Synopsys Inc

synopsys.com

What Do They Do?

Sells software and hardware for chip design and testing, semiconductor IP, and engineering simulation software to semiconductor and electronics companies and engineering teams across industries.

How Do They Make Money?

Customers mainly pay in installments over the term for time-limited EDA software licenses. They pay per design for IP licenses, with royalties sometimes collected as customers sell products using the IP; hardware is sold, while maintenance and consulting are provided over service terms or billed at milestones or by hours used.

revenue

Segment	Share	How money arrives
Time-based products Recurring	49% FY2022: 58%	Recurring
Upfront products Licensed	29% FY2022: 26%	Licensed
Maintenance and service Mix	22% FY2022: 16%	Mix

Who Are Their Customers?

Semiconductor and electronics companies buy chip-design software and semiconductor IP; simulation and analysis customers span industries such as aerospace, automotive, energy and healthcare. Synopsys sells directly in the United States and principal foreign markets, and also distributes some products through channel partners.

Customers above 10% of revenue, FY2024

of revenue from one customer

FY2023: 14% from one customer

Do Revenues Turn Into Profits?

Yes. It kept 19 cents of every revenue dollar as net income in FY2025 and turned 19 cents into free cash flow.

Operating income, FY2025

13% of revenue

▼ −33% vs FY2024 ($1.4B, 22%)

Net income, FY2025

19% of revenue

▼ −41% vs FY2024 ($2.3B, 37%)

Free cash flow, FY2025

19% of revenue

▲ +6% vs FY2024 ($1.3B, 21%)

How Are They Changing?

Since the FY2025 annual report

Latest quarter: Q3 FY2026, the three months to Jul 31, 2026

Revenue: ▲ +42%; vs $1.7B in Q3 FY2025
Net income: ▲ +125%; vs $242.5M in Q3 FY2025

Time-based products share of revenue vs 51.3% in Q3 FY2025

Aug 26, 2026 Raises full-year revenue and earnings guidance The third-quarter announcement raised its full-year revenue expectations and non-GAAP earnings-per-share outlook.
Feb 25, 2026 Reiterates full-year revenue expectations The first-quarter announcement kept the full-year revenue midpoint at $9.61 billion.

Growing. Revenue grew 68% in 4 years, from $4.2B in FY2021 to $7.1B in FY2025, about 14% a year.

Added engineering simulation The latest business description includes Ansys simulation and analysis software for engineers across industries, alongside the older report’s focus on chip and system design and software code quality tools.

Sold Software Integrity The older report described a Software Integrity business offering software security and quality tools; the latest report says it excludes the operations of the former business after its sale.

Revenue over time

Time-based products Upfront products Maintenance and service

$10B$5B$0

FY2021 FY2022 FY2023 FY2024 FY2025

Comments