Form 8-K

8-K — SYNOPSYS INC

Accession: 0001193125-26-368620

Filed: 2026-08-26

Period: 2026-08-26

CIK: 0000883241

SIC: 7372 (SERVICES-PREPACKAGED SOFTWARE)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — d157153d8k.htm (Primary)

EX-99.1 (d157153dex991.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: d157153d8k.htm · Sequence: 1

8-K

SYNOPSYS INC false 0000883241 0000883241 2026-08-26 2026-08-26

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 26, 2026

SYNOPSYS, INC.

(Exact name of registrant as specified in charter)

Delaware

000-19807

56-1546236

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

675 Almanor Ave

Sunnyvale, California 94085

(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: (650) 584-5000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock

(par value of $0.01 per share)

SNPS

Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition.

On August 26, 2026, Synopsys, Inc. (“Synopsys”) issued a press release announcing the financial results of its third fiscal quarter ended July 31, 2026. A copy of the press release is furnished and attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto and incorporated by reference herein, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission by Synopsys whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

Exhibit

Number

Exhibit Title

99.1

Press release dated August 26, 2026 containing Synopsys, Inc.’s results of operations for its third fiscal quarter ended July 31, 2026.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

SYNOPSYS, INC.

Dated: August 26, 2026

By:

/S/ JANET LEE

Janet Lee

General Counsel and Corporate Secretary

EX-99.1

Filename: d157153dex991.htm · Sequence: 2

EX-99.1

Exhibit 99.1

PRESS RELEASE

INVESTOR CONTACT:

Tushar Jain

Synopsys, Inc.

650-584-4289

Synopsys-ir@synopsys.com

EDITORIAL CONTACT:

Cara Walker

Synopsys, Inc.

650-584-5000

corp-pr@synopsys.com

Synopsys Posts Financial Results for Third Quarter Fiscal Year 2026

Results Summary

•

Quarterly revenue of $2.477 billion; reflects broad-based strength with outperformance in Design Automation

•

Quarterly GAAP earnings per diluted share (EPS) of $2.84, and non-GAAP

EPS of $3.91, exceeding high-end of prior guidance

•

Raising expectations for full-year total revenue to $9.715 billion at the midpoint and full-year non-GAAP EPS guidance to $15.07 at the midpoint on continued AI-driven demand strength

SUNNYVALE, Calif. – Aug. 26, 2026 – Synopsys, Inc. (Nasdaq: SNPS) today reported results for its third quarter of

fiscal year 2026. Revenue for the third quarter of fiscal year 2026 was $2.477 billion, compared to $1.740 billion for the third quarter of fiscal year 2025.

“AI is driving unprecedented complexity and increasing demand for the silicon IP and engineering solutions necessary to deliver next-generation AI

compute, infrastructure and physical AI systems,” said Sassine Ghazi, president and CEO of Synopsys. “One year after the transformational acquisition of Ansys, we are executing with focus, extending our leadership and gaining

momentum.”

“Synopsys delivered an outstanding third quarter, with revenue and earnings per share exceeding the high end of our guidance

range. Results were driven by broad-based strength across the business, led by EDA, a strong quarter from Ansys, and our design IP business returned to year-over-year growth,” said Shelagh Glaser, CFO of Synopsys. “Given our strong

performance and expectations for double-digit growth in EDA, we are raising our full year revenue, non-GAAP operating margin, EPS and cash flow guidance.”

GAAP Results

On a U.S. generally accepted accounting principles (GAAP) basis, net income for the third quarter of fiscal year 2026 was $545.8 million, or $2.84 per

diluted share, compared to $242.5 million, or $1.50 per diluted share, for the third quarter of fiscal year 2025.

Non-GAAP Results

On a non-GAAP basis, net income for the third quarter of fiscal year 2026 was $752.5 million, or $3.91 per diluted

share, compared to non-GAAP net income of $548.9 million, or $3.39 per diluted share, for the third quarter of fiscal year 2025.

For a reconciliation of net income, earnings per diluted share and other measures on a GAAP and non-GAAP basis, see

“GAAP to Non-GAAP Reconciliation” in the accompanying tables below.

Business Segments

Synopsys reports revenue and operating income in two segments: (1) Design Automation, which includes our advanced silicon design, verification products

and services, Ansys products, system integration products and services, digital, custom and field programmable gate array integrated circuit design software, verification software and hardware products, manufacturing software products and other; and

(2) Design IP, which includes our logic libraries, embedded memories, wired interface IP, memory interface IP and security IP.

Financial Targets

Synopsys also provided its consolidated financial targets for the fourth quarter and full fiscal year 2026. These targets assume no further changes to

export control restrictions or the current U.S. government “Entity List” restrictions. These targets constitute forward-looking statements and are based on current expectations. For a discussion of factors that could cause actual results

to differ materially from these targets, see “Forward-Looking Statements” below.

Fourth Quarter and Full Fiscal Year 2026 Financial Targets

(in millions, except per share amounts)

Range for Three Months

Ending

October 31, 2026

Range for Fiscal Year

Ending

October 31, 2026

Low

High

Low

High

Revenue (1)

2,530

2,580

9,690

9,740

GAAP Expenses

2,225

2,300

8,667

8,742

Non-GAAP Expenses

1,450

1,480

5,670

5,700

Non-GAAP Interest and Other Income (Expense), net

(119

)

(115

)

(485

)

(481

)

Non-GAAP Tax Rate

Outstanding Shares (fully diluted)

192

194

192

194

GAAP Operating Margin

Midpt: ~10.4%

Non-GAAP Operating Margin

Midpt: ~41.5%

GAAP EPS

0.60

0.85

3.84

4.08

Non-GAAP EPS

4.10

4.16

15.04

15.10

Operating Cash Flow

~$2,800

Free Cash Flow (2)

~$2,600

Capital Expenditures

~$225

(1)

Fiscal year 2026 revenue includes $2.98 billion of expected Ansys revenue, and reflects the impact of

approximately $110 million of the divested Optical Solutions Group and PowerArtist RTL businesses, and $40 million related to the recently completed divestiture of the Processor IP Solutions business.

(2)

Free cash flow is calculated as cash provided from operating activities less capital expenditures.

For a reconciliation of Synopsys’ fourth quarter and fiscal year 2026 targets, including expenses, earnings per diluted share and

other measures on a GAAP and non-GAAP basis, a discussion of the financial targets that we are not able to reconcile without unreasonable efforts and a discussion of why management believes such measurements

provide useful information to investors, see “GAAP to Non-GAAP Reconciliation” in the accompanying tables below.

Earnings Call Open to Investors

Synopsys will hold a

conference call for financial analysts and investors today at 2:00 p.m. Pacific Time. A live webcast of the call will be available in the investor relations portion of Synopsys’ corporate website at www.synopsys.com. Synopsys uses

its website and social media channels as tools to disclose important information about Synopsys and to comply with its disclosure obligations under Regulation Fair Disclosure. A webcast replay will also be available on the corporate website from

approximately 5:30 p.m. Pacific Time today through the time Synopsys announces its results for the fourth quarter and fiscal year 2026.

Availability of Final Financial Statements

Synopsys will include final financial statements for the third quarter of fiscal year 2026 in its quarterly report on Form

10-Q to be filed with the Securities and Exchange Commission (SEC) and available at www.sec.gov on or before September 9, 2026.

Continuing Operations

On Sept. 30, 2024, Synopsys

completed the sale of its Software Integrity business. Unless otherwise noted, Synopsys’ Software Integrity business has been presented as a discontinued operation in Synopsys’ consolidated financial statements for all periods presented

herein and all financial results and targets are presented herein on a continuing operations basis.

Reconciliation of Third Quarter Fiscal Year 2026

Results

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP

net income, earnings per diluted share, and tax rate for the periods indicated below.

GAAP to

Non-GAAP Reconciliation of Third Quarter Fiscal Year 2026 Results

(unaudited and in

thousands, except per share amounts)

Three Months Ended

July 31,

Nine Months Ended

July 31,

2026

2025

2026

2025

GAAP net income from continuing operations attributed to Synopsys

545,800

242,509

627,863

887,424

Adjustments:

Amortization of acquired intangible assets

402,426

74,941

1,210,292

99,193

Stock-based compensation

231,604

267,723

712,631

655,725

Restructuring charges

2,164

—

236,340

—

Acquisition/divestiture related items

(402,556

)

120,012

(363,315

)

264,355

Loss on sale of strategic investments

—

1,200

—

3,635

Tax adjustments

(26,945

)

(157,477

)

(309,115

)

(315,553

)

Non-GAAP net income from continuing operations attributed

to Synopsys

752,493

548,908

2,114,696

1,594,779

Three Months Ended

July 31,

Nine Months Ended

July 31,

2026

2025

2026

2025

GAAP net income from continuing operations per diluted share attributed to Synopsys

2.84

1.50

3.27

5.61

Adjustments:

Amortization of acquired intangible assets

2.09

0.46

6.30

0.63

Stock-based compensation

1.20

1.66

3.71

4.15

Restructuring charges

0.01

—

1.23

—

Acquisition/divestiture related items

(2.09

)

0.74

(1.89

)

1.67

Loss on sale of strategic investments

—

0.01

—

0.02

Tax adjustments

(0.14

)

(0.98

)

(1.60

)

(2.00

)

Non-GAAP net income from continuing operations per diluted

share attributed to Synopsys

3.91

3.39

11.02

10.08

Shares used in computing net income per diluted share amounts:

192,319

161,682

191,981

158,176

GAAP to Non-GAAP Operating Margin Reconciliation

(unaudited)

Three Months Ended

July 31, 2026

GAAP operating margin

14.4

Amortization of acquired intangible assets

16.2

Stock-based compensation

9.4

Restructuring charges

0.1

Acquisition/divestiture related items

0.9

Non-qualified deferred compensation plan

0.6

Non-GAAP operating margin

41.6

GAAP to Non-GAAP Tax Rate Reconciliation

(unaudited)

Three Months Ended

July 31, 2026

Nine Months Ended

July 31, 2026

GAAP effective tax rate

20.2

19.8

Stock-based compensation

(5.0

(4.6

Restructuring charges

(3.3

Income tax adjustments (1)

6.1

Non-GAAP effective tax rate

18.0

(1)

The income tax adjustments are primarily due to differences in the tax rate effect of certain deductions, such

as the deduction for foreign-derived intangible income and credits.

Reconciliation of 2026 Targets

The following tables reconcile the specific items excluded from GAAP in the calculation of non-GAAP targets for the

periods indicated below.

GAAP to Non-GAAP Reconciliation of Fourth Quarter Fiscal Year 2026

Targets

(in thousands, except per share amounts)

Range for Three Months Ending

October 31, 2026

Low

High

Target GAAP expenses

2,225,000

2,300,000

Adjustments:

Amortization of acquired intangible assets

(400,000

)

(405,000

)

Stock-based compensation

(230,000

)

(240,000

)

Restructuring charges

(145,000

)

(175,000

)

Target non-GAAP expenses

1,450,000

1,480,000

Range for Three Months Ending

October 31, 2026

Low

High

Target GAAP earnings per diluted share attributed to Synopsys

0.60

0.85

Adjustments:

Amortization of acquired intangible assets

2.10

2.07

Stock-based compensation

1.24

1.19

Restructuring charges

0.91

0.75

Tax adjustments

(0.75

)

(0.70

)

Target non-GAAP earnings per diluted share attributed to

Synopsys

4.10

4.16

Shares used in non-GAAP calculation (midpoint of target

range)

193,000

GAAP to Non-GAAP Reconciliation of Full Fiscal

Year 2026 Targets

(in thousands, except per share amounts)

Range for Fiscal Year Ending

October 31, 2026

Low

High

Target GAAP expenses

8,667,091

8,742,091

Adjustments:

Amortization of acquired intangible assets

(1,610,000

)

(1,615,000

)

Stock-based compensation

(945,000

)

(955,000

)

Restructuring charges

(380,000

)

(410,000

)

Acquisition/divestiture related items

(1)

(62,091

)

(62,091

)

Target non-GAAP expenses

5,670,000

5,700,000

Range for Fiscal Year Ending

October 31, 2026

Low

High

Target GAAP earnings per diluted share attributed to Synopsys

3.84

4.08

Adjustments:

Amortization of acquired intangible assets

8.37

8.34

Stock-based compensation

4.95

4.90

Restructuring charges

2.12

1.97

Acquisition/divestiture related items (1)

(1.88

)

(1.88

)

Tax adjustments

(2.36

)

(2.31

)

Target non-GAAP earnings per diluted share attributed to

Synopsys

15.04

15.10

Shares used in non-GAAP calculation (midpoint of target

range)

193,000

(1)

Adjustments reflect actual expenses incurred by Synopsys as of July 31, 2026, and do not fully reflect all

potential adjustments for future periods for the reasons set forth in “GAAP to Non-GAAP Reconciliation” below.

GAAP to Non-GAAP Reconciliation of Operating Margin at Midpoint of Full Fiscal Year

2026 Targets (1)

Fiscal Year Ending

October 31, 2026

At midpoint of revenue and expense guidance ranges

GAAP operating margin

10.4

Amortization of acquired intangible assets

16.6

Stock-based compensation

9.8

Restructuring charges

4.1

Acquisition/divestiture related items

(2)

0.6

Target non-GAAP operating margin

41.5

(1)

These numbers represent the midpoint of targets in the prepared remarks provided on August 26, 2026, and

do not represent official guidance for fiscal year 2026.

(2)

Adjustments reflect actual expenses incurred by Synopsys as of July 31, 2026 and do not fully reflect all

potential adjustments for future periods for the reasons set forth in “GAAP to Non-GAAP Reconciliation” below.

Forward-Looking Statements

This press release and the investor conference call contain forward-looking statements, including, but not limited to, statements concerning our short-term and

long-term financial targets, expectations and objectives; our businesses, business segments, strategies, partnerships, initiatives and opportunities, including, among other things, the reallocation of resources in our Design IP segment to higher

growth opportunities and planned restructuring activities; industry growth and technological trends, such as artificial intelligence, including our development and planned commercialization thereof; business and market outlook; the potential impact

of the uncertain macroeconomic environment and global economic conditions on our financial results; the impact of current and future U.S. and foreign trade regulations, government actions and regulatory changes, such as export control restrictions

and tariffs; the ANSYS, Inc. (Ansys) integration and its expected impact, including expected synergies and the timing thereof, our ability to create joint solutions as a combined company, and related accounting changes; planned and recently

completed acquisitions or divestitures, and their anticipated timing and impact; our key customers, customer concentration, customer engagement, customer demand and market expansion; results and strategies related to our products, technology and

services, including product development and our planned product releases and capabilities; the expected realization of our contracted but unsatisfied or partially unsatisfied performance obligations (backlog); planned stock repurchases; our expected

tax rate; and the status, expected outcome or expected impact of litigation and/or regulatory investigations. These statements involve risks, uncertainties and other factors that could cause our actual results, time frames or achievements to differ

materially from those expressed or implied in such forward-looking statements. Such risks, uncertainties and factors include, but are not limited to: macroeconomic conditions and geopolitical uncertainty in the global economy; uncertainty in the

growth of the semiconductor and electronics industries; the highly competitive industry we operate in; actions by the U.S. or foreign governments, such as the imposition of additional export restrictions or tariffs; consolidation among our customers

and our dependence on a relatively small number of large customers; risks and compliance obligations relating to the global nature of our operations; failure to realize the benefits expected from the transactions we complete, including the

acquisition of Ansys (the Ansys Merger) or unexpected difficulties or expenditures arising therefrom; risks related to inaccuracies in, or failures to achieve, our operational and business metrics or forecasts of growth; and more. Additional

information on potential risks, uncertainties and other factors that could affect Synopsys’ results is included in filings we make with the SEC from time to time, including in the sections entitled “Risk Factors” in our latest

Annual Report on Form 10-K and in our latest Quarterly Report on Form 10-Q. The financial information contained in this press release should be read in conjunction with

the consolidated financial statements and notes thereto included in Synopsys’ most recent reports on Forms 10-K and 10-Q, each as may be amended from time to time.

Synopsys’ financial results for its third quarter of fiscal year 2026 are not necessarily indicative of Synopsys’ operating results for any future periods.

Effectiveness of Information

The targets included in this press release, the statements made during the earnings conference call, the information contained in the financial supplement and

the corporate overview presentation, each of which are available in the investor relations portion of Synopsys’ corporate website at www.synopsys.com (collectively, the Earnings Materials), represent Synopsys’ expectations and

beliefs as of August 26, 2026. Although these Earnings Materials are expected to remain available on Synopsys’ website through the time Synopsys announces its results for the fourth quarter and fiscal year 2026, their continued

availability through such time does not mean that Synopsys is reaffirming or confirming their continued validity. Synopsys undertakes no duty, and does not intend, to update any forward-looking statement, including any targets, provided in the

Earnings Materials, whether as a result of new information, future events or otherwise, unless required by law.

SYNOPSYS, INC.

Condensed Consolidated Statements of Income

(Unaudited, in thousands, except per share amounts)

Three Months Ended

Nine Months Ended

July 31,

2026

2025

2026

2025

Revenue:

Time-based products

1,002,792

892,364

2,899,957

2,548,928

Upfront products

665,223

516,404

1,953,005

1,395,204

Total products revenue

1,668,015

1,408,768

4,852,962

3,944,132

Maintenance and service

808,807

330,969

2,308,643

855,186

Total revenue

2,476,822

1,739,737

7,161,605

4,799,318

Cost of revenue:

Products

275,622

230,895

750,921

615,953

Maintenance and service

156,514

103,301

451,849

290,309

Amortization of acquired intangible assets

247,252

46,368

743,850

62,624

Total cost of revenue

679,388

380,564

1,946,620

968,886

Gross margin

1,797,434

1,359,173

5,214,985

3,830,432

Operating expenses:

Research and development

719,737

625,301

2,134,849

1,732,496

Sales and marketing

385,889

259,480

1,164,262

683,700

General and administrative

176,979

280,550

532,129

584,133

Amortization of acquired intangible assets

155,174

28,573

466,442

36,569

Restructuring charges

2,164

—

236,340

—

Total operating expenses

1,439,943

1,193,904

4,534,022

3,036,898

Operating income

357,491

165,269

680,963

793,534

Interest expense

(133,234

)

(146,502

)

(429,313

)

(251,977

)

Other income (expense), net

459,665

170,543

530,601

335,061

Income before income taxes

683,922

189,310

782,251

876,618

Provision (benefit) for income taxes

138,216

(52,967

)

154,961

(12,080

)

Net income from continuing operations

545,706

242,277

627,290

888,698

Loss from discontinued operations, net of income taxes

—

(3,900

)

Net income

545,706

242,277

627,290

884,798

Less: Net income (loss) attributed to non-controlling

interest and redeemable non-controlling interest

(94

)

(232

)

(573

)

1,274

Net income attributed to Synopsys

545,800

242,509

627,863

883,524

Net income (loss) attributed to Synopsys:

Continuing operations

545,800

242,509

627,863

887,424

Discontinued operations

—

(3,900

)

Net income

545,800

242,509

627,863

883,524

Net income (loss) per share attributed to Synopsys - basic:

Continuing operations

2.85

1.51

3.29

5.67

Discontinued operations

—

(0.03

)

Basic net income per share

2.85

1.51

3.29

5.64

Net income (loss) per share attributed to Synopsys - diluted:

Continuing operations

2.84

1.50

3.27

5.61

Discontinued operations

—

(0.02

)

Diluted net income per share

2.84

1.50

3.27

5.59

Shares used in computing per share amounts:

Basic

191,536

160,174

190,858

156,536

Diluted

192,319

161,682

191,981

158,176

SYNOPSYS, INC.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except par value amounts)

July 31, 2026

October 31, 2025

ASSETS:

Current assets:

Cash and cash equivalents

3,606,286

2,888,030

Short-term investments

1,383

72,929

Total cash, cash equivalents and short-term investments

3,607,669

2,960,959

Accounts receivable, net

1,318,747

1,505,427

Inventories

479,129

365,190

Prepaid and other current assets

1,238,791

1,180,526

Total current assets

6,644,336

6,012,102

Property and equipment, net

749,598

696,693

Operating lease

right-of-use assets, net

694,603

702,008

Goodwill

26,834,774

26,899,215

Intangible assets, net

11,458,656

12,679,591

Deferred income taxes

95,515

112,159

Other long-term assets

1,248,781

1,122,693

Total assets

47,726,263

48,224,461

LIABILITIES AND STOCKHOLDERS’ EQUITY:

Current liabilities:

Accounts payable and accrued liabilities

1,480,598

1,326,211

Operating lease liabilities

137,837

128,205

Deferred revenue

2,331,173

2,245,961

Short-term debt

1,020,247

22,117

Total current liabilities

4,969,855

3,722,494

Long-term operating lease liabilities

666,592

680,698

Long-term deferred revenue

383,936

382,557

Long-term debt

9,017,113

13,462,398

Other long-term liabilities

1,537,388

1,649,299

Total liabilities

16,574,884

19,897,446

Stockholders’ equity:

Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding

—

Common stock, $0.01 par value: 400,000 shares authorized; 191,605 and 185,994 shares outstanding,

respectively

1,916

1,860

Capital in excess of par value

20,711,069

18,640,947

Retained earnings

10,943,350

10,315,487

Treasury stock, at cost: 433 and 1,222 shares, respectively

(193,292

)

(398,278

)

Accumulated other comprehensive income (loss)

(310,504

)

(232,414

)

Total Synopsys stockholders’ equity

31,152,539

28,327,602

Non-controlling interest

(1,160

)

(587

)

Total stockholders’ equity

31,151,379

28,327,015

Total liabilities and stockholders’ equity

47,726,263

48,224,461

SYNOPSYS, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

Nine Months Ended July 31,

2026

2025

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

627,290

884,798

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization and depreciation

1,362,021

211,307

Reduction of operating lease

right-of-use assets

109,254

80,789

Amortization of capitalized costs to obtain revenue contracts

70,835

38,920

Stock-based compensation

712,631

655,909

Allowance for credit losses

21,847

23,559

Loss on sale of strategic investments

—

3,635

Gain on sale of building

—

(51,385

)

(Gain) loss on divestitures, net of transaction costs

(380,527

)

8,299

Amortization of bridge financing costs

—

41,996

Amortization of debt issuance costs

21,280

6,790

Deferred income taxes

(121,720

)

(326,610

)

Other

(737

)

Net changes in operating assets and liabilities, net of effects from acquisitions and

dispositions:

Accounts receivable

165,337

(27,989

)

Inventories

(133,944

)

(34,068

)

Prepaid and other current assets

(70,709

)

120,348

Other long-term assets

(125,304

)

(427,793

)

Accounts payable and accrued liabilities

90,610

31,384

Operating lease liabilities

(109,757

)

(78,360

)

Income taxes

(56,728

)

(140,347

)

Deferred revenue

116,166

(19,932

)

Unrealized loss on settlement of interest rate treasury lock

—

(121,643

)

Net cash provided by operating activities

2,298,603

878,870

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from maturities of short-term investments

20,995

53,630

Proceeds from sales of short-term investments

68,761

148,809

Purchases of short-term investments

(18,524

)

(47,558

)

Proceeds from sales of strategic investments

—

3,470

Purchases of strategic investments

(1,402

)

(4,086

)

Purchases of property and equipment, net

(156,089

)

(134,908

)

Proceeds from sale of building

—

74,279

Acquisitions, net of cash acquired

—

(16,681,257

)

Proceeds from business divestiture, net of cash divested

440,022

142,546

Other

—

(611

)

Net cash provided by (used in) investing activities

353,763

(16,445,686

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from debt, net of issuance costs

—

14,329,340

Repayment of debt

(3,463,726

)

(2,579

)

Issuances of common stock

124,585

138,101

Payments for taxes related to net share settlement of equity awards

(262,761

)

(242,791

)

Common stock issuance for private placement

2,000,000

—

Purchases of treasury stock

(300,000

)

—

Redemption of redeemable non-controlling interest

—

(30,000

)

Other

—

(463

)

Net cash provided by (used in) financing activities

(1,901,902

)

14,191,608

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(33,409

)

8,649

Net change in cash, cash equivalents and restricted cash

717,055

(1,366,559

)

Cash, cash equivalents and restricted cash, beginning of year

2,893,721

3,898,729

Cash, cash equivalents and restricted cash, end of period

3,610,776

2,532,170

Synopsys provides segment information, namely revenue, adjusted segment operating income and adjusted segment operating

margin, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 280, Segment Reporting. Synopsys’ chief operating decision maker (CODM) is our Chief Executive Officer. In evaluating our business

segments, the CODM considers the income and expenses that the CODM believes are directly related to those segments. The CODM does not allocate certain operating expenses managed at a consolidated level to our business segments and, as a result, the

reported operating income and operating margin do not include these unallocated expenses as shown in the table below. These unallocated expenses are presented in the table below to provide a reconciliation of the total adjusted operating income from

segments to our consolidated operating income:

SYNOPSYS, INC.

Business Segment Reporting (1)

(Unaudited, in millions)

Three Months Ended

July 31, 2026

Three Months Ended

July 31, 2025

Nine Months Ended

July 31, 2026

Nine Months Ended

July 31, 2025

Revenue by segment

- Design Automation

2,003.0

1,312.1

5,826.6

3,454.6

% of Total

80.9

75.4

81.4

72.0

- Design IP

473.8

427.6

1,335.0

1,344.7

% of Total

19.1

24.6

18.6

28.0

Adjusted operating income by segment

- Design Automation

905.0

583.8

2,641.6

1,447.2

- Design IP

125.4

86.0

302.2

363.1

Adjusted operating margin by segment

- Design Automation

45.2

44.5

45.3

41.9

- Design IP

26.5

20.1

22.6

27.0

Total Adjusted Segment Operating Income Reconciliation (1)

(Unaudited, in millions)

Three Months Ended

July 31, 2026

Three Months Ended

July 31, 2025

Nine Months Ended

July 31, 2026

Nine Months Ended

July 31, 2025

GAAP total operating income – as reported

357.5

165.3

681.0

793.5

Other expenses managed at consolidated level

Amortization of acquired intangible assets

402.4

74.9

1,210.3

99.2

Stock-based compensation (2)

231.6

267.7

712.6

655.9

Restructuring charges

2.2

—

236.3

—

Acquisition/divestiture related items

(3)

22.9

118.4

62.1

218.7

Non-qualified deferred compensation plan

13.9

43.4

41.5

42.9

Total adjusted segment operating income

1,030.4

669.8

2,943.8

1,810.3

(1)

Synopsys manages the business on a long-term, annual basis, and considers quarterly fluctuations of revenue and

profitability as normal elements of our business. Amounts may not foot due to rounding.

(2)

The adjustment includes non-GAAP expenses attributable to non-controlling interest and redeemable non-controlling interest.

(3)

The adjustment excludes the amortization of bridge financing costs entered into in connection with the Ansys

Merger that was recorded in interest expense, and certain divestiture related items that were recorded in other income (expense), net in our unaudited condensed consolidated statements of income.

GAAP to Non-GAAP Reconciliation

Synopsys continues to provide all information required in accordance with GAAP but acknowledges evaluating its ongoing operating results may not be as useful

if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool

to evaluate Synopsys’ operating results in a manner that focuses on what Synopsys believes to be its core business operations and what Synopsys uses to evaluate its business operations and for internal budgeting and resource allocation

purposes. This press release includes non-GAAP earnings per diluted share, non-GAAP net income, non-GAAP operating margin and non-GAAP tax rate for the periods presented. It also includes future estimates for non-GAAP expenses, non-GAAP interest and other

income (expense), net, non-GAAP tax rate, non-GAAP operating margin, non-GAAP earnings per diluted share and free cash flow.

These non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

When possible, Synopsys provides a reconciliation of non-GAAP financial measures to their most closely applicable GAAP

financial measures. Synopsys is unable to provide a full reconciliation of certain fourth quarter and full fiscal year 2026 non-GAAP financial targets to the corresponding GAAP financial measures on a

forward-looking basis because Synopsys

believes that it would not be possible for it to have the information necessary to quantitatively reconcile such measures with sufficient precision without unreasonable efforts due to, among

other things, the potential variability and limited predictability of the excluded adjustment items necessary for a full reconciliation such as certain acquisition/divestiture related items, tax deduction variability, changes in the fair value of non-qualified deferred compensation plan, and gains (losses) on the sale of strategic investments. For the same reasons, Synopsys is unable to address the probable significance of the unavailable information.

Synopsys’ management does not itself, nor does it suggest that investors should, consider such non-GAAP

financial measures in isolation from, as superior to, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are meant to supplement, and be viewed in

conjunction with, the corresponding GAAP financial measures. Synopsys’ management believes the presentation of non-GAAP financial measures, when shown in conjunction with the corresponding GAAP financial

measures, provides useful information to investors allowing them to view financial and business trends relating to our financial condition and results of operations through the eyes of management. Synopsys’ management evaluates and makes

decisions about our business operations using both GAAP financial measures and non-GAAP financial measures to help facilitate internal comparisons to Synopsys’ historical operating results and forecasted

targets, planning and forecasting in subsequent periods and comparisons to competitors’ operating results.

The following are descriptions of the

adjustments made to reconcile non-GAAP financial measures (other than free cash flow, which is defined in the footnote to the Financial Targets table above) to the most directly comparable GAAP

financial measures:

(i) Amortization of acquired intangible assets. We incur expenses from the amortization of acquired intangible assets, which

may include impairment charges from write-downs of acquired intangible assets. Acquired intangible assets include, among other things, core/developed technology, customer relationships, contract rights, trademarks and trade names, and other

intangibles related to acquisitions. We amortize the intangible assets over their estimated useful lives. We do not enter into acquisitions on a predictable cycle. The amount of an acquisition’s purchase price allocated to intangible assets

and their estimated useful lives can vary significantly and are unique to each acquisition. From time to time, we incur impairment charges due to write-downs of acquired intangible assets. We believe that the presentation of non-GAAP financial measures that adjust for the amortization of intangible assets, including impairment

charges, provides investors and others with a consistent basis for comparison across accounting periods. We also exclude this item because such expenses are

non-cash in nature and we believe the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding our core operational

performance and liquidity, and ability to invest in research and development and fund future acquisitions and capital expenditures.

(ii) Stock-based

compensation. Stock-based compensation expenses consist primarily of expenses related to restricted stock units, stock options, employee stock purchase rights and other stock awards, including such expenses associated with acquisitions. We

exclude stock-based compensation expense from our non-GAAP financial measures primarily because it is not an expense that typically requires or will require cash settlement by us. Further, the expense for the

fair value of the stock-based instruments we utilize may bear little resemblance to the actual value realized upon the vesting or future exercise of the related stock-based awards and, therefore, is not used by management to assess the core

profitability of our business operations.

(iii) Acquisition/divestiture related items. In connection with certain of our business combinations

and/or divestitures, we incur significant expenses that we would not have otherwise incurred as part of our business operations. These expenses include, among other things, compensation expenses, professional fees and other direct expenses,

concurrent restructuring activities and divestiture activities, including employee severance and other exit costs, bridge financing costs, costs related to integration activities, debt forgiveness, changes to the fair value of contingent

consideration related to the acquired company, and amortization of the fair value difference of below-market value assets arising from arrangements entered into or acquired in conjunction with an acquisition. We also recognize the gains and losses

from the divestitures of business, as well as the mark-up of equity or cost method investments to fair value upon obtaining control through acquisition. We exclude these items because they are related to

acquisitions and divestitures and have no direct correlation to the core operation of our business. Further, because we do not acquire or divest businesses on a predictable cycle and the terms of each transaction can vary significantly and are

unique to each transaction, we believe it is useful to exclude such expenses when looking for a consistent basis for comparison across accounting periods.

(iv) Restructuring charges. We initiate restructuring activities to align our costs to our operating

plans and business strategies based on then-current economic conditions, and such activities have a specific and defined term. Restructuring costs generally include severance and other termination benefits related to voluntary retirement programs,

involuntary headcount reductions and facilities closures. Such restructuring costs include elimination of operational redundancy, permanent reductions in workforce and facilities closures and, therefore, are not considered by us to be a part of the

core operation of our business and are not used by management when assessing the core profitability and performance of our business operations.

(v)

Gains (losses) on the sale of strategic investments. We exclude gains and losses on the sale of equity investments in privately held companies because we do not believe they are reflective of our core business and operating results.

(vi) Deferred compensation. We exclude changes in the fair value of our non-qualified deferred compensation

plan because we do not use these to assess the core profitability of our business operations.

(vii) Income tax effect of non-GAAP pre-tax adjustments. Excluding the income tax effect of non-GAAP pre-tax

adjustments from the provision for income taxes assists investors in understanding the tax provision associated with those adjustments and the effect on net income. Beginning in fiscal year 2026, we transitioned from an annual non-GAAP tax rate to a three-year normalized non-GAAP tax rate of 18.0%. We believe this will provide better consistency across reporting periods by eliminating the effects of

non-recurring and period-specific items, which can vary in size and frequency and do not necessarily reflect our normal operations. This rate is based on our projected annual rate through fiscal year 2028,

primarily due to the completion of the acquisition of Ansys in the third quarter of fiscal year 2025 and the enactment of the One Big Beautiful Bill Act (the OBBB), which affects taxable income starting in fiscal year 2026 over the next several

years. In projecting this rate, we evaluated our historical and projected mix of U.S. and international profit before tax, excluding the impact of stock-based compensation, the amortization of purchased intangibles and other GAAP only adjustments

described above. We also considered other factors, including our current tax structure, U.S. tax law changes, such as the OBBB which impacts Synopsys’ expensing of U.S. research expenditures commencing in fiscal year 2026, and changes to

foreign derived intangible income commencing in fiscal year 2027.

About Synopsys

Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their

R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.

https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners.

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