10-K – 2025-12-22 – snps-20251031.htm

Note 6. Goodwill and Intangible Assets
Goodwill
Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired in business combination. The change in the goodwill during fiscal 2025 resulted primarily from $ 23.4  billion related to the Ansys Merger. For additional information, refer to Note 4. Business Combination of the Notes to Consolidated Financial Statements in this Annual Report.
We performed the required annual goodwill assessment in the fourth quarter of fiscal 2025, and concluded the goodwill was not impaired. There was no goodwill impairment in fiscal 2025, 2024 and 2023.
Goodwill activity by reportable segment consists of the following:
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  Design Automation
Design IP Total
(in thousands)
Balance at October 31, 2023 $ 2,400,682   $ 945,383   $ 3,346,065  
Additions 61,803   34,339   96,142  
Adjustments 170   —   170  
Effect of foreign currency translation 6,602   ( 129 ) 6,473  
Balance at October 31, 2024 2,469,257   979,593   3,448,850  
Additions 23,442,889   —   23,442,889  
Adjustments (OSG Divestiture) ( 19,471 ) —   ( 19,471 )
Effect of foreign currency translation 24,255   2,692   26,947  
Balance at October 31, 2025 $ 25,916,930   $ 982,285   $ 26,899,215  

Intangible Assets
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. The change in the gross carrying amounts of intangible assets in fiscal 2025 was due to the Ansys Merger. For additional information, refer to Note 4. Business Combination of the Notes to Consolidated Financial Statements in this Annual Report.
During the fourth quarter of fiscal 2024, we assessed long-lived assets for impairment and recorded an impairment charge of $ 53.5  million related to acquired intangible assets. The impairment charge was triggered by a decline in estimated fair value resulting from the reductions in the expected future cash flows associated with our core/developed technology intangible assets related to our OpenLight business. There were no other impairment charges for long-lived assets in fiscal 2025, 2024 and 2023.
Intangible assets as of October 31, 2025 consists of the following:

Gross Carrying Amount Accumulated
Amortization Net Amount
  (in thousands)
Core/developed technology $ 7,309,753   $ 929,901   $ 6,379,852  
Customer relationships 5,415,558   428,377   4,987,181  
Contract rights intangible 614,358   239,808   374,550  
Trademarks and trade names 962,925   24,917   938,008  

Total $ 14,302,594   $ 1,623,003   $ 12,679,591  

Intangible assets as of October 31, 2024 consists of the following:
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Gross Carrying Amount Accumulated
Amortization
and Impairment
Net Amount
  (in thousands)
Core/developed technology $ 904,347   $ 777,518   $ 126,829  
Customer relationships 314,140   247,025   67,115  
Contract rights intangible 176,382   175,170   1,212  
Trademarks and trade names 12,925   12,917   8  

Total $ 1,407,794   $ 1,212,630   $ 195,164  

Amortization expense related to acquired intangible assets, including the impairment charge , consists of the following:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Core/developed technology $ 247,210   $ 104,797   $ 42,892  
Customer relationships 180,525   15,550   9,288  
Contract rights intangible 64,648   3,872   2,389  
Trademarks and trade names 12,000   15   7  
Capitalized software development costs (1)
—   —   4,770  

Total $ 504,383   $ 124,234   $ 59,346  

(1) Amortization of capitalized software development costs is included in cost of products revenue in the consolidated statements of income.
The following table presents the estimated future amortization of acquired intangible assets as of October 31, 2025:

Fiscal Year (in thousands)
2026 $ 1,613,410  
2027 1,544,994  
2028 1,384,004  
2029 1,381,360  
2030 1,375,519  
2031 and thereafter 5,380,304  

Total $ 12,679,591  

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Note 7. Balance Sheet Components

As of October 31,

2025 2024
(in thousands)
Accounts receivable, net:
Accounts receivable $ 1,548,858   $ 941,312  
Unbilled accounts receivable 45,528   44,166  
Total accounts receivable 1,594,386   985,478  
Less: allowance for credit losses ( 88,959 ) ( 51,008 )
Total $ 1,505,427   $ 934,470  

Property and equipment, net:
Computer and other equipment $ 1,150,804   $ 1,011,712  
Buildings 100,016   103,779  
Furniture and fixtures 101,183   87,524  
Land 13,888   18,219  
Leasehold improvements 295,917   271,753  
Total property and equipment
1,661,808   1,492,987  
Less: accumulated depreciation (1)
( 965,115 ) ( 929,981 )
Total $ 696,693   $ 563,006  

Accounts payable and accrued liabilities:
Payroll and related benefits $ 822,575   $ 624,823  
Accounts payable 164,766   207,333  
Accrued income taxes
94,664   147,115  
Interest payable 49,826   —  
Other accrued liabilities 194,380   184,321  
Total $ 1,326,211   $ 1,163,592  

Other long-term liabilities:
Deferred tax liability $ 1,001,070   $ 36,557  
Deferred compensation plan liabilities 447,232   386,757  
Other
200,997   46,424  
Total $ 1,649,299   $ 469,738  

(1) Accumulated depreciation includes write-offs due to retirement of fully depreciated fixed assets.

Note 8. Financial Assets and Liabilities
Cash Equivalents and Short-term Investments
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As of October 31, 2025, the balances of our cash equivalents and short-term investments are as follows:
Amortized Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Less Than 12 Continuous Months Gross
Unrealized
Losses 12 Continuous Months or Longer Estimated
Fair Value (1)

  (in thousands)
Cash equivalents:
Money market funds $ 52,978   $ —  $ —  $ —  $ 52,978  

Total: $ 52,978   $ —  $ —  $ —  $ 52,978  
Short-term investments:
U.S. Treasury, agency & T-bills $ 6,661   $ 19   $ —   $ —   $ 6,680  
Municipal bonds 22,004   61   —   —   22,065  
Corporate debt securities 43,878   139   ( 18 ) —   43,999  

Other 185   —   —   —   185  
Total: $ 72,728   $ 219   $ ( 18 ) $ —   $ 72,929  

(1) See Note 9. Fair Value Measurements for further discussion on fair values.
Our short-term investment portfolio includes both corporate and government debt securities that have a maximum maturity of three years . The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. Most of our unrealized losses are due to changes in market interest rates, and bond yields. We believe that we have the ability to realize the full value of all of these investments upon maturity. As of October 31, 2025, our investments that were in a continuous loss position of 12 months or more, as well as the unrealized losses on those investments, were immaterial.
The contractual maturities of our available-for-sale debt securities as of October 31, 2025 are as follows:

Amortized Cost Fair Value
(in thousands)
Less than 1 year $ 26,944   $ 27,014  
1-5 years 45,784   45,915  

Total $ 72,728   $ 72,929  

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As of October 31, 2024, the balances of our cash equivalents and short-term investments are as follows:
Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Less Than 12 Continuous Months Gross
Unrealized
Losses 12 Continuous Months or Longer Estimated
Fair Value (1)

  (in thousands)
Cash equivalents:
Money market funds $ 869,972   $ —   $ —  $ —  $ 869,972  

U.S. Treasury, agency & T-bills 7,984   1   —  —  7,985  

Total: $ 877,956   $ 1   $ —  $ —  $ 877,957  
Short-term investments:
U.S. Treasury, agency & T-bills $ 19,411   $ 44   $ ( 6 ) $ —   $ 19,449  

Corporate debt securities 105,024   349   ( 115 ) ( 2 ) 105,256  
Asset-backed securities 29,061   130   ( 7 ) ( 20 ) 29,164  

Total: $ 153,496   $ 523   $ ( 128 ) $ ( 22 ) $ 153,869  

(1) See Note 9. Fair Value Measurements for further discussion on fair values.
Restricted cash
We include amounts generally described as restricted cash in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown in the consolidated statements of cash flows. Restricted cash is primarily associated with deposits for office leases and employee loan programs.
The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the consolidated balance sheets and the consolidated statements of cash flows:

As of October 31,

2025 2024
(in thousands)
Cash and cash equivalents $ 2,888,030   $ 3,896,532  
Restricted cash included in prepaid and other current assets 4,680   1,529  
Restricted cash included in other long-term assets 1,011   668  
Cash, cash equivalents and restricted cash $ 2,893,721   $ 3,898,729  

Non-marketable equity securities
Our portfolio of non-marketable equity securities consists of strategic investments in privately held companies. During the first quarter of fiscal 2024, we completed the sale of certain strategic investments in privately-held companies. The gain recognized from the sales was $ 55.1  million and included in other income (expense), net, in our consolidated statements of income. There were no material impairments of non-marketable equity securities in fiscal 2025, 2024, and 2023.
Derivatives
We recognize derivative instruments as either assets or liabilities in the consolidated balance sheets at fair value and provide qualitative and quantitative disclosures about such derivatives. We operate internationally and are exposed to potentially adverse movements in foreign currency exchange and interest rates. We enter into hedges in the form of foreign currency forward contracts to reduce our exposure to foreign currency rate changes on non-functional currency denominated forecasted transactions and balance sheet positions including: (1) certain assets and liabilities, (2) shipments forecasted to occur within approximately one month , (3) future billings and revenue on previously shipped orders, and (4) certain future intercompany invoices denominated in foreign currencies.
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The majority of the forward contracts are short-term with maturity of up to 30 months at inception. We do not use foreign currency forward contracts for speculative or trading purposes. We enter into foreign exchange forward contracts with high credit quality financial institutions that are rated "A" or above and to date have not experienced nonperformance by counterparties. In addition, we mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty and anticipate continued performance by all counterparties to such agreements.
The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or accrued liabilities in the consolidated balance sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. The cash flow impact upon settlement of the derivative contracts is included in net cash provided by operating activities in the consolidated statements of cash flows.
Additionally, in order to manage interest rate exposure related to anticipated debt transactions, in the first quarter of fiscal 2025, we entered into treasury rate lock agreements to hedge against unfavorable interest rate changes. The accounting for gains and losses resulting from changes in fair value depends on whether these are designated and qualify for hedge accounting. The assets or liabilities associated with these derivatives are recorded at fair value in other current assets or accrued liabilities in the consolidated balance sheets. The cash flow impact upon settlement of these derivative contracts is included in net cash used in operating activities in the consolidated statements of cash flows.
Cash Flow Hedging Activities
Certain foreign exchange forward contracts are designated and qualify as cash flow hedges. These contracts have durations of up to 30 months or less. Certain forward contracts are rolled over periodically to capture the full length of exposure to our foreign currency risk, which can be up to three years . To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. The related gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of other comprehensive income (loss) (OCI) in stockholders’ equity and reclassified into revenue or operating expenses, as appropriate, at the time the hedged transactions affect earnings. We expect a majority of the hedge balance in OCI to be reclassified to the statements of income within the next 12 months.
We did not record any gains or losses related to discontinuation of foreign exchange forward contracts cash flow hedges for fiscal years 2025, 2024 and 2023.
During the first quarter of fiscal 2025, we entered into 6-month interest rate hedge contracts (the 2025 Rate Lock Agreements) with notional value of $ 2.0  billion to lock the benchmark interest rate prior to expected debt issuances with 10-year and 30-year terms. The objective of the 2025 Rate Lock Agreements was to hedge the risk associated with the variability in interest rates due to the changes in the benchmark rate leading up to the closing of the intended financing on the notional amount being hedged. To receive hedge accounting treatment, the hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. These derivatives are designated as cash flow hedges with unrealized gains and losses deferred in OCI. The 2025 Rate Lock Agreements terminated and settled in the second quarter of fiscal 2025, and we recorded the fair value of $ 121.6  million as a loss within OCI. The unrealized loss of $ 121.6  million is being amortized to interest expense over the life of the related debt. We expect $ 7.0  million of the unrealized loss to be amortized to interest expense over the next 12 months. As of October 31, 2025, the unamortized portion of the fair value of the 2025 Rate Lock Agreements was $ 117.0  million. We had no interest rate hedge contracts outstanding as of October 31, 2025.
During the second quarter of fiscal 2025, we entered into a deferred payment agreement with the counterparty bank to defer the cash settlement of 2025 Rate Lock Agreements over a period of 5.5 years with installments due semi-annually. The implied interest rate is 3.45 %. This liability is recognized in our consolidated balance sheets as short-term debt for the portion due within the next 12 months and as long-term debt for the remaining portion. There were no debt covenants applicable to the deferred payment agreement.
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Non-designated Hedging Activities
Our foreign exchange forward contracts that are used to hedge non-functional currency denominated balance sheet assets and liabilities are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the underlying assets and liabilities, which are also recorded in other income (expense), net. The duration of the forward contracts for hedging our balance sheet exposure is approximately one month .
We also have certain foreign exchange forward contracts for hedging certain international revenues and expenses that are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of these forward contracts are recorded in other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the foreign currency in operating income. The duration of these forward contracts is usually less than one year . The overall goal of our hedging program is to minimize the impact of currency fluctuations on the net income over the fiscal year.
The effects of the non-designated foreign currency derivative instruments in the consolidated statements of income are summarized as follows: 

  Year Ended October 31,

  2025 2024 2023
  (in thousands)
Gains (losses) recorded in other income (expense), net $ ( 5,492 ) $ ( 307 ) $ ( 5,899 )

The notional amounts in the table below for foreign currency derivative instruments provide one measure of the transaction volume outstanding:

As of October 31,

2025 2024
  (in thousands)
Total gross notional amounts $ 1,587,863   $ 1,686,341  
Net fair value $ ( 1,234 ) $ 1,819  

Our exposure to the market gains or losses will vary over time as a function of currency exchange rates. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.
The following table represents the consolidated balance sheets location and amount of foreign currency derivative instrument fair values segregated between designated and non-designated hedge instruments: 

Fair values of
derivative instruments
designated as
hedging instruments Fair values of
derivative instruments
not designated as
hedging instruments
  (in thousands)
Balance at October 31, 2025
Other current assets $ 8,598   $ 265  
Accrued liabilities $ 9,504   $ 593  
Balance at October 31, 2024
Other current assets $ 8,839   $ 12  
Accrued liabilities $ 6,918   $ 114  

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The following table represents the location of the amount of gains and losses on derivative instrument fair values for designated hedge instruments, net of tax in the consolidated statements of income:

Location of gains (losses)
recognized in OCI on
derivatives Amount of gains (losses)
recognized in 
OCI on
derivatives
(effective portion) Location of gains (losses)
reclassified 
from OCI Amount of
gains (losses)
reclassified 
from OCI
(effective 
portion)
  (in thousands)
Fiscal year ended October 31, 2025
Foreign exchange contracts Revenue $ 20,434   Revenue $ 3,155  
Foreign exchange contracts Operating expenses ( 7,292 ) Operating expenses ( 3,320 )
Interest rate contracts Interest expense ( 93,216 ) Interest expense
( 3,551 )
Total $ ( 80,074 ) $ ( 3,716 )
Fiscal year ended October 31, 2024
Foreign exchange contracts Revenue $ 3,940   Revenue $ 3,089  
Foreign exchange contracts Operating expenses 5,685   Operating expenses 112  
Total $ 9,625   $ 3,201  
Fiscal year ended October 31, 2023
Foreign exchange contracts Revenue $ 8,390   Revenue $ ( 9,942 )
Foreign exchange contracts Operating expenses 16,596   Operating expenses ( 15,334 )
Total $ 24,986   $ ( 25,276 )

Note 9. Fair Value Measurements
ASC 820-10, Fair Value Measurements and Disclosures , defines fair value, establishes guidelines and enhances disclosure requirements for fair value measurements. The accounting guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The accounting guidance also establishes a fair value hierarchy based on the independence of the source and objective evidence of the inputs used. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement:
Level 1 —Observable inputs that reflect quoted prices (unadjusted) for identical instruments in active markets;
Level 2 —Observable inputs other than quoted prices for identical instruments in active markets, quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in inactive markets, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 —Unobservable inputs derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
On a recurring basis, we measure the fair value of certain assets and liabilities, which include cash equivalents, short-term investments, marketable securities, non-qualified deferred compensation plan assets, contingent consideration receivable, and foreign currency derivative contracts.
Our cash equivalents, short-term investments and marketable securities are classified within Level 1 or Level 2 because they are valued using quoted market prices in an active market or alternative independent pricing sources and models utilizing market observable inputs.
Our non-qualified deferred compensation plan assets consist of money market and mutual funds invested in domestic and international marketable securities that are directly observable in active markets and are therefore classified within Level 1.
Our foreign currency derivative contracts are classified within Level 2 because these contracts are not actively traded and the valuation inputs are based on quoted prices and market observable data of similar instruments.
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Our borrowings under our Credit and Term Loan facilities are classified within Level 2 because these borrowings are not actively traded and have a variable interest rate structure based upon market rates currently available to us for debt with similar terms and maturities. See Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in this Annual Report for more information on these borrowings.
Our contingent consideration receivable, which was recorded in connection with the Software Integrity Divestiture, was classified within Level 3 because it was estimated using significant inputs that were not observable in the market. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in this Annual Report for additional information.
Assets/Liabilities Measured at Fair Value on a Recurring Basis
Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2025:

   
  Fair Value Measurement Using
Description Total Quoted Prices in 
Active Markets 
for Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable Inputs
(Level 3)
  (in thousands)
Assets
Cash equivalents:
Money market funds $ 52,978   $ 52,978   $ —   $ —  

Short-term investments:
U.S. Treasury, agency & T-bills
6,680   —   6,680   —  
Municipal bonds 22,065   —   22,065   —  
Corporate debt securities 43,999   —   43,999   —  

Others 185   —   185   —  
Prepaid and other current assets:
Foreign currency derivative contracts 8,863   —   8,863   —  
Contingent consideration receivable
22,202   —   —   22,202  
Other long-term assets:
Deferred compensation plan assets 447,232   447,232   —   —  
Marketable equity securities 785   785   —   —  
Total assets $ 604,989   $ 500,995   $ 81,792   $ 22,202  
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts $ 10,097   $ —   $ 10,097   $ —  
Other long-term liabilities:
Deferred compensation plan liabilities 447,232   447,232   —   —  
Total liabilities $ 457,329   $ 447,232   $ 10,097   $ —  
 
Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2024:
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Description Total Fair Value Measurement Using
Quoted Prices in 
Active Markets 
for Identical Assets
(Level 1) Significant Other
Observable Inputs
(Level 2) Significant
Unobservable Inputs
(Level 3)
  (in thousands)
Assets
Cash equivalents:
Money market funds $ 869,972   $ 869,972   $ —   $ —  

U.S. Treasury, agency & T-bills
7,985   —   7,985   —  

Short-term investments:
U.S. Treasury, agency & T-bills
19,449   —   19,449   —  

Corporate debt securities 105,256   —   105,256   —  
Asset-backed securities 29,164   —   29,164   —  

Prepaid and other current assets:
Foreign currency derivative contracts 8,851   —   8,851   —  
Contingent consideration receivable
22,202   —   —   22,202  
Other long-term assets:
Deferred compensation plan assets 386,757   386,757   —   —  
Total assets $ 1,449,636   $ 1,256,729   $ 170,705   $ 22,202  
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts $ 7,032   $ —   $ 7,032   $ —  
Other long-term liabilities:
Deferred compensation plan liabilities 386,757   386,757   —   —  
Total liabilities $ 393,789   $ 386,757   $ 7,032   $ —  

Assets/Liabilities Measured at Fair Value on a Non-Recurring Basis
Non-Marketable Equity Securities
Non-marketable equity securities are classified within Level 3 as they are valued using a combination of observable transaction price and unobservable inputs or data in an inactive market due to the absence of market price and inherent lack of liquidity.

Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities
The following table summarizes our borrowings as of October 31, 2025:
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Effective Interest Rate Amount
(in thousands)

Fixed-rate 4.550 % Senior Notes due on April 1, 2027
4.840   % $ 1,000,000  
Fixed-rate 4.650 % Senior Notes due on April 1, 2028
4.850   % 1,000,000  
Fixed-rate 4.850 % Senior Notes due on April 1, 2030
4.980   % 2,000,000  
Fixed-rate 5.000 % Senior Notes due on April 1, 2032
5.150   % 1,500,000  
Fixed-rate 5.150 % Senior Notes due on April 1, 2035
5.270   % 2,400,000  
Fixed-rate 5.700 % Senior Notes due on April 1, 2055
5.800   % 2,100,000  
Term Loan due on July 17, 2027
5.390   % 600,000  
Term Loan due on July 17, 2028
5.480   % 2,850,000  
Total 13,450,000  
Unamortized discount and issuance costs
( 89,156 )
Total Senior Notes and Term Loan
13,360,844  
Deferred payment on settlement of interest rate treasury lock
110,585  
Other borrowings
13,086  
Total
$ 13,484,515  
Reported as:

Short-term debt
$ 22,117  
Long-term debt 13,462,398  
Total $ 13,484,515  

Senior Notes
On March 17, 2025, we issued $ 10.0  billion in aggregate principal amount of senior, unsecured and unsubordinated long-term notes, including $ 1.0  billion aggregate principal amount of 4.550 % Senior Notes due April 1, 2027 (the 2027 Senior Notes), $ 1.0  billion aggregate principal amount of 4.650 % Senior Notes due April 1, 2028 (the 2028 Senior Notes), $ 2.0  billion aggregate principal amount of 4.850 % Senior Notes due April 1, 2030 (the 2030 Senior Notes), $ 1.5  billion aggregate principal amount of 5.000 % Senior Notes due April 1, 2032 (the 2032 Senior Notes), $ 2.4  billion aggregate principal amount of 5.150 % Senior Notes due April 1, 2035 (the 2035 Senior Notes) and $ 2.1  billion aggregate principal amount of 5.700 % Senior Notes due April 1, 2055 (the 2055 Senior Notes and together with the 2027 Senior Notes, 2028 Senior Notes, 2030 Senior Notes, 2032 Senior Notes and 2035 Senior Notes, the Senior Notes). Our total proceeds were approximately $ 9.9  billion, net of original issuance discount of $ 17.0  million and total issuance costs of $ 70.2  million. Interest on the Senior Notes is payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2025. The discount and issuance costs on our Senior Notes are amortized to interest expense over the terms of the respective notes using the effective interest method. The effective rates for the Senior Notes include the interest on the notes, the accretion of the discount and the amortization of issuance costs.
The Senior Notes were issued under an indenture, dated as of March 17, 2025 (the Base Indenture), as supplemented by the first supplemental indenture, dated as of March 17, 2025 (the Supplemental Indenture and, together with the Base Indenture, the Indenture), each between Synopsys and U.S. Bank Trust Company, National Association, as trustee.
The net proceeds of the Senior Notes were used to fund a portion of the Cash Consideration in the Ansys Merger and pay related transaction fees and expenses.
At any time and from time to time prior to their respective par call dates (as defined in the Indenture and applicable series of Senior Notes or, in the case of the 2027 Senior Notes, prior to the maturity date), Synopsys may redeem the applicable series of the Senior Notes at its option, in whole or in part, at any time and from time to time, at the “make-whole” redemption price (calculated as set forth in the Indenture and applicable series of Senior Notes), plus, in each case, accrued and unpaid interest, if any, on the Senior Notes being redeemed to, but excluding, the redemption date. In addition, on or after the applicable par call date, Synopsys may redeem the 2028 Senior Notes, 2030 Senior Notes, 2032 Senior Notes, 2035 Senior Notes or 2055 Senior Notes at its option, in whole or in part, at
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any time and from time to time, at a redemption price equal to 100 % of the principal amount of the Senior Notes being redeemed plus accrued and unpaid interest, if any, thereon to, but excluding, the applicable redemption date.
The Indenture contains covenants limiting Synopsys’ ability to create certain liens and enter into certain sale and leaseback transactions. These covenants are subject to important limitations and exceptions as set forth in the Indenture.
Based on the trading prices of the Senior Notes, the fair value of our Senior Notes was $ 10.1  billion as of October 31, 2025. While the Senior Notes are recorded at cost, the fair value of long-term debt was determined based on observable market prices in less active markets and categorized as Level 2 for purposes of the fair value measurement hierarchy.
As of October 31, 2025 , we were in compliance with all of our covenants under the Indenture.
During the first quarter of fiscal 2025, we entered into 6-month interest rate hedge contracts with an aggregate notional amount of $ 2.0  billion to manage the variability in cash flows due to changes in benchmark interest rates related to the Senior Notes. These interest rate hedge contracts were terminated and settled during the second quarter of fiscal 2025, and we entered into a deferred payment agreement with the counterparty bank to defer the cash settlement. See Note 8. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements for more information on these cash flow hedging activities.
Bridge Commitment
On January 15, 2024, we entered into the Bridge Commitment Letter with certain financial institutions that committed to provide, subject to the satisfaction of customary closing conditions, the bridge commitment (the Bridge Commitment) for the purpose of financing a portion of the aggregate Cash Consideration in the Ansys Merger and paying related fees and expenses in connection with the Ansys Merger and the other transactions contemplated by the Merger Agreement.
On October 3, 2024, we reduced the Bridge Commitment by $ 1.1  billion to $ 10.6  billion following the closing of the Software Integrity Divestiture. On March 17, 2025, we further reduced the Bridge Commitment by $ 9.9  billion following the issuance of the Senior Notes. On the Acquisition Date, we terminated the approximately $ 690.0  million in remaining Bridge Commitment, reducing the Bridge Commitment to $ 0 .
Term Loan
On February 13, 2024, we entered into a term loan facility credit agreement (the Term Loan Agreement) in connection with the financing of the Ansys Merger. On July 17, 2025, we borrowed the full $ 4.3  billion available under the Term Loan Agreement to fund a portion of the Cash Consideration in the Ansys Merger and to pay transaction fees, premiums and expenses related to the Ansys Merger.
The Term Loan Agreement provides for two tranches of senior unsecured term loans: a $ 1.45  billion tranche (Tranche 1) that matures on July 17, 2027 and a $ 2.85  billion tranche (Tranche 2) that matures on July 17, 2028. On October 17, 2025, we made an early repayment of $ 850.0  million on the Tranche 1 Term Loan. The outstanding balance under the Term Loan Agreement as of October 31, 2025 was $ 3.45  billion.
Under the Term Loan Agreement, borrowings will bear interest on the principal amount outstanding at a floating rate based on, at Synopsys’ election, (i) the Adjusted Term SOFR Rate (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of Synopsys ranging from 0.875 % to 1.375 % (in the case of Tranche 1) or 1.000 % to 1.500 % (in the case of Tranche 2) or (ii) the ABR (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of Synopsys ranging from 0.000 % to 0.375 % (in the case of Tranche 1) or 0.000 % to 0.500 % (in the case of Tranche 2).
The Term Loan Agreement contains a financial covenant requiring that Synopsys maintain a maximum consolidated leverage ratio, as well as certain other non-financial covenants. As of October 31, 2025, we were in compliance with the financial covenant as well as the other covenants.
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Subsequent Event
On November 17, 2025, we made an early repayment of $ 600.0  million on the Tranche 1 Term Loan, which reduced the Tranche 1 outstanding balance to $ 0 , and an early repayment of $ 300.0  million on the Tranche 2 Term Loan. On December 17, 2025 we made another early repayment of $ 2.2  billion on the Tranche 2 Term Loan, which reduced the Tranche 2 outstanding balance to $ 350.0  million.
Revolving Credit Facilities
On February 13, 2024, we entered into a Sixth Amendment Agreement (the Sixth Amendment), which amended and restated our previous revolving credit agreement, dated as of December 14, 2022 (as amended and restated, the Revolving Credit Agreement).
The Revolving Credit Agreement provides an unsecured $ 850.0  million committed multicurrency revolving credit facility and an unsecured uncommitted incremental revolving loan facility of up to $ 150.0  million. The maturity date of the revolving credit facility is December 14, 2027, which may be extended at our option.
Under the Sixth Amendment, certain amendments became effective on February 13, 2024 and certain additional amendments became effective on the Acquisition Date. The Sixth Amendment amended the financial covenant to allow netting of the cash proceeds of certain debt incurred to finance the Ansys Merger as well as certain other modifications set forth therein. The Sixth Amendment, among other things, also amended: (i) the applicable margin used to determine the interest that accrues on loans and the facility fee payable under the revolving credit facility to be based on our credit ratings, (ii) the financial covenant thresholds under the financial covenant in the Revolving Credit Agreement requiring us to maintain a maximum consolidated leverage ratio and (iii) certain conditions to borrowing, other non-financial covenants and events of default.
The Revolving Credit Agreement contains a financial covenant requiring us to maintain a maximum consolidated leverage ratio, as well as other non-financial covenants. As of October 31, 2025, we were in compliance with the financial covenant.
Interest under the Revolving Credit Agreement accrues on dollar-denominated loans at a floating rate based on, at Synopsys’ election, (i) the Adjusted Term SOFR Rate (as defined in the Revolving Credit Agreement) plus an applicable margin based on our credit ratings ranging from 0.795 % to 1.200 % or (ii) the ABR (as defined in the Revolving Credit Agreement) plus an applicable margin based on our credit ratings ranging from 0.000 % to 0.200 %. In addition to the interest on any outstanding loans, Synopsys is also required to pay a facility fee on the entire portion of the revolving credit facility ranging from 0.080 % to 0.175 % based on the credit ratings of Synopsys on the daily amount of the revolving commitment.
There was no outstanding balance under the Revolving Credit Agreement as of October 31, 2025 and October 31, 2024.
Other Borrowings
In July 2018, we entered into a 12 -year 220.0 million Renminbi (approximately $ 33.0 million) credit agreement with a lender in China to support our facilities expansion. Borrowings bear interest at a floating rate based on the 5-year Loan Prime Rate plus 0.74 %. As of October 31, 2025, we had $ 13.1 million outstanding balance under the agreement.
The carrying amount of the short-term and long-term debt approximates the estimated fair value.
The future principal payments of debt as of October 31, 2025 are as follows:
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Principal Payments

Fiscal year (in thousands)
2026 $ 24,734  
2027 1,624,734  
2028 3,874,734  
2029 24,734  
2030 2,024,735  
2031 and thereafter 6,000,000  
Total $ 13,573,671  

Note 11. Leases
We have operating lease arrangements for office space, data center, equipment and other corporate assets. These leases have various expiration dates through December 31, 2042, some of which include options to extend the leases for up to 15 years. We consider the lease renewal options in determining the lease term and include associated potential option payments in lease payments when it is reasonably certain that the renewal options will be exercised.
The components of our lease expense during the period presented are as follows:

Year Ended October 31,
2025 2024 2023
(in thousands)
Operating lease expense (1)
$ 117,722   $ 92,222   $ 90,680  

Variable lease expense (2)
32,389   23,835   20,395  
Total lease expense $ 150,111   $ 116,057   $ 111,075  

(1) Operating lease expense includes immaterial amounts of short-term leases, net of sublease income.
(2) Variable lease expense includes payments to lessors that are not fixed or determinable at lease commencement date. These payments primarily consist of maintenance, property taxes, insurance and variable indexed based payments.
Supplemental cash flow information during the period presented is as follows:

Year Ended October 31,
2025 2024 2023
(in thousands)
Cash paid for amounts included in the measurement of operating lease liabilities (1)
$ 115,481   $ 99,905   $ 88,983  
ROU assets obtained in exchange for operating lease liabilities (2)
$ 153,178   $ 100,480   $ 101,390  

(1) Cash paid for amounts included in the measurement of operating lease liabilities included cash from discontinued operations of $ 5.2  million and $ 5.7  million in fiscal 2024 and 2023.
(2) ROU assets obtained in exchange for operating lease liabilities included ROU assets from discontinued operations of $ 2.2  million and $ 1.2  million in fiscal 2024 and 2023.
Lease term and discount rate information related to our operating leases as of the end of the period presented are as follows:

As of October 31,

2025 2024
Weighted-average remaining lease term (in years) 6.88 7.59
Weighted-average discount rate 3.40   % 2.86   %

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The following table represents the maturities of our future lease payments due under operating leases as of October 31, 2025:

Lease Payments
Fiscal year (in thousands)
2026 $ 151,583  
2027 154,521  
2028 140,001  
2029 130,259  
2030 101,406  
2031 and thereafter 232,094  
Total future minimum lease payments
909,864  
Less: Imputed interest 100,961  
Total lease liabilities
$ 808,903  

In addition, the sublease income from facilities leased by us, due to us as of October 31, 2025, are as follows:
Lease Receipts
  (in thousands)
Fiscal year
2026 $ 18,767  
2027 19,689  
2028 20,280  
2029 20,888  
2030 17,867  

Total $ 97,491  

Note 12. Contingencies
Legal Proceedings
We are subject to routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate outcome of any litigation is often uncertain and unfavorable outcomes could have a negative impact on our results of operations and financial condition. We regularly review the status of each significant matter and assess its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount is estimable, we accrue a liability for the estimated loss. Legal proceedings are inherently uncertain and as circumstances change, it is possible that the amount of any accrued liability may increase, decrease, or be eliminated.
We have determined that no disclosure of estimated loss is required for a claim against us because: (1) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (2) a reasonably possible loss or range of loss cannot be estimated; or (3) such estimate is immaterial.
Tax Matters
We undergo examination from time to time by U.S. and foreign authorities for non-income based taxes, such as sales, use and value-added taxes, and are currently under examination by tax authorities in certain jurisdictions. If the potential loss from such examinations is considered probable and the amount or the range of loss could be estimated, we would accrue a liability for the estimated expense. In addition to the foregoing, we are, from time to time, party to various other claims and legal proceedings in the ordinary course of our business, including with tax and other governmental authorities. For a description of certain of these other matters, refer to Note 17. Income Taxes of the Notes to Consolidated Financial Statements in this Annual Report .
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Note 13. Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss), on an after-tax basis where applicable, are as follows:

  As of October 31,

  2025 2024
  (in thousands)
Cumulative currency translation adjustments $ ( 137,457 ) $ ( 161,954 )
Unrealized gains (losses) on derivative instruments, net of taxes ( 95,158 ) ( 18,800 )
Unrealized gains (losses) on available-for-sale securities, net of taxes 201   374  
Total $ ( 232,414 ) $ ( 180,380 )

The effect of amounts reclassified out of each component of accumulated other comprehensive income (loss) into net income is as follows:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Reclassifications:
Gains (losses) on cash flow hedges, net of taxes
Revenues $ 3,155   $ 3,089   $ ( 9,942 )
Operating expenses ( 3,320 ) 112   ( 15,334 )

Interest expense
( 3,551 ) —   —  
Total $ ( 3,716 ) $ 3,201   $ ( 25,276 )

Amounts reclassified in fiscal 2025, 2024, and 2023 primarily consisted of gains (losses) from our cash flow hedging activities. See Note 8. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements in this Annual Report .

Note 14. Stock Repurchase Program
In fiscal 2022, our Board of Directors approved a stock repurchase program (the Program) with authorization to purchase up to $ 1.5 billion of our common stock. As of October 31, 2025, $ 194.3 million remained available for future repurchases under the Program. However, in connection with the Ansys Merger, we have suspended the Program until we reduce our expected debt levels.
Stock repurchase activities as well as the reissuance of treasury stock for employee stock-based compensation purposes are as follows:

  Year Ended October 31,
  2025 2024 2023 (1)

  (in thousands, except per share price)
Shares repurchased —   74   2,992  
Average purchase price per share —   $ 608.91   $ 387.92  
Aggregate purchase price —   $ 45,000   $ 1,160,724  
Reissuance of treasury stock 1,927   2,133   2,670  

(1)     Excludes 73,903 shares and $ 45.0 million equity forward contract that was settled in November 2023.
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Note 15. Employee Benefit Plans
Employee Stock Purchase Plan
Under our Employee Stock Purchase Plan (ESPP), participating employees are granted the right to purchase shares of common stock at a price per share that is 85 % of the lesser of the fair market value of the shares at (1) the beginning of an offering period (generally, a rolling two year period) or (2) the purchase date (generally occurring at the end of each semi-annual purchase period), subject to the terms of ESPP, including a limit on the number of shares that may be purchased in a purchase period.
On April 10, 2025, our stockholders approved amendments to the ESPP to increase the number of shares of common stock authorized for issuance under the plan by 2.2  million shares. During fiscal 2025, 2024 and 2023, we issued 0.5 million, 0.5 million, and 0.6 million shares, respectively, under the ESPP at average per share prices of $ 375.72 , $ 315.24 and $ 266.82 , respectively. As of October 31, 2025, 14.7 million shares of common stock were reserved for future issuance under the ESPP.
Equity Incentive Plans
2006 Employee Equity Incentive Plan. On April 25, 2006, our stockholders approved the 2006 Employee Equity Incentive Plan (2006 Employee Plan), which provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, RSU awards, stock appreciation rights and other forms of equity compensation, including performance stock awards and performance cash awards, as determined by the plan administrator. The terms and conditions of each type of award are set forth in the 2006 Employee Plan and in the award agreements governing particular awards.
RSUs are granted under the 2006 Employee Plan as part of our incentive compensation program. In general, RSUs vest over three to four years and are subject to the employee's continuing service with us. RSUs granted with specific performance criteria and certain market conditions vest to the extent the performance and market conditions are met. For each RSU granted under the 2006 Employee Plan, a share reserve ratio of 1.70 is applied for the purpose of determining the remaining number of shares reserved for future grants under the plan. Options granted under this plan generally have a contractual term of seven years and generally vest over four years .
On April 10, 2025, our stockholders amended the 2006 Employee Plan to, among other things, increase the number of shares of common stock reserved for future issuance under the plan by 1.6  million shares. As of October 31, 2025, an aggregate of 1.1 million stock options and 3.4 million RSUs were outstanding, and 14.1 million shares were available for future issuance under the 2006 Employee Plan.
2017 Non-Employee Directors Equity Incentive Plans. On April 6, 2017, our stockholders approved the 2017 Non-Employee Directors Equity Incentive Plan (2017 Directors Plan). The 2017 Directors Plan provides for equity awards to non-employee directors in the form of stock options, RSUs, restricted stock or a combination thereof. On April 6, 2017, our stockholders approved an aggregate of 0.45 million shares of common stock reserved under the 2017 Directors Plan.
We grant restricted stock awards and options under the 2017 Directors Plan. Restricted stock awards generally vest on an annual basis and options vest over a period of three years . As of October 31, 2025, 9,395 stock options were outstanding, and a total of 359,486 shares of common stock were reserved for future issuance under the 2017 Directors Plan.
Assumed Equity Plans
As of the Acquisition Date, we assumed outstanding equity incentive awards under the following Ansys equity incentive plans: (i) the Fourth Amended and Restated Ansys, Inc. 1996 Stock Option and Grant Plan, (ii) the Fifth Amended and Restated Ansys, Inc. 1996 Stock Option and Grant Plan, and (iii) the Ansys, Inc. 2021 Equity and Incentive Compensation Plan (each, an Assumed Equity Plan, and collectively the Assumed Equity Plans). The awards under the Assumed Equity Plans, previously issued in the form of stock options and RSUs, were generally settled as follows:
(1)    Each award of Ansys RSUs held by non-employee directors and specified employees that were outstanding immediately prior to the Acquisition Date (the specified RSUs), including any RSUs deferred as part of Ansys'
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director deferred compensation program, was canceled and terminated and converted into the right to receive the Merger Consideration as of the Acquisition Date.
(2)    Each award of Ansys stock options and RSUs (other than specified RSUs) that was outstanding and unvested immediately prior to the Acquisition Date was assumed by us (each, an Assumed Option and Assumed RSU, and collectively, the Assumed Equity Awards) and converted to stock options exercisable and RSUs settleable in the number of shares of our common stock equal to the product of (i) the number of Ansys shares underlying such Assumed Equity Awards as of immediately prior to the Acquisition Date multiplied by (ii) the conversion ratio defined in the Merger Agreement. Any Ansys performance-based RSUs that were assumed by us will only be subject to time-based vesting. The number of Ansys shares underlying the performance-based RSUs for which the performance period was not complete as of the Acquisition Date was based on the target level of performance, and the number of Ansys shares underlying the performance-based RSUs for which the performance period was complete as of the Acquisition Date was based on the actual level of performance. The Assumed Equity Awards generally retain all of the rights, terms and conditions of the respective plans under which they were originally granted, including the same service-based vesting schedule, applicable thereto.
If these assumed equity awards are cancelled, forfeited or expire unexercised, the underlying shares do not become available for future issuance.
As of the Acquisition Date, the estimated fair value of the Assumed Equity Awards was $ 639.7  million, of which $ 131.0  million was recognized as goodwill and the balance of $ 508.7  million is being recognized as stock-based compensation expense over the remainder term of the Assumed Equity Awards. The fair value of the Assumed Equity Awards for services rendered through the Acquisition Date was recognized as a component of the purchase consideration, with the remaining fair value related to the post-combination services to be recorded as stock-based compensation over the remaining vesting period.
A total of 1.1  million shares of our common stock underlying the Assumed Equity Awards that is being recognized as stock-based compensation expense had an estimated weighted average fair value at the Acquisition Dat e of $ 453.83 per sh are. As of October 31, 2025, there were 0.9 million shares of our common stock underlying the outstanding Assumed Equity Awards under the Assumed Equity Plans.
Other Assumed Stock Plans through Acquisitions. In addition, we have assumed certain outstanding stock awards of other acquired companies, including restricted stock units and options. If these assumed equity awards are canceled, forfeited or expire unexercised, the underlying shares do not become available for future grant. As of October 31, 2025, 235 shares of our common stock remained subject to such outstanding assumed equity awards.
Equity Incentive Plans - General Information
Restricted Stock Units. The following table contains information concerning activities related to restricted stock units granted under the 2006 Employee Plan and assumed from acquisitions including those associated with our discontinued operations:
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Restricted
Stock Units Outstanding Weighted 
Average
Grant Date
Fair Value Weighted
Average
Remaining
Contractual
Life (In Years) Aggregate
Fair
Value
  (in thousands, except per share amounts and years)
Balance at October 31, 2022 (1)
4,638   $ 265.76   1.32
Granted (2)
2,083   $ 394.34  
Vested (3)
( 1,839 ) $ 237.19   $ 706,136  
Forfeited ( 365 ) $ 283.29  
Balance at October 31, 2023 (1)
4,517   $ 335.26   1.41
Granted (2)
1,620   $ 543.69  
Vested (3)
( 1,778 ) $ 303.23   $ 962,127  
Forfeited ( 460 ) $ 395.74  
Balance at October 31, 2024 (1)
3,899   $ 429.36   1.35
Assumed upon acquisition of Ansys
1,116   $ 571.20  
Granted (2)
1,280   $ 494.29  
Vested (3)
( 1,753 ) $ 407.12   $ 865,731  
Forfeited ( 224 ) $ 466.51  
Balance at October 31, 2025 4,318   $ 492.36   1.05

(1) No restricted stock units were assumed in connection with acquisitions during these fiscal years.
(2) The number of granted restricted stock units includes those granted to senior management with market-based and performance-based vesting criteria in addition to service-based vesting criteria (market-based RSUs) reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.
(3) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.
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Stock Options. The following table summarizes stock option activity and includes stock options granted under all equity plans including those associated with our discontinued operations:

  Options Outstanding
  Shares Under Stock Option (1)
Weighted-
Average Exercise
Price per Share Weighted-
Average
Remaining
Contractual
Life (In Years) Aggregate
Intrinsic
Value
  (in thousands, except per share amounts and years)
Balance at October 31, 2022 2,160   $ 150.37   3.57 $ 328,120  
Granted 294   $ 361.64  

Exercised ( 849 ) $ 109.83  
Canceled/forfeited/expired ( 90 ) $ 245.86  
Balance at October 31, 2023 1,515   $ 208.49   3.70 $ 376,563  
Granted 238   $ 551.41  

Exercised ( 429 ) $ 141.83  
Canceled/forfeited/expired ( 42 ) $ 376.97  
Balance at October 31, 2024 1,282   $ 288.91   3.63 $ 301,781  
Assumed upon acquisition of Ansys
5   $ 124.53  
Granted 232   $ 502.29  

Exercised ( 323 ) $ 171.82  
Canceled/forfeited/expired ( 42 ) $ 463.57  
Balance at October 31, 2025 1,154   $ 357.66   3.74 $ 141,969  
Vested and expected to vest as of October 31, 2025 1,154   $ 357.66   3.74 $ 141,969  
Exercisable at October 31, 2025 709   $ 279.76   2.66 $ 131,982  

(1) The balance at fiscal year-end includes certain stock options that were previously assumed in connection with other acquisitions.
The aggregate intrinsic value in the preceding table represents the pre-tax intrinsic value based on stock options with an exercise price less than our closing stock price of $ 453.82 at the end of fiscal 2025. The pre-tax intrinsic value of options exercised and their average exercise prices including those associated with our discontinued operations are:

  Year Ended October 31,
  2025 2024 2023
  (in thousands, except per share price)
Intrinsic value $ 104,394   $ 185,663   $ 241,385  
Average exercise price per share $ 171.82   $ 141.83   $ 109.83  

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Restricted Stock Units and Stock Options. The following table contains additional information concerning activities related to stock options and restricted stock units that were granted under the 2006 Employee Plan and assumed from acquisitions, except for the Ansys Merger, including those associated with our discontinued operations:

  Available for Grant (1)(2)

  (in thousands)
Balance at October 31, 2022 13,111  
Options granted (2)
( 294 )

Options canceled/forfeited/expired (2)
89  
Restricted stock units granted (1)(3)
( 3,540 )
Restricted stock units forfeited (1)
620  
Additional shares reserved 3,300  
Balance at October 31, 2023 13,286  
Options granted (2)
( 238 )

Options canceled/forfeited/expired (2)
40  
Restricted stock units granted (1)(3)
( 2,754 )
Restricted stock units forfeited (1)
782  
Additional shares reserved 3,400  
Balance at October 31, 2024 14,516  
Options granted (2)
( 232 )

Options canceled/forfeited/expired (2)
41  
Restricted stock units granted (1)(3)
( 2,176 )
Restricted stock units forfeited (1)
365  
Additional shares reserved 1,600  
Balance at October 31, 2025 14,114  

(1) Restricted stock units includes awards granted under the 2006 Employee Plan and assumed through acquisitions. The number of RSUs reflects the application of the award multiplier of 1.70 as described above. No additional options and RSUs will be granted under the Assumed Equity Plans.
(2) Options granted by us are not subject to the award multiplier ratio described above.
(3) The number of granted restricted stock units includes market-based RSUs reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.

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Restricted Stock Awards . The following table summarizes restricted stock award activities under the 2017 Directors Plan:

Restricted
Shares Weighted-Average
Grant Date Fair Value
  (in thousands, except per share amounts)
Unvested at October 31, 2022
5   $ 310.02  
Granted 5   $ 387.79  
Vested ( 5 ) $ 310.02  
Forfeited —   $ —  
Unvested at October 31, 2023
5   $ 387.79  
Granted 3   $ 561.23  
Vested ( 4 ) $ 382.88  
Forfeited —   $ —  
Unvested at October 31, 2024 4   $ 541.51  
Granted 6   $ 419.34  
Vested ( 4 ) $ 550.58  
Forfeited —   $ —  
Unvested at October 31, 2025 6   $ 419.64  

Valuation and Expense of Stock-Based Compensation. We estimate the fair value of stock options and employee stock purchase rights under the ESPP on the grant date. The value of awards expected to vest is recognized as expense over the applicable service periods. We use the Black-Scholes option-pricing model to determine the fair value of stock options and employee stock purchase plan rights . The Black-Scholes option-pricing model incorporates various assumptions including expected volatility, expected term and interest rates. The expected volatility for both stock options and employee stock purchase rights is estimated by a combination of implied volatility for publicly traded options of our common stock with a term of six months or longer and the historical stock price volatility over the estimated expected term of such awards, which is based on historical experience.
Restricted stock units are valued based on the closing price of our common stock on the grant date. We use the straight-line attribution method to recognize stock-based compensation costs over the service period of the award except for performance-based RSUs and market-based RSUs.
We estimated the fair value of market-based RSUs on the grant date using a Monte Carlo simulation model. Under the award agreements, the vesting of the market-based RSUs is contingent on achieving total stockholder return (TSR) relative to a peer index as well as revenue growth metrics. The maximum potential awards that may be earned are 187.5 % of the target number of the initial awards. For market-based RSUs granted in February and August 2023, the performance period during which the achievement goals will be measured is fiscal 2023, fiscal 2024 and fiscal 2025. The awards will vest in December 2025 if the TSR target, revenue growth metrics, and service conditions are achieved. For market-based RSUs granted in December 2023, the performance period during which the achievement goals will be measured is fiscal 2024, fiscal 2025 and fiscal 2026. The awards will vest in December 2026 if the TSR target, revenue growth metrics, and service conditions are achieved. For market-based RSUs granted in January and February 2025, the performance period during which the achievement goals will be measured is fiscal 2025, fiscal 2026 and fiscal 2027. The awards will vest in December 2027 if the TSR target, revenue growth metrics, and service conditions are achieved.
We estimate the probability of achievement of applicable performance goals for performance-based and market-based RSUs in each reporting period and recognize related stock-based compensation expense using the graded-vesting method. The amount of stock-based compensation expense recognized in any period can vary based on the attainment or expected attainment of the various performance goals. If such performance goals are not ultimately met, no compensation expense is recognized and any previously recognized compensation expense is reversed.
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The assumptions presented in the following table are used to estimate the fair value of stock options and employee stock purchase rights granted under our stock plans:

  Year Ended October 31,
  2025 2024 2023
Stock Options:

Expected life (in years) 4.1
4.1
4.1

Risk-free interest rate 3.53 %- 4.53 %
3.62 % - 4.61 %
3.80 % - 4.80 %

Volatility 34.84 % - 42.33 %
32.09 % - 35.42 %
32.74 %- 36.16 %

Weighted average estimated fair value $ 170.77
$ 178.67
$ 120.33

ESPP:

Expected life (in years) 0.5 - 2.0
0.5 - 2.0
0.5 - 2.0

Risk-free interest rate 3.66 % - 4.31 %
3.88 % - 5.27 %
4.85 % - 5.38 %

Volatility 34.69 % - 38.34 %
31.40 % - 34.39 %
28.03 % - 35.27 %

Weighted average estimated fair value $ 166.64
$ 179.10
$ 120.82

The grant date fair value of the market-based RSUs and the assumptions used in the Monte Carlo simulation model to determine the grant date fair value during the periods are as follows:

  Year Ended October 31,
  2025 2024 2023
Expected life (in years) 2.67 - 2.79
  2.89
0.90 - 2.70

Risk-free interest rate 3.90 % - 4.39 %
4.41 %
4.36 % - 4.80 %

Volatility 33.40 % - 34.72 %
34.03 %
34.79 % - 42.86 %

Grant date fair value $ 409.94 - $ 464.17
$ 600.29
$ 357.29 - $ 465.79

The compensation cost recognized in the consolidated statements of income for our stock compensation arrangements is as follows:

  Year Ended October 31,
  2025 (1)
2024 2023
  (in thousands)
Cost of products $ 89,366   $ 66,403   $ 49,896  
Cost of maintenance and service 41,897   32,189   29,572  
Research and development expense 456,804   359,244   282,540  
Sales and marketing expense 178,384   121,524   91,082  
General and administrative expense 126,843   78,575   60,004  
Stock-based compensation expense from continuing operations before taxes 893,294   657,935   513,094  
Stock-based compensation expense from discontinued operations before taxes —   34,381   50,198  
Total stock-based compensation expense before taxes 893,294   692,316   563,292  
Income tax benefit ( 134,441 ) ( 115,271 ) ( 90,915 )
Stock-based compensation expense after taxes $ 758,853   $ 577,045   $ 472,377  

(1) Includes $ 150.5  million of stock-based compensation expense related to the Assumed Equity Awards in connection with the Ansys Merger.
As of October 31, 2025, we had $ 1.5 billion of total unrecognized stock-based compensation expense relating to options, RSUs and restricted stock awards, which is expected to be recognized over a weighted average period of 1.9 years. As of October 31, 2025, we had $ 88.2 million of total unrecognized stock-based compensation expense relating to the ESPP, which is expected to be recognized over a period of 2.0 years.
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Deferred Compensation Plan. We maintain the Synopsys Deferred Compensation Plan (Deferred Plan), which permits eligible employees to defer up to 50 % of their annual cash base compensation and up to 100 % of their eligible cash variable compensation. Amounts may be withdrawn from the Deferred Plan pursuant to elections made by the employees in accordance with the terms of the plan. Since the inception of the Deferred Plan, we have not made any matching or discretionary contributions to the Deferred Plan. There are no Deferred Plan provisions that provide for any guarantees or minimum return on investments. Undistributed amounts under the Deferred Plan are subject to the claims of our creditors.
Deferred plan assets and liabilities are as follows:

As of October 31,

2025 2024
  (in thousands)
Plan assets recorded in other long-term assets $ 447,232   $ 386,757  
Plan liabilities recorded in other long-term liabilities (1)
$ 447,232   $ 386,757  

(1) Undistributed deferred compensation balances due to participants.
Income or loss from the change in fair value of the Deferred Plan assets is recorded in other income (expense), net. The increase or decrease in the fair value of the undistributed Deferred Plan obligation is recorded in total cost of revenue and operating expense. The following table summarizes the impact of the Deferred Plan:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Increase (reduction) to cost of revenue and operating expense $ 65,492   $ 85,446   $ 20,196  
Interest and other income (expense), net
65,492   85,446   20,196  
Net increase (decrease) to net income $ —   $ —   $ —  

Other Retirement Plans. We sponsor various defined contribution retirement plans for our eligible U.S. and non-U.S. employees. Total contributions to these plans were $ 80.7 million, $ 51.3 million, and $ 50.8 million in fiscal 2025, 2024, and 2023, respectively. For employees in the United States and Canada, we match pre-tax employee contributions up to a maximum of U.S. $ 7,500 and Canadian $ 4,000 , respectively, per participant per year, except for legacy Ansys employees with maximum matching contributions of 4.25 % of the employee's eligible compensation.
Certain of our international subsidiaries sponsor defined benefit retirement plans. The unfunded projected benefit obligation for these defined benefit retirement plans as of October 31, 2025 and 2024 was immaterial and recorded in other long-term liabilities in our consolidated balance sheets.
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Note 16. Net Income (Loss) Per Share
The table below reconciles the weighted average common shares used to calculate basic net income (loss) per share with the weighted average common shares used to calculate diluted net income (loss) per share:

  Year Ended October 31,
  2025 2024 2023
  (in thousands, except per share amounts)
Numerator:
Net income from continuing operations attributed to Synopsys $ 1,336,120   $ 1,441,710   $ 1,227,045  
Net income (loss) from discontinued operations attributed to Synopsys ( 3,900 ) 821,670   2,843  
Net income attributed to Synopsys $ 1,332,220   $ 2,263,380   $ 1,229,888  
Denominator:
Weighted average common shares for basic net income per share 163,947   153,138   152,146  
Dilutive effect of common share equivalents from equity-based compensation 1,709   2,806   3,049  
Weighted average common shares for diluted net income per share 165,656   155,944   155,195  
Net income (loss) per share attributed to Synopsys - basic:
Continuing operations $ 8.15   $ 9.41   $ 8.06  
Discontinued operations ( 0.02 ) 5.37   0.02  
Basic net income per share $ 8.13   $ 14.78   $ 8.08  
Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations $ 8.07   $ 9.25   $ 7.91  
Discontinued operations ( 0.03 ) 5.26   0.01  
Diluted net income per share $ 8.04   $ 14.51   $ 7.92  
Anti-dilutive employee stock-based awards excluded 427   229   475  

Subsequent Event
In December 2025, we entered into a securities purchase agreement for a private placement with NVIDIA Corporation, pursuant to which we sold an aggregate of approximately 4.8  million shares of our common stock at a price of $ 414.79 per share for net proceeds of $ 2.0  billion.

Note 17. Income Taxes
The domestic and foreign components of our total income before provision for income taxes are as follows:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
United States $ 983,195   $ 1,333,132   $ 1,144,410  
Foreign 409,947   180,726   161,060  
Total income before provision for income taxes
$ 1,393,142   $ 1,513,858   $ 1,305,470  

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The components of the provision (benefit) for income taxes are as follows:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Current:
Federal $ 376,014   $ 345,859   $ 252,186  
State 25,041   19,808   23,042  
Foreign 118,696   110,021   22,869  
519,751   475,688   298,097  
Deferred:
Federal ( 339,076 ) ( 312,677 ) ( 191,249 )
State ( 109,078 ) ( 39,164 ) ( 219 )
Foreign ( 15,606 ) ( 24,129 ) ( 16,441 )
( 463,760 ) ( 375,970 ) ( 207,909 )
Provision (benefit) for income taxes $ 55,991   $ 99,718   $ 90,188  

The provision (benefit) for income taxes differs from the taxes computed with the statutory federal income tax rate as follows: 

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Statutory federal tax $ 292,560   $ 317,912   $ 274,149  
State tax (benefit), net of federal effect 26,897   48,393   438  
Federal tax credits ( 64,818 ) ( 70,119 ) ( 60,500 )
Tax (benefit) on foreign earnings
28,008   3,316   ( 17,571 )
Foreign-derived intangible income deduction ( 106,903 ) ( 104,835 ) ( 80,034 )
Tax settlements —   —   ( 23,752 )
Stock-based compensation 20,583   ( 43,419 ) ( 39,995 )
Changes in valuation allowance ( 148,006 ) ( 57,371 ) 29,631  

Capital loss on the sale of investments ( 30,868 ) —   —  
Acquisition costs 17,877   —   —  
Other 20,661   5,841   7,822  
Provision (benefit) for income taxes $ 55,991   $ 99,718   $ 90,188  

On December 22, 2017, the Tax Cuts and Jobs Act (Tax Act) was enacted, which significantly changed prior U.S. tax law and includes numerous provisions that affect our business. Effective in our fiscal 2023 year, the Tax Act requires that research and development expenditures be capitalized and amortized instead of being deducted when incurred. Domestic research is capitalized over five years and foreign research is capitalized over fifteen years. Capitalization of research and development expenditures also results in a corresponding deferred tax benefit and decreased our effective tax rate due to increasing the foreign-derived intangible income deduction.
We have provided for foreign withholding taxes on undistributed earnings of certain of our foreign subsidiaries to the extent such earnings are no longer considered to be indefinitely reinvested in the operations of those subsidiaries. Where foreign subsidiaries are considered indefinitely reinvested, and if the tax effect of undistributed earnings and other outside basis differences were recognized, the nature of taxes expected would primarily be withholding, taxes in non-conforming states, and taxes on intermediate holding companies outside of the U.S., net of foreign tax credits where available. As of October 31, 2025, the taxes due, after allowable foreign tax credits, are not expected to be material.
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The significant components of deferred tax assets and liabilities are as follows:

  As of October 31,

  2025 2024
  (in thousands)
Net deferred tax assets:
Deferred tax assets:
Deferred revenue $ 164,953   $ 37,849  
Deferred compensation 88,079   73,869  
Intangible and depreciable assets 57,278   65,489  
Capitalized research and development costs 1,352,914   978,085  
Stock-based compensation 110,861   74,934  
Tax loss carryovers 54,854   37,787  
Foreign tax credit carryovers 43,342   42,534  
Research and other tax credit carryovers 139,998   107,643  
Operating lease liabilities
127,570   108,235  
Accruals and reserves
117,113   49,935  

Gross deferred tax assets 2,256,962   1,576,360  
Valuation allowance ( 38,900 ) ( 170,672 )
Total deferred tax assets 2,218,062   1,405,688  
Deferred tax liabilities:
Intangible assets
2,982,708   80,034  
Operating lease right-of-use-assets
104,486   84,512  

Undistributed earnings of foreign subsidiaries
24,074   8,800  
Other
269   21,641  
Total deferred tax liabilities 3,111,537   194,987  
Net deferred tax assets (liabilities)
$ ( 893,475 ) $ 1,210,701  

It is more likely than not that the results of future operations will be able to generate sufficient taxable income to realize the net deferred tax assets. The valuation allowance provided against our deferred tax assets as of October 31, 2025 is mainly attributable to foreign tax credits available to non-U.S. subsidiaries. The valuation allowance decreased by a net of $ 131.8  million in fiscal 2025, primarily related to realization of California research credits.
We have the following tax loss and credit carryforwards available to offset future income tax liabilities:

Carryforward Amount Expiration
Date
  (in thousands)  
Federal net operating loss carryforward $ 11,531   2026-2042
Federal research credit carryforward 1,636   2026-2035
Federal foreign tax credit carryforward 35,780   2031
International foreign tax credit carryforward 3,170   Indefinite
International net operating loss carryforward 196,491   2027-Indefinite
California research credit carryforward 171,267   Indefinite
Other state research credit carryforward 29,849   2026-2045
State net operating loss carryforward 37,840   2032-2045

The federal and state net operating loss carryforward is from acquired companies and the annual use of such loss is subject to significant limitations under Internal Revenue Code Section 382. Foreign tax credits may only be used to offset tax attributable to foreign source income.
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The gross unrecognized tax benefits increased by approximately $ 111.9  million during fiscal 2025 resulting in gross unrecognized tax benefits of $ 173.7  million as of October 31, 2025. A reconciliation of the beginning and ending balance of gross unrecognized tax benefits is summarized as follows:

As of October 31,

2025 2024
  (in thousands)
Beginning balance $ 61,854   $ 64,880  
Increases in unrecognized tax benefits related to prior year tax positions 22,568   1,106  
Decreases in unrecognized tax benefits related to prior year tax positions ( 11,686 ) ( 8,639 )
Increases in unrecognized tax benefits related to current year tax positions 25,664   8,036  

Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations ( 4,089 ) ( 4,380 )
Increases in unrecognized tax benefits acquired 79,321   161  
Changes in unrecognized tax benefits due to foreign currency translation 102   690  
Ending balance $ 173,734   $ 61,854  

As of October 31, 2025 and 2024, approximately $ 173.7  million and $ 61.9  million, respectively, of the unrecognized tax benefits would affect our effective tax rate if recognized upon resolution of the uncertain tax positions.
Interest and penalties related to estimated obligations for tax positions taken in our tax returns are recognized as a component of income tax expense (benefit) in the consolidated statements of income and totaled approximately $( 0.2 ) million , $( 1.0 ) million and $( 10.6 ) million for fiscal years 2025, 2024 and 2023, respectively. As of October 31, 2025 and 2024, the combined amount of accrued interest and penalties related to tax positions taken on our tax returns were approximately $ 0.9 million and $ 1.1 million, respectively.
The timing of the resolution of income tax examinations, and the amounts and timing of various tax payments that are part of the settlement process, are highly uncertain. Variations in such amounts and/or timing could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. During the next 12 months, it is reasonably possible that certain audits and ongoing tax litigation will be resolved, or that the statute of limitations on certain state and foreign income and withholding taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax positions, we estimate a potential decrease in underlying unrecognized tax benefits to be between $ 0.0 and $ 29.0 million.
We and/or our subsidiaries remain subject to tax examination in the following jurisdictions:

Jurisdiction Year(s) Subject to Examination
United States Fiscal years after 2021
California Fiscal years after 2020
Ireland Fiscal years after 2020
Japan Fiscal years after 2020
Korea Fiscal years after 2020
Taiwan Fiscal years after 2023
China Fiscal years after 2015
India Fiscal years after 2018

In addition, we have made acquisitions with operations in several of our significant jurisdictions which may have years subject to examination different from the years indicated in the above table.
Non-U.S. Examinations
One of our Korean subsidiaries, Ansys Korea, is currently involved in various stages of Tax Tribunal and Korea's High Court appeals regarding Korea's National Tax Service assessments of withholding taxes against Ansys Korea
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for calendar tax years 2017-2023. In connection with this matter, we have recorded the net impact of the unrecognized tax benefit and offsetting foreign tax credit.
We are under examinations by the tax authorities in certain jurisdictions. No material assessments have been proposed in these examinations.
Legislative Developments
On July 4, 2025, U.S. President Donald J. Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBB) into law. The OBBB includes many changes to corporate income tax law, including expensing for domestic research expenditures commencing in fiscal 2026 and changes to foreign-derived intangible income deduction in fiscal 2027. We are currently evaluating the impacts of OBBB.
Effective our fiscal 2024, we are subject to the new 15% corporate alternative minimum tax (CAMT) enacted as part of the Inflation Reduction Act of 2022 (the IR Act). As of October 31, 2025, this has not had an impact on our consolidated financial statements. We will monitor regulatory developments and will continue to evaluate the impact, if any, of the CAMT.
The IR Act imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. In general, the total taxable value of shares repurchased is reduced by the fair market value of any newly issued shares during the taxable year. As of October 31, 2025, this has not had an impact on our consolidated financial statements.
On June 27, 2024, California enacted SB-167, which suspends the use of California net operating loss and limits the use of California research tax credits to $5 million for our fiscal 2025-2027. On June 29, 2024, California enacted SB-175, which provides a refund mechanism effective beginning in our fiscal 2025 for the incremental tax that was paid as a result of SB-167.
The Organisation for Economic Co-operation and Development (the OECD) has model rules for a global minimum tax framework, which is a two-pillar solution to address tax challenges arising from digitalization of the economy. This two-pillar solution includes the Pillar Two Model Rules (Pillar 2) which define global minimum tax rules and imposes a 15% minimum tax rate. Various countries have started to enact new laws related to Pillar 2, including certain new laws effective beginning in fiscal 2025. As of fiscal 2025, the impact of Pillar 2 is not material.

Note 18. Other Income (Expense), Net
The following table presents the components of other income (expense), net:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Interest income $ 277,684   $ 67,017   $ 36,674  
Gain on divestitures
548,906   —   —  

Gains on assets related to deferred compensation plan
65,492   85,446   20,196  
Gain on sale of building 51,385   1,906   —  
Gain (loss) on sale of strategic investments ( 3,635 ) 55,077   —  
Foreign currency exchange gains (losses) 1,842   6,294   ( 1,529 )
Other, net ( 16,730 ) ( 20,764 ) ( 20,407 )
Total $ 924,944   $ 194,976   $ 34,934  

Assets Held for Sale
We commenced a plan to sell one office building with approximately 118,000 square feet during the first quarter of fiscal 2025. The carrying value of the building was included within prepaid and other current assets at the end of the first quarter. During the second quarter of fiscal 2025, we completed the sale of an office building for cash consideration of $ 74.3  million, net of selling costs. We recognized a pre-tax gain on sale of $ 51.4  million, which was included in other income (expense), net in the consolidated statements of income.
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Note 19. Segment Disclosure
Segment reporting is based upon the “management approach,” i.e., how management organizes our operating segments for which separate financial information is (1) available and (2) evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. Our CODM is our CEO.
We have two reportable segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, Ansys products, system integration products and services, digital, custom and field programmable gate array (FPGA) IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our interface, foundation, security, and embedded processor IP, IP subsystems, and IP implementation services.
We completed our assessment of our organizational structure after the Ansys Merger and concluded that Ansys is included within our Design Automation segment based on how our CODM evaluates the financial results in making operational decisions, allocating resources and assessing performance.
The financial information provided to and used by the CODM to assist in making operational decisions, allocating resources, and assessing performance includes consolidated financial information as well as revenue, adjusted operating income, and adjusted operating margin information for the Design Automation, and Design IP segments, accompanied by disaggregated information relating to revenue by geographic region.
The Software Integrity business constituted its own reportable segment under Topic 280. In accordance with applicable accounting guidance, the results of the Software Integrity business were presented as discontinued operations in the consolidated statements of income and, as such, have been excluded from both continuing operations and segment results for all periods presented. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in this Annual Report.
Information by reportable segment is as follows:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Total Segments:
      Revenue $ 7,054,178   $ 6,127,436   $ 5,318,014  
      Cost of revenue and operating expenses
4,421,327   3,765,377   3,389,987  
      Adjusted operating income 2,632,851   2,362,059   1,928,027  
      Adjusted operating margin 37   % 39   % 36   %
Design Automation:
      Revenue $ 5,302,340   $ 4,221,122   $ 3,775,288  
      Cost of revenue and operating expenses
3,088,814   2,589,237   2,361,362  
      Adjusted operating income 2,213,526   1,631,885   1,413,926  
      Adjusted operating margin 42   % 39   % 37   %
Design IP:
Revenue $ 1,751,838   $ 1,906,314   $ 1,542,726  
      Cost of revenue and operating expenses
1,332,513   1,176,140   1,028,625  
Adjusted operating income 419,325   730,174   514,101  
Adjusted operating margin 24   % 38   % 33   %

Certain operating expenses are not allocated to the segments and are managed at a consolidated level. The unallocated expenses managed at a consolidated level, including amortization of acquired intangible assets, stock-based compensation, changes in the fair value of deferred compensation plan, restructuring charges, and acquisition/divestiture related items, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income from continuing operations:
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  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Total segment adjusted operating income $ 2,632,851   $ 2,362,059   $ 1,928,027  
Reconciling items:
      Amortization of acquired intangible assets ( 504,383 ) ( 124,234 ) ( 54,576 )
      Stock-based compensation expense ( 893,294 ) ( 657,935 ) ( 513,094 )
      Deferred compensation plan ( 65,492 ) ( 85,446 ) ( 20,196 )
      Restructuring charges —   —   ( 53,091 )
      Acquisition/divestiture related items ( 254,755 ) ( 138,733 ) ( 13,831 )
Total operating income $ 914,927   $ 1,355,711   $ 1,273,239  

The CODM does not use total assets by segment to evaluate segment performance or allocate resources. As a result, total assets by segment are not disclosed.
In allocating revenue to particular geographic areas, the CODM considers where individual “seats” or licenses to our products are located. Revenue is defined as revenue from external customers. Revenue and property and equipment, net, related to operations in the United States and other geographic areas are:

  Year Ended October 31,
  2025 2024 2023
  (in thousands)
Revenue:
United States
$ 3,100,095   $ 2,739,756   $ 2,462,009  
Europe
888,524   614,584   514,780  
China
814,324   989,524   855,023  
Korea
946,999   773,018   625,502  
Other
1,304,236   1,010,554   860,700  
Consolidated $ 7,054,178   $ 6,127,436   $ 5,318,014  

  As of October 31,
  2025 2024
  (in thousands)
Property and Equipment, net:
United States
$ 327,803   $ 335,306  
Other 368,890   227,700  
Total $ 696,693   $ 563,006  

Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.
One customer, including its subsidiaries, accounted for 12.6 %, and 13.5 % of our consolidated revenue in fiscal 2024 and 2023, respectively. No customer accounted for over 10% of our accounts receivable as of October 31, 2025, and October 31, 2024.

Note 20. Restructuring Charges
In the first quarter of fiscal 2023, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2023 Plan). The 2023 Plan was substantially completed in the third quarter of fiscal 2023 and total charges under the 2023 Plan consisting primarily of severance costs and facility exit costs were $ 77.0  million, of which $ 23.9  million were related to discontinued operations.
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During fiscal 2025, we made payments of $ 0.8  million related to continuing operations under the 2023 Plan. As of October 31, 2025, $ 0.7  million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $ 3.1  million were recorded in other long-term liabilities in the consolidated balance sheets.
During fiscal 2024, we made payments of $ 3.6  million related to continuing operations and $ 0.5  million related to discontinued operations under the 2023 Plan. As of October 31, 2024, the payroll and related benefits liabilities of $ 0.8  million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $ 3.8  million were recorded in other long-term liabilities in the consolidated balance sheets.
During fiscal 2023, we recorded restructuring charges related to continuing operations of $ 53.1  million and made payments of $ 44.9  million under the 2023 Plan. We recorded restructuring charges related to discontinued operations of $ 23.9  million and made payments of $ 23.4  million under the 2023 Plan. As of October 31, 2023, the payroll and related benefits liabilities related to continuing operations of $ 3.7 million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $ 4.5  million were recorded in other long-term liabilities in the consolidated balance sheets. The payroll and related benefits liabilities related to discontinued operations were $ 0.5 million.
Subsequent event
In November 2025, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2026 Plan) upon approval by the Board of Directors. The 2026 Plan will allow us to invest in key growth opportunities and drive business efficiencies following the completion of the Ansys Merger. Total charges under the 2026 Plan are expected to be in the range of $ 300.0  million and $ 350.0  million, and will consist primarily of severance costs, other one-time termination benefits and facility exit costs. The 2026 Plan is anticipated to be completed by the end of fiscal 2027, with majority of the workforce reduction in fiscal 2026.
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 Item 9.      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

 Item 9A.      Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures. As of October 31, 2025, Synopsys carried out an evaluation under the supervision and with the participation of Synopsys’ management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Synopsys’ disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Regardless of how well designed and operated, there are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives. Our compliance programs and compliance training for employees may not prevent our employees or contractors from breaching or circumventing our policies or violating applicable laws and regulations. Our Chief Executive Officer and Chief Financial Officer have concluded that, as of October 31, 2025, Synopsys’ disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports Synopsys files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required, and that such information is accumulated and communicated to Synopsys’ management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding its required disclosure.
(b) Management’s Report on Internal Control Over Financial Reporting . Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) for Synopsys.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of October 31, 2025. In assessing the effectiveness of our internal control over financial reporting, our management used the framework established in Internal Control Integrated Framework (2013)  issued by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our management has concluded that, as of October 31, 2025, our internal control over financial reporting was effective based on these criteria.
We acquired Ansys during fiscal 2025 and have excluded Ansys from our assessment of the effectiveness of our internal control over financial reporting as of October 31, 2025. Total assets and total revenues of Ansys represent approximately 21% and 11% of each of our total consolidated assets and of total consolidated revenue as of and for the year ended October 31, 2025.
Our independent registered public accounting firm, KPMG LLP, has issued an auditors’ report on the effectiveness of our internal control over financial reporting, which is included herein.
(c) Changes in Internal Control Over Financial Reporting. There were no changes in Synopsys’ internal control over financial reporting during the fiscal quarter ended October 31, 2025 that have materially affected, or are reasonably likely to materially affect, Synopsys’ internal control over financial reporting. We are currently in the process of integrating the Ansys operations, control processes and information systems into our systems and control environment. We believe that we have taken the necessary steps to monitor and maintain appropriate internal controls over financial reporting during this integration.

 Item 9B.      Other Information

Insider Adoption or Termination of Trading Arrangements

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None of our directors or officers informed us of the adoption, modification or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" (as those terms are defined in Item 408(c) of Regulation S-K) during the quarterly period covered by this report, except as described in the table below:

Name and Title Action Date Adopted
Character of Trading Arrangement (1)
Aggregate Number of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement
Expiration Date (2)

Sassine Ghazi Adoption 9/19/2025 Rule 10b5-1 Trading Arrangement Up to 43,811 shares to be sold
10/30/2026
President, Chief Executive Officer and Director

Janet Lee
Adoption 10/01/2025 Rule 10b5-1 Trading Arrangement Up to 1,000 shares to be sold
7/31/2026
General Counsel and Corporate Secretary

Aart de Geus
Adoption 10/14/2025 Rule 10b5-1 Trading Arrangement Up to 74,641 shares to be sold
10/15/2026
Executive Chair

(1) Except as indicated by footnote, each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended (the Rule).
(2) Except as indicated by footnote, each trading arrangement permitted or permits transactions through and including the earlier to occur of (a) the completion of all purchases or sales or (b) the date listed in the table. Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permitted or only permits transactions upon expiration of the applicable mandatory cooling-off period under the Rule.

 Item 9C.      Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.
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PART III

 Item 10.      Directors, Executive Officers and Corporate Governance

For information required by this Item relating to our executive officers, see Information about our Executive Officers in Part I, Item 1 of this Annual Report.
The information required by this Item relating to our directors and nominees is included under the heading “Proposal 1 — Election of Directors,” in our definitive Proxy Statement to be filed within 120 days after October 31, 2025 for the 2026 Annual Meeting of Stockholders (our Proxy Statement) and is incorporated herein by reference. The information required by this Item regarding our Audit Committee is included under the headings “Audit Committee Report” and “Corporate Governance” in our Proxy Statement and is incorporated herein by reference. We will provide disclosure of delinquent Section 16(a) reports, if any, in our Proxy Statement, and such disclosure, if any, is incorporated herein by reference.
The information required by this Item relating to our code of ethics and its applicability to our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer is included under the heading “Ethics and Business Conduct” in our Proxy Statement and is incorporated herein by reference.
The information required by this Item relating to our insider trading policies and procedures is included under the
heading “Proposal 3 — Advisory Vote to Approve Executive Compensation — Insider Trading Policy,” in our Proxy
Statement and is incorporated herein by reference.

 Item 11.      Executive Compensation

The information required by this Item relating to director and executive compensation is included under the headings “Compensation Discussion and Analysis,” “Executive Compensation Tables,” “Director Compensation,” “Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report” in our Proxy Statement and is incorporated herein by reference.

 Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item relating to security ownership of certain beneficial owners and management is included under the heading “Security Ownership of Certain Beneficial Owners and Management” in our Proxy Statement, and the information required by this Item relating to securities authorized for issuance under equity compensation plans is included under the heading “Equity Compensation Plan Information” in our Proxy Statement, and, in each case, is incorporated herein by reference.

 Item 13.      Certain Relationships and Related Transactions and Director Independence

The information required by this Item relating to the review, approval or ratification of transactions with related persons is included under the heading “Transactions with Related Persons” in our Proxy Statement, and the information required by this Item relating to director independence is included under the heading “Director Independence,” and, in each case, is incorporated herein by reference.

 Item 14.      Principal Accountant Fees and Services

The information required by this Item is included under the headings “Fees and Service of Independent Registered Public Accounting Firm” and “Audit Committee Pre-Approval Policies and Procedures” in our Proxy Statement and is incorporated herein by reference.

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PART IV

 Item 15.      Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this Form 10-K:
(1) Financial Statements
The following documents are included as Part II, Item 8 of this Form 10-K:

  Page
Report of Independent Registered Public Accounting Firm ( KPMG LLP , Santa Clara, CA , PCAOB ID: 185 )
54

Consolidated Balance Sheets
57

Consolidated Statements of Income
58

Consolidated Statements of Comprehensive Income
60

Consolidated Statements of Stockholders’ Equity
61

Consolidated Statements of Cash Flows
62

Notes to Consolidated Financial Statements
64

(2) Financial Statement Schedules
Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes herein.
(3) Exhibits
See Item 15(b) below.
(b) Exhibits
EXHIBIT INDEX

Exhibit Number Exhibit Description
Incorporated By Reference
Filed or Furnished Herewith

Form
File No.
Exhibit
Filing Date

2.1 Agreement and Plan of Merger, dated as of January 15, 2024, by and among Synopsys, Inc., ANSYS, Inc. and ALTA Acquisition Corp.
8-K 000-19807 2.1 1/16/2024
2.2 Amendment to Agreement and Plan of Merger, dated as of July 15, 2025, by and among Synopsys, Inc., ANSYS, Inc. and ALTA Acquisition Corp.
8-K 000-19807 1.1 7/17/2025
3.1 Restated Certificate of Incorporation
10-Q 000-19807 3.1 9/15/2003
3.2 Amended and Restated Bylaws
8-K
000-19807 3.1 3/25/2024
4.1 Description of Synopsys' Securities Pursuant to Section 12 of the Securitie s E xchange Act of 1934
10-K 000-19807 4.2 12/15/2020
4.2 Indenture, dated as of March 17, 2025, between Synopsys and U.S. Bank Trust Company, National Association, as trustee
8-K
000-19807 4.1 3/17/2025

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Exhibit Number Exhibit Description
Incorporated By Reference
Filed or Furnished Herewith

Form
File No.
Exhibit
Filing Date

4.3 First Supplemental Indenture, dated as of March 17, 2025, between the Synopsys and U.S. Bank Trust Company, National Association, as trustee.
8-K
000-19807 4.2 3/17/2025
4.4 Form of 4.550% senior notes due 2027 (included in Exhibit 4.3)
8-K
000-19807 4.3 3/17/2025
4.5 Form of 4.650% senior notes due 2028 (included in Exhibit 4.3)
8-K
000-19807 4.4 3/17/2025
4.6 Form of 4.850% senior notes due 2030 (included in Exhibit 4.3)
8-K
000-19807 4.5 3/17/2025
4.7 Form of 5.000% senior notes due 2032 (included in Exhibit 4.3)
8-K
000-19807 4.6 3/17/2025
4.8 Form of 5.150% senior notes due 2035 (included in Exhibit 4.3)
8-K
000-19807 4.7 3/17/2025
4.9 Form of 5.700% senior notes due 2055 (included in Exhibit 4.3)
8-K
000-19807 4.8 3/17/2025
10.1 Sixth Amendment Agreement, dated February 13, 2024, by and among Synopsys, as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent for the lenders.
8-K 000-19807 2.1 2/14/2024
10.2
Term Loan Facility Credit Agreement, dated February 13, 2024, by and among Synopsys, as borrower, the lenders party thereto, HSBC Securities (USA) Inc., and Bank of America, N.A., as co-syndication agents, Mizuho Bank, LTD., The Bank of Nova Scotia, TD Bank, N.A., Truist Bank, and Wells Fargo Bank, National Association, as co-documentation agents, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders.
8-K
000-19807 2.2
2/14/2024
10.3*
2006 Employee Equity Incentive Plan, as amended
8-K 000-19807 10.1
4/11/2025
10.4*
Form of Restricted Stock Unit Grant Notice and Award Agreement under 2006 Employee Equity Incentive Plan
8-K 000-19807 10.3
4/14/2023
10.5*
Form of Stock Option Grant Notice and Award Agreement under 2006 Employee Equity Incentive Plan
8-K 000-19807 10.4
4/14/2023

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Exhibit Number Exhibit Description
Incorporated By Reference
Filed or Furnished Herewith

Form
File No.
Exhibit
Filing Date

10.6*
Employee Stock Purchase Plan, as amended
8-K 000-19807 10.2
4/11/2025
10.7*
2017 Non-Employee Directors Equity Incentive Plan
8-K 000-19807 10.8 4/10/2017
10.8*
Form of Restricted Stock Grant Notice and Award Agreement under 2017 Non-Employee Directors Equity Incentive Plan
10-K 000-19807 10.9 12/14/2017
10.9*
Form of Stock Options Grant Notice and Option Agreement under 2017 Non-Employee Directors Equity Incentive Plan
10-K 000-19807 10.10 12/14/2017
10.10*
Synopsys Amended and Restated Deferred Compensation Plan II
10-Q 000-19807 10.23 3/9/2009
10.11 Form of Indemnification Agreement for directors and executive officers
8-K 000-19807 99.2 7/14/2011
10.12*
Director’s and Officer’s Insurance and Company Reimbursement Policy S-1 33-45138 10.2 2/24/1992
(effective date)
10.13*
Executive Incentive Plan, as amended
10-Q
000-19807 10.1 2/17/2023
10.14*
Amended and Restated Executive Change of Control Severance Benefit Plan
8-K 000-19807 10.19 12/21/2016
10.15*
Executive Severance Benefit and Transition Plan
8-K 000-19807 10.1 2/9/2021
10.16*
Offer Letter, dated November 23, 2022, by and between Synopsys, Inc. and Shelagh Glaser
8-K 000-19807 10.1 11/29/2022
10.17*
Employment Agreement, dated December 20, 2023 between Synopsys, Inc. and Mr. Sassine Ghazi
8-K/A
000-19807 10.1
12/21/2023
10.18*
E xecutive Chair person Agreement , dated December 20 , 2023 between Synopsys, Inc . and Dr. Aart J. de Geus
8-K/A
000-19807 10.2
12/21/2023
10.19*
Separation Agreement and General Release, dated July 17, 2025, between Synopsys, Inc. and Ajei Gopal
10-Q
000-19807 10.1
9/9/2025
10.20*
Transition Letter, dated July 17, 2025, between Synopsys, Inc. and John F. Runkel, Jr.
10-Q
000-19807 10.2
9/9/2025
19.1 Insider Trading Policy
X

21.1 Subsidiaries of Synopsys, Inc.
X

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Table of Contents

Exhibit Number Exhibit Description
Incorporated By Reference
Filed or Furnished Herewith

Form
File No.
Exhibit
Filing Date

23.1 Consent of KPMG LLP, Independent Registered Public Accounting Firm
X
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
X
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act
X
32.1+ Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code
X
97.1
Executive Officer Compensation Recovery Policy
10-K
000-19807
97.1 12/12/2023
101 The following financial statements from the Company’s Annual Report on Form 10-K for the year ended October 31, 2025, formatted in Inline XBRL: (i) Consolidated Balance Sheets as of October 31, 2025 and November 2, 2024, (ii) Consolidated Statements of Income for the Years Ended October 31, 2025, November 2, 2024 and October 28, 2023 (iii) Consolidated Statements of Comprehensive Income for the Years Ended October 31, 2025, November 2, 2024 and October 28, 2023, (iv) Consolidated Statements of Stockholders' Equity for the Years Ended October 31, 2025, November 2, 2024 and October 28, 2023, (v) Consolidated Statements of Cash Flows for the Years Ended October 31, 2025, November 2, 2024 and October 28, 2023, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags
X
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*    Indicates a management contract, compensatory plan or arrangement.
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+    This exhibit is furnished with this Annual Report on Form 10-K and is not deemed filed with the Securities and Exchange Commission and is not incorporated by reference in any filing of Synopsys, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.

 Item 16.      Form 10-K Summary

None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

S YNOPSYS , I NC .

Date: December 19, 2025
  By:   /s/ S HELAGH G LASER

    Shelagh Glaser
Chief Financial Officer
(Principal Financial Officer)

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Name   Title   Date

/ S /    S ASSINE G HAZI
  President, Chief Executive Officer (Principal Executive Officer) and Director
  December 19, 2025

Sassine Ghazi

/ S /    S HELAGH G LASER
  Chief Financial Officer (Principal Financial Officer)   December 19, 2025

Shelagh Glaser

/ S /    S UDHINDRA K ANKANWADI
  Chief Accounting Officer (Principal Accounting Officer)   December 19, 2025

Sudhindra Kankanwadi

/ S /    A ART J . DE G EUS
Executive Chair of the Board of Directors
December 19, 2025

Aart J. de Geus

/ S /   L UIS B ORGEN
Director December 19, 2025

Luis Borgen

/ S /     J ANICE D. C HAFFIN
  Director   December 19, 2025

Janice D. Chaffin

/ S /    B RUCE  R. C HIZEN
  Director   December 19, 2025

Bruce R. Chizen

/ S /    A JEI  G OPAL
Director December 19, 2025

Ajei Gopal

/ S /    M ERCEDES J OHNSON
  Director   December 19, 2025

Mercedes Johnson

/ S /    R OBERT G. P AINTER
  Director   December 19, 2025

Robert G. Painter

/s/    J EANNINE P . S ARGENT
  Director   December 19, 2025

 Jeannine P. Sargent

/ S /    J OHN  G. S CHWARZ
  Director   December 19, 2025

John G. Schwarz

/ S /    R AVI V IJAYARAGHAVAN
Director December 19, 2025

Ravi Vijayaraghavan

120