Synopsys' Core EDA Business Grew at Only 8.5% in Q3 Despite Strong Overall Revenue Growth
In fiscal Q3 2026, Synopsys (SNPS) reported revenue of $2.477 billion, a year-over-year increase of about 42%. However, the core EDA segment—excluding recent acquisitions like Ansys—grew at just 8.5%, significantly below management's previous expectations and investor hopes for stronger organic growth. The Design Automation segment, which includes both Synopsys' traditional chip design tools and its newly acquired simulation business from Ansys, accounted for roughly $2 billion of total revenue. While the company cited a difficult year-over-year comparison due to 16% EDA growth in Q3 2025, it still highlighted strong performance in hardware-assisted verification as a positive. Looking ahead, management expects double-digit organic EDA growth by fiscal Q4 and into full-year 2026. New joint products like Multiphysics Fusion are expected to contribute starting in 2027, but these benefits won't be reflected in the current year's results.
