Synopsys revenue rose 42% to $2.48B in fiscal Q3 2026, but $622M of the $737M increase came from Ansys's first full-quarter comparison and GAAP EPS of $2.84 includes a $425M gain on selling Processor IP; adjusted EPS rose 15% to $3.91.
Revenue
$2.5B
+42.4% YoY
Net income
$546M
+125.1% YoY
Diluted EPS
$2.84
+89.3% YoY
Operating margin
14.4%
Headline: revenue up 42%, but about five-sixths of that is Ansys, and GAAP profit is inflated by a one-off sale gain
Synopsys makes electronic design automation (EDA) software — the programs chip companies use to design, simulate and check a processor before paying billions to manufacture it — plus design IP, pre-built, pre-tested circuit blocks (memory interfaces, USB/PCIe connectors and similar) that customers license instead of designing from scratch. In July 2025 it bought Ansys, whose simulation software tests how physical products (from chips to aircraft parts) behave under heat, stress and airflow.
For its fiscal third quarter ended July 31, 2026, Synopsys reported revenue of $2,476.8 million, up 42% from $1,739.7 million a year earlier. The filing is explicit that most of that jump is the acquisition: Ansys closed on July 17, 2025, so last year's quarter included only about two weeks of Ansys, while this year's includes all three months. The 10-Q says revenue grew by $737.1 million, "which includes an increase of $622.2 million in revenue from Ansys for the full quarter in fiscal 2026 versus the partial quarter in fiscal 2025. The remaining growth came organically due to broad-based strength across our business."
That leaves roughly $115 million of non-Ansys growth, about 6.6% on last year's base — a solid but far more ordinary rate than the 42% headline. (This is our calculation from the filing's figures; the company does not publish an organic growth rate, and the 6.6% also absorbs the loss of revenue from businesses Synopsys has sold, discussed below.)
Key figures
Metric
Q3 FY2026
Q3 FY2025
YoY Change
Revenue
$2,476.8M
$1,739.7M
+42.4%
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Operating margin is the share of revenue left after running the business, before interest and tax. "Non-GAAP" figures are the company's own adjusted measures that strip out items like amortization of acquired intangibles, stock-based pay and acquisition/divestiture effects.
Why GAAP profit more than doubled — and why that overstates it
Net income of $545.8 million (+125%) looks spectacular, but a large chunk is a one-time gain. On June 1, 2026 Synopsys sold its Processor IP Solutions business to GlobalFoundries for $443.3 million and booked a pre-tax gain of $425.4 million in other income (a net $380.5 million after $44.9 million of divestiture costs). Pre-tax income was $683.9 million; without the gross gain it would have been about $258.5 million.
Last year's figure was also flattered, in the opposite direction: Q3 FY2025 had a tax benefit of $53.0 million (an effective tax rate of −28.0%), which the filing attributes to "the release of a full valuation allowance against California research credits." This quarter's tax rate was a normal 20.2%.
Strip out both distortions and the underlying picture is closer to the company's non-GAAP view: adjusted EPS rose 15.3% to $3.91, while GAAP EPS growth (+89%) is mostly the sale gain. Adjusted EPS also grew much less than adjusted net income (+37%, $752.5M vs $548.9M) because Synopsys issued stock to pay for Ansys — diluted share count rose 19% to 192.3 million.
Operating costs: Ansys amortization is the big drag on GAAP margins
Total cost of revenue and operating expenses rose $544.8 million (+35%). The filing lists "an increase of $330.0 million in amortization expense related to intangible assets acquired from the Ansys Merger" and $169.2 million of added Ansys employee costs. Amortization of intangibles is an accounting charge that spreads the purchase price paid for Ansys's technology and customer relationships over several years; it is non-cash and is why GAAP and adjusted margins are so far apart (14.4% vs 41.6%).
GAAP margin still improved from 9.5% to 14.4% partly because last year's quarter carried heavy one-off deal costs: general & administrative expense fell 37% to $177.0 million, "primarily attributable to lower consulting and professional fees of $86.7 million, which were higher in the third quarter of fiscal 2025 primarily due to expenses incurred in connection with the Ansys Merger," plus $53.6 million of stock-based pay accelerated at the Ansys close last year. Interest expense fell to $133.2 million from $146.5 million after the Ansys term loan was repaid in Q1 FY2026 — but interest income fell even more, to $18.5 million from $131.4 million, because the cash pile was spent on the deal.
Segments
Segment
Q3 FY2026 revenue
Q3 FY2025 revenue
Change
Adj. operating margin (FY26 vs FY25)
Design Automation (EDA + Ansys)
$2,003.0M
$1,312.1M
+53%
45% vs 44%
Design IP
$473.8M
$427.6M
+11%
27% vs 20%
Design Automation holds all of Ansys, so nearly all of its $690.9 million increase is the acquisition: taking out the $622.2 million Ansys increase leaves about $69 million (~5%) of growth in the rest of the segment (our estimate, assuming the Ansys increase sits entirely in this segment, which is where the filing places Ansys products). The filing credits the rise in segment profit to "an increase in revenue from arrangements booked in prior periods, partially offset by a decrease in license revenue due to the Optical Solutions Group divestiture." Management's release describes the quarter as "led by EDA."
Design IP returned to growth: +11% in the quarter even after selling Processor IP mid-quarter, with adjusted margin up to 27% from 20% "due to an increase in the revenue of IP products driven by timing of customer demands." The nine-month view is still weak — revenue down 1% and adjusted operating income down 17% — so one quarter doesn't settle whether this segment has turned. IP revenue is recognized upfront when delivered, so it swings with the timing of individual deals. This segment is also the subject of shareholder class actions filed in late 2025 alleging misstatements about its performance (disclosed in the 10-Q's legal proceedings).
Revenue quality: more upfront and support revenue, less classic subscription
Synopsys's core EDA business is sold as 2–3 year licenses recognized evenly over time, which makes revenue predictable. Ansys changes the mix: much of its software is recognized upfront with separate maintenance fees.
Time-based revenue rose 12% to $1,002.8M, but fell to 40% of total from 51%. Of the $110.4M increase, $71.6M came from Ansys, so the legacy time-based business grew roughly $38.8M (~4%).
Upfront revenue rose 29% to $665.2M; Ansys added $161.4M — more than the whole $148.8M increase — meaning non-Ansys upfront revenue fell, which the filing ties to "a decrease in license revenue due to the Optical Solutions Group divestiture."
Maintenance revenue nearly tripled to $575.0M, with $367.0M of the increase from Ansys.
Two accounting notes affect comparability: since Q2 FY2026, reseller revenue is reported gross rather than net (which lifts reported revenue without changing profit dollars), and divestitures (Optical Solutions Group, PowerArtist, Processor IP) are removing revenue from the base.
Geography
US revenue was $1,051.9M (vs $816.2M), Europe $370.9M (vs $178.6M — Ansys has a large European customer base), Korea $325.6M (vs $202.1M) and China $255.5M (vs $247.3M, +3%). China was nearly flat despite the addition of Ansys; the filing notes that US export restrictions imposed in Q3 2025 and later rescinded "negatively impacted our business in China, including in our Design IP segment."
Takeaway: Strip out Ansys's first full-quarter comparison and the one-off $425 million gain from selling Processor IP, and Synopsys is growing its underlying business at roughly 6–7% with adjusted EPS up 15% — healthy for a mature software franchise, but a long way from the 42% revenue and 89% GAAP EPS headlines.
Outlook
Management raised full-year guidance (fiscal year ending October 31, 2026):
Q4 FY2026 target
Full-year FY2026 target
Revenue
$2,530–2,580M
$9,690–9,740M
GAAP EPS
$0.60–0.85
$3.84–4.08
Non-GAAP EPS
$4.10–4.16
$15.04–15.10
Non-GAAP operating margin
—
~41.5% (midpoint)
Free cash flow
—
~$2.6B
The full-year revenue target includes $2.98 billion of expected Ansys revenue and reflects roughly $110 million lost from the divested Optical Solutions Group and PowerArtist businesses and $40 million from the Processor IP sale. CFO Shelagh Glaser cited "expectations for double-digit growth in EDA." The targets assume no further changes to US export controls or the Entity List.
The low Q4 GAAP EPS guide ($0.60–0.85 vs $4.10–4.16 adjusted) reflects $400–405M of intangible amortization and $145–175M of restructuring charges in Q4 alone. In August 2026 the board raised the cost of the "2026 Plan" layoffs and site closures to $425–500 million from $300–350 million, with most of the workforce reduction in fiscal 2026 and completion by end of fiscal 2027.
Our read: The Ansys integration looks on track on the numbers the filing gives — it contributed $622.2 million of incremental revenue this quarter, and the $2.98 billion full-year expectation implies Q4 continues at a similar pace. The integration's cost side is where the risk sits: a restructuring budget that grew by about $150 million mid-year means the savings plan is larger and more disruptive than first sized. From Q4 onward the Ansys comparison becomes like-for-like (Q4 FY2025 already had a full quarter of Ansys), so reported growth will fall sharply toward the underlying rate — investors should expect a much lower headline growth number next quarter, and judge it against the ~6–7% organic pace and the "double-digit EDA" claim rather than this quarter's 42%. The $10.9 billion backlog, about 49% of which (excluding flexible-spending commitments) is expected to turn into revenue within 12 months, gives decent visibility.
Source: Synopsys Form 10-Q for the quarter ended July 31, 2026 (filed August 26, 2026) and the Q3 FY2026 earnings release (Exhibit 99.1 to the Form 8-K filed the same day). Figures described as "our calc." are derived from the filing's reported figures.