Synopsys Shares Plunge 13% on Q3 Earnings Miss, Guidance Cut
The design software firm's weaker-than-expected results and lowered full-year forecast overshadow its recent landmark acquisition of Ansys.
Synopsys, Inc. (SNPS), a key player in the semiconductor design software industry, saw its shares plummet 13.58% in after-hours trading Wednesday after the company announced disappointing third-quarter results and cut its full-year earnings guidance.
The sharp sell-off was triggered by an earnings report that missed analyst expectations on multiple fronts. Synopsys reported , significantly below the $3.74 consensus estimate. Revenue for the quarter landed at $1.73 billion, falling short of the $1.76 billion anticipated by Wall Street.
Perhaps more concerning for investors was the company's revised outlook. Management slashed its full-year 2025 adjusted EPS guidance to a new range of $12.76-$12.80. This marks a steep drop from the previous forecast of $15.11-$15.19 and signals potential headwinds for the firm.
The weak quarterly performance comes at a critical juncture for Synopsys, which recently completed its , a leader in simulation and analysis software. The deal is central to the company's strategy of creating an end-to-end leader in 'silicon to systems' design, but the latest results raise questions about execution during this crucial integration period.
CEO Sassine Ghazi acknowledged that while Q3 was a 'transformational quarter' due to the Ansys deal, the company's core intellectual property (IP) business underperformed, impacting the overall results. The significant after-hours sell-off indicates investor concern that these challenges could complicate the integration of Ansys.
The , as the market recalibrates its expectations for Synopsys's growth trajectory. Investors will be closely watching for signs of stabilization in its core business and progress on the promised synergies from the massive acquisition in the coming quarters.