Synopsys

Synopsys makes software that engineers use to design computer chips. This software is called electronic design automation, or EDA. Chip makers pay for licenses to this software, along with pre-built circuit blocks called design IP.

In July 2025, Synopsys bought Ansys, a maker of engineering simulation software, adding tools that test how a product performs before it is built. To get approval for that purchase, Synopsys sold its optical software business and the Ansys PowerArtist tool to Keysight in October 2025. In June 2026, it sold its processor IP business to GlobalFoundries.

The market prices Synopsys at a discount because of the debt from the $35 billion Ansys purchase and because of US export rules for China. The purchase added about $10 billion of debt, and the combination of two large engineering software companies takes years. In May 2025, a US export rule stopped sales of chip design software to China for about five weeks, and a rule like it can come back with little warning. The design IP business also missed badly in 2025 and is still the weakest part of the company.

For the gap to close, Synopsys must keep its debt falling while it buys back stock. It must also deliver the margin gains from Ansys that it promised: a non-GAAP operating margin of about 44% in fiscal 2027 and about 50% in fiscal 2030. And it must avoid a new China export shock. At its Investor Day on September 30, 2026, Synopsys gave fiscal 2027 guidance above what analysts expected, and the stock rose about 13% the next day.

The next tests are the fiscal Q4 2026 report, expected in early to mid December 2026 with the first formal fiscal 2027 guidance, the fiscal Q1 2027 report around February 2027, and the repayment of the first $1.0 billion of notes on April 1, 2027. If the margin plan holds and no new export shock hits, the discount can close over the next three to five quarters. A new China trade restriction would delay that.

1. Dec 9, 2026 · est.Pending

   Fiscal Q4 2026 earnings: full-year result and Ansys integrationQ4 revenue inside the $2.53 to $2.58 billion guidance, so the year lands in the $9.69 to $9.74 billion range, and fiscal 2027 guidance kept near $11.15 billion pass; a miss or a lower 2027 outlook fails.
2. Feb 2027 · est.Pending

   Fiscal Q1 2027 earnings: margin progress and buyback paceNon-GAAP operating margin moving toward the 44% fiscal 2027 target and buybacks on plan pass; margin pressure from Ansys costs fails.
3. Apr 1, 2027Pending

   First $1.0 billion of Ansys deal notes fall dueRepayment from cash without new borrowing passes; refinancing that keeps gross debt at $10 billion fails the debt reduction test.

Every passed and failed checkpoint across all picks

Synopsys borrowed to buy Ansys in July 2025. At July 31, 2026, goodwill of $26.8 billion and intangible assets of $11.5 billion were larger than total equity of $31.2 billion, so the value of the balance sheet depends on Ansys earning its price. Read more

• Synopsys carries about $10 billion in debt from the Ansys acquisition. If integration costs run higher than planned, or cost savings arrive slower than promised, planned margin expansion and debt reduction will slip.
• On May 29, 2025, the US Commerce Department told Synopsys to stop sales of chip design software to China. Synopsys suspended its guidance on the same day. The US lifted the rule on July 2, 2025, about five weeks later. China policy can change again with little warning.
• The design IP part of the business can miss badly on its own. In Q3 fiscal 2025, reported on September 9, 2025, design IP revenue fell about 8% from a year earlier, partly because of problems at a major foundry customer. The stock fell about 36% the next day. In the first nine months of fiscal 2026, the Design IP segment had an adjusted operating margin of 22.6%. This part of the business depends on a small number of large, lumpy customer commitments.

• October 5, 2026Synopsys signed a $1 billion accelerated share repurchase agreement with JPMorgan Chase Bank. Synopsys receives about 1,735,000 shares at the start. Any remaining shares settle on or before January 5, 2027. This is the buyback of about $1 billion that Synopsys announced at its Investor Day.
• October 1, 2026Synopsys stock rose about 13%, to $490.54, after the Investor Day. The fiscal 2027 guidance was above the analysts' consensus in LSEG data: revenue of $11.10 to $11.20 billion against $10.81 billion, and non-GAAP earnings per share of $19.04 to $19.12 against $17.81. BofA raised its price target to $600 from $500, and KeyBanc raised its target to $605 from $600.
• September 30, 2026At its Investor Day, Synopsys gave a fiscal 2027 outlook: revenue of $11.10 to $11.20 billion, up about 15%, a non-GAAP operating margin of about 44%, and free cash flow of about $3.1 billion. Its long-term model targets revenue growth of about 15% each year and a non-GAAP operating margin of about 50% in fiscal 2030. Synopsys also plans to buy back about $1 billion of its shares and to return up to 50% of free cash flow.