Synopsys Reports Record Quarterly Revenue for Q1 FY 2024

The News: Synopsys reported first quarter (Q1) fiscal year (FY) 2024 earnings for the period ending January 31, 2024. Revenue for Q1 FY 2024 was $1.649 billion, compared with $1.361 billion Q1 FY 2023, an increase of almost 21% year-over-year (YoY). Read the press release on the Synopsys website.

Synopsys Reports Record Quarterly Revenue for Q1 FY 2024

Analyst Take: Synopsys reported a strong start to 2024 with revenue for Q1 FY 2024 of $1.65 billion, up nearly 21% YoY compared with Q1 FY 2023 revenue of $1.36 billion. Q1 FY 2024 generally accepted accounting principles (GAAP) net income was $449.1 million, or $2.89 per diluted share, compared with $271.5 million, or $1.75 per diluted share, for the Q1 FY 2023.

Shares of Synopsys reached record highs as the company reported better-than-expected quarterly profits and improved its full-year outlook. Synopsys pointed to strong demand for its AI-powered software platform, Synopsys.ai, which is fueling customer investments in next-generation silicon and system designs.

“The first quarter marked an excellent start to the year with strong execution across the company as AI continues to drive our customers’ investments in silicon and systems that position them for future growth,” said Sassine Ghazi, president and CEO of Synopsys. “These results underscore the strength of our technology and our strategy. In the face of mounting design complexity, technology R&D teams are counting on Synopsys’ broad portfolio of semiconductor IP and leading design solutions from silicon to systems. There is no one more capable than Synopsys of helping companies innovate for this era of pervasive intelligence.”

Highlights from Synopsys three business segments include:

Design Automation: Q1 FY 2024 revenue of $985.3 million, 59.7% of total revenue
Design IP: Q1 FY 2024 revenue of $525.7 million, 31.9% of total revenue
Software Integrity: Q1 FY 2024 revenue of $138.2 million, 8.4% of total revenue

2024 Financial Outlook

For the fiscal quarter ending April 30, 2024, Synopsys forecast adjusted earnings per share (EPS) of $3.12 on sales of $1.58 billion. This forecast beats analyst expectations of earnings of $3 per share on sales of $1.56 billion for the quarter.

Looking Forward

Mid-January, Synopsys revealed plans to purchase engineering simulation software company Ansys for approximately $35 billion. This acquisition will unite Synopsys’ semiconductor and electronic design automation technologies with Ansys’ simulation and analysis products to form a premier provider of silicon-to-systems design solutions, according to statements from both companies. The deal is scheduled to finalize within the first 6 months of 2025.

All in all, Q1 was a great quarter for Synopsys, even amidst the NVIDIA media storm, and the company will continue to be more critical as AI demand grows and chip volume and design diversity proliferate. 2024 is poised to be a successful year for Synopsys—definitely worth watching.

Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discussed Synopsys’ earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.

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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.