Synopsys, Inc.

Q3 outperformance + fundamentals strengthening (good/surprising) - Revenue $2.477B (+42% YoY); non-GAAP operating margin 41.6%; non-GAAP EPS $3.91 — all above the high end of guidance. - Strength was broad-based: EDA plus Ansys, with Design IP returning to growth. - Backlog $10.9B, modestly down QoQ due to the processor IP solutions divestiture closed in Q3.

Guidance raised materially for FY26 (good) - Raising full-year guidance: revenue, non-GAAP operating margin, EPS, and cash flow. - FY26 revenue raised by $50M (midpoint); management expects double-digit organic EDA growth in Q4 and for the full year 2026. - EDA momentum supported by ongoing design complexity (AI, advanced packaging/3DIC) and record hardware-assisted verification revenue. - Cash flow improved: guidance for cash from operations raised by ~$500M to ~$2.8B, with CapEx reduced to ~$225M, implying free cash flow ~ $2.6B (+$600M vs prior guidance). - Q4 outlook (ranges): revenue $2.53B–$2.58B, non-GAAP EPS $4.10–$4.16, non-GAAP operating costs $1.45B–$1.48B (vs strong Q3 run-rate).

EDA acceleration drivers: AI + advanced packaging + hardware-assisted verification (good) - Management attributes Q4 acceleration confidence to: - Advanced package / multi-die / 3DIC complexity (3DIC Compiler + multi-die co-design) - AI-driven reengineering of design workflows, requiring more software and validation - Hardware-assisted verification (Q3 record; strong repeat and new customer wins) - Verification momentum: 12 new + 66 repeat HAV customer wins in Q3.