Synopsys 2025 Q3 Earnings Revenue Grows but Net Income Falls 40%

Synopsys reported fiscal 2025 Q3 earnings on September 9, 2025. The company delivered a revenue beat with a 14% year-over-year increase to $1.74 billion, but saw a significant decline in net income and issued a conservative Q4 outlook. The earnings report included updated full-year guidance and highlighted strategic shifts following the Ansys acquisition.

Revenue
Synopsys's total revenue for the quarter rose 14.0% year-over-year to $1.74 billion, surpassing $1.53 billion in the same period last year. The growth reflects strong performance across the business, driven by sustained demand in key markets. However, challenges in the IP segment impacted overall results, with issues including China export restrictions and a foundry customer issue contributing to the headwinds.

Earnings/Net Income
Synopsys reported a decline in earnings, with EPS falling 43.2% to $1.51 in Q3 2025 from $2.66 in Q3 2024. Net income also dropped 40.2% to $242.28 million, compared to $404.89 million in the prior-year period. The drop in profitability underscores the impact of ongoing challenges in the IP business and integration costs from the Ansys acquisition.

Price Action
Following the earnings report, Synopsys’s stock edged down 1.08% during the latest trading day. However, it gained 2.09% over the most recent full trading week, before declining 2.57% month-to-date.

Post-Earnings Price Action Review
CEO Sassine Ghazi characterized the quarter as a "transformational milestone," highlighting the Ansys acquisition, Q3 revenue of $1.74 billion, and non-GAAP EPS of $3.39. The IP business faced challenges, including China export restrictions, a foundry customer issue, and roadmap/resource decisions. Ghazi outlined a strategic shift, redirecting IP resources toward high-growth opportunities and leveraging Ansys to become the global leader in engineering solutions. He expressed optimism about AI-driven infrastructure investment and Synopsys’ role in addressing complexity in AI-powered systems. Strategic priorities include portfolio diversification, resource reallocation, and AI efficiency, with a target to reduce global headcount by 10% by 2026. Ghazi acknowledged near-term headwinds but remained confident in the company’s long-term growth prospects, stating, “we are laser-focused on executing a strong finish to the year.”

Guidance
Synopsys updated its full-year 2025 guidance, forecasting revenue between $7.03 billion and $7.06 billion, and non-GAAP EPS between $12.76 and $12.80. For Q4, the company expects revenue in the range of $2.23 billion to $2.26 billion. The guidance reflects a conservative outlook due to IP business headwinds, though the company remains on track for a record revenue year. Free cash flow is estimated at $950 million, lower than previous forecasts due to the Ansys acquisition. Integration of Ansys is progressing, with anticipated synergies and a planned 10% reduction in global headcount by 2026.

Additional News
On September 8, 2025, Nigeria’s Punch newspaper highlighted a range of news stories impacting business and governance. A major story focused on the Nigerian Stock Exchange (NGX) which saw a N254 billion uptick in trading activity. The article also covered political developments, including premature 2027 election campaigns and concerns over governance. Additionally, Nigerian students are increasingly relying on AI for academic support, according to a report by Google. Meanwhile, Nigeria’s Super Eagles face uncertainty in their 2026 World Cup qualifiers after a 1-1 draw with South Africa. Insecurity and political tensions also featured prominently, with reports on abductions, strikes, and calls for accountability in public offices.