What it does
The company states that it provides engineering solutions spanning silicon design, semiconductor intellectual property (IP), simulation and analysis (S&A), and design services. Its Design Automation offerings include electronic design automation (EDA) software and hardware used to design, verify, test and manufacture chips, as well as simulation tools for broader engineering applications. Its Design IP business supplies pre-designed circuit components for chip designs. The filing also describes technical support, consulting, training and cloud-based access to certain software.
Source: Synopsys, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
How it makes money
The company reports two segments: Design Automation and Design IP. Design Automation generated $5.3 billion in FY2025, or 75.2% of revenue, and includes EDA, Ansys and Other revenue groups. Design IP generated $1.8 billion, or 24.8%. Revenue is also categorized by time-based products, upfront products, and maintenance and service; time-based products were $3.5 billion, representing 49.5% of FY2025 revenue. The company typically licenses software on a non-exclusive basis, sells or leases certain hardware, and may charge IP fees per design and, in some cases, royalties.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Time-based products | $3.5 billion | 49.5% | 8.23% |
| Upfront products | $2.0 billion | 28.5% | 11.6% |
| Maintenance and service | $1.6 billion | 22.0% | 41.2% |
Source: Synopsys, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Customers and geography
The filing states that EDA and Design IP customers are primarily semiconductor and electronics systems companies. S&A customers span high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction. Synopsys markets through direct sales in the United States and principal foreign markets, while distributing certain products through independent channel partners. In FY2025, United States revenue was $3.1 billion, or 43.9%; Korea, Republic of revenue was $947.0 million, or 13.4%; and China revenue was $814.3 million, or 11.5%.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| UNITED STATES | $3.1 billion | 43.9% | 13.2% |
| Other | $1.3 billion | 18.5% | 29.1% |
| KOREA, REPUBLIC OF | $947.0 million | 13.4% | 22.5% |
| Europe | $888.5 million | 12.6% | 44.6% |
| China | $814.3 million | 11.5% | −17.7% |
Source: Synopsys, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Competition
The filing describes competition in Design Automation from other EDA vendors, customers’ internal design tools and capabilities, and, for Ansys S&A software, publicly traded companies, small geographically focused firms, startups and in-house solutions. In Design IP, the company competes with other IP providers and customers’ internally developed IP. The filing does not name specific competitors. It states that buying decisions are influenced by technology, product quality and features, commercial terms, support and interoperability, among other factors.
Source: Synopsys, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Key risks
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Uncertainty in the macroeconomic environment and its potential impact on the semiconductor and electronics industries may negatively affect the business, operating results and financial condition.
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The filing cites competition and the need to anticipate technological shifts, innovate, improve existing products and develop or acquire new products.
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The global nature of operations exposes the company to increased risks and compliance obligations, including trade restrictions, currency effects and regional economic, legal and political conditions.
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Backlog, revenue and earnings may fluctuate with customer demand, budgets, sales cycles, large-customer renewals, product mix and IP drawdowns.
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The timing of revenue recognition may cause revenue and earnings to fluctuate, including because hardware and IP revenue is generally recognized upfront.
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Acquisitions and strategic investments, including the Ansys Merger, are difficult, time-consuming and pose integration, cost, regulatory and operational risks.
Source: Synopsys, Inc. Form 10-K for fiscal 2025, Item 1A — sec.gov
People and operations
As of FY2025 year-end, the company had approximately 28,000 employees, with about 23% located in the United States and 77% elsewhere. Approximately 75% of employees were engineers, and more than half held master’s or PhD degrees. The company reports 189 offices worldwide, with headquarters in Sunnyvale, California. It maintains sales and support centers throughout the United States and sales, support or service offices in Canada, Europe, Israel and Asia. The filing states that fiscal 2025 headcount grew by approximately 40%, primarily because of the Ansys Merger.
Source: Synopsys, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov