Synopsys
shares traded modestly higher after the provider of chip- design software posted a higher quarterly profit than Wall Street expected.
For its fiscal third quarter, ended Oct. 31, Synopsys reported revenue of $1.599 billion, up 25% from a year earlier. That was slightly ahead of both the $1.567 billion to $1.597 billion management had told investors to expect and the Wall Street consensus forecast of $1.585 billion.
On an adjusted basis, Synopsys earned $3.17 a share, above both the guidance range of $3.01 to $3.06 a share, and the Street consensus call of $3.04. Under generally accepted accounting principles, the company earned $2.26 a share.
For the full year, Synopsys posted revenue of $5.843 billion, up 15%.
For the January quarter, Synopsys is forecast revenue ranging from $1.63 billion to $1.66 billion, ahead of the Street consensus call for $1.578 billion. Management is expecting adjusted profits of $3.40 to $3.45 a share, above the Street’s call for $3.05.
For the October 2024 fiscal year, Synopsys is projecting revenue of between $6.57 billion and $6.63 billion, with non-GAAP profits of between $13.33 and $13.41 a share. Street consensus had called for $6.59 billion in revenue and a profit of $12.68 a share.
Synopsys shares have rallied 73% this year, aided by a view on the Street that the company stands to benefit from the emergence of generative artificial intelligence software.
In an interview with Barron’s, new CEO Sassine Ghazi noted that Synopsys sees multiple ways for the company to leverage AI in its business. One of those is for the company to use AI itself to write code.
The company also recently announced Copilot software created in partnership with
Microsoft,
which Ghazi said will “simplify and accelerate our users’ productivity.” Eventually, he says, Synopsys will offer an AI tool that will allow users to specify design parameters using natural language, as they can with any other chatbot.
In premarket trading, Synopsys shares were 3% higher at $569.16.
Write to Eric J. Savitz at eric.savitz@barrons.com
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