Synopsys Sets New Standards in Engineering Solutions with Record-Breaking Q3
Synopsys delivered an outstanding third quarter, exceeding guidance across revenue, non-GAAP operating margin, and earnings per share (EPS) with broad-based strength across its portfolio. CEO Sassine Ghazi highlighted the company's success on a recent conference call, citing outperformance in Electronic Design Automation (EDA) and continued growth in Intellectual Property (IP).
Notably, Synopsys raised its full-year revenue, non-GAAP operating margin, and EPS guidance for fiscal year 2026. The company expects EDA growth to accelerate in Q4 and deliver double-digit growth for the full year. This acceleration is attributed to the increasing demand for complex chip design, driven by the needs of Artificial Intelligence (AI) and high-performance compute customers.
One of the key highlights from Q3 was the launch of Multiphysics Fusion, a joint solution with Ansys that combines Synopsys's thermal analysis capabilities with Ansys's multiphysics simulation technology. This integrated platform enables chip designers to validate up to 10x faster design closure and 3x faster runtime, setting a new standard for engineering solutions.
The Synopsys-Ansys combination has strengthened the company's competitive position, expanded its opportunity, and enabled it to deliver differentiated solutions addressing modern chip design challenges. The industry trends align perfectly with Synopsys's strategy and strengths as the leading provider of engineering solutions from silicon to systems.
Design automation achieved healthy growth in Q3, underpinned by strength in EDA, including record hardware revenue. This momentum is expected to continue, with EDA growth accelerating to double digits in Q4 and for the full year. The complex software and system requirements of AI compute also drive demand for Synopsys's hardware-assisted verification solutions.
The company secured 12 new and 66 repeat Hardware-Assisted Verification (HAV) customer wins in the quarter, further solidifying its position in this critical market segment. As mentioned earlier, the launch of Multiphysics Fusion creates a new growth opportunity for Synopsys, with expected contributions to EDA growth in 2027.
Another growth vector for Synopsys is Agentic AI, where the company demonstrated strong progress in Q3. At the DAC conference with NVIDIA, they showcased the fully autonomous long-running design verification agent that can orchestrate the entire chip verification cycle and deliver up to 50x faster time to validated RTL while achieving 20% additional coverage improvement.
With Microsoft and AMD, Synopsys introduced the first autonomous EDA workflows on Microsoft Discovery that can automate debug, implementation, and design closure. This innovative approach is poised to revolutionize chip design, enabling designers to work more efficiently and effectively."
