Synopsys Sets Sights on Next Chapter: Record Revenue, Strong Growth Outlook, and Pioneering Silicon to Systems Strategy
Synopsys, the renowned leader in electronic design automation (EDA), has concluded its most recent fiscal year with a resounding success story. In a conference call held on December 4th, the company's executives shared an update on their Q4 performance and outlined their vision for the future.
According to Sassine Ghazi, President and CEO of Synopsys, the company 'delivered a strong finish to the year,' exceeding the midpoint of its Q4 guidance targets. This achievement caps another record revenue year for Synopsys, with revenue growth at an impressive 15% year-over-year in FY '24.
The $6 billion mark was crossed in just three years since hitting the $4 billion milestone, a testament to Synopsys' sustained momentum and strategic focus on growth segments. Notably, earnings per share (EPS) have grown at a 24% compound annual growth rate (CAGR) over the last five years.
As Ghazi emphasized, FY '24 was a transformational year for the company, marked by key developments such as the successful sale of their Software Integrity business and the pending acquisition of Ansys. This strategic pivot towards silicon to systems underlines Synopsys' commitment to innovation and customer needs in an era of pervasive intelligence.
The driving force behind Synopsys' success is tied to technology innovation cycles, unlike the cyclical nature of the broader semiconductor market. AI-driven reinvention of compute has accelerated the pace, scale, and systemic complexity of technology R&D, expanding opportunities for Synopsys.
Ghazi highlighted that AI and HPC chip design starts continue at a relentless pace, while end-demand in industries like industrial, auto, and consumer electronics are recovering more slowly. However, all industries are investing for their AI future, making Synopsys an essential strategic partner in helping them realize their ambitions.
The acquisition of Ansys is set to further the company's growth into new adjacent areas, enabling them to deliver on engineering needs for new AI-powered design solutions that fuse electronics and physics. Regulatory review processes are proceeding as expected, with the HSR waiting period expiring this week, marking an important milestone towards close in the first half of 2025.
Looking ahead to 2025, Synopsys expects to deliver double-digit revenue growth and a 40% operating margin. The company will remain focused on execution, excellence, and operating discipline while balancing guidance with pragmatism, given its readiness for the largest acquisition in its history and continued management of macro uncertainties in some geographies.
Shelagh Glaser, CFO, will discuss the guidance in more detail later in the call. With a clear focus on innovation and customer needs, Synopsys is poised to write the next chapter in its success story.
