Synopsys Reports 10% Revenue Growth to $1.604 Billion in Q2 Fiscal 2025

Synopsys, Inc. reported a strong financial performance for the second quarter of fiscal 2025, with total revenue reaching $1.604 billion, a 10% increase from $1.455 billion in the same period last year. The growth was driven by a notable rise in both time-based and upfront product revenues, which increased by 6% and 29%, respectively. Time-based product revenue amounted to $828.3 million, while upfront products generated $510.7 million. The company's net income attributed to Synopsys was $345.3 million, or $2.21 per diluted share, compared to $292.1 million, or $1.88 per diluted share, in the prior year.

In comparison to the previous fiscal period, Synopsys experienced a 3% increase in total revenue for the first six months of fiscal 2025, totaling $3.060 billion, up from $2.966 billion. However, operating income decreased by 8% to $628.3 million, down from $684.7 million, primarily due to increased operating expenses, which rose by 7% to $1.843 billion. The increase in expenses was largely attributed to higher employee-related costs and legal fees associated with the pending acquisition of Ansys, Inc.

Strategically, Synopsys is in the process of acquiring Ansys in a cash-and-stock transaction valued at approximately $35 billion. The merger is expected to close in the first half of calendar year 2025, pending regulatory approvals. To finance this acquisition, Synopsys issued $10 billion in senior unsecured notes in March 2025 and has secured a bridge financing commitment of approximately $690 million. The company also completed the divestiture of its Software Integrity business, which generated a pre-tax gain of $860.5 million.

Operationally, Synopsys reported a backlog of approximately $8.1 billion as of April 30, 2025, with 42% expected to be recognized as revenue over the next 12 months. The company’s customer base continues to expand, with significant contributions from various geographic regions, including the United States, Europe, and Korea. Employee headcount has also increased, reflecting the company's ongoing investment in research and development, which saw expenses rise by 12% to $554 million in the latest quarter.

Looking ahead, Synopsys anticipates continued growth across its product lines, although it remains cautious about potential macroeconomic challenges, including inflation and geopolitical tensions that could impact customer spending. The company is focused on maintaining its leadership in electronic design automation and expanding its design IP offerings, while also managing its operational costs effectively.