Synopsys Inc.
[SNPS]
NYSE
MVPro™ Score: 53/100
Last Earnings: 03 Dec 2025
[SNPS]
NYSE
MVPro™ Score: 53/100
Last Earnings: 03 Dec 2025
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| Capitalization (mln USD) | 65,712 |
| Revenue (mln USD) | 1,740 |
| EBITDA (mln USD) | 299 |
| Net Income (mln USD) | 243 |
| Net Margin | 13.97% |
| EPS Ratio (TTM, USD) | 12.33 |
| P/E Ratio (TTM) | 32.89 |
| P/S Ratio (TTM) | 10.16 |
| D/E Ratio | 0.75 |
| EV/EBITDA (TTM) | 53.8 |
| CAPEX (Q/Q) | 29978.43% |
| Dividend Yield | 0.00% |
Revenue, EBITDA & Net Income
Company Overview
Synopsys, Inc., founded in 1986, is a global leader in electronic design automation (EDA) and semiconductor intellectual property (IP). The company is headquartered in Sunnyvale, California, and has steadily expanded its operations worldwide to serve the ever-growing needs of the technology sector. Over the decades, Synopsys has positioned itself as a critical partner in the design and verification of advanced chips, software security, and quality testing.
The company’s portfolio includes comprehensive EDA software tools, semiconductor IP, and solutions focused on software integrity. These offerings enable customers to design and optimise complex integrated circuits, ensure software is secure and reliable, and bring innovative products to market faster. Synopsys is led by Sassine Ghazi, who assumed the role of Chief Executive Officer in January 2024, succeeding co-founder Aart de Geus, who remains Executive Chair of the Board.
Synopsys operates on a global scale, with customers ranging from semiconductor manufacturers to system companies across North America, Europe, and Asia. Its mission centres on accelerating innovation in technology while upholding commitments to sustainability and responsible business practices. The company has embraced ESG principles by reducing its environmental footprint, fostering diversity and inclusion, and maintaining transparent governance structures.
🔴 P/E (Price to Earnings, TTM)
Price-to-earnings (P/E) ratio for the most recent quarter is 32.7, compared to 33.1 in the previous quarter, with a longer-term trend value of 28.4. This decline in the P/E ratio may indicate a shift in market sentiment, where investors are placing a lower premium on future earnings growth. A falling P/E ratio could be driven by slowing revenue growth, increased risk perception, or improved earnings performance that is outpacing stock price growth.
P/E Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports (TTM)
P/E Ratio
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🟡 EPS (Earnings Per Share, TTM)
Synopsys's earnings per share (EPS) for the most recent quarter is 12.33 USD (-11.0%), compared to 13.87 USD in the previous quarter, with a longer-term trend value of 14.36 USD. This quarterly decline in EPS may indicate increased operational costs, lower revenue growth, or market pressures.
EPS
Source: MarketVectors.Pro, Synopsys Financial Reports (TTM, USD)
EPS
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🟢 P/B (Price to Book)
Price-to-book (P/B) ratio for the most recent quarter stands at 2.37 (-67.2%), compared to 7.22 in the previous quarter, with a long-term trend value of 2.21. This decline in the P/B ratio may indicate a more conservative market stance on the company’s asset valuation, potentially influenced by shifting investor sentiment, changes in financial fundamentals, or broader economic conditions.
P/B Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports
P/B Ratio
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🟡 EBIT
EBIT for Synopsys in the most recent quarter is 165 million USD, compared to 376 million USD in the previous quarter, with a long-term trend value of 169 million USD. This decline may indicate increased costs, lower revenue, or market challenges impacting profitability, requiring strategic adjustments.
EBIT
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
EBIT
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🟡 Risk Assessment
This risk assessment outlines the key challenges and exposures that may influence Synopsys, Inc. (SNPS) in its ongoing business operations and strategic development.
Market Risk
Synopsys operates in highly competitive technology sectors where rapid innovation and shifting customer demands can affect market share. Global economic slowdowns and reduced capital spending in the semiconductor industry may negatively impact demand for its products and services. Furthermore, geopolitical tensions, particularly in Asia, could disrupt supply chains and customer relationships.
Financial Risk
Although Synopsys generates strong revenues, fluctuations in currency exchange rates may affect profitability, given its significant international operations. The company faces exposure to rising costs of research and development, which are essential to maintaining its technological leadership. In addition, reliance on large contracts with a limited number of customers could increase revenue concentration risks.
Operational Risk
The complexity of Synopsys’ software and IP offerings makes the company vulnerable to technical failures and cyber security threats. Talent acquisition and retention are critical, as the industry requires highly skilled engineers and specialists. Any significant disruption to its global infrastructure could hinder service delivery and product development.
Regulatory Risk
Synopsys must navigate complex international regulations, including export controls and intellectual property laws. Increased scrutiny from governments regarding semiconductor technologies could limit the company’s ability to operate freely in some regions. Moreover, stricter ESG-related disclosure requirements may increase compliance costs and operational burdens.
Overall Risk Assessment
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🔴 Piotroski F-Score Analysis
Piotroski F-Score analysis is a robust methodology designed to assess the financial strength and operational efficiency of companies, providing valuable insights for investment decision-making.
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
| Previous TTM | Current TTM | Score | |
| Net Income | 1,498 | 1,998 | 1 |
| ROA | 13.76% | 8.15% | 1 |
| Net Operating Cash Flow | 183.788 | 658.253 | 1 |
| OCF > Net Income | -328 | -558 | 0 |
| Long-Term Debt | 68 | 24,376 | 0 |
| Current Ratio | 2.02 | 1.62 | 0 |
| New Shares Issued (mln) | 156 | 162 | 0 |
| Gross Margin | 80.98% | 79.11% | 0 |
| Total Asset Turnover Ratio | 0.54 | 0.26 | 0 |
| Piotroski F-Score | 3/9 |
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🟢 Altman Z-Score Analysis
Altman Z-Score is a widely recognised financial metric used to evaluate the risk of bankruptcy for companies. It is particularly relevant for assessing the creditworthiness of manufacturing and industrial companies but has also been adapted for other industries.
Source: MarketVectors.Pro, Synopsys Financial Reports
| Q2 25 | |||
| Altman Z-Score (TTM) | 5.66 | ||
| 0 | Distress | 1.8 | Grey | 2.99 | Safe | 4 |
Source: MarketVectors.Pro, Synopsys Financial Reports
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🟡 Key Assets Components
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
As of last quarter the company reported total assets of 48,230 million USD, representing an increase of 314.0% compared to the previous year the same quarter 11,649 million USD. The largest contributor to this change in current assets was Receivables, which grew by 72.9% to 1,392 million USD from 805 million USD.
Assets
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
| Q2 24 | Q2 25 | Change (%) | |
| Cash & Short-Term Inv | 1,994 | 2,594 | 30.09% |
| Inventory | 386 | 382 | -1.04% |
| Receivables | 805 | 1,392 | 72.92% |
| Total Current Assets | 5,128 | 5,596 | 9.13% |
| Property and Equipment | 571 | 700 | 22.59% |
| Goodwill, Intangibles | 3,710 | 40,026 | 978.87% |
| Other Long-Term Assets | 580 | 1,119 | 92.93% |
| Total Assets | 11,649 | 48,230 | 314.03% |
Assets
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🔴 Key Liabilities & Equity
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Total current liabilities increased by 35.9%, indicating a potential growth in operational activities. This change may affect the company's ability to manage its working capital efficiently. Long-term debt increased by 89387.5%, suggesting a rise in long-term obligations. This shift could have implications for the Synopsys's financing costs and overall debt strategy.
Liabilities & Equity
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
| Q2 24 | Q2 25 | Change (%) | |
| Accounts Payable | 78 | 133 | 70.51% |
| Accrued Expenses, Other | 675 | 1,133 | 67.85% |
| Total Current Liabilities | 2,535 | 3,444 | 35.86% |
| Long-term Lease | 658 | 800 | 21.58% |
| Long-term Debt | 16 | 14,318 | 89387.50% |
| Total Liabilities | 3,934 | 20,616 | 424.05% |
| Shareholders’ Equity | 7,714 | 27,614 | 257.97% |
Liabilities & Equity
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🔴 Income Statement Analysis
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
As of Q2 25, Synopsys reported a revenue of 1,740 million USD, marking an increase of 14.0% compared to the previous year to 1,526 million USD. Operating expenses rose to 1,194 million USD, increasing by 25.7% year-on-year from 950 million USD.
Revenue & Net Income
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
| Q2 24 | Q2 25 | Change (%) | |
| Revenue | 1,526 | 1,740 | 14.02% |
| Operating Expenses | 950 | 1,194 | 25.68% |
| Operating Income | 360 | 165 | -54.17% |
| Net Income | 408 | 243 | -40.44% |
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Revenue & Net Income
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🟡 Cash Flow Analysis
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
The company’s cash flow performance over the year demonstrates varied trends across key categories. Net operating cash flows increased by 47.3% from 455 million USD to 670 million USD, reflecting stronger cash generation from core business activities. Net investing cash flows decreased by 30573.1% from -54 million USD to -16,500 million USD, indicating higher expenditure on investments, potentially related to strategic initiatives.
Operating Cash Flow
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
| Q2 24 | Q2 25 | Change (%) | |
| Net Operating Cash Flows | 455 | 670 | 47.25% |
| Net Investing Cash Flows | -53.793 | -16,500 | -30573.14% |
| Net Financing Cash Flows | -56.811 | 4,237 | 7558.06% |
| Net Cash Flow, Equivalents | 344.396 | -11,593 | -3466.18% |
Operating Cash Flow
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🟡 EBITDA
Synopsys's EBITDA for the most recent quarter is 299 milion USD (-36.5%), compared to 471 milion USD in the previous quarter, with a long-term trend value of 315 milion USD. This decline in EBITDA may suggest increased operating costs, lower revenue generation, or other external factors affecting profitability.
EBITDA
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
EBITDA
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🟡 Net Income
Net income for the most recent quarter is 243 milion USD (-29.6%), compared to 345 milion USD in the previous quarter, with a long-term trend value of 332 milion USD. This decline in net income may indicate increased operational costs, lower revenue generation, or external market challenges affecting profitability.
Net Income
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Net Income
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🟡 ROE (Return on Equity, %) ★ Buffett's Key Metric
Synopsys's return on equity (ROE) for the most recent quarter is 7.2%, compared to 21.8% in the previous quarter, with a long-term trend value of 8.0%. This decline in ROE may indicate reduced profitability, increased equity base, or other financial challenges affecting the company's return on investment.
ROE Indicator
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
ROE Indicator
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🟡 ROA (Return on Assets, %)
Return on assets (ROA) for the most recent quarter is 4.1%, compared to 9.1% in the previous quarter, with a long-term trend value of 4.6%. This decline in ROA may indicate lower profitability, increased asset base, or operational inefficiencies affecting the company's ability to generate returns.
ROA Indicator
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
ROA Indicator
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🟡 Operating Margin (%) ★ Buffett's Key Metric
Synopsys's operating margin for the most recent quarter is 9.5%, compared to 23.4% in the previous quarter, with a long-term trend value of 10.5%. This decline in operating margin may indicate increased production or operational costs, pricing pressures, or lower revenue retention. A reduction in margin suggests that certain cost components are weighing on profitability, potentially requiring adjustments in expense management.
Operating Margin
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
Operating Margin
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🟡 Net Margin (%) ★ Buffett's Key Metric
Net margin for the most recent quarter is 14.0%, compared to 21.5% in the previous quarter, with a long-term trend value of 19.5%. This decline in net margin may indicate rising operational costs, pricing pressures, or changes in revenue mix that are affecting overall profitability. A lower net margin suggests that expenses have grown at a faster rate than revenue, potentially requiring adjustments in cost management or pricing strategy.
Net Margin
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
Net Margin
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🔴 Long-Term Debt & EBITDA
The current long-term debt is 14,318 million USD, and EBITDA is 299 million USD. The long-term debt to EBITDA ratio for the most recent quarter is 4788.6%, compared to 2129.1% in the previous quarter, with a long-term trend value of 4583.2%. This increase in the long-term debt to EBITDA ratio may indicate higher leverage, reduced earnings capacity, or an increase in long-term debt obligations. A rising ratio suggests that Synopsys may be taking on additional debt or facing challenges in maintaining EBITDA growth.
Long-Term Debt to EBITDA Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
The ratio now exceeds the 400% threshold, signaling potential financial concerns that may require strategic adjustments to debt management. Investors and analysts will closely monitor future financial performance to determine whether this increase reflects temporary fluctuations or a more significant shift in the company's capital structure.
Long-Term Debt & EBITDA
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Long-Term Debt to EBITDA Ratio
The ratio now exceeds the 400% threshold, signaling potential financial concerns that may require strategic adjustments to debt management. Investors and analysts will closely monitor future financial performance to determine whether this increase reflects temporary fluctuations or a more significant shift in the company's capital structure.
Long-Term Debt & EBITDA
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🟢 Long-Term Debt & Assets
The current long-term debt is 14,318 million USD, and total assets are 48,230 million USD, resulting in a debt ratio of 29.7%. This decline in the long-term debt-to-assets ratio indicates an improvement in financial stability, as the company is reducing its reliance on long-term debt relative to its total assets. This suggests either an increase in total assets or a reduction in outstanding long-term liabilities.
Long-Term Debt to Assets Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
The current level remains within the safe range <40%, reflecting a strong balance sheet and a conservative debt structure. A declining debt-to-assets ratio is generally seen as a positive signal for investors, as it implies lower financial risk and greater balance sheet resilience.
Long-Term Debt & Assets
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Long-Term Debt to Assets Ratio
The current level remains within the safe range <40%, reflecting a strong balance sheet and a conservative debt structure. A declining debt-to-assets ratio is generally seen as a positive signal for investors, as it implies lower financial risk and greater balance sheet resilience.
Long-Term Debt & Assets
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🟡 Long-Term Debt & Equity ★ Buffett's Key Metric
The current long-term debt is 14,318 million USD, while Total Equity stands at 27,614 million USD, resulting in a debt-to-equity ratio of 51.9%. This decline in the long-term debt-to-equity ratio suggests improved financial strength, as the company is reducing its reliance on debt financing relative to its equity base. This may be the result of increased retained earnings, debt repayments, or higher equity financing, all of which contribute to a healthier balance sheet.
Long-Term Debt to Equity Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
Although the ratio has decreased, it is still within the healthy range 50%–150%, suggesting that debt levels remain manageable and in line with industry standards. A declining debt-to-equity ratio is generally a positive signal for investors, reflecting reduced leverage and improved financial flexibility.
Long-Term Debt & Equity
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Long-Term Debt to Equity Ratio
Although the ratio has decreased, it is still within the healthy range 50%–150%, suggesting that debt levels remain manageable and in line with industry standards. A declining debt-to-equity ratio is generally a positive signal for investors, reflecting reduced leverage and improved financial flexibility.
Long-Term Debt & Equity
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🟢 Equity to Assets
The current equity is 27,614 million USD, while total assets stand at 48,230 million USD, resulting in an equity-to-assets ratio of 57.3%. This increase in the equity-to-assets ratio indicates a strengthening financial position, as the company is relying more on its own capital rather than external debt. The rise suggests higher retained earnings, new equity issuance, or asset appreciation, all of which contribute to long-term financial stability.
Equity to Assets Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports (%)
The current ratio remains in the strong financial stability above the 50%, indicating that the company is well-capitalized and relies primarily on shareholder equity to fund its assets. A rising equity-to-assets ratio is generally a positive sign for investors, as it indicates lower financial risk and improved capital structure.
Equity & Assets
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Equity to Assets Ratio
The current ratio remains in the strong financial stability above the 50%, indicating that the company is well-capitalized and relies primarily on shareholder equity to fund its assets. A rising equity-to-assets ratio is generally a positive sign for investors, as it indicates lower financial risk and improved capital structure.
Equity & Assets
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🟡 Quick Ratio
The quick ratio for Synopsys is 1.51, compared to 6.85 in the previous quarter, with a long-term trend value of 1.56. This decline in the quick ratio may indicate lower liquidity, reduced cash reserves, or an increase in short-term liabilities. Although the ratio has declined, it remains above 1.0, which still reflects strong liquidity; however, the downward trend should be monitored.
Quick Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports
Quick Ratio
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🟢 Current Ratio
The current ratio for Synopsys is 1.62, compared to 7.02 in the previous quarter, with a long-term trend value of 1.67. This decline in the current ratio may indicate a higher reliance on short-term liabilities, reduced cash flow, or increased working capital constraints. Despite the decrease, the ratio remains within the 1.0–2.0 range, which is still considered healthy, though further monitoring of working capital efficiency is advisable.
Current Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports
Current Ratio
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🟡 Net Working Capital
The net working capital (NWC) for Synopsys in the most recent quarter is 2,152 million USD, compared to 14,473 million USD in the previous quarter, with a long-term trend value of 2,098 million USD.
Net Working Capital
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Net Working Capital
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🟡 Inventory Turnover Ratio
The inventory turnover ratio for Synopsys in the most recent quarter is 3.52, compared to 3.28 in the previous quarter. This increase in inventory turnover indicates that Synopsys is selling goods more rapidly, suggesting strong demand, efficient inventory management, and optimized supply chain processes. Although turnover remains within the optimal range of 3.0–6.0, maintaining this balance is crucial for effective inventory management and supply chain stability.
Inventory Turnover Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports
Inventory Turnover Ratio
🔴 Asset Turnover Ratio
The assets turnover ratio for Synopsys in the most recent quarter is 0.13, compared to 0.26 in the previous quarter. This decline in the assets turnover ratio may suggest lower revenue generation, excess assets, or inefficiencies in assets utilization. A decreasing trend could indicate weaker sales growth or an overinvestment in fixed assets. The ratio has fallen below the 1.0, suggesting that Synopsys may have a high level of assets relative to revenue generation. This could indicate underutilized resources or the need for improved asset efficiency.
Assets Turnover Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports
Assets Turnover Ratio
🔴 Book Value / Share
The book value per share (BVPS) is a key valuation metric that represents the equity value per outstanding share. Calculated by dividing total book value by the number of shares, it helps assess whether a stock trades above or below its book value.
Source: MarketVectors.Pro, Synopsys Financial Reports (USD)
Book Value per Share Valuation
Source: MarketVectors.Pro, Synopsys Financial Reports (USD, generated on 9 September 2025)
| Q2 24 | Q2 25 | Change (%) | |
| Book Value / Share | 49.45 | 170.46 | 244.71 % |
Book Value per Share Valuation
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🟡 Graham Method
The intrinsic value of Synopsys’s stock is calculated using Benjamin Graham’s formula, which takes into account the current earnings per share (EPS) and an assumed growth rate (g), providing a simplified yet insightful perspective on a company’s value.
Benjamin Graham Valuation
Source: MarketVectors.Pro, Synopsys Financial Reports (USD, generated on 9 September 2025)
Benjamin Graham Valuation
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🔴 Discounted Cash Flow ★ Buffett's Key Metric
The discounted cash flow (DCF) method is used to estimate Synopsys’s intrinsic value by projecting future cash flows and discounting them to their present value. This approach considers the company’s potential to generate cash flows in the future, taking into account the time value of money and associated risks.
The terminal value represents the value of Synopsys’s cash flows beyond the five-year forecast horizon. It is calculated using the Gordon Growth Model, assuming a perpetual growth rate of 4.0% and WACC of 10.0%. The calculated terminal value is -672,925 million USD.
Total Intrinsic Value Calculations
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Assuming 162 million shares outstanding, the intrinsic value per share is approximately -3,156.42 USD. The current market price of Synopsys’s stock is 405.63 USD. Discounted cash flow valuation indicates that the stock is 112.9% overvalued, trading above its intrinsic value.
Discounted Cash Flow Valuation
Source: MarketVectors.Pro, Synopsys Financial Reports (USD, generated on 9 September 2025)
| Value | |
| Present Value of FCFs | -93,507 |
| Present Value of Terminal Value | -417,833 |
| Total Intrinsic Value | -511,340 |
Discounted Cash Flow Valuation
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🟢 Assets Correlation
The Pearson correlation analysis for Synopsys examines the relationship between share price and key financial indicators. Gross profit has a correlation of 0.97, which indicates a strong relationship, meaning profitability is a key driver of stock price movements. Operating income is correlated at 0.92, highlighting a strong relationship between operating profitability and market valuation.
Source: MarketVectors.Pro, Synopsys Financial Reports
Current liabilities are correlated at 0.87, implying that short-term obligations are closely monitored by investors, influencing stock valuation. Total assets have a correlation of 0.61, highlighting a moderate influence on stock valuation.
Key Financial Indicators Growth Dynamics
Source: MarketVectors.Pro, Synopsys Financial Reports, Index=100 on Q4 10
| Pearson Correlation | |
| Share Price | 1 |
| Gross Profit | 0.97 |
| Operating Income | 0.92 |
| Current Liabilities | 0.87 |
| Total Assets | 0.61 |
Key Financial Indicators Growth Dynamics
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🟡 FCF Margin Scenarios
• Optimistic Scenario: -311%, driven by operational efficiencies and cost optimisation.
• Base Case: -239% of revenue, consistent with historical trends.
• Pessimistic Scenario: -167%, reflecting higher operating and labour costs. Impact of Changes in FCF Margin
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
An approximately -72-percentage-point increase in the FCF margin to -311%, results in an additional -4,632 milion USD in FCF, highlighting the critical role of operational efficiency. Conversely, a decrease to -167% reduces FCF by 4,635 milion USD, illustrating the significant impact of profitability on cash flow generation.
Projected FCF Margin Scenarios Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
• Base Case: -239% of revenue, consistent with historical trends.
• Pessimistic Scenario: -167%, reflecting higher operating and labour costs. Impact of Changes in FCF Margin
| FCF Margin (%) | Revenue TTM | FCF TTM | Difference | |
| Optimistic | -311% | 6,435 | -20,013 | -4,632 |
| Base Case | -239% | 6,435 | -15,381 | – |
| Pessimistic | -167% | 6,435 | -10,746 | 4,635 |
Projected FCF Margin Scenarios Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
🟡 Operating Costs Scenarios
• Optimistic Scenario: 80%, reflecting enhanced efficiency and lower costs.
• Base Case: 83% of revenue, aligned with historical trends and cost structures.
• Pessimistic Scenario: 85%, driven by rising wages and increased energy costs. Impact of Changes in FCF Margin
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Reducing operational costs to 80% of revenue leads to a 183 milion USD increase in operating profit, emphasising the significance of cost control in enhancing margins. Increasing costs to 85% of revenue results in a 139 milion USD decline in operating profit, highlighting the sensitivity of profitability to rising expenses.
Projected Operating Costs Scenarios Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
• Base Case: 83% of revenue, aligned with historical trends and cost structures.
• Pessimistic Scenario: 85%, driven by rising wages and increased energy costs. Impact of Changes in FCF Margin
| Operating Costs (%) | Revenue TTM | Operating Profit | Difference | |
| Optimistic | 80% | 6,435 | 1,287 | 183 |
| Base Case | 83% | 6,435 | 1,104 | – |
| Pessimistic | 85% | 6,435 | 965 | -139 |
Projected Operating Costs Scenarios Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
🟡 Revenue Growth Scenarios
Optimistic Scenario: Projected to grow by 15% annually, driven by:
• Robust macroeconomic conditions.
• Strong industry growth with minimal disruptions.
• Favorable regulatory and competitive environment. Base Case: Projected to grow by 13% annually, driven by: • Stable macroeconomic conditions.
• Balanced market growth with manageable risks.
• Limited external disruptions from regulation or supply chains. Pessimistic Scenario: Projected to grow by 10% annually, driven by: • Global economic uncertainty and potential downturn.
• Increased competition and rising operational costs.
• Regulatory and supply chain challenges impacting business operations.
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD, TTM)
The projected revenue for the next twelve months varies depending on the scenario. Under the optimistic scenario, revenue is expected to increase by 15% to 7,430 million USD, reflecting strong market growth and operational efficiency. In the base case scenario, revenue is forecasted to grow by 13% to 7,264 million USD, assuming stable economic conditions and consistent business expansion. However, under the pessimistic scenario, revenue is projected to increase by 10% to 7,098 million USD, reflecting potential economic slowdowns or adverse market conditions.
Projected Revenues Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
The variation between projected scenarios highlights the Synopsys's ability to perform across a range of market conditions. The growth even in the pessimistic case reflects a degree of resilience and suggests a strong underlying business model. This outlook supports confidence in management’s ability to navigate uncertainty while sustaining forward momentum. Scenario analysis enhances strategic visibility, helping stakeholders understand the potential bandwidth of future results.
• Strong industry growth with minimal disruptions.
• Favorable regulatory and competitive environment. Base Case: Projected to grow by 13% annually, driven by: • Stable macroeconomic conditions.
• Balanced market growth with manageable risks.
• Limited external disruptions from regulation or supply chains. Pessimistic Scenario: Projected to grow by 10% annually, driven by: • Global economic uncertainty and potential downturn.
• Increased competition and rising operational costs.
• Regulatory and supply chain challenges impacting business operations.
| Revenue | Net Income | Revenue (Next) | Net Income (Next) | |
| Optimistic | 6,435 | 1,998 | 7,430 | 2,307 |
| Base Case | 6,435 | 1,998 | 7,264 | 2,256 |
| Pessimistic | 6,435 | 1,998 | 7,098 | 2,204 |
Projected Revenues Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
The variation between projected scenarios highlights the Synopsys's ability to perform across a range of market conditions. The growth even in the pessimistic case reflects a degree of resilience and suggests a strong underlying business model. This outlook supports confidence in management’s ability to navigate uncertainty while sustaining forward momentum. Scenario analysis enhances strategic visibility, helping stakeholders understand the potential bandwidth of future results.
🟡 Net Income Growth Scenarios
The projected net income for the next twelve months varies depending on the scenario. Under the optimistic scenario, net income is expected to increase by 15% to 2,307 million USD, reflecting improved profitability and strong financial performance. In the base case scenario, net income is forecasted to grow by 13% to 2,256 million USD, assuming stable market conditions and effective cost management. However, under the pessimistic scenario, net income is projected to increase by 10% to 2,204 million USD, reflecting potential challenges such as higher operational costs or slowing revenue growth.
Projected Net Income Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
The projected resilience in net income across all scenarios suggests a stable underlying profitability profile. Even under adverse assumptions, the Synopsys is expected to maintain earnings growth, indicating effective cost controls and strong core operations. This consistency can help support valuation multiples and reduce perceived investment risk. Scenario modeling enhances transparency and strengthens the credibility of financial forecasting in the eyes of stakeholders.
Projected Net Income Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
The projected resilience in net income across all scenarios suggests a stable underlying profitability profile. Even under adverse assumptions, the Synopsys is expected to maintain earnings growth, indicating effective cost controls and strong core operations. This consistency can help support valuation multiples and reduce perceived investment risk. Scenario modeling enhances transparency and strengthens the credibility of financial forecasting in the eyes of stakeholders.
🟡 Financial Performance Overview
Synopsys demonstrated stronger financial performance in the most recent period, reflecting strong revenue growth, operational efficiency, and profitability improvements revenue increased by 14.0% year-over-year, reaching 1,740 million USD, supported by strong sales performance across all key markets. At the same time, EBITDA declined by 33.1% year-over-year, totaling 299 million USD, reflecting increased operational costs and margin pressures.
Revenue & Net Income
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Notably, net income declined by 40.4% year-over-year, reaching 243 million USD, negatively impacting Synopsys's net margin, which expanded to 14.0%. This growth reflects effective expense control and revenue expansion, strengthening the company’s bottom-line performance.
Revenue & Net Income
Notably, net income declined by 40.4% year-over-year, reaching 243 million USD, negatively impacting Synopsys's net margin, which expanded to 14.0%. This growth reflects effective expense control and revenue expansion, strengthening the company’s bottom-line performance.
Key Performance Indicators (KPIs)
Source: MarketVectors.Pro, Synopsys Financial Reports (YoY)
Valuation & Market Position
Synopsys’s valuation metrics indicate a weakened financial standing. The EV to EBITDA (TTM) ratio currently stands at 53.80, increasing from 41.92, reflecting a lower market capitalization, potentially due to weakened investor sentiment. This suggests a high enterprise valuation relative to earnings.
EV to EBITDA Ratio
Source: MarketVectors.Pro, Synopsys Financial Reports (TTM)
The EV to EBITDA trendline illustrates Synopsys’s valuation trajectory, with an increasing enterprise value despite declining earnings, potentially indicating overvaluation or speculative sentiment.
Source: MarketVectors.Pro, Synopsys Financial Reports (TTM)
Meanwhile, the P/E (Price to Earnings) ratio has declined to 32.7, down from 35.4 a year ago, potentially signaling a more balanced market outlook on Synopsys’s earnings potential. The P/S (Price to Sales) ratio has declined to 10.16, compared to 13.07 a year ago, suggesting a more conservative valuation stance among investors.
| Change (%) | |
| Revenue Growth | 14.0% |
| EBITDA Growth | -33.1% |
| Net Income Growth | -40.4% |
| Net Margin | 14.0% |
| EPS | 28.4% |
EV to EBITDA Ratio
The EV to EBITDA trendline illustrates Synopsys’s valuation trajectory, with an increasing enterprise value despite declining earnings, potentially indicating overvaluation or speculative sentiment.
| Ratio (TTM) | |
| EV/EBITDA | 53.8 |
| P/E Ratio | 32.89 |
| P/S Ratio | 10.16 |
Cash Flow & Liquidity ★ Buffett's Key Metric
Synopsys is experiencing a weakened cash flow position, reflecting potential liquidity challenges. The decline in cash flow may indicate increased operational costs or reduced cash inflows, requiring closer financial monitoring and strategic adjustments.
• Free Cash Flow (FCF) – totaled -16,050 million USD, indicating a decline in available cash resources, requiring enhanced financial oversight.
• Net Operating Cash Flow – increased by 258.2% year-over-year, reaching 658 million USD, showcasing strong core business cash generation.
• Long-term debt – increased by 35747.1%, strengthening the company’s financial structure and reducing interest burdens.
Synopsys’s ability to generate substantial cash flow while increasing debt reinforces its financial flexibility, though ongoing financial management is essential to sustain long-term growth and strategic investments.
Free Cash Flow
Source: MarketVectors.Pro, Synopsys Financial Reports (million USD)
Synopsys's financial performance in the most recent quarter shows that EBITDA reached 299 million USD, indicating a potential slowdown in operational profitability. The company's return on equity (ROE) is 7.2%, pointing to reduced return on shareholder capital and weaker financial performance. The long-term debt-to-equity ratio stands at 51.9%, indicating a more resilient balance sheet and lower financial risk. The quick ratio is 1.51, highlighting tightened liquidity conditions and the need for cautious cash management. The EV/EBITDA ratio is currently 53.80x, suggesting that the stock may be trading at a premium, potentially pricing in high growth expectations. Overall, Synopsys’s financial health remains strong, with consistent revenue expansion, rising operational costs, and strong liquidity. Meanwhile, the P/E ratio is declining, while Synopsys’s long-term prospects remain positive.
Free Cash Flow
Synopsys's financial performance in the most recent quarter shows that EBITDA reached 299 million USD, indicating a potential slowdown in operational profitability. The company's return on equity (ROE) is 7.2%, pointing to reduced return on shareholder capital and weaker financial performance. The long-term debt-to-equity ratio stands at 51.9%, indicating a more resilient balance sheet and lower financial risk. The quick ratio is 1.51, highlighting tightened liquidity conditions and the need for cautious cash management. The EV/EBITDA ratio is currently 53.80x, suggesting that the stock may be trading at a premium, potentially pricing in high growth expectations. Overall, Synopsys’s financial health remains strong, with consistent revenue expansion, rising operational costs, and strong liquidity. Meanwhile, the P/E ratio is declining, while Synopsys’s long-term prospects remain positive.
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