Synopsys Q1 Revenue Jumps 65.5% While Maintenance Sales Soar 176.4%; China Restricts Q2 Growth
Synopsys reported Q1 revenue of $2.41 billion, up 65.5% year-over-year, and EPS of $3.77, topping estimates by 0.75% on revenue and 5.7% on EPS. Maintenance and service revenue soared 176.4%, design automation climbed 96.2% while design IP fell 6.5%, and Q2 growth is forecast muted by China restrictions.
1. Q1 Financial Results
Synopsys delivered Q1 revenue of $2.41 billion, up 65.5% year-over-year, and GAAP EPS of $3.77, beating consensus by 0.75% on revenue and 5.7% on EPS. This marks the third consecutive quarter of revenue surprises and underscores robust demand for its chip-design software.
2. Segment Performance
Maintenance and service revenue reached $715.7 million (+176.4% YoY), while total products revenue hit $1.69 billion (+41.5%). Design automation revenue climbed 96.2%, upfront products rose 101.4% to $741.5 million, and time-based products grew 14.9%, offsetting a 6.5% drop in design IP revenue to $407 million.
3. Q2 Outlook and China Impact
Management warned that China export restrictions on its software tools will mute Q2 growth, triggering a share decline. These regulatory headwinds are set to constrain top-line expansion until clarity on licensing approvals is restored.