Earnings Call Intelligence Subscribe
Home › Call Sheets › SNPS › Q2'26
Call sheet · Q2'26

Synopsys (SNPS)

Q2'26 earnings call · held May 27, 2026 · compared with the Q1'26 call · management-credibility review
3/12
Disclosure score
2 high, 2 medium, 2 low flags
Financial quality
Bottom line
The sleeper story is that Synopsys just inflated revenue by $60M annually through pure accounting changes while the core business shows mounting stress fractures. The Street sees 'AI momentum' but I see IP still shrinking 6% YoY and multiphysics fusion, the entire strategic rationale for spending $35B on Ansys, still stuck in trials with zero revenue. The binding constraint is that legacy EDA is ex-growth and new initiatives aren't monetizing fast enough to offset. Most revealing quote: 'The current thinking and we are in early exploration,' translation: we have no idea how to price AI. My view changes if they show actual IP growth YoY or quantify any AI revenue contribution.

The 30-second version

  • THE SLEEPER: Ansys channel accounting change reveals $60M annual revenue that was always there, just hidden
  • The obvious AI narrative masks IP's continued weakness: Q2 down 6% YoY despite 'bottoming'
  • Multiphysics fusion still in 'expanding trials' despite being THE strategic rationale for the $35B Ansys deal

What changed this quarter

MetricQ1'26Q2'26Change
Total Revenue$2.41B (flat YoY ex-Ansys)$2.276B (includes $12.5M accounting change)Sequential decline of 5.6% despite 'strong' quarter
Non-GAAP EPS$3.77 (beat by $0.66)$3.35 (beat by $0.20)Beat magnitude shrinking 70% QoQ
Non-GAAP Operating Margin42.1%39.5%260 bps sequential compression
Design IP Revenue$407M (down 6% YoY)$454M (down 6% YoY)Still negative YoY despite 'recovery'
Design IP Operating Margin16.2%24.4%+820 bps QoQ improvement
Backlog$11.3B$11.0B300M sequential decline
Free Cash Flow$822M$575M30% sequential decline
Ansys Revenue$886M$652M (includes $12.5M accounting)26% sequential decline from Q1 surge
Hardware Verification GrowthStrong growthKey growth driver with multiple winsSustained momentum
PCIe 7.0 Win RateNot disclosed>90% with 18 new licensesNew disclosure showing dominance

Accountability tracked

7 new promises made5 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
Read the full SNPS Q2'26 report Subscribe
About Research ↗Call SheetsCredibility IndexMissed PromisesScreens13F BooksData & InstitutionalPrivacyTermsSubscribe
This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

Follow what management promises next

Get free previews of our earnings-call research: the key changes, management scores, and questions worth investigating. Subscribe for full call sheets and deeper analysis.

Subscriptions are managed by Substack. If the form does not load, subscribe directly. Or follow the RSS feed.