On August 27, Synopsys fell 4.02% in after-hours trading, trading at approximately $395.00 per share, with turnover of $38.11 million.
The decline was triggered by the company's full-year guidance disappointing investors despite a strong Q3 beat. Synopsys reported Q3 adjusted EPS of $3.91, exceeding the consensus estimate of $3.67 by 6.5%, while revenue of $2.477 billion topped the $2.438 billion estimate, representing approximately 38% year-over-year growth. However, the company guided full-year revenue to $9.69 billion-$9.74 billion, only marginally above the $9.68 billion consensus, and full-year adjusted EPS of $15.04-$15.10 versus the $14.78 estimate.
The limited upward revision to annual revenue guidance raised concerns about growth sustainability, triggering a classic sell-the-news reaction. Heading into the report, shares had risen over 3% on August 25 on expectations of a strong print amid the AI earnings cycle. The company has recently undergone a strategic pivot, discontinuing chip manufacturing process control software to concentrate resources on higher-margin AI design tools, including autonomous agentic AI workflows developed with Nvidia and AMD.
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