Synopsys has reported an optimistic revenue forecast for its third quarter of fiscal year 2025, estimating figures between $1.75bn and $1.78bn. This projection, fuelled by surging demand for its semiconductor design software amid a global increase in AI chip investments, exceeds the average analyst expectation of $1.76bn, as per data from LSEG. For the fiscal year ending 31 October 2025, the company is forecasting revenue of $6.74bn-$6.8bn.
“In a dynamic macro environment, Synopsys continues to execute with strong Q2 results on the top and bottom line,” said Synopsys CFO Shelagh Glaser. “We’re poised to deliver a solid second half, and we’re reaffirming our full-year revenue and operating margin guidance, reflecting our confidence in the business and continued healthy demand for our products.”
Listed on Nasdaq, Synopsys specialises in developing and supplying Electronic Design Automation software for semiconductor design.
The company’s stock experienced a 3.8% upswing in after-hours trading despite an earlier dip of around 10%, following news that the Trump administration directed US chip software firms to halt sales to Chinese companies.
While Synopsys faces challenges in China, which historically has contributed 16% of its annual revenue, robust sales in Europe and South Korea have provided a buffer against the ongoing slowdown of the Chinese economy. The escalating geopolitical tensions are expected to be mitigated by diversified regional demand for Synopsys’ technological offerings.
In parallel, Synopsys is addressing regulatory hurdles linked to its previously announced $35bn acquisition of Ansys. The US Federal Trade Commission (FTC) announced it would require both companies to divest specific assets to resolve antitrust issues. This move, according to the regulator, aims to preserve competitive dynamics within essential EDA and light simulation device markets, thereby protecting consumers from potential spikes in prices for technology products like smartphones and televisions.
The FTC’s proposed consent order mandates that Synopsys offload its optical and photonic software tools, which are crucial for designing cutting-edge optical devices and photon-based communication systems such as fibre optics and solar panels. Meanwhile, Ansys is required to divest PowerArtist, a tool integral for early-stage digital chip power consumption analysis.
The strategic acquisition of Ansys, announced in January 2024 through a cash and stock deal, reflects Synopsys’ ambition to lead in silicon-to-systems design solutions. Despite gaining regulatory clearance across multiple jurisdictions, the merger remains pending approval in China, a pivotal market for both entities.
CEO Sassine Ghazi confirmed during an earnings call that while regulatory approvals have been secured globally, China’s decision remains outstanding. The merger’s completion is intended to position Synopsys and Ansys at the forefront of innovation within the semiconductor design sector.
Details of Synopsys Q2FY25 financial results
Financially, Synopsys reported a significant rise in its second-quarter fiscal year 2025 results, with revenue hitting $1.6bn compared to $1.45bn in the previous year’s corresponding period. Net income also saw an increase to $349.2m or $2.24 per diluted share, up from $299.1m or $1.92 per diluted share in fiscal year 2024’s second quarter. Synopsys reported maintenance and service revenue at $265.26m, below estimates, with a 4.1% decline year over year (YoY). Total product revenue hit $1.34bn, exceeding estimates, showing a 13.7% increase. Design IP and Upfront products also surpassed expectations, increasing 20.6% and 28.8%, respectively.
Read more: UK CMA weighs remedies in Synopsys-Ansys $35bn merger to avoid deeper scrutiny
