SYNOPSYS INC
For the period ended Jul 31, 2026. Filed Aug 26, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2026 · Filed Aug 26, 2026
SNPS$450.46+2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-04-30; filed 2026-05-27.
0000883241-26-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-31; filed 2026-08-26.
0000883241-26-000025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 131 current paragraphs.
75 unchanged; 47 reworded; 8 added; 6 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
•Revenues were $7.2 billion, an increase of $2.4 billion or 49%, which includes an increase of $2.2 billion in revenue from Ansys for the full period in fiscal 2026 versus the partial period in fiscal 2025. The remaining growth came organically due to broad-based strength across our business.
Current report
•Total cost of revenue and operating expenses was $6.5 billion, an increase of $2.5 billion or 62%, reflecting increases of $1.1 billion in amortization expense related to intangible assets acquired from the Ansys Merger, $768.9 million in employee-related costs, which includes an increase of $794.8 million from Ansys, primarily due to the inclusion of Ansys' results for a full period for the nine months ended July 31, 2026 versus a partial period for the same period in fiscal 2025, partially offset by a decrease in employee-related costs due to headcount reductions as a result of the 2026 Plan (as defined in Restructuring Charges below). The increase in total cost of revenue and operating expenses was also driven by $236.3 million of restructuring charges for the nine months ended July 31, 2026.
Current report
We completed the acquisition of Ansys on July 17, 2025. Accordingly, period-to-period comparisons discussed below are affected by the inclusion of Ansys' results for partial periods in fiscal 2025 versus full periods in fiscal 2026.
Current report
The increase in total revenues for the three and nine months ended July 31, 2026 compared to the same periods in fiscal 2025 was primarily attributable to increases in revenue from Ansys, which contributed $622.2 million and $2.2 billion for the respective periods, reflecting a full period of revenue from Ansys, compared to a partial period contribution in the prior year following our acquisition of Ansys. Overall revenue growth also reflected broad-based strength across our business.
Current report
The decrease in general and administrative expenses for the three months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily attributable to lower consulting and professional fees of $86.7 million, which were higher in the third quarter of fiscal 2025 primarily due to expenses incurred in connection with the Ansys Merger. Additionally, employee-related costs were lower in the three months ended July 31, 2026 primarily due to $53.6 million of stock-based compensation expense accelerated in connection with the Ansys Merger in the third quarter of fiscal 2025. These decreases were partially offset by higher employee-related costs from Ansys of $17.8 million, excluding the accelerated stock-based compensation expense for the Ansys Merger, due to the impact of the full quarter in fiscal 2026 versus the partial quarter in fiscal 2025.
Current report
The increase in other income (expense), net for the nine months ended July 31, 2026 as compared to the same period in fiscal 2025 was primarily due to a pre-tax gain of$425.4 million on the sale of our Processor IP business on June 1, 2026, partially offset by lower interest income as a result of lower average cash balances and the gain recognized from the sale of an office building in the second quarter of fiscal 2025.
Current report
The increase in adjusted operating income for the three months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to an increase in the revenue of IP products driven by timing of customer demands.
Current report
Our effective tax rate increased in the three months ended July 31, 2026 as compared to the same period in fiscal 2025, which was primarily due to the release of a full valuation allowance against California research credits during the third quarter of fiscal 2025.
Removed paragraphs (6)
Previous report
•Revenues were $4.7 billion, an increase of $1.6 billion or 53%, which includes revenues from Ansys of $1.5 billion. The remaining growth came organically due to strength across our business, partially offset by weakness in our Design IP segment.
Previous report
•Total cost of revenue and operating expenses was $4.4 billion, an increase of $1.9 billion or 79%, reflecting $788.3 million of amortization expense related to intangible assets acquired from the Ansys Merger, as well as an increase of $594.7 million in employee-related costs primarily due to the headcount increases as a result of the Ansys Merger.
Previous report
Our results of operations for the three and six months ended April 30, 2026 reflect the inclusion of Ansys' results of operations. As discussed above, we completed the Ansys Merger on July 17, 2025 and therefore our results of operations for the three and six months ended April 30, 2025 do not include Ansys' results of operations for such time periods, impacting the period comparisons discussed below.
Previous report
The increase in total revenues for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to Ansys' contribution of $652.4 million and $1.5 billion in revenue, respectively, for the three and six months ended April 30, 2026, including a $12.5 million increase due to the accounting change in Ansys' channel partner business, and strength across our business, partially offset by weakness in our Design IP segment.
Previous report
The increase in general and administrative expenses for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $63.3 million in employee-related costs due to headcount increases from the Ansys Merger, $7.3 million in depreciation and maintenance expense and $4.2 million in IT and facility costs, partially offset by a decrease of $54.0 million in consulting and other professional fees.
Previous report
Our debt and liquidity needs increased as a result of completing the Ansys Merger. We funded the cash consideration in the Ansys Merger (the Cash Consideration) from the issuance of the Senior Notes and the borrowings under the Term Loan Agreement. See Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further discussion.
Reworded paragraphs (47)
Previous wording
This Quarterly Report on Form 10-Q (this Quarterly Report) includes forward-looking statements, which involve risks, uncertainties and other factors that could cause Synopsys, Inc.'s (Synopsys, we, our or us) actual results, time frames or achievements to differ materially from those expressed or implied in such forward-looking statements. Readers are urged to carefully review and consider the various disclosures regarding these risks and uncertainties made in this Quarterly Report, including those identified below in Part II, Item 1A, Risk Factors, and in other documents we file from time to time with the Securities and Exchange Commission (SEC). Forward-looking statements include any statements that are not statements of historical fact and include, but are 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 (AI), 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 acquisitions or divestitures, including the expected completion of the sale of the Processor IP Solutions (Processor IP) business, 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. Forward-looking statements may be identified by words including, but not limited to, “may,” “will,” “could,” “would,” “can,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project,” “continue,” “forecast,” "likely," "potential," "seek," or the negatives of such terms and similar expressions. The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-…
Excerpt shortened here; the source contains the full paragraph.
Current wording
This Quarterly Report on Form 10-Q (this Quarterly Report) includes forward-looking statements, which involve risks, uncertainties and other factors that could cause Synopsys, Inc.'s (Synopsys, we, our or us) actual results, time frames or achievements to differ materially from those expressed or implied in such forward-looking statements. Readers are urged to carefully review and consider the various disclosures regarding these risks and uncertainties made in this Quarterly Report, including those identified below in Part II, Item 1A, Risk Factors, and in other documents we file from time to time with the Securities and Exchange Commission (SEC). Forward-looking statements include any statements that are not statements of historical fact and include, but are 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 (AI), 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. Forward-looking statements may be identified by words including, but not limited to, “may,” “will,” “could,” “would,” “can,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project,” “continue,” “forecast,” "likely," "potential," "seek," or the negatives of such terms and similar expressions. The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ mater…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
For the second quarter of fiscal 2026, our results reflect continued, strong execution and the resiliency of our business, including 42% revenue growth compared to the second quarter of fiscal 2025, primarily due to strength across our business and Ansys' contribution of $652.4 million in revenue, partially offset by weakness in our Design IP segment.
Current wording
For the third quarter of fiscal 2026, our results reflect continued, strong execution and the resiliency of our business, including 42% revenue growth compared to the third quarter of fiscal 2025, due to broad-based strength across our business, led by electronic design automation (EDA), Design IP returning to year-over-year growth, and a strong quarter from Ansys. Results for the third quarter of fiscal 2026 reflected a full quarter of revenue from Ansys, compared to a partial quarter contribution in the prior year period following our acquisition of Ansys in July 2025.
Previous wording
•Revenues were $2.3 billion, an increase of $671.7 million or 42%, which includes revenues from Ansys of $652.4 million. The remaining growth came organically due to strength across our business, partially offset by weakness in our Design IP segment.
Current wording
•Revenues were $2.5 billion, an increase of $737.1 million or 42%, which includes an increase of $622.2 million in revenue from Ansys for the full quarter in fiscal 2026 versus the partial quarter in fiscal 2025. The remaining growth came organically due to broad-based strength across our business.
Previous wording
•Total cost of revenue and operating expenses was $2.2 billion, an increase of $927.8 million or 76%, reflecting $394.2 million of amortization expense related to intangible assets acquired from the acquisition of Ansys (the Ansys Merger), as well as an increase of $244.5 million in employee-related costs primarily due to the headcount increases as a result of the Ansys Merger.
Current wording
•Total cost of revenue and operating expenses was $2.1 billion, an increase of $544.8 million or 35%, reflecting an increase of $330.0 million in amortization expense related to intangible assets acquired from the Ansys Merger (as defined below), as well as an increase of $174.3 million in employee-related costs, which includes an increase of $169.2 million from Ansys, primarily due to the inclusion of Ansys' results for a full period for the three months ended July 31, 2026 versus a partial period for the same period in fiscal 2025.
Previous wording
Financial performance summary for the six months ended April 30, 2026 compared to the same period of fiscal 2025:
Current wording
Financial performance summary for the nine months ended July 31, 2026 compared to the same period of fiscal 2025:
Previous wording
On July 17, 2025 (the Acquisition Date), we completed our acquisition of ANSYS, Inc. (Ansys) pursuant to the terms of the previously announced Agreement and Plan of Merger, dated as of January 15, 2024 (the Merger Agreement) by and among Synopsys, Ansys and ALTA Acquisition Corp. (Merger Sub), a Delaware corporation and a wholly owned subsidiary of Synopsys (the Ansys Merger). See Note 4. Acquisition of Ansysof the Notes to Condensed Consolidated Financial Statements for more information on the Ansys Merger.
Current wording
On July 17, 2025 (the Acquisition Date), we completed our acquisition of Ansys pursuant to the terms of the previously announced Agreement and Plan of Merger, dated as of January 15, 2024 (the Merger Agreement) by and among Synopsys, Ansys and ALTA Acquisition Corp. (Merger Sub), a Delaware corporation and a wholly owned subsidiary of Synopsys (the Ansys Merger). See Note 4. Acquisition of Ansysof the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for more information on the Ansys Merger.
Previous wording
We expect growth across most geographies in fiscal 2026; however, we are expecting a challenging near-term environment, including in China, due to macroeconomic factors and Trade Restrictions (as defined below). See the discussion below under the heading "Impact of Global Trade Policy and the Current Geopolitical Environment" and in Part II, Item 1A, Risk Factors, "We are subject to governmental export and import requirements that could subject us to liability and restrict our ability to sell our products and services, which could impair our ability to compete in international markets" for further discussion of the impact of Trade Restrictions, including export control regulations and geopolitical events, on Synopsys.
Current wording
Growth trends have varied across geographies during fiscal 2026, and the near-term environment, including in China, continues to be affected by macroeconomic factors and Trade Restrictions (as defined below). See the discussion below under the heading "Impact of Global Trade Policy and the Current Geopolitical Environment" and in Part II, Item 1A, Risk Factors, "We are subject to governmental export and import requirements that could subject us to liability and restrict our ability to sell our products and services, which could impair our ability to compete in international markets" for further discussion of the impact of Trade Restrictions, including export control regulations and geopolitical events, on Synopsys.
Previous wording
Design Automation. This segment includes our advanced silicon design, verification products and services, and Ansys products, and system integration products and services. This segment also includes digital, custom and field programmable gate array (FPGA) integrated circuit (IC) design software, verification software and hardware products, and manufacturing software products. Designers use our electronic design automation (EDA) products to accelerate and automate the chip design process, reduce errors and enable more powerful and robust designs, with improved productivity for faster time to market. Engineers use our S&A solutions to virtually test and optimize designs across various physics domains, such as structural analysis, thermal analysis, and computational fluid dynamics (CFD).
Current wording
Design Automation. This segment includes our advanced silicon design, verification products and services, and Ansys products, and system integration products and services. This segment also includes digital, custom and field programmable gate array (FPGA) integrated circuit (IC) design software, verification software and hardware products, and manufacturing software products. Designers use our EDA products to accelerate and automate the chip design process, reduce errors and enable more powerful and robust designs, with improved productivity for faster time to market. Engineers use our S&A solutions to virtually test and optimize designs across various physics domains, such as structural analysis, thermal analysis, and computational fluid dynamics (CFD).
Previous wording
Design IP. This segment includes our logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors that serve companies primarily in the semiconductor and electronics industries. We are a leading provider of high-quality, silicon-proven IP solutions for system-on-chips (SoCs). This includes IP that has been optimized to address specific application requirements for the mobile, automotive, digital home, Internet of Things and AI/data center markets, enabling designers to quickly develop SoCs in these areas.
Current wording
Design IP. This segment includes our logic libraries, embedded memories, wired interface IP, memory interface IP, and security IP that serve companies primarily in the semiconductor and electronics industries. We are a leading provider of high-quality, silicon-proven IP solutions for system-on-chips (SoCs). This includes IP that has been optimized to address specific application requirements for the mobile, automotive, digital home, Internet of Things and AI/data center markets, enabling designers to quickly develop SoCs in these areas.
Previous wording
We believe the critical accounting policies that reflect more significant judgments and estimates used in the preparation of our consolidated financial statements regarding critical accounting estimates are Revenue Recognition and Business Combinations. There have been no material changes in our critical accounting estimates during the six months ended April 30, 2026 since our Annual Report for fiscal 2025.
Current wording
We believe the critical accounting policies that reflect more significant judgments and estimates used in the preparation of our consolidated financial statements regarding critical accounting estimates are Revenue Recognition and Business Combinations. There have been no material changes in our critical accounting estimates during the nine months ended July 31, 2026 since our Annual Report for fiscal 2025.
Previous wording
•S&A solutions allow engineers to virtually test and optimize designs across various physics domains, such as structural analysis, thermal analysis, and CFD. S&A software solutions are offered as subscription solutions and also as perpetual licenses. Software subscription arrangements include bundles of time-based software licenses with support services, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. In such subscription arrangements, the updates to time-based software licenses are not considered integral to maintaining the utility of the software. We consider the license and support services as separate performance obligations. In these instances, we allocate the total consideration received for the revenue arrangement to the separate performance obligations based on the standalone selling prices of the time-based software license and support service. The time-based software license revenue is presented as upfront products revenue, recognized at a point of time upon the later of the delivery date or the beginning of the license period, and the revenue related to the support service is presented as maintenance and service revenue and is recognized over the term of the arrangement. Perpetual license arrangements typically include a perpetual license sold with support services, which includes a stand-ready obligation to provide technical support and software updates over the support term. We allocate the total consideration received for the bundled perpetual and support service arrangements based on the standalone selling prices of the perpetual license and support service. Revenue from perpetual licenses is presented as upfront product revenue and is recognized at a point in time upon the later of the delivery date or the beginning of the license period. Revenue from support service is classified as maintenance and service revenue and is recognized ratably over the term of the contract, as we satisfy the support service performance obligation. For our reseller business, we evaluate whether we are the principal or agent for reporting purposes. Beginning in the second quarter of fiscal 2026, we have enhanced our channel partner arrangements to improve oversight and pricing visibility. Specifically, we now have visibility into end-customer pricing, improved delivery control over key distributors, and are able to provide routine maintenance to the end customers. As a result, we report our revenue from reseller arrangements on a gross basis beginning in the second quarter of fiscal 2026.
Current wording
•S&A solutions allow engineers to virtually test and optimize designs across various physics domains, such as structural analysis, thermal analysis, and CFD. S&A software solutions are offered as subscription solutions and also as perpetual licenses. Software subscription arrangements include bundles of time-based software licenses with support services, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. In such subscription arrangements, the updates to time-based software licenses are not considered integral to maintaining the utility of the software. We consider the license and support services as separate performance obligations. In these instances, we allocate the total consideration received for the revenue arrangement to the separate performance obligations based on the standalone selling prices of the time-based software license and support service. The time-based software license revenue is presented as upfront products revenue, recognized at a point of time upon the later of the delivery date or the beginning of the license period, and the revenue related to the support service is presented as maintenance and service revenue and is recognized over the term of the arrangement. Perpetual license arrangements typically include a perpetual license sold with support services, which includes a stand-ready obligation to provide technical support and software updates over the support term. We allocate the total consideration received for the bundled perpetual and support service arrangements based on the standalone selling prices of the perpetual license and support service. Revenue from perpetual licenses is presented as upfront product revenue and is recognized at a point in time upon the later of the delivery date or the beginning of the license period.
Previous wording
•Design IP includes our logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors. These arrangements generally have two performance obligations which consist of transferring of the licensed IP and providing related support, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. Revenue allocated to the IP licenses is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support is recognized over the support term. Royalties are recognized as revenue in the quarter in which the applicable customer sells its products that incorporate our IP. Payments for IP contracts are generally received upon delivery of the IP. Revenue related to the customization of certain IP is recognized over time, generally using costs incurred or hours expended to measure progress.
Current wording
•Design IP includes our logic libraries, embedded memories, wired interface IP, memory interface IP and security IP. These arrangements generally have two performance obligations which consist of transferring of the licensed IP and providing related support, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. Revenue allocated to the IP licenses is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support is recognized over the support term. Royalties are recognized as revenue in the quarter in which the applicable customer sells its products that incorporate our IP. Payments for IP contracts are generally received upon delivery of the IP. Revenue related to the customization of certain IP is recognized over time, generally using costs incurred or hours expended to measure progress.
Previous wording
Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) were $11.0 billion as of April 30, 2026, which includes $1.8 billion in non-cancellable FSA commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 49% of the backlog as of April 30, 2026, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder to be recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years.
Current wording
Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) were $10.9 billion as of July 31, 2026, which includes $1.9 billion in non-cancellable FSA commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 49% of the backlog as of July 31, 2026, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder to be recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years.
Previous wording
The amount and composition of unsatisfied performance obligations will fluctuate period to period. We do not believe the amount of unsatisfied performance obligations is indicative of future sales or revenue, or that such obligations at the end of any given period correlates with actual sales performance of a particular geography or particular products and services. For more information regarding our revenue during the three and six months ended April 30, 2026, including our contract balances as of such date, see Note 5. Revenue of the Notes to Condensed Consolidated Financial Statementsin this Quarterly Report.
Current wording
The amount and composition of unsatisfied performance obligations will fluctuate period to period. We do not believe the amount of unsatisfied performance obligations is indicative of future sales or revenue, or that such obligations at the end of any given period correlates with actual sales performance of a particular geography or particular products and services. For more information regarding our revenue during the three and nine months ended July 31, 2026, including our contract balances as of such date, see Note 5. Revenue of the Notes to Condensed Consolidated Financial Statementsin this Quarterly Report.
Previous wording
The increase in time-based products revenue for the three andsix months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily attributable to Ansys' contribution of $78.7 million and $157.1 million in time-based products revenue, respectively for the three andsix months ended April 30, 2026, and an increase in TSL license revenue from arrangements booked in prior periods.
Current wording
The increase in time-based products revenue for the three andnine months ended July 31, 2026 compared to the same periods in fiscal 2025 was primarily attributable to increases of $71.6 million and $228.7 million, respectively, from Ansys, and higher TSL license revenue from arrangements entered into in prior periods.
Previous wording
The increase in upfront products revenue for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to Ansys' contribution of $149.3 million and $532.3 million, respectively for the three and six months ended April 30, 2026 in upfront products revenue, partially offset by a decrease in license revenue due to timing of customer requirements for IP products and the Optical Solutions Group divestiture.
Current wording
The increase in upfront products revenue for the three and nine months ended July 31, 2026 compared to the same periods in fiscal 2025 was primarily attributable to increases of $161.4 million and $693.7 million, respectively, from Ansys, partially offset by a decrease in license revenue due to the Optical Solutions Group divestiture.
Previous wording
The increase in maintenance revenue for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to an increase in the volume of arrangements that include maintenance largely due to Ansys' contribution of $402.9 million and $807.3 million in maintenance revenue, respectively, for the three and six months ended April 30, 2026.
Current wording
The increase in maintenance revenue for the three and nine months ended July 31, 2026 compared to the same periods in fiscal 2025 was primarily attributable to increases of $367.0 million and $1.2 billion, respectively, from Ansys, and an increase in the volume of arrangements that include maintenance.
Previous wording
The increase in professional service and other revenue for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to Ansys' contribution of $21.5 million and $41.3 million in professional service and other revenue, respectively, for the three and six months ended April 30, 2026 and the timing of IP customization projects.
Current wording
The increase in professional service and other revenue for the three and nine months ended July 31, 2026 compared to the same periods in fiscal 2025 was primarily attributable to the timing of IP customization projects, as well as increases of $22.2 million and $63.5 million, respectively, from Ansys.
Previous wording
Our cost of revenue is comprised of three categories: cost of products revenue, cost of maintenance and service revenue, and amortization of acquired intangible assets.
Current wording
Our cost of revenue consists of three categories: cost of products revenue, cost of maintenance and service revenue, and amortization of acquired intangible assets.
Previous wording
The increase incosts of products revenue and costs of maintenance and service revenue for the six months ended April 30, 2026 compared to the same period in fiscal 2025 wasprimarily due to increases in employee-related costs as a result of headcount increases from the Ansys Merger, which contributed $54.6 million, $31.0 million in costs to fulfill IP consulting arrangements, $22.3 million in IT and facility costs and $22.3 million in hardware-related costs including inventory provisions. The increase in amortization of acquired intangible assetsfor the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to an increase of $484.4 million in connection with the Ansys Merger.
Current wording
The increase incosts of products revenue and costs of maintenance and service revenue for the three months ended July 31, 2026 compared to the same period in fiscal 2025 wasprimarily due to increases of $20.9 million in employee-related costs from Ansys for the full quarter in fiscal 2026 versus the partial quarter in fiscal 2025, $20.8 million in hardware-related costs including inventory provisions, $17.2 million in costs to fulfill IP consulting arrangements, and $7.2 million in IT and facility costs. The increase in amortization of acquired intangible assetsfor the three months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to an increase of $202.7 million in connection with the Ansys Merger.
Previous wording
The increase incosts of products revenue and costs of maintenance and service revenue for the three months ended April 30, 2026 compared to the same period in fiscal 2025 wasprimarily due to increases in employee-related costs as a result of headcount increases from the Ansys Merger, which contributed $25.9 million, $16.1 million in costs to fulfill IP consulting arrangements, and $10.2 million in IT and facility costs. The increase in amortization of acquired intangible assetsfor the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to an increase of $242.3 million in connection with the Ansys Merger.
Current wording
The increase incosts of products revenue and costs of maintenance and service revenue for the nine months ended July 31, 2026 compared to the same period in fiscal 2025 wasprimarily due to increases of $75.4 million in employee-related costs from Ansys for the full period in fiscal 2026 versus the partial period in fiscal 2025, $48.2 million in costs to fulfill IP consulting arrangements, $43.1 million in hardware-related costs including inventory provisions, and $29.6 million in IT and facility costs. The increase in amortization of acquired intangible assetsfor the nine months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to an increase of $687.1 million in connection with the Ansys Merger.
Previous wording
The increase in research and development expenses for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due toincreases of $116.2 million in employee-related costs due to headcount increases from the Ansys Merger, $36.7 million in IT and facility costs, and $20.5 million in the change in the fair value of our executive deferred compensation plan assets, partially offset by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan (as defined in Restructuring Charges below).
Current wording
The increase in research and development expenses for the three months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $91.5 million in employee-related costs due to the inclusion of Ansys for the full quarter in fiscal 2026 versus the partial quarter in fiscal 2025 and $27.8 million in IT and facility costs, partially offset by a decrease of $20.5 million in the change in the fair value of our executive deferred compensation plan assets and a decrease in employee-related costs due to headcount reductions as a result of the 2026 Plan (as defined in Restructuring Charges below).
Previous wording
The increase in research and development expenses for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due toincreases of $243.2 million in employee-related costs due to headcount increases from the Ansys Merger, $74.3 million in IT and facility costs and $15.8 million in the change in the fair value of our executive deferred compensation plan assets, partially offset by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan.
Current wording
The increase in research and development expenses for the nine months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due toincreases of $334.4 million in employee-related costs from Ansys for the full period in fiscal 2026 versus the partial period in fiscal 2025 and $102.2 million in IT and facility costs, partially offset by a decrease in employee-related costs due to headcount reductions as a result of the 2026 Plan.
Previous wording
The increase in sales and marketing expenses for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due toincreases of $123.8 million in employee-related costs due to headcount increases from the Ansys Merger, $19.5 million in IT and facility costs and $7.3 million in the change in the fair value of our executive deferred compensation plan assets, partially offset by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan.
Current wording
The increase in sales and marketing expenses for the three months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due toincreases of $92.6 million in employee-related costs from Ansysfor the full quarter in fiscal 2026 versus the partial quarter in fiscal 2025 and $9.6 million in IT and facility costs.
Previous wording
The increase in sales and marketing expenses for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due toincreases of $267.6 million in employee-related costs due to headcount increases from the Ansys Merger, $38.9 million in IT and facility costs and $6.9 million in the change in the fair value of our executive deferred compensation plan assets, offset in part by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan.
Current wording
The increase in sales and marketing expenses for the nine months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due toincreases of $357.6 million in employee-related costs from Ansys for the full period in fiscal 2026 versus the partial period in fiscal 2025 and $49.5 million in IT and facility costs, offset in part by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan.
Previous wording
The increase in general and administrative expenses for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $23.6 million in employee-related costs due to headcount increases from the Ansys Merger,$4.3 million in the change in the fair value of our executive deferred compensation plan assets,$3.9 million in depreciation and maintenance expense and $2.2 million in IT and facility costs, partially offset by a decrease of $12.0 million in consulting and other professional fees.
Current wording
The decrease in general and administrative expenses for the nine months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to lower consulting and professional fees of $140.7 million, which were higher during the nine months ended July 31, 2025 primarily due to expenses incurred in connection with the Ansys Merger. Excluding the accelerated stock-based compensation expense for the Ansys Merger of $53.6 million in the third quarter of fiscal 2025, employee-related costs were higher, primarily due to the contribution from Ansys of $81.0 million, due to the impact of the full period in fiscal 2026 versus the partial period in fiscal 2025. Additionally, the overall decrease was partially offset by increases of $9.3 million in depreciation and maintenance expense and $5.2 million in IT and facility costs.
Previous wording
The increase in amortization of acquired intangible assets for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to amortization expense related to intangible assets acquired from the Ansys Merger. See Note 6. Goodwill and Intangible Assetsof the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for a schedule of future amortization amounts.
Current wording
The increase in amortization of acquired intangible assets for the three and nine months ended July 31, 2026 compared to the same periods in fiscal 2025 was primarily due to increases in amortization expense related to intangible assets acquired from the Ansys Merger. See Note 6. Goodwill and Intangible Assetsof the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for a schedule of future amortization amounts.
Previous wording
In November 2025, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2026 Plan). Total charges under the 2026 Plan are expected to be in the range of $300.0 million to $350.0 million, and consist primarily of severance costs and other one-time termination benefits. The 2026 Plan is anticipated to be completed by the end of fiscal 2027, with majority of the workforce reduction in fiscal 2026. We recorded restructuring charges of $115.9 million and $234.2 million for the three andsix months ended April 30, 2026, respectively. See Note 10. Restructuring Charges of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for more information.
Current wording
In November 2025, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2026 Plan) with total charges expected to be in the range of $300.0 million and $350.0 million. In August 2026, our Board of Directors (the Board) approved updated estimates of charges related to the 2026 Plan ranging from $425.0 million to $500.0 million, consisting primarily of severance and other one-time termination benefits, and other costs such as certain site closures as part of Synopsys' global site strategy. The 2026 Plan is anticipated to be completed by the end of fiscal 2027, with majority of the workforce reduction in fiscal 2026. We recorded restructuring charges of $2.2 million and $236.3 million for the three andnine months ended July 31, 2026, respectively. See Note 10. Restructuring Charges of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for more information.
Previous wording
The increase in interest expense for the three months ended April 30, 2026 as compared to the same period in fiscal 2025 was primarily due to interest on the Senior Notes issued in the second quarter of fiscal 2025 in connection with the Ansys Merger.
Current wording
The decrease in interest expense for the three months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to the repayment and termination of the Term Loan Agreement during the first quarter of fiscal 2026.
Previous wording
The increase in interest expense for the six months ended April 30, 2026 as compared to the same period in fiscal 2025 was primarily due to interest on the Senior Notes issued in the second quarter of fiscal 2025 and the borrowing under the Term Loan Agreement in the third quarter of fiscal 2025 in connection with the Ansys Merger. See Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilitiesof the Notes to Condensed Consolidated Financial Statementsin this Quarterly Report for further detail on our debt obligations.
Current wording
The increase in interest expense for the nine months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to interest on the Senior Notes issued in the second quarter of fiscal 2025 and the borrowing under the Term Loan Agreement in the third quarter of fiscal 2025 in connection with the Ansys Merger. See Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilitiesof the Notes to Condensed Consolidated Financial Statementsin this Quarterly Report for further detail on our debt obligations.
Previous wording
The decrease in other income (expense), net for the three and six months ended April 30, 2026 as compared to the same periods in fiscal 2025 was primarily due to the gain recognized from the sale of an office building for the three and six months ended April 30, 2025, lower interest income as a result of lower average cash balances, partially offset by an increase in the change in fair value of our executive deferred compensation plan assets.
Current wording
The increase in other income (expense), net for the three months ended July 31, 2026 as compared to the same period in fiscal 2025 was primarily due to a pre-tax gain of $425.4 million on sale of our Processor IP Solutions (Processor IP) business on June 1, 2026, partially offset bylower interest income as a result of lower average cash balances and a decrease in the change in fair value of our executive deferred compensation plan assets.
Previous wording
The increase in adjusted operating income for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to an increase in revenue from arrangements booked in prior periods.
Current wording
The increase in adjusted operating income for the three and nine months ended July 31, 2026 compared to the same periods in fiscal 2025 was primarily due to an increase in revenue from arrangements booked in prior periods, partially offset by a decrease in license revenue due to the Optical Solutions Group divestiture.
Previous wording
The decrease in adjusted operating income for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to lower revenueas we continue to reallocate resources to the highest growth opportunities.
Current wording
The decrease in adjusted operating income for the nine months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to higher expenses and lower revenueas we continue to reallocate resources to the highest growth opportunities.
Previous wording
Our effective tax rate increased in the three and six months ended April 30, 2026, as compared to the same periods in fiscal 2025, primarily due to the reduced benefit from stock-based compensation and foreign-derived intangible income deduction. The capital loss on the sale of our ownership in OpenLight was included in the first quarter of 2025.
Current wording
Our effective tax rate increased in the nine months ended July 31, 2026 as compared to the same period in fiscal 2025, which was primarily due to the release of a full valuation allowance against California research credits during the third quarter of fiscal 2025 and the recognition of a capital loss on the sale of our ownership in OpenLight during the first quarter of fiscal 2025, as well as a lower benefit from stock-based compensation and the foreign-derived intangible income deduction in fiscal 2026.
Previous wording
As of April 30, 2026, we held $2.5 billion in cash, cash equivalents and short-term investments. We also held $4.3 million in restricted cash primarily associated with deposits for office leases and employee loan programs. Our cash equivalents consisted primarily of taxable money market mutual funds, time deposits and highly liquid investments with maturities of three months or less. Our short-term investments include U.S. government and municipal obligations, and investment-grade available-for-sale debt with an overall weighted-average credit rating of approximately AA.
Current wording
As of July 31, 2026, we held $3.6 billion in cash, cash equivalents and short-term investments. We also held $4.5 million in restricted cash primarily associated with deposits for office leases and employee loan programs. Our cash equivalents consisted primarily of taxable money market mutual funds, time deposits and highly liquid investments with maturities of three months or less. Our short-term investments include U.S. government securities and other U.S. government obligations, with an overall weighted-average credit rating of approximately AA+.
Previous wording
As of April 30, 2026, approximately $1.5 billion of our cash and cash equivalents were domiciled in various foreign jurisdictions. We have provided for foreign withholding taxes on the undistributed earnings of certain of our foreign subsidiaries to the extent such earnings are no longer considered to be indefinitely reinvested in the operations of those subsidiaries.
Current wording
As of July 31, 2026, approximately $1.7 billion of our cash and cash equivalents were domiciled in various foreign jurisdictions. We have provided for foreign withholding taxes on the undistributed earnings of certain of our foreign subsidiaries to the extent such earnings are no longer considered to be indefinitely reinvested in the operations of those subsidiaries.
Previous wording
During the second quarter of fiscal 2025, we entered into a deferred payment agreement to defer the cash settlement of the 2025 Rate Lock Agreements over a period of 5.5 years. As of April 30, 2026, we had $99.5 million outstanding balance under the deferred payment agreement related to the 2025 Rate Lock agreements. See Note 8. Financial Assets and Liabilitiesof the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further discussion.
Current wording
As of July 31, 2026, we had $9.9 billion outstanding balance of the Senior Notes and $99.5 million outstanding balance under the deferred payment agreement related to the 2025 Rate Lock agreements. See Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities and Note 8. Financial Assets and Liabilitiesof the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further discussion.
Previous wording
The following sections discuss changes in our condensed consolidated statements of cash flows and other commitments of our liquidity and capital resources during the six months ended April 30, 2026.
Current wording
The following sections discuss changes in our condensed consolidated statements of cash flows and other commitments of our liquidity and capital resources during the nine months ended July 31, 2026.
Previous wording
The increase in net cash provided by operating activities for thesix months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to contributions from Ansys, organic growth in our business (excluding Ansys), higher accounts receivable collections, and the non-recurring unrealized loss from settlement of the interest rate treasury lock of $121.6 million in the second quarter of fiscal 2025, partially offset by higher disbursements for operations, including vendor and tax payments, and lower net income of $560.9 million.
Current wording
The increase in net cash provided by operating activities for thenine months ended July 31, 2026 compared to the same period in fiscal 2025 was primarily due to contributions from Ansys, organic growth in our business (excluding Ansys), higher accounts receivable collections, and the non-recurring unrealized loss from settlement of the interest rate treasury lock of $121.6 million in the second quarter of fiscal 2025, partially offset by higher disbursements for operations, including vendor payments, and lower net income of $257.5 million.
Previous wording
Net cash used in investing activities was $89.4 million for the six months ended April 30, 2026 compared to net cash provided by investing activities of $54.0 million for the same period in fiscal 2025. The increase in cash used in investing activities was driven by net cash proceeds from the sale of an office building of $74.3 million in the second quarter of fiscal year 2025, proceeds of $70.1 million from the deferred consideration and final working capital adjustment payment received in connection with the Software Integrity Divestiture in the first half of fiscal 2025, and lower cash inflows of $6.4 million from the net proceeds from the purchases, sales and maturities of investments, partially offset by a decrease in the purchases of property and equipment of $6.8 million.
Current wording
Net cash provided by investing activities was $353.8 million for the nine months ended July 31, 2026 compared to net cash used in investing activities of $16.4 billion for the same period in fiscal 2025. The cash provided by investing activities for the nine months ended July 31, 2026 was primarily driven by the net proceeds of $440.0 million from the sale of the Processor IP business and $69.8 million from the net proceeds from the purchases, sales and maturities of investments, partially offset by the net cash outflows in the purchase of property and equipment of $156.1 million. The cash used in investing activities for the nine months ended July 31, 2025 was primarily driven by cash paid for acquisitions, net of cash acquired, of $16.7 billion mainly for the Ansys Merger, partially offset by proceeds of $142.5 million from the deferred consideration and final working capital adjustment payment received in connection with the Software Integrity Divestiture andproceeds of $74.3 million from the sale of an office building.
Showing the first 40 of 47 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Revenue from support service is classified as maintenance and service revenue and is recognized ratably over the term of the contract, as we satisfy the support service performance obligation. For our reseller business, we evaluate whether we are the principal or agent for reporting purposes. Beginning in the second quarter of fiscal 2026, we have enhanced our channel partner arrangements to improve oversight and pricing visibility. Specifically, we now have visibility into end-customer pricing, improved delivery control over key distributors, and are able to provide routine maintenance to the end customers. As a result, we report our revenue from reseller arrangements on a gross basis beginning in the second quarter of fiscal 2026.