Synopsys (SNPS) Q2 earnings and revenues miss estimates, but show bottom line improvement

From Nasdaq: 2024-05-23 11:12:00

Synopsys (SNPS) missed revenue and earnings estimates in Q2 2024, with non-GAAP EPS of $3 below the Zacks Consensus Estimate of $3.03. However, bottom line improved by 26% due to higher revenues and cost management. Revenues grew 15% YoY to $1.45 billion but missed estimates, driven by growth across business segments.

Revenue growth attributed to semiconductor and systems companies’ investments in solutions, leading to new customer acquisitions and repeat engagements. Synopsys reported quarterly revenues across different segments, with a clear focus on ongoing growth and development.

Synopsys announced the software integrity segment’s acquisition by Clearlake Capital and Francisco Partners for $2.1 billion. The deal is expected to close by the second half of 2024, impacting financial statements as a discontinued operation and reflecting changes in previous quarters.

Segment-wise revenue breakdown includes Time-Based Product revenues up 8.9% YoY, Upfront Product revenues up 18.3%, and Maintenance and Service revenues up 31.8%. EDA revenues were $1.01 billion, with Design IP revenues at $399.8 million and other revenues at $47.3 million.

Geographically, Synopsys saw revenues in North America, Europe, Korea, China, and Other regions. The company reported an expanded non-GAAP operating margin of 37.3%, with improvements in EDA and Design IP segment margins.

Synopsys revised its fiscal 2024 guidance, expecting lower revenues and non-GAAP earnings compared to previous estimates. For Q3 2024, the company anticipates specific revenue ranges and non-GAAP EPS along with expenses projections.

Despite recent performance, Synopsys currently holds a Zacks Rank #3. Other top-ranked tech stocks include AppFolio (APPF), Arista Networks (ANET), and Alphabet (GOOGL) with Zacks Rank #1, each showing strong growth potential.

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Read more at Nasdaq: Synopsys (SNPS) Q2 Earnings and Revenues Miss Estimates