Synopsys (SNPS) Q2 2026 earnings summary

Executive summary

• Q2 FY2026 revenue grew 42% year-over-year to $2.3 billion, driven by the Ansys acquisition and robust AI-driven demand, with strong execution and expanded product portfolio.

• Completed $34.9 billion acquisition of Ansys in July 2025, expanding leadership in engineering solutions from silicon design to system simulation and analysis.

• Net income from continuing operations was $17.1 million, down from $349.2 million in Q2 2025, reflecting higher costs and amortization from the Ansys deal.

• Raised full-year 2026 guidance for revenue, operating margin, and EPS based on momentum, market signals, and successful integration of acquisitions.

• Announced cooperation agreement with Elliott Management and appointment of Jesse Cohn as independent director.

Financial highlights

• Q2 FY2026 revenue: $2.3 billion, up 42% year-over-year; non-GAAP operating margin: 39.5%; non-GAAP EPS: $3.35; GAAP EPS: $0.09.

• Ansys contributed $652.4 million in Q2 2026 revenue.

• Backlog ended at $11 billion; 49% expected to be recognized as revenue over the next 12 months.

• Free cash flow: $575 million in Q2; cash and short-term investments: $2.5 billion; total debt: $10 billion.

• GAAP net income for Q2 FY2026 was $17.1 million; non-GAAP net income was $643.7 million.

Outlook and guidance

• FY2026 revenue guidance raised to $9.665 billion at midpoint, reflecting Ansys integration and divestitures.

• Non-GAAP EPS guidance for FY2026 increased to $14.76 at midpoint; non-GAAP operating margin guidance raised to 41%.

• Q3 FY2026 revenue expected between $2.41 billion and $2.46 billion; non-GAAP EPS between $3.63 and $3.69.

• Long-term objectives include double-digit revenue growth and non-GAAP EPS growth in the high-teens.

• Guidance assumes no further changes to export control restrictions or U.S. Entity List.