Synopsys beats estimates, guides in line with expectations

Investing.com -- Synopsys Inc (NASDAQ: SNPS) reported first-quarter results that exceeded Wall Street expectations, with adjusted earnings per share of $3.77 beating the analyst consensus of $3.56 by $0.21. Revenue reached $2.41 billion, surpassing the $2.39 billion estimate and representing a 65.6% increase from $1.455 billion in the same quarter last year.

The company provided second-quarter guidance with adjusted EPS of $3.11 to $3.17, with a midpoint of $3.14 that exceeds the analyst consensus of $3.08. Revenue guidance of $2.225 billion to $2.275 billion has a midpoint of $2.25 billion, slightly above the $2.243 billion consensus. For fiscal year 2026, Synopsys expects adjusted EPS of $14.38 to $14.46, with the midpoint of $14.42 higher than the analyst estimate of $14.38. Full-year revenue guidance of $9.56 billion to $9.66 billion has a midpoint of $9.61 billion, below the consensus of $9.634 billion.

Shares rose 2.1% in after-hours trading Wednesday following the announcement.

"AI continues to fuel robust system-level and semiconductor R&D, and the increasing AI capabilities throughout our portfolio strengthen our strategic advantage and accelerate our customers' innovation," said Sassine Ghazi, president and CEO of Synopsys.

CFO Shelagh Glaser noted that first-quarter results reflect strong execution and financial discipline across the business, with revenue at the upper end of the guided range and adjusted EPS above guidance.

The company's board of directors approved a replenishment of the existing stock repurchase program with authorization to purchase up to $2.0 billion of Synopsys common stock. The company expects fiscal 2026 operating cash flow of approximately $2.2 billion and free cash flow of around $1.9 billion.

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