Synopsys Secures Major Nvidia Investment Amid Record Results and Restructuring

The semiconductor design software leader Synopsys has capped off its 2025 fiscal year with record financial performance, but the headlines are dominated by a significant strategic shift. In a move that underscores the critical convergence of artificial intelligence and chip design, graphics processing unit giant Nvidia is making a substantial $2 billion investment in the company. This development coincides with Synopsys announcing a major workforce reduction as part of its ongoing integration of recent acquisition ANSYS.

Synopsys reported a strong finish to its fiscal year. Fourth-quarter revenue reached $2.26 billion, contributing to a full-year total of $7.05 billion. This represents a 15% annual increase, a growth rate significantly fueled by the incorporation of ANSYS. The acquisition alone added $757 million to the annual results. The company’s remaining performance obligation, a key indicator of future revenue, grew to $11.4 billion.

On a non-GAAP basis, earnings per share were $2.90 for the fourth quarter and $12.91 for the entire 2025 fiscal year.

Strategic Expansion and Operational Streamlining

The deepened partnership with Nvidia is central to Synopsys's forward strategy. The $2 billion investment aims to integrate AI and GPU capabilities directly into Synopsys's electronic design automation (EDA) software suite. This collaboration is positioned to accelerate the development of AI-powered chip design tools, potentially giving Synopsys a competitive edge in this rapidly evolving segment.

In parallel, management has initiated a restructuring plan that will eliminate approximately 10% of positions globally. This cost-optimization measure is intended to capture synergies following the ANSYS takeover and to streamline the cost structure heading into fiscal 2026.

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Ambitious Guidance for Fiscal 2026

Buoyed by the full-year contribution from ANSYS, Synopsys has issued ambitious targets for the current fiscal year 2026:

• Revenue Forecast: A range of $9.56 billion to $9.66 billion, with a midpoint of $9.61 billion.
• ANSYS Contribution: Expected to be approximately $2.9 billion.
• Earnings Per Share (non-GAAP): Projected between $14.32 and $14.40.
• Operating Margin: A target of around 40.5%.

These projections indicate that the financial impact of the ANSYS acquisition is now fully materializing.

Challenges in Key Markets

Despite the overall positive outlook, Synopsys faces headwinds in specific areas. Revenue in China declined by 18% during the fourth quarter. Excluding the contribution from ANSYS, the core business in the region fell by 22%. Company leadership attributed this weakness to increased competition from local firms and ongoing geopolitical tensions.

Furthermore, the Design IP segment revenue decreased by 8% to $1.75 billion for the year. For fiscal 2026, Synopsys anticipates only modest growth in this division, meaning the software and integration businesses will need to carry a larger portion of the growth burden.

In the lead-up to the earnings release, analysts at Rosenblatt Securities upgraded their rating on Synopsys shares to "Buy," assigning a price target of $560. With a new revenue base approaching $10 billion and a fortified strategic partnership with Nvidia, Synopsys appears poised for a pivotal year in 2026.