Synopsys — FQ2 FY2026 Earnings Preview

FQ2 FY2026 = Quarter ending May 2, 2026  ·  Reports Wednesday, May 27, 2026 AMC  ·  Conference call 5:00 PM ET  ·  Prepared May 21, 2026

Synopsys reports FQ2 FY2026 (Feb–Apr 2026) on Wednesday, May 27, 2026 AMC — the same day as SNOW. Management's Q2 guide of $2,225-$2,275M revenue / $3.11-$3.17 EPS sits with consensus ($3.17 EPS, $2,251M rev) at the TOP of the guide range — an unusual setup that compresses positive surprise potential. FY26 is the first full year integrating Ansys (closed July 2025), with full-year guide of $9.56-$9.66B revenue and $14.38-$14.46 EPS. Sell-side has already positioned FY26 EPS at ~$14.62 — above guide high — leaving the implied bar higher than the official one.

Setup contrarianism flag: The implied H2 step-up is steep — FY26 mid $9.61B less Q1 $2.41B and Q2 guide mid $2.25B leaves ~$4.95B for H2, requiring ~+10% sequential Q2→Q3 lift. Most of that is back-end-loaded IP and Ansys synergy. CDNS printed +17% FY26 growth guide on 4/27 with Rule-of-60 economics — raising the competitive bar entering the SNPS print.

Bull case: 7-of-8 revenue beats and 7-of-8 EPS beats vs guide midpoint over the last 8 quarters (avg +0.4% rev / +4.6% EPS). FY26 Q1 (first quarter with Ansys) beat by +5.9% EPS. AI chip design demand from NVDA/AVGO/AAPL/META custom silicon programs is structural. TSMC N2 multi-tape-out announcement (4/22) validates IP roadmap recovery. Ansys synergies starting to flow through (cross-sell to EDA customer base). DSO continues to compound at ~10%+ on AI-driven design complexity.

Bear case: China EDA export-control overhang remains structural — FY25 Q3 missed by -1.7% rev / -11.8% EPS on US BIS rule. Q2 guide reflects continued China headwind. Hardware (IP/Design IP) segment is choppy quarter-to-quarter. Ansys integration costs and dilution take ~150 bps of FY26 op margin (40.5% mid vs >42% potential ex-Ansys). Sell-side FY26 EPS at $14.62 already above guide high — leaves little room for "just-meet-and-raise" reaction. FQ1'26 stock reaction was negative across the post-print window despite the beat, suggesting investors are sensitive to the in-line guide narrative.

What's at stake: Aug 20 print needs revenue ≥ $2.275B (high end), EPS ≥ $3.18, FY26 raise of $50-100M revenue and $0.15-0.20 EPS to clear the implied bar. Watch China commentary (any BIS reprieve), Ansys cross-sell metrics, IP order book trajectory, and any FY27 commentary on Ansys margin path.

Q2 consensus EPS of $3.17 sits at the TOP of the $3.11-$3.17 guide range — unusually aggressive positioning for a name that typically beats by mid-single-digits on EPS. The sell-side FY26 EPS of $14.62 is +$0.16 above guide high — has already priced in a raise. Source: Daloopa series 3621925/3621926 (Q rev), 3621940/3621941 (Q EPS), 3621966/3621967 (annual rev), 3621981/3621982 (annual EPS), 2976545 (annual op margin), 3621985 (annual CFO).

7/8 revenue beats vs guide midpoint, avg +0.4% — very tight beat pattern (SNPS guides precisely). Single miss in FY25 Q3 (-1.7%) was tied to BIS China export-control rule. The bar to beat on 5/27 is ~$2,260M (+0.4% on $2,250M mid) — consistent with cadence. Anything below $2,250M would break the streak.

FQ4'25 and FQ1'26 YoY % inflated by Ansys consolidation (closed July 2025). Underlying organic growth was ~+12-14%. On an ex-Ansys basis, Q2 FY26 implied YoY is ~+8-10% organic. Revenue beat magnitude steady ~+0.4%; FY25 Q3 single miss was a China-export event. Source: Daloopa company_id 176; guide IDs linked.

Revenue growth jumped from +5% (FY24) to +19% (FY25) and +32% (FY26E) on Ansys consolidation. Op margin compression from 40.0% (FY25) to 40.5% guide (only +50 bps) reflects Ansys integration costs and dilution — ex-Ansys organic op margin would be >42%. EPS growth decelerates from 15.6% (FY24) to just 1.5% (FY26E) on share count dilution from Ansys deal — pre-buyback. FY27 is the cleaner synergy-realization year. Source: Daloopa 3621966/3621967 (annual rev), 3621981/3621982 (annual EPS), 2976545 (op margin).

CDNS print on 4/27 is the single most important read — they raised FY26 to +17% growth and Rule-of-60 economics, setting a high bar. WFE peers (KLAC/AMAT/LRCX) all reported constructive — semi capex cycle healthy. NVDA reports +1 day (5/28) — AI chip design demand pulse will be a same-week cross-read.

Net read: Product/strategy constructive (TSMC N2, AI Copilot, Ansys cross-sell); setup mixed (CDNS +17% raises bar; sell-side heavily positioned for beat-and-raise; China overhang status quo). Modal outcome is a meet-and-raise that fails to clear the implied bar.

Bull Catalysts

Bear Risks

1. Q2 revenue magnitude: Beat to ≥$2.275B (above guide high $2,275M). Anything below $2,265M is in-line at best given cadence; consensus already at $2,251M.

2. FY26 raise: Implied bar is +$50-100M revenue / +$0.15-0.20 EPS. Maintaining mid breaks the beat-and-raise streak. Sell-side at $14.62 EPS = +$0.16 above guide high already.

3. China commentary: FY25 Q3 miss was BIS-driven. Any commentary on additional restrictions OR workarounds is the swing variable. Currently -2pt FY26 headwind in guide per Glaser.

4. Ansys synergy: First full year. Watch for revenue synergy metrics (>10% customer overlap?), cost-synergy realization vs $400M run-rate plan, op margin progression toward 41%+.

5. IP order book: TSMC N2 multi-tape-out (Apple/NVDA/AVGO) is the back-half driver. Watch for IP backlog $ disclosure or qualitative TSMC partnership commentary.

6. Q3 implied guide: FY26 mid $9.61B less Q1 $2.41B and Q2 mid $2.25B = ~$4.95B for H2 = ~+10% sequential Q2→Q3 lift. Q3 guide must bridge this cleanly.

7. Op margin trajectory: Q2 vs implied 40.5% midpoint; FY26 commentary on whether 40.5% is conservative or actual ceiling. Ansys dilution running ~150 bps.

8. CDNS competitive context: Any explicit commentary on share wins/losses vs CDNS (which raised FY26 to +17%).

9. Analyst Day timing: Watch for FY26 Q4 print or shortly after as Analyst Day announcement — FY27 synergy roadmap is the key setup.

10. FCF / capital return: FY26 CFO guide of $2.2B. Buyback pace into the Ansys integration year matters for EPS arithmetic.