Synopsys To Reveal Ansys Synergies At Conference

Electronic design automation software firm Synopsys (SNPS) will outline its technology roadmap following its recent Ansys acquisition. It will provide the update on March 11 at the company’s inaugural Converge Conference. That could be a catalyst for Synopsys stock, which has been in a slump lately.

Synopsys Chief Executive Sassine Ghazi will give a keynote presentation at the start of the two-day conference in Santa Clara, Calif. The Converge Conference will combine the SNUG Silicon Valley, Simulation World, and Executive Forum events.

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“We’re excited because we’re bringing together all the partners and customers on the classic Synopsys side along with the Ansys side,” Chief Financial Officer Shelagh Glaser told Investor’s Business Daily.

Ghazi will unveil the joint roadmap for Synopsys and Ansys as the company brings together the two design environments, Glaser said.

“He’ll talk more about AI and more about agent engineers,” she said. “We’ve been the pioneer in AI in EDA and digital design.”

Synopsys Beats Fiscal Q1 Goals

Synopsys late Wednesday beat estimates for its fiscal first quarter and with its outlook for the current quarter. But Synopsys stock fell after the report, on its light outlook for the full year.

The Sunnyvale, Calif.-based company earned an adjusted $3.77 a share on sales of $2.41 billion in the quarter ended Jan. 31. Analysts polled by FactSet had expected adjusted earnings of $3.56 a share on sales of $2.39 billion in fiscal Q1. On a year-over-year basis, Synopsys earnings rose 24% while sales increased 66%.

Growth at Synopsys was helped by its acquisition of Ansys, which it completed last July.

For the current quarter ending April 30, Synopsys guided to adjusted earnings of $3.14 a share on sales of $2.25 billion. Wall Street was modeling earnings of $3.09 a share on sales of $2.24 billion in fiscal Q2. In the same quarter last year, Synopsys earned $3.67 a share on sales of $1.6 billion.

Full-Year Guidance Comes Up Short

The company reiterated its fiscal 2026 revenue target of $9.61 billion, including $2.9 billion of Ansys revenue. But analysts had been looking for full-year sales of $9.62 billion.

The midpoint of its fiscal 2026 earnings guidance was $14.42 a share, vs. the consensus estimate of $14.38 a share.

“AI continues to fuel robust system-level and semiconductor R&D, and the increasing AI capabilities throughout our portfolio strengthen our strategic advantage and accelerate our customers’ innovation,” CEO Ghazi said in a news release.

AI Is A Tailwind To Synopsys Business

CFO Glaser told IBD that investors are wrong if they think AI is a negative to the Synopsys business.

“We see AI very much as a tailwind for our business,” she said. “There’s a scarcity of semiconductor engineers and the complexity of these chips is so high that there’s a need for an (AI) agent to do some portion of the more routine tasks.”

Synopsys AI functions are built on the foundations of EDA technology and intellectual property that the company has built over the years, she said.

“But there’s this nervousness writ large” about the impact of AI on software companies, Glaser acknowledged.

Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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