Synopsys Inc (NASDAQ:SNPS) stock fell 1.91% (As on December 11, 11:30:00 AM UTC-4, Source: Google Finance) after Gross Law Firm issues the notice to shareholders of the company. However, the company has topped Wall Street expectations for its fourth quarter and issued an upbeat earnings outlook for fiscal 2026. The company’s backlog reached a robust $11.4 billion in FY25, which management highlighted as evidence of business resilience. On a non-GAAP basis, net income for the fourth quarter of fiscal year 2025 was $543.1 million compared to non-GAAP net income of $529.9 million for the fourth quarter of fiscal year 2024. Ansys integration is well underway following completion of the planned divestitures of the Optical Solutions and PowerArtist businesses. In Q4, the company saw continued strong demand in hardware-assisted verification driven by the increasing engineering complexity of AI and high-performance computing. The HAV business ended a record year with 12 competitive wins in the fourth quarter. The company is also seeing continued demand for virtual prototyping among automotive and high-performance compute customers looking to accelerate their software development. The free cash flow for 2025 was approximately $1.35 billion. The company ended the quarter with cash and short-term investments of $2.96 billion, which includes approximately $600 million in proceeds from the sale of the Optical Solutions Group and Ansys PowerArtist business. Total debt ended at $13.5 billion. The company repaid approximately $850 million of the term loans in Q4 2025 and $900 million in November, and plan to prepay the balance of $2.55 billion in the first half of 2026.

SNPS in the fourth quarter of FY25 has reported the adjusted earnings per share of $2.90, beating the analysts’ estimates for the adjusted earnings per share of $2.78. The company had reported the adjusted revenue growth of 37.8 percent to $2.26 billion in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $2.25 billion. The recently acquired Ansys contributed $667.7 million to the total.

Looking ahead, Synopsys provided an optimistic outlook for fiscal 2026, projecting earnings per share of $14.32 to $14.40, above the analyst consensus of $14.05. The company expects revenue between $9.56 billion and $9.66 billion, with the midpoint of $9.61 billion including approximately $2.9 billion from Ansys and reflecting the impact of roughly $110 million from divested businesses.

For the first quarter of fiscal 2026, Synopsys forecasts adjusted EPS of $3.52 to $3.58, surpassing the consensus of $3.42, on revenue between $2.37 billion and $2.42 billion.