Synopsys Posts Financial Results for Q2 Fiscal Year 2024Synopsys ( NASDAQ:SNPS ) has raised its annual revenue and profit forecast due to the robust demand for its software to design advanced chips driving artificial intelligence applications. The AI boom has boosted investments in custom design of chips as tech firms race to dominate the lucrative technology with new innovations, triggering demand for companies such as Synopsys. Chief Executive Sassine Ghazi said demand for the company's core products remained strong, with revenue from them expected to grow 15% this year as customers design their own chips for AI and other purposes. Semiconductor firms continue to invest in research and design and turn to the company's AI-powered electronic design automation suite, Synopsys.ai, in a bid to ace and improve complex chip designs.
Synopsys ( NASDAQ:SNPS ) now expects annual adjusted earnings per share between $12.90 and $12.98 from its earlier forecast of $12.86 and $12.94. The company updated its annual expectations on its investor day in March, excluding its software integrity (SIG) unit. Earlier this month, the company said it would sell the SIG unit to a private-equity group led by Clearlake Capital and Francisco Partners in a $2.1 billion deal.
Synopsys ( NASDAQ:SNPS ) forecast third-quarter revenue between $1.51 billion and $1.54 billion, below analysts' average estimate of $1.60 billion, according to LSEG data. Revenue in the second-quarter ended April 30 rose about 15% to $1.45 billion, but fell short of estimates of $1.53 billion. Excluding items, it earned $3.00 per share, beating estimates of $2.95 per share.
In January, Synopsys ( NASDAQ:SNPS ), which partners with chipmakers including Taiwan Semiconductor Manufacturing Co, Intel (INTC.O), and Samsung Electronics, said it would buy Ansys (ANSS.O) in a $35 billion cash-and-stock deal. Separately, Ansys said on Wednesday that its stockholders approved its proposed acquisition by Synopsys.
Synopsys ( NASDAQ:SNPS ) reported Q2 financial results for the second quarter of fiscal year 2024, with quarterly revenue of $1.455 billion, up approximately 15% year over year and at the high-end of guidance. Quarterly GAAP earnings per diluted share of $1.92; non-GAAP earnings per diluted share of $3.00, up approximately 26% year over year1 and exceeding guidance.
Synopsys' strong Q2 results were driven by its team's relentless focus on execution, leading technology that is mission-critical to customers, and resilient business model. The company is again raising its full-year targets for revenue and non-GAAP EPS, based on strong execution and continued business momentum.
Technical Outlook
Synopsys ( NASDAQ:SNPS ) stock closed Thursday's trading session with a Relative Strength Index (RSI) of 60.27 which is slightly overbought. The stock has been on a rising trend since the fall of November, 2023 consecutively rising to new highs.
