Synopsys Inc (NASDAQ:SNPS) stock rose 5.49% (As on May 23, 12:39:24 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the second quarter of FY 24. On May 5, 2024, Synopsys has entered into an agreement to sell its Software Integrity business. On a non-GAAP basis, net income for the second quarter of fiscal year 2024 was $466.9 million compared to non-GAAP net income of $368.3 million, for the second quarter of fiscal year 2023. Synopsis saw revenue growth across its core segments. Electric design automation, which includes digital and custom integrated circuit design software, verification hardware and software products, manufacturing-related design products, field-programmable gate array design software, artificial intelligence-driven EDA solutions and professional services rose 12%, to $1.008 billion. It was the first time Synopsys broke the $1 billion mark in its EDA division. Design IP revenue came in at $399.8 million, up from $335.3 million in the second quarter of 2023 but down from $525.7 million in the first quarter. Other revenue came in at $47.3 million, up from $26.7 million from the same quarter of last year.
Moreover, in March, the company announced the availability of Synopsys fAST Dynamic, a dynamic application security testing offering that is optimized for modern web applications and DevSecOps workflows. On April 9, Synopsys announced the availability of Black Duck Supply Chain Edition, a software composition analysis offering that allows organizations to mitigate upstream risks in supply chain attacks. On April 30, the company announced Polaris Assist, an artificial intelligence-powered application security assistant that provides AI-augmented vulnerability summaries and code fixes.
SNPS in the second quarter of FY 24 has reported the adjusted earnings per share of $3.00, missing the analysts’ estimates for the adjusted earnings per share of $2.95. The company had reported the adjusted revenue growth of 15 percent to $1.46 billion in the second quarter of FY 24, missing the analysts’ estimates for revenue of $1.51 billion.
Looking ahead, Synopsys provided guidance for the third quarter with revenue expected to range between $1.505 billion and $1.535 billion. The midpoint of this guidance, $1.52 billion, is slightly above the analyst consensus estimate of $1.51 billion.
For the full fiscal year 2024, the company anticipates revenue to be between $6.090 billion and $6.150 billion. The midpoint of this range, $6.12 billion, also surpasses the consensus estimate. Adjusted EPS guidance for the third quarter is set at $3.25 to $3.30, with the midpoint of $3.275 slightly below the consensus estimate of $3.30.