TLDR
- Synopsys stock fell 9.64% to $462.43 despite beating Q2 earnings expectations
- Revenue reached $1.604 billion, surpassing guidance
- GAAP EPS hit $2.24; non-GAAP EPS rose to $3.67
- Full-year revenue and margin guidance reaffirmed
- Strong demand fueled by AI, silicon, and software trends
Synopsys, Inc. (Nasdaq: SNPS) stock closed at $462.43 on May 28, 2025, down sharply by 9.64% despite reporting stronger-than-expected second-quarter results.
The company announced earnings after the market closed, with an earnings call set for 5 PM EDT on the same day.
The reported quarterly revenue hit $1.604 billion, beating the midpoint of guidance and rising from $1.455 billion a year ago. Synopsys continues to benefit from strong demand across AI, software-defined systems, and silicon design, which drive complexity and performance needs in the tech sector.
🚨 $SNPS Q2 2025 Earnings — Strong Beat & Upward Momentum 🚨
🟢 Adj. EPS: $3.67 (vs. $3.39 est)
🟢 Revenue: $1.604 B (vs. $1.599 B est)
🟢 Adj. Net Income: $572.7 M (vs. $531.1 M est)Q3 Guidance:
🔹 Revenue: $1.76–1.79 B
🔹 Adj. EPS: $3.82–3.87FY25 Outlook (Reaffirmed):
🔹… pic.twitter.com/hMXtbqa6Bw— Abhisek Jha (@hmabhisek) May 28, 2025
Earnings Date and GAAP Results
For the second quarter of fiscal year 2025, Synopsys posted GAAP net income of $349.2 million, or $2.24 per diluted share. This compares favorably to $299.1 million, or $1.92 per diluted share, in the same quarter last year.
On a non-GAAP basis, the company reported net income of $572.7 million, or $3.67 per diluted share, up from $466.9 million, or $3.00 per diluted share, in Q2 2024. Both figures exceeded company guidance and analyst expectations, signaling operational strength.
Business Segment Insights
Synopsys operates through two main business segments: Design Automation and Design IP. The Design Automation segment includes advanced silicon design tools, verification products, system integration solutions, and manufacturing software. The Design IP segment provides interface and embedded processor IP, subsystems, and implementation services.
These segments continue to play a critical role as companies grapple with increasing design costs, energy demands, and compute performance challenges. Synopsys positions itself as a key partner helping customers accelerate innovation, especially by applying AI technologies to reduce design times.
Reaffirmed Financial Targets
Despite a challenging macro environment, Synopsys reaffirmed its full-year 2025 revenue and non-GAAP operating margin guidance. CFO Shelagh Glaser expressed confidence in the company’s positioning, citing a solid pipeline and healthy demand.
The company also highlighted its recent sale of the Software Integrity business, which completed on September 30, 2024. As a result, Synopsys’ reported figures reflect continuing operations only.
While the fiscal year 2025 calendar change reduces the total number of days by eight compared to the previous year, Synopsys remains optimistic about delivering a robust second half. Its third-quarter and full-year targets assume no new export restrictions or shifts in the U.S. government’s Entity List policies.
Despite strong results, the steep stock decline suggests investors may be reacting to concerns about the broader tech market or future growth pacing. With a five-year return of 165.69%, Synopsys has significantly outpaced the S&P 500’s 94.36%, but its one-year return of -21.35% shows recent headwinds.
Synopsys’ ability to sustain growth amid complex market conditions will be closely watched in the coming quarters.
