Synopsys rally back above the 50-day following earnings beat
1min read Synopsys, Inc., a leading provider of semiconductor design and verification software, has announced its financial results for the first quarter of fiscal year 2024. The company reported strong revenue growth and increased adjusted earnings per share (EPS), exceeding expectations. Synopsys also issued upside guidance for the second quarter and full-year fiscal 2024, driving shares higher in the after-hours session.
Synopsys generated revenue of $1,649 million in Q1, slightly surpassing the estimated $1,646 million provided by Ibes. This represents a significant 21.1% increase compared to the same period last year. The company's robust revenue growth can be attributed to strong demand for its advanced silicon design, verification products and services, as well as its software integrity solutions.
SNPS reported its adjusted earnings per share (EPS), which came in at $3.56 for Q1. This figure exceeded market projections of $3.43. Synopsys showcased its ability to generate sustainable earnings by reporting an adjusted net income of $553.7 million, surpassing Ibes' estimate of $533.8 million.
The company's Design Automation segment, which accounts for the majority of revenue, experienced significant growth due to the increasing complexity of semiconductor designs and the need for higher performance and lower power solutions.
The Design IP segment also demonstrated solid performance, with revenue increasing by 4.5% year-over-year. This segment provides high-quality, customizable intellectual property (IP) for semiconductor design, enabling customers to accelerate their product development cycles and reduce time-to-market.
While the Software Integrity segment experienced a 6.6% year-over-year decline in revenue, this is likely due to temporary factors, such as contract renewals and project timing. The company's software integrity solutions are critical for securing software code and ensuring quality, and demand for these services is expected to remain strong in the long term.
Looking ahead, Synopsys has issued upside guidance for the second quarter and full-year fiscal 2024. The company expects adjusted EPS of $3.09 to $3.14 for Q2, compared to estimates of $3.00, and revenue of $1,560 million to $1,590 million, in line with expectations.
For fiscal 2024, Synopsys forecasts adjusted EPS of $13.47 to $13.55, compared to estimates of $13.46 , and revenue of $6,570 million to $6,630 million, also in line with expectations.
The company's strong performance in Q1, coupled with its positive outlook,suggests that Synopsys is well-positioned to maintain its leadership position in the semiconductor design and verification software market.
In conclusion, Synopsys's Q1 results demonstrate the company's resilience and ability to deliver strong financial performance in the face of market challenges. The company's upside guidance for Q2 and full-year fiscal 2024 indicate that Synopsys remains optimistic about its future prospects, and investors should keep an eye on the stock as it continues to navigate the semiconductor design and verification software market.