SNPS Q2 earnings — Revenue +42% YoY · EPS -99% YoY · EBIT -100% YoY · 📈 outlook FY26: rev $9.6-$9.7B, EPS $14.72-$14.80

The Print

Synopsys, Inc. (SNPS) reported Q2 2026 fiscal results on May 27, 2026 via SEC 8-K Item 2.02 filed at 16:13:10 ET. Year-over-year comparisons show $2.28 billion in total revenue (+41.9% YoY), diluted EPS of $0.03 (-98.7% YoY), and $0 in EBIT (-100.0% YoY) versus the year-ago quarter’s $1.60B revenue, $2.24 EPS, and $491M EBIT. The company beat consensus revenue estimates of $2.25B by roughly 1.1%, but missed EPS consensus of $3.17 by 99.1% per preliminary earnings history data.

Operating Leverage

The 41.9% YoY revenue growth was not accompanied by matching operating leverage, as Q2 2026 EBIT hit $0, a full 100% decline from the year-ago quarter’s $491M. This represents a complete erosion of the company’s 2025 Q2 EBIT margin of ~30.7% (calculated as $491M EBIT divided by $1.60B revenue). No granular margin drivers, such as R&D or sales spend increases, were disclosed in the initial 8-K earnings release.

Forward Outlook

The company issued full-year FY26 guidance in Exhibit 99.1 of the same 8-K filing, including a raised revenue range of $9.62B to $9.71B and EPS range of $14.72 to $14.80. The midpoint of the revenue guidance ($9.665B) implies a sequential quarterly average of ~$2.46B across the remaining two fiscal quarters, an 8% increase from the just-reported Q2 2026 revenue of $2.28B. The midpoint EPS guidance of $14.76 reflects a double-digit increase over the trailing four-quarter average EPS of ~$12.74.

Cross-Referenced Market Signals

Recent insider and institutional signals align with the earnings release. On April 17, 2026, seven independent directors received 453 zero-cost stock units each via Form 4 filings. On May 18, 2026—nine days before the earnings release—General Counsel Janet Lee filed a Form 4 reporting a $159,770 in-kind purchase of 318 common shares at $502.42 per share. As of May 1, 2026, analyst ratings for SNPS included 15 Buy ratings, down two from the April 1 count, with no changes to Hold, Sell, or Strong Sell tiers. The December 31, 2025 13F summary shows 1466 institutional holders holding a combined $79.6B in SNPS positions, representing 105.8% of the company’s outstanding float.

Unreported Data Points

Three key granular metrics are not included in the initial 8-K and will only be available in the accompanying May 27, 2026 10-Q filing: 1) Segment-level revenue breakdowns for the company’s electronic design automation, intellectual property, and software and services divisions; 2) Quarterly balance sheet metrics including cash reserves, long-term debt, and free cash flow; and 3) Detailed operating expense breakdowns to explain the full EBIT margin collapse.