Synopsys Inc. Faces a Sharp Earnings Shortfall Amid a Major Acquisition

Synopsys Inc. reported its third‑quarter fiscal 2025 results on September 9, 2025, and the numbers fell short of Wall Street expectations. The company’s non‑GAAP earnings per share (EPS) came in at $3.39, missing analysts’ consensus by $0.36, while revenue of $1.740 billion lagged by $30 million. GAAP EPS stood at $1.50, a figure that, although solid, did not offset the disappointment in the adjusted metric.

The shortfall is notable given that the company’s revenue grew 14 % year‑over‑year. Yet the guidance for the full year remains tentative; analysts expect a $1.74 billion revenue for the quarter to be replicated or slightly outpaced, but the EPS gap indicates higher operating costs or a slower conversion of sales into profit than anticipated.

The Ansys Acquisition: A Double‑Edged Sword

Synopsys announced the acquisition of Ansys on July 17, 2025, a move that has reshaped market expectations. The deal is expected to bolster Synopsys’ position in the electronic design automation (EDA) space, but the integration costs are evident in the Q3 earnings. Commentators note that the closing of the Ansys transaction is reflected in the quarter’s results, contributing to the earnings miss. Analysts at Stifel and KeyBanc have nevertheless raised their price targets—Stifel to $650 and KeyBanc to $660—citing the strategic value of the acquisition and the anticipated long‑term revenue synergies.

Market Reaction and Technical Signals

Despite the earnings miss, market sentiment remains cautiously optimistic. Technical analysts point to a bullish flag pattern on Synopsys’ stock, suggesting a potential surge following the earnings release. The stock closed at $609.08 on September 7, approaching its 52‑week high of $651.73. The price target elevations and the positive technical indicators have kept the share price within a tight trading range, avoiding a sharp decline that might otherwise have followed the miss.

Investors have been monitoring the earnings call closely. The company’s management emphasized that the $1.74 billion revenue growth is a positive sign, even if the adjusted EPS did not meet forecasts. They also highlighted ongoing efforts to streamline the integration of Ansys’ capabilities and to capitalize on the expanding demand for integrated circuit design tools.

Analyst Consensus and Future Outlook

A survey of 12 analysts on September 9 projected a Q3 EPS of $3.75, meaning Synopsys fell $0.36 short of expectations. The consensus forecast for the full year remains $14.50 billion in revenue with a $3.60 EPS, indicating that the market still expects strong growth trajectories post‑Acquisition. KeyBanc’s recent upward revision of the target price to $660 reflects confidence in the company’s strategic direction, despite the temporary earnings dip.

In summary, Synopsys Inc. reported a Q3 performance that missed consensus estimates, largely due to the integration costs associated with the Ansys acquisition. Nevertheless, analyst upgrades and technical bullish signals suggest that the market views the acquisition as a long‑term value driver, and investors are likely to monitor how Synopsys translates the combined capabilities into sustained earnings growth over the next fiscal year.