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Research Alert: Snps Q2: Modest Fy 26 Guidance Raise And Eda Deceleration (ex-ansys)

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

SNPS posted Q2 FY26 sales of $2.28B (+42% Y/Y), slightly ahead of consensus ($2.25B), with non-GAAP EPS of $3.35 exceeding expectations of $3.16. Design Automation sales grew 62% driven by Ansys acquisition (29% of Q2 sales), while ex-Ansys growth decelerated to 9% from 12% in Q1, and Design IP declined 6% for the second consecutive quarter reflecting Intel process delays. We view the Ansys integration as progressing well with accelerating cost synergies and expect the $2.96B FY26 contribution to drive meaningful revenue acceleration. Management lifted FY26 revenue guidance to $9.665B from $9.61B and EPS to $14.76 from $14.42, supported by synergies and margin expansion. We expect continued Design IP margin pressure near-term as SNPS adjusts its portfolio, though Design Automation margins improved 240 bps Y/Y to 43.3%. The China business (11% of sales) remains stable, and we believe the combined entity positions SNPS well for AI-driven design complexity growth.

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