"With ANSYS, Synopsys has transformed from an EDA leader to the leader in engineering solutions from silicon to systems. That's a big claim. Tonight's results are the first real stress test of whether the underlying business is healthy enough to back it up."
"Synopsys already repaid $850 million in Q4 and another $900 million in November, with a plan to pay down the remaining $2.55 billion balance in FY2026. That's aggressive, and it requires the business to generate serious cash. Management guided for roughly $1.9 billion in free cash flow for FY2026, up about $700 million year over year."
Synopsys closed its $35 billion Ansys acquisition in Q3 FY2025, significantly expanding its business scope from chip design software to comprehensive engineering solutions spanning aerospace, automotive, and industrial sectors. The deal added substantial leverage, with total debt reaching $13.5 billion and total assets jumping to $48.2 billion. Management has committed to aggressive debt repayment, already paying down $1.75 billion and planning to eliminate the remaining $2.55 billion balance in FY2026. The critical metric for Q1 FY2026 results is free cash flow performance against guidance of $1.9 billion for the full year, which would indicate successful integration and validate whether the combined business can support the debt burden.
Read at 24/7 Wall St.
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