Synopsys (SNPS) Q2 FY26 earnings call: guidance and Q&A

Inquired about the nature of high-value, customized IP deals with hyperscalers compared to traditional IP, factors driving confidence in H2 reacceleration, and future growth opportunity.

Sassine expressed enthusiasm for the IP portfolio, highlighting the shift towards new business models with hyperscalers for customized IP, moving beyond traditional use fees or NRE. He confirmed sequential growth for the rest of the year, with Q1 being the bottom.

“I'm confident that we will get to the direction I communicated a number of quarters ago, which will accelerate our opportunity of growth in IP.”

asked by Sitikantha Panigrahi · answered by Sassine Ghazi

Asked about the magnitude of remaining Ansys synergy opportunity beyond FY26 and other drivers for margin expansion.

Shelagh stated that about half of committed cost synergies would be achieved by end of FY26, focusing on reducing overlap and duplication while investing in innovation. More details on future synergies will be provided at Investor Day.

“by the end of this fiscal year, we will have achieved about half of our committed synergies, and we're doing that in a very systematic way, ensuring that we're continuing to invest in building out the Multiphysics portfolio.”

asked by Sitikantha Panigrahi · answered by Shelagh Glaser

Sought color on the structure of contracts for agentic AI engagements and how it might drive EDA's share of R&D spend higher.

Sassine explained that agentic AI represents a shift from human-centric to agent-engineer workflows, requiring more Synopsys products. The current thinking is a subscription-plus-consumption model for agents, which is an upside for EDA and S&A business.

“The current thinking, and we're in early exploration with customers, is how do we build from the subscription license that our customer has for the human engineers to run our product to subscription plus consumption for the agents to utilize our products.”

asked by Joseph Quatrochi · answered by Sassine Ghazi

Asked if Synopsys has seen benefit from Intel Foundry's 18A/14A pipeline and when it might impact numbers.

Sassine stated that new foundry technologies are a tailwind for IP, as Synopsys IP is essential for customer on-ramping. While they are aware of engagements, no upside is accounted for in FY26 guidance, but it will be seen once evaluations move to production.

“when we see or you hear about customers like Intel. Intel Foundry, expanding their engagements. We are, of course, aware of these engagements very early on when the target customer is evaluating the technology. Now to remind you, we get paid once the customer commits to the technology and they want to go into production.”

asked by Liam Pharr · answered by Sassine Ghazi

Inquired about the mid-teens growth of Ansys (ex-accounting) and why guidance assumes a deceleration to ~10% for the full year.

Sassine attributed Ansys' strength to successful integration and market dynamics, including semiconductor-related multiphysics and an uptick in industrial, automotive, and aerospace sectors. Shelagh clarified that Ansys' Q1 (Synopsys' fiscal Q1) is typically their strongest due to retooling to Synopsys' fiscal year, creating a different seasonality.

“we closed the acquisition of Ansys in July last year. We retool them to be on our fiscal year, which means that their December, their prior Q4 is actually our Q1. And so you saw kind of outsized growth in Q1. Our fiscal Q1.”

asked by Jason Celino · answered by Sassine Ghazi

Asked about operational plans for the Ansys channel beyond initial EDA integrations, specifically what product set would enable more conjoined sales, and the new CRO's actions.

Sassine explained that semiconductor customers and Multiphysics Fusion will primarily use the direct channel (Synopsys classic). The Ansys channel partners will be leveraged for the 'long tail' of customers and to sell Synopsys products where classic Synopsys lacked coverage. The CRO is architecting the organization for current and future opportunities.

“The ability to go after long tail of customers and capture the opportunities is something that the classic Synopsys would like to leverage in areas of the portfolio that we did not have the similar investment or coverage.”

asked by Jay Vleeschhouwer · answered by Sassine Ghazi