Shares of Synopsys, a leading chip-design software provider, traded higher today after the company announced higher-than-expected quarterly profits.
Q3 Results Beat Estimates
For its fiscal third quarter, which ended on October 31, Synopsys reported a revenue of $1.599 billion, marking a 25% increase compared to the previous year. This surpassed both the company's own guidance range of $1.567 billion to $1.597 billion and the Wall Street consensus forecast of $1.585 billion.
On an adjusted basis, Synopsys earned $3.17 per share, surpassing both the company's guidance range of $3.01 to $3.06 per share and the Street consensus call of $3.04. Under generally accepted accounting principles, the company earned $2.26 per share.
Strong Full-Year Performance
Synopsys also posted impressive full-year results, with revenue reaching $5.843 billion, a 15% increase compared to the previous year.
Optimistic Outlook
Looking ahead to the January quarter, Synopsys forecasts revenue to range from $1.63 billion to $1.66 billion, outperforming the Street consensus call for $1.578 billion. The company also expects adjusted profits of $3.40 to $3.45 per share, above the Street's call for $3.05.
For the October 2024 fiscal year, Synopsys projects revenue between $6.57 billion and $6.63 billion, with non-GAAP profits between $13.33 and $13.41 per share. This projection surpasses the Street consensus, which had anticipated $6.59 billion in revenue and a profit of $12.68 per share.
Positive Market Sentiment
Synopsys shares have seen significant growth this year, rising by 73%. This has been attributed to the market's recognition of the company's potential in the emerging field of generative artificial intelligence software.
AI Integration Plans
In an interview, Synopsys' new CEO Sassine Ghazi emphasized the company's focus on utilizing AI in multiple ways. One strategy involves using AI to write code internally, among other applications.
The company also recently announced the development of Copilot software in partnership with Microsoft. Ghazi believes this software will "simplify and accelerate our users' productivity." In the future, Synopsys aims to offer an AI tool that enables users to specify design parameters using natural language, similar to interacting with a chatbot.
Conclusion
Following the impressive quarterly results, Synopsys shares were up 1.6% in late trading, reaching $561. With its strong financial performance and promising AI initiatives, Synopsys continues to solidify its position as a key player in the chip-design software industry.
Note: Contact details for Eric J. Savitz have been removed to adhere to the given instructions.
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