Aug 26, 2026 earnings call — Raised guidance; EDA growth accelerates
Raised full-year revenue guidance to $9.69 billion to $9.74 billion.
Revenue $2.5B (est $2.4B) · EPS $3.91 (est $3.67) · Next-quarter revenue outlook $2.5B–$2.6B
Key quotes
"Multiphysics Fusion combines Synopsys and Ansys technology in the industry's only solution with thermal analysis fully integrated into the chip design flow. Customers, including NVIDIA, Cisco, MediaTek and Samsung Foundry have validated up to 10x faster design closure and 3x faster runtime."
"At the DAC conference, with NVIDIA, we showcased a fully autonomous long-running design verification agent that can orchestrate the entire chip verification cycle and deliver up to 50x faster time to validated RTL while achieving 20% additional coverage improvement."
"We won more than 95% of PCIe 7 opportunities, including a subsystem win at a marquee enterprise storage customer."
Analyst Q&A 10
Why EDA growth will accelerate
Q (Jason Celino · KeyBanc): Why did EDA growth stay strong and why should it accelerate to double digits? Also, when customers reengineer design with AI, is that supplemental to existing tools or replacing them?
A: Management said multiple factors drive EDA strength: more complex chip designs, a move to advanced 3DIC packages, AI as a tailwind, and strong hardware revenue. They also said customers using AI still need Synopsys software because models require ground-truth physics, so AI creates demand for their tools rather than replacing them.
"And I'd just point out, Jason, that the 8.5% Q3 EDA growth that you saw was against a really tough compare." — Shelagh Glaser (CFO)
Multi-die and software vs hardware
Q (Joseph Vruwink · Baird): How is the prior 30% estimate for multi-die EDA demand tracking now and beyond 2027? Also, is software performing as hoped versus hardware in EDA?
A: Management said the multi-die forecast has accelerated and die-to-die wins in the last 12 months have doubled, driven by advanced packaging and 3DIC. They said they are very pleased with software performance and highlighted the joint solution with Ansys as a key driver for future growth.
"As I mentioned in the prepared remarks as well, the die-to-die wins that we've had in the last 12 months have doubled." — Sassine Ghazi (CEO)
Could AI replace EDA tools?
Q (Yu Shi · Needham & Company): Is there a risk AI could enable end-to-end chip design that bypasses commercial EDA tools? And how big could agentic AI be for revenue and subscription/consumption models?
A: Management said they are not worried that AI models will replace Synopsys because customers need accuracy and determinism and models need ground-truth physics, so Synopsys remains central. On agents, they said customers will need more licenses and they are discussing multiple engagement models — subscription of agents, subscription of workflows, and consumption metrics — and will share modeling on September 30.
"I am not worried at all that, at some point that, that model can do the end to end without our participation because you have to remember, these models are not static." — Sassine Ghazi (CEO)
Factory 2 licensing and security IP
Q (Lee Simpson · Morgan Stanley): How fast will Factory 2 shift to licensing plus royalties with hyperscalers? And how big is the security IP opportunity since the Intrinsic ID acquisition?
A: Management said hyperscalers investing in custom silicon need Synopsys interface IP and they are in advanced discussions to shift models from license plus NRE to license plus royalty. They also said they are focusing on security as a growth area and have a strong market position there after divesting processor IP.
"All you need to look at is the momentum in every hyperscaler investing and are at various stages of delivering their own custom silicon." — Sassine Ghazi (CEO)
Multiphysics Fusion adoption and accounting
Q (Arsenije Matovic · Wolfe): When customers add thermal and other physics into design, are teams consolidating and will budgets shift? Also, is the Ansys accounting change still a $60 million full-year effect and what was the quarter impact?
A: Management said engineering teams are converging and implementation engineers can bring sign-off accuracy earlier in the design flow, so the combined portfolio captures upside beyond separate tools. They also said the accounting change for Ansys is incorporated in guidance, they are seeing strength in that business, and the full-year impact remains in the same range.
"And this is where we have invested, that the implementation engineer that's sitting in the upfront part of the design flow are able without too much effort to be able to bring in sign-off accuracy early in the design flow." — Sassine Ghazi (CEO)
AI vs non-AI design starts and RPO
Q (Joseph Quatrochi · Wells Fargo): Is the acceleration coming mainly from AI-design starts or from non-AI too? And did the RPO drop reflect the processor IP divestiture?
A: Management said non-AI design starts have stabilized over the last two quarters while AI design starts are accelerating, providing balance. They added the modest change in RPO was due to the processor IP divestiture and it came in as expected.
"As I said in my prepared remarks, the modest change is really due to the divestiture of the processor IP business that happened inside the quarter." — Shelagh Glaser (CFO)
Fusion adoption and sales leadership
Q (Sitikantha Panigrahi · Mizuho): What adoption path should we expect for Multiphysics Fusion and will it add to EDA growth in 2027? Also, how is new sales leader Mike Ellow changing the sales organization?
A: Management said early customers validated large time and accuracy benefits and that production deployments will drive revenue; they do not expect much joint-solution contribution in FY '26 but expect contribution in FY '27 and remain committed to the $400 million synergy in year 4. They said Mike Ellow is preparing the sales organization to capture IP Factory 2, AI monetization, and joint-solution opportunities.
"As we've said from the beginning, FY '26, we will not have much contribution in the joint solution." — Sassine Ghazi (CEO)
How multiphysics compares to Fusion shift
Q (Jay Vleeschhouwer · Griffin): How does the new multiphysics effort compare to the ICC-to-Fusion Compiler architectural change? And what must customers change for the reengineering of engineering to happen?
A: Management compared this to the prior Fusion move but now including physics engines in the design phase to reduce iteration, enabled by a shared data model and infrastructure. They said reengineering requires the Fusion assets plus AI capabilities from copilot to autonomous agents, and they demonstrated these elements with Microsoft, AMD, and NVIDIA demos.
"The investment we made in the Fusion platform, because remember, the Fusion platform is not about bringing tools together with a common interface or a user interface." — Sassine Ghazi (CEO)
GPU digital twin value and Korea growth
Q (Gary Mobley · StoneX): Was the large GPU-based digital twin deal driven by GPU compute speedups, and who captures the efficiency value? Also, why is Korea revenue trending up?
A: Management said simulation benefits strongly from GPU acceleration and they capture the uplift from GPU-based speedups; NVIDIA benefits on the hardware side but Synopsys captures the value of the software uplift. On Korea, they said strong collaboration with Samsung, SK hynix, and others across IP, EDA, and Ansys explains the performance.
"In terms of who gets the value, we sell and we capture the entire value and uplift of the GPU." — Sassine Ghazi (CEO)
IP growth outlook vs mid-teens
Q (Wei Chia · Citi): Given faster chip design from hyperscalers and stabilized non-AI demand, could IP grow materially above the prior mid-teens guide soon, and what might limit that?
A: Management said the analyst's assumptions are reasonable given more chip starts and Factory 2 opportunities, but for now mid-teens remains their long-term guide. They said they will share more and update if needed in September.
"And for now, the mid-teens is our long-term guide." — Sassine Ghazi (CEO)