4.13

Adjustments:

Amortization of acquired intangible assets

2.10

0.07

4.22

0.16

Stock-based compensation

1.16

1.29

2.51

2.48

Restructuring charges

0.60

—

1.22

—

Acquisition/divestiture related items

0.12

0.45

0.20

0.92

Loss on sale of strategic investments

—

0.02

—

0.02

Tax adjustments

(0.72

)

(0.40

)

(1.47

)

(1.02

)

Non-GAAP net income from continuing operations per diluted

share attributed to Synopsys

3.35

3.67

7.11

6.69

Shares used in computing net income per diluted share amounts:

192,144

156,088

191,580

156,218

GAAP to Non-GAAP Tax Rate Reconciliation

(unaudited)

Three Months Ended

Six Months Ended

April 30, 2026

GAAP effective tax rate

12.5

17.0

Stock-based compensation

9.7

4.7

Restructuring charges

(2.1

Income tax adjustments (1)

(2.1

(1.6

Non-GAAP effective tax rate

18.0

(1)

The tax adjustments are primarily due to differences in the tax rate effect of certain deductions, such as the

deduction for foreign-derived intangible income and credits.

Reconciliation of 2026 Targets

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP targets for the

periods indicated below.

GAAP to Non-GAAP Reconciliation of Third Quarter Fiscal Year 2026 Targets

(in thousands, except per share amounts)

Range for Three Months Ending

July 31, 2026

Low

High

Target GAAP expenses

2,075,000

2,125,000

Adjustments:

Amortization of acquired intangible assets

(400,000

)

(405,000

)

Stock-based compensation

(230,000

)

(240,000

)

Restructuring charges

(5,000

)

(10,000

)

Target non-GAAP expenses

1,440,000

1,470,000

Range for Three Months Ending

July 31, 2026

Low

High

Target GAAP earnings per diluted share attributed to Synopsys

0.84

0.98

Adjustments:

Amortization of acquired intangible assets

2.10

2.07

Stock-based compensation

1.24

1.19

Restructuring charges

0.05

0.03

Tax adjustments

(0.60

)

(0.58

)

Target non-GAAP earnings per diluted share attributed to

Synopsys

3.63

3.69

Shares used in non-GAAP calculation (midpoint of target

range)

193,000

GAAP to Non-GAAP Reconciliation of Full Fiscal Year 2026 Targets

(in thousands, except per share amounts)

Range for Fiscal Year Ending

October 31, 2026

Low

High

Target GAAP expenses

8,469,241

8,599,241

Adjustments:

Amortization of acquired intangible assets

(1,610,000

)

(1,620,000

)

Stock-based compensation

(945,000

)

(965,000

)

Restructuring charges

(200,000

)

(250,000

)

Acquisition/divestiture related items

(1)

(39,241

)

(39,241

)

Target non-GAAP expenses

5,675,000

5,725,000

Range for Fiscal Year Ending

October 31, 2026

Low

High

Target GAAP earnings per diluted share attributed to Synopsys

2.49

2.91

Adjustments:

Amortization of acquired intangible assets

8.39

8.34

Stock-based compensation

5.00

4.90

Restructuring charges

1.30

1.04

Acquisition/divestiture related items (1)

0.20

Tax adjustments

(2.66

)

(2.59

)

Target non-GAAP earnings per diluted share attributed to

Synopsys

14.72

14.80

Shares used in non-GAAP calculation (midpoint of target

range)

193,000

(1)

Adjustments reflect actual expenses incurred by Synopsys as of April 30, 2026, and do not fully reflect

all potential adjustments for future periods for the reasons set forth in “GAAP to Non-GAAP Reconciliation” below.

Forward-Looking Statements

This press release and the

investor conference call contain forward-looking statements, including, but not limited to, statements concerning our short-term and long-term financial targets, expectations and objectives; our businesses, business segments, strategies,

partnerships, initiatives and opportunities, including, among other things, the reallocation of resources in our Design IP segment to higher growth opportunities and planned restructuring activities; industry growth and technological trends, such as

artificial intelligence, including our development and planned commercialization thereof; business and market outlook; the potential impact of the uncertain macroeconomic environment and global economic conditions on our financial results; the

impact of current and future U.S. and foreign trade regulations, government actions and regulatory changes, such as export control restrictions and tariffs; the ANSYS, Inc. (Ansys) integration and its expected impact, including expected synergies

and the timing thereof, our ability to create joint solutions as a combined company, and related accounting changes; planned acquisitions or divestitures, including the expected completion of the sale of the Processor IP Solutions business, and

their anticipated timing and impact; our key customers, customer concentration, customer engagement, customer demand and market expansion; results and

strategies related to our products, technology and services, including product development and our planned product releases and capabilities; the expected realization of our contracted but

unsatisfied or partially unsatisfied performance obligations (backlog); planned stock repurchases; our expected tax rate; and the status, expected outcome or expected impact of litigation and/or regulatory investigations. These statements involve

risks, uncertainties and other factors that could cause our actual results, time frames or achievements to differ materially from those expressed or implied in such forward-looking statements. Such risks, uncertainties and factors include, but are

not limited to: macroeconomic conditions and geopolitical uncertainty in the global economy; uncertainty in the growth of the semiconductor and electronics industries; the highly competitive industry we operate in; actions by the U.S. or foreign

governments, such as the imposition of additional export restrictions or tariffs; consolidation among our customers and our dependence on a relatively small number of large customers; risks and compliance obligations relating to the global nature of

our operations; failure to realize the benefits expected from the transactions we complete, including the acquisition of Ansys (the Ansys Merger) or unexpected difficulties or expenditures arising therefrom; risks related to inaccuracies in, or

failures to achieve, our operational and business metrics or forecasts of growth; and more. Additional information on potential risks, uncertainties and other factors that could affect Synopsys’ results is included in filings we make with the

SEC from time to time, including in the sections entitled “Risk Factors” in our latest Annual Report on Form 10-K and in our latest Quarterly Report on Form

10-Q. The financial information contained in this press release should be read in conjunction with the consolidated financial statements and notes thereto included in Synopsys’ most recent reports on

Forms 10-K and 10-Q, each as may be amended from time to time. Synopsys’ financial results for its second quarter of fiscal year 2026 are not necessarily

indicative of Synopsys’ operating results for any future periods.

Effectiveness of Information

The targets included in this press release, the statements made during the earnings conference call, the information contained in the financial supplement and

the corporate overview presentation, each of which are available in the investor relations portion of Synopsys’ corporate website at www.synopsys.com (collectively, the Earnings Materials), represent Synopsys’ expectations and

beliefs as of May 27, 2026. Although these Earnings Materials are expected to remain available on Synopsys’ website through the time Synopsys announces its results for the third quarter of fiscal year 2026, their continued

availability through such time does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys undertakes no duty, and does not intend, to update any forward-looking statement, including any targets, provided in the

Earnings Materials, whether as a result of new information, future events or otherwise, unless required by law.

SYNOPSYS, INC.

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

Three Months Ended

Six Months Ended

April 30,

2026

2025

2026

2025

Revenue:

Time-based products

945,624

828,326

1,897,165

1,656,564

Upfront products

546,252

510,676

1,287,782

878,800

Total products revenue

1,491,876

1,339,002

3,184,947

2,535,364

Maintenance and service

784,109

265,264

1,499,836

524,217

Total revenue

2,275,985

1,604,266

4,684,783

3,059,581

Cost of revenue:

Products

232,897

216,216

475,299

385,058

Maintenance and service

148,597

94,471

295,335

187,008

Amortization of acquired intangible assets

248,356

7,660

496,598

16,256

Total cost of revenue

629,850

318,347

1,267,232

588,322

Gross margin

1,646,135

1,285,919

3,417,551

2,471,259

Operating expenses:

Research and development

700,124

553,979

1,415,112

1,107,195

Sales and marketing

381,998

215,021

778,373

424,220

General and administrative

172,418

136,497

355,150

303,583

Amortization of acquired intangible assets

155,275

3,996

311,268

7,996

Restructuring charges

115,894

—

234,176

—

Total operating expenses

1,525,709

909,493

3,094,079

1,842,994

Operating income

120,426

376,426

323,472

628,265

Interest expense

(133,364

)

(94,336

)

(296,079

)

(105,475

)

Other income (expense), net

32,214

114,101

70,936

164,518

Income before income taxes

19,276

396,191

98,329

687,308

Provision for income taxes

2,408

47,181

16,745

40,887

Net income from continuing operations

16,868

349,010

81,584

646,421

Loss from discontinued operations, net of income taxes

—

(3,900

)

—

(3,900

)

Net income

16,868

345,110

81,584

642,521

Less: Net income (loss) attributed to non-controlling

interest and redeemable non-controlling interest

(237

)

(222

)

(479

)

1,506

Net income attributed to Synopsys

17,105

345,332

82,063

641,015

Net income (loss) attributed to Synopsys

Continuing operations

17,105

349,232

82,063

644,915

Discontinued operations

—

(3,900

)

—

(3,900

)

Net income

17,105

345,332

82,063

641,015

Net income (loss) per share attributed to Synopsys - basic:

Continuing operations

0.09

2.25

0.43

4.17

Discontinued operations

—

(0.02

)

—

(0.03

)

Basic net income per share

0.09

2.23

0.43

4.14

Net income (loss) per share attributed to Synopsys - diluted:

Continuing operations

0.09

2.24

0.43

4.13

Discontinued operations

—

(0.03

)

—

(0.03

)

Diluted net income per share

0.09

2.21

0.43

4.10

Shares used in computing per share amounts:

Basic

191,464

154,927

190,513

154,666

Diluted

192,144

156,088

191,580

156,218

SYNOPSYS, INC.

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except par value amounts)

April 30, 2026

October 31, 2025

ASSETS:

Current assets:

Cash and cash equivalents

2,412,472

2,888,030

Short-term investments

71,966

72,929

Total cash, cash equivalents and short-term investments

2,484,438

2,960,959

Accounts receivable, net

1,267,305

1,505,427

Inventories

441,836

365,190

Prepaid and other current assets

1,195,391

1,180,526

Current assets held for sale

48,248

—

Total current assets

5,437,218

6,012,102

Property and equipment, net

714,744

696,693

Operating lease

right-of-use assets, net

697,112

702,008

Goodwill

26,853,807

26,899,215

Intangible assets, net

11,875,418

12,679,591

Deferred income taxes

113,642

112,159

Other long-term assets

1,197,086

1,122,693

Total assets

46,889,027

48,224,461

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:

Accounts payable and accrued liabilities

1,185,204

1,326,211

Operating lease liabilities

135,523

128,205

Deferred revenue

2,419,876

2,245,961

Short-term debt

22,117

Current liabilities held for sale

27,912

—

Total current liabilities

3,790,632

3,722,494

Long-term operating lease liabilities

670,475

680,698

Long-term deferred revenue

389,419

382,557

Long-term debt

10,013,845

13,462,398

Other long-term liabilities

1,547,591

1,649,299

Total liabilities

16,411,962

19,897,446

Stockholders’ equity:

Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding

—

Common stock, $0.01 par value: 400,000 shares authorized; 191,444 and 185,994 shares outstanding,

respectively

1,928

1,860

Capital in excess of par value

20,565,562

18,640,947

Retained earnings

10,397,550

10,315,487

Treasury stock, at cost: 593 and 1,222 shares, respectively

(242,827

)

(398,278

)

Accumulated other comprehensive loss

(244,082

)

(232,414

)

Total Synopsys stockholders’ equity

30,478,131

28,327,602

Non-controlling interest

(1,066

)

(587

)

Total stockholders’ equity

30,477,065

28,327,015

Total liabilities and stockholders’ equity

46,889,027

48,224,461

SYNOPSYS, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

Six Months Ended April 30,

2026

2025

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

81,584

642,521

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization and depreciation

907,177

96,838

Reduction of operating lease

right-of-use assets

72,852

51,728

Amortization of capitalized costs to obtain revenue contracts

41,158

25,405

Stock-based compensation

481,027

388,186

Allowance for credit losses

14,842

15,940

Loss on sale of strategic investments

—

2,435

Gain on sale of building

—

(51,385

)

Loss on divestitures, net of transaction costs

—

8,299

Amortization of bridge financing costs

—

40,411

Amortization of debt issuance costs

16,903

2,348

Deferred income taxes

(121,045

)

(237,170

)

Other

(153

)

(181

)

Net changes in operating assets and liabilities, net of effects from acquisitions and

dispositions:

Accounts receivable

234,512

(74,098

)

Inventories

(85,832

)

(39,766

)

Prepaid and other current assets

44,649

(140,472

)

Other long-term assets

(87,060

)

(36,058

)

Accounts payable and accrued liabilities

(114,629

)

(242,529

)

Operating lease liabilities

(74,166

)

(48,617

)

Income taxes

(122,420

)

(36,870

)

Deferred revenue

196,367

(37,412

)

Unrealized loss on settlement of interest rate treasury lock

—

(121,643

)

Net cash provided by operating activities

1,485,766

207,910

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from maturities of short-term investments

11,180

35,461

Proceeds from sales of short-term investments

3,656

22,015

Purchases of short-term investments

(13,903

)

(47,558

)

Purchases of strategic investments

(781

)

(3,368

)

Purchases of property and equipment, net

(89,518

)

(96,303

)

Proceeds from sale of building

—

74,279

Proceeds from business divestiture, net of cash divested

—

70,082

Other

—

(611

)

Net cash provided by (used in) investing activities

(89,366

)

53,997

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from debt, net of issuance costs

—

10,034,464

Repayment of debt

(3,462,369

)

(1,289

)

Issuances of common stock

116,136

118,308

Payments for taxes related to net share settlement of equity awards

(217,884

)

(166,872

)

Common stock issuance for private placement

2,000,000

—

Purchase of equity forward contract

(37,500

)

—

Purchases of treasury stock

(262,500

)

—

Redemption of redeemable non-controlling interest

—

(30,000

)

Net cash provided by (used in) financing activities

(1,864,117

)

9,954,611

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(9,247

)

8,186

Net change in cash, cash equivalents and restricted cash

(476,964

)

10,224,704

Cash, cash equivalents and restricted cash, beginning of year

2,893,721

3,898,729

Cash, cash equivalents and restricted cash, end of period

2,416,757

14,123,433

Synopsys provides segment information, namely revenue, adjusted segment operating income and adjusted

segment operating margin, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 280, Segment Reporting. Synopsys’ chief operating decision maker (CODM) is our Chief Executive Officer. In evaluating our

business segments, the CODM considers the income and expenses that the CODM believes are directly related to those segments. The CODM does not allocate certain operating expenses managed at a consolidated level to our business segments and, as a

result, the reported operating income and operating margin do not include these unallocated expenses as shown in the table below. These unallocated expenses are presented in the table below to provide a reconciliation of the total adjusted operating

income from segments to our consolidated operating income:

SYNOPSYS, INC.

Business Segment Reporting (1)

(in millions)

Three Months Ended

April 30, 2026

Three Months Ended

April 30, 2025

Six Months Ended

April 30, 2026

Six Months Ended

April 30, 2025

Revenue by segment

- Design Automation

1,821.8

1,122.3

3,823.6

2,142.5

% of Total

80.0

70.0

81.6

70.0

- Design IP

454.2

482.0

861.2

917.1

% of Total

20.0

30.0

18.4

30.0

Adjusted operating income by segment

- Design Automation

789.1

458.8

1,736.6

863.4

- Design IP

110.6

150.5

176.8

277.1

Adjusted operating margin by segment

- Design Automation

43.3

40.9

45.4

40.3

- Design IP

24.4

31.2

20.5

30.2

Total Adjusted Segment Operating Income Reconciliation (1)

(in millions)

Three Months Ended

April 30, 2026

Three Months Ended

April 30, 2025

Six Months Ended

April 30, 2026

Six Months Ended

April 30, 2025

GAAP total operating income – as reported

120.4

376.4

323.5

628.3

Other expenses managed at consolidated level

Amortization of acquired intangible assets

403.6

11.7

807.9

24.3

Stock-based compensation (2)

222.3

201.7

481.0

388.2

Restructuring charges

115.9

—

234.2

—

Acquisition/divestiture related items

(3)

23.6

39.6

39.2

100.3

Non-qualified deferred compensation plan

13.8

(20.1

)

27.6

(0.5

)

Total adjusted segment operating income

899.7

609.3

1,913.4

1,140.5

(1) Synopsys manages the business on a long-term, annual basis, and considers

quarterly fluctuations of revenue and profitability as normal elements of our business. Amounts may not foot due to rounding.

(2) The adjustment includes non-GAAP

expenses attributable to non-controlling interest and redeemable non-controlling interest.

(3) The adjustment excludes the amortization of bridge financing costs entered

into in connection with the Ansys Merger that was recorded in interest expense, and certain divestiture related items that were recorded in other income (expense), net in our unaudited condensed consolidated statements of income.

GAAP to Non-GAAP Reconciliation

Synopsys continues to provide all information required in accordance with GAAP but acknowledges evaluating its ongoing operating results may not be as useful

if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool

to evaluate Synopsys’ operating results in a manner that focuses on what Synopsys believes to be its core business operations and what Synopsys uses to evaluate its business operations and for internal budgeting and resource allocation

purposes. This press release includes non-GAAP earnings per diluted share, non-GAAP net income and non-GAAP tax rate for the

periods presented. It also includes future estimates for non-GAAP expenses, non-GAAP interest and other income (expense), net,

non-GAAP tax rate, non-GAAP earnings per diluted share and free cash flow. These non-GAAP financial measures may be different

from non-GAAP financial measures used by other companies.

When possible, Synopsys provides a reconciliation of non-GAAP financial measures to their most closely applicable GAAP financial measures. Synopsys is unable to provide a full reconciliation of certain third quarter and full fiscal year 2026 non-GAAP financial targets to the corresponding GAAP financial measures on a forward-looking basis because Synopsys believes that it would not be possible for it to have the required information necessary to

quantitatively reconcile such measures with sufficient precision without unreasonable efforts due to, among other things, the potential variability and limited predictability of the excluded adjustment items necessary for a full reconciliation such

as certain acquisition/divestiture related items, tax deduction variability, changes in the fair value of non-qualified deferred compensation plan, and gains (losses) on the sale of strategic investments. For

the same reasons, Synopsys is unable to address the probable significance of the unavailable information.

Synopsys’ management does not itself, nor

does it suggest that investors should, consider such non-GAAP financial measures in isolation from, as superior to, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, the corresponding GAAP financial measures. Synopsys’ management believes the presentation of non-GAAP financial measures, when shown

in conjunction with the corresponding GAAP financial measures, provides useful information to investors allowing them to view financial and business trends relating to our financial condition and

results of operations through the eyes of management. Synopsys’ management evaluates and makes decisions about our business operations using both GAAP financial measures and non-GAAP financial measures

to help facilitate internal comparisons to Synopsys’ historical operating results and forecasted targets, planning and forecasting in subsequent periods and comparisons to competitors’ operating results.

The following are descriptions of the adjustments made to reconcile non-GAAP financial measures (other than free cash

flow, which is defined in the footnote to the Financial Targets table above) to the most directly comparable GAAP financial measures:

(i)

Amortization of acquired intangible assets. We incur expenses from the amortization of acquired intangible assets, which may include impairment charges from write-downs of acquired intangible assets. Acquired intangible assets include, among

other things, core/developed technology, customer relationships, contract rights, trademarks and trade names, and other intangibles related to acquisitions. We amortize the intangible assets over their estimated useful lives. We do not enter into

acquisitions on a predictable cycle. The amount of an acquisition’s purchase price allocated to intangible assets and their estimated useful lives can vary significantly and are unique to each acquisition. From time to time, we incur

impairment charges due to write-downs of acquired intangible assets. We believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets, including impairment

charges, provides investors and others with a consistent basis for comparison across accounting periods. We also exclude this item because such expenses are non-cash in nature and we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our core operational performance and liquidity, and ability to invest in research and development and fund future

acquisitions and capital expenditures.

(ii) Stock-based compensation. Stock-based compensation expenses consist primarily of expenses related to

restricted stock units, stock options, employee stock purchase rights and other stock awards, including such expenses associated with acquisitions. We exclude stock-based compensation expense from our non-GAAP

financial measures primarily because it is not an expense that typically requires or will require cash settlement by us. Further, the expense for the fair value of the stock-based instruments we utilize may bear little resemblance to the actual

value realized upon the vesting or future exercise of the related stock-based awards and, therefore, is not used by management to assess the core profitability of our business operations.

(iii) Acquisition/divestiture related items. In connection with certain of our business combinations

and/or divestitures, we incur significant expenses that we would not have otherwise incurred as part of our business operations. These expenses include, among other things, compensation expenses, professional fees and other direct expenses,

concurrent restructuring activities and divestiture activities, including employee severance and other exit costs, bridge financing costs, costs related to integration activities, debt forgiveness, changes to the fair value of contingent

consideration related to the acquired company, and amortization of the fair value difference of below-market value assets arising from arrangements entered into or acquired in conjunction with an acquisition. We also recognize the gains and losses

from the mark-up of equity or cost method investments to fair value upon obtaining control through acquisition. We exclude these items because they are related to acquisitions and divestitures and have no

direct correlation to the core operation of our business. Further, because we do not acquire or divest businesses on a predictable cycle and the terms of each transaction can vary significantly and are unique to each transaction, we believe it is

useful to exclude such expenses when looking for a consistent basis for comparison across accounting periods.

(iv) Restructuring charges. We

initiate restructuring activities to align our costs to our operating plans and business strategies based on then-current economic conditions, and such activities have a specific and defined term. Restructuring costs generally include severance and

other termination benefits related to voluntary retirement programs, involuntary headcount reductions and facilities closures. Such restructuring costs include elimination of operational redundancy, permanent reductions in workforce and facilities

closures and, therefore, are not considered by us to be a part of the core operation of our business and are not used by management when assessing the core profitability and performance of our business operations.

(v) Gains (losses) on the sale of strategic investments. We exclude gains and losses on the sale of equity investments in privately held companies

because we do not believe they are reflective of our core business and operating results.

(vi) Deferred compensation. We exclude changes in the

fair value of our non-qualified deferred compensation plan because we do not use these to assess the core profitability of our business operations.

(vii) Income tax effect of non-GAAP pre-tax adjustments. Excluding the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes assists

investors in understanding the tax provision associated with those adjustments and the effect on net income. Beginning in fiscal year 2026, we transitioned from an annual non-GAAP tax rate to a three-year

normalized non-GAAP tax rate of 18.0%. We believe this will provide better consistency across reporting periods by eliminating the effects of non-recurring and

period-specific items, which can vary in size and frequency and do not necessarily reflect our normal operations. This rate is based on our projected annual rate through fiscal year 2028, primarily due to the completion of the acquisition of Ansys

in the third quarter of fiscal year 2025 and the enactment of the One Big Beautiful Bill Act (the OBBB), which affects taxable income starting in fiscal year 2026 over the next several years. In projecting this rate, we evaluated our historical and

projected mix of U.S. and international profit before tax, excluding the impact of stock-based compensation, the amortization of purchased intangibles and other GAAP only adjustments described above. We also considered other factors, including our

current tax structure, U.S. tax law changes, such as the OBBB which impacts Synopsys’ expensing of U.S. research expenditures commencing in fiscal year 2026, and changes to foreign derived intangible income commencing in fiscal year 2027.

About Synopsys

Synopsys, Inc. (Nasdaq: SNPS) is the

leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and

design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.

and other Synopsys trademarks are available at https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners.

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