Synopsys (NASDAQ:SNPS) traded slightly lower in U.S. premarket action on Thursday, easing back after a sharp after-hours jump, even as the company reported fourth-quarter numbers that topped analyst expectations and issued a bullish outlook for fiscal 2026.
The engineering and chip design software specialist—whose tools help semiconductor manufacturers validate increasingly complex processors—has benefited significantly from the rapid adoption of artificial intelligence models that depend on advanced architectures.
Based in California, Synopsys collaborates with industry leaders such as Nvidia, Intel, and Qualcomm, and in July finalized its acquisition of simulation software provider Ansys.
For the fourth quarter, Synopsys posted adjusted earnings of $2.90 per share, beating market estimates of $2.78, while revenue came in at $2.26 billion, just ahead of the $2.25 billion consensus. Sales grew 37.8% from the prior year, with Ansys contributing $667.7 million.
Full-year fiscal 2025 revenue reached a record $7.05 billion, an increase of about 15%. The company also reported a backlog of $11.4 billion, which executives said underscores the durability of its business model.
“The Synopsys team delivered a solid finish to a year that redefined our company as the leader in engineering solutions from silicon to systems,” said Sassine Ghazi, president and CEO of Synopsys.
The company now expects full-year earnings per share of $14.32 to $14.40 for fiscal 2026, ahead of analyst expectations of $14.05. Revenue is projected to land between $9.56 billion and $9.66 billion, with the midpoint including roughly $2.9 billion from Ansys and reflecting a $110 million impact from recently divested units.
For the first quarter of fiscal 2026, Synopsys anticipates adjusted EPS of $3.52 to $3.58, beating the consensus of $3.42, on revenue between $2.36 billion and $2.42 billion.
“Management characterized fiscal 2026 as a transitional year, especially for IP, but backlog strength supports upside potential, especially in the second half as integration and cross-sell ramp,” analysts at Stifel said in a note.