- Synopsys stock slid 5.1% in after-hours trading to reach $389 after the electronic design automation leader released its fiscal third-quarter 2026 results, with the market’s reaction suggesting the report failed to clear the high bar that had been set by months of elevated expectations.
- Revenue for the third quarter of fiscal year 2026 was $2.477 billion, compared to $1.740 billion for the third quarter of fiscal year 2025.
- Non-GAAP EPS was reported at $3.91, exceeding the forecast of approximately $3.67.
- The stock now trades roughly 37% below its 52-week high of $615.79, reflecting persistent investor skepticism since a painful earnings miss in the prior fiscal year.
- Rosenblatt Securities reiterated a Buy rating and a $575 price target just ahead of the report, and options activity on the day showed calls outnumbering puts by a roughly 1.6-to-1 ratio.
- The stock rose approximately 3% in the prior session, meaning the after-hours decline effectively unwound those gains and then some.
- The company raised its full-year guidance for revenue, non-GAAP operating margin, EPS, and cash flow.
Synopsys stock dropped 5.1% to $389 in after-hours trading after the company reported its Q3 FY2026 results, which fell short of high expectations. Analysts had predicted non-GAAP earnings of approximately $3.67 per share and revenue of $2.44 billion, reflecting a 40% year-over-year growth target.
The market's reaction indicates that the results did not meet the elevated bar set by previous quarters, which had seen two consecutive beat-and-raise performances and a $11 billion backlog. The stock's decline effectively reversed a 3% gain from the prior session, highlighting investor skepticism following a previous earnings miss.
The broader market remained stable, with the S&P 500 and Nasdaq gaining 0.1% and 0.2%, respectively, suggesting that the after-hours pressure on Synopsys was driven solely by its earnings report. The 52-week high for Synopsys stands at $615.79, indicating a 37% drop from that peak.
CEO Sassine Ghazi noted, "AI is driving unprecedented complexity and increasing demand for the silicon IP and engineering solutions necessary to deliver next-generation AI compute, infrastructure and physical AI systems." CFO Shelagh Glaser stated, "Synopsys delivered an outstanding third quarter, with revenue and earnings per share exceeding the high end of our guidance range."
The company also provided its consolidated financial targets for the fourth quarter and full fiscal year 2026, assuming no changes to export control restrictions.
“The company reported revenue of $2.477 billion and non-GAAP EPS of $3.91, both above guidance, and raised full-year guidance. CEO Sassine Ghazi cited AI-driven demand and momentum from the Ansys acquisition, while CFO Shelagh Glaser highlighted broad-based strength led by EDA.”
