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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM  10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2026
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM                      TO
COMMISSION FILE NUMBER: 000-19807

SYNOPSYS, INC.
(Exact name of registrant as specified in its charter)

Delaware   56-1546236
(State or other jurisdiction of
incorporation or organization)   (I.R.S. Employer
Identification Number)

675 ALMANOR AVE
SUNNYVALE , CA 94085
(Address of principal executive offices, including zip code)
( 650 ) 584-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock
(par value of $0.01 per share)
SNPS Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes    ý     No   ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes    ý     No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   ý    Accelerated Filer   ☐
Non-accelerated filer   ¨   
   Smaller reporting company   ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐     No   ý
As of May 22, 2026, there were 191,479,325 shares of the registrant’s common stock outstanding.

SYNOPSYS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED APRIL 30, 2026
TABLE OF CONTENTS

    Page
PART I. Financial Information
1

Item 1. Financial Statements (Unaudited)
1

Condensed Consolidated Balance Sheets
1

Condensed Consolidated Statements of Income
2

Condensed Consolidated Statements of Comprehensive Income
4

Condensed Consolidated Statements of Stockholders’ Equity
5

Condensed Consolidated Statements of Cash Flows
6

Notes to Condensed Consolidated Financial Statements
8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
32

Item 3. Quantitative and Qualitative Disclosures About Market Risk
47

Item 4. Controls and Procedures
48

PART II. Other Information
49

Item 1. Legal Proceedings
49

Item 1A. Risk Factors
51

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
65

Item 5. Other Information
65

Item 6. Exhibits
66

Signatures
68

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SYNOPSYS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands, except par value amounts)

April 30,
2026  October 31,
2025

ASSETS
Current assets:
Cash and cash equivalents $ 2,412,472   $ 2,888,030  
Short-term investments 71,966   72,929  
      Total cash, cash equivalents and short-term investments 2,484,438   2,960,959  
Accounts receivable, net 1,267,305   1,505,427  
Inventories 441,836   365,190  

Prepaid and other current assets 1,195,391   1,180,526  
Current assets held for sale
48,248   —  
Total current assets 5,437,218   6,012,102  
Property and equipment, net 714,744   696,693  
Operating lease right-of-use assets, net 697,112   702,008  
Goodwill 26,853,807   26,899,215  
Intangible assets, net 11,875,418   12,679,591  

Deferred income taxes 113,642   112,159  
Other long-term assets 1,197,086   1,122,693  

Total assets $ 46,889,027   $ 48,224,461  
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued liabilities $ 1,185,204   $ 1,326,211  
Operating lease liabilities 135,523   128,205  

Deferred revenue 2,419,876   2,245,961  
Short-term debt 22,117   22,117  
Current liabilities held for sale
27,912   —  
Total current liabilities 3,790,632   3,722,494  
Long-term operating lease liabilities 670,475   680,698  

Long-term deferred revenue 389,419   382,557  
Long-term debt 10,013,845   13,462,398  
Other long-term liabilities 1,547,591   1,649,299  

Total liabilities 16,411,962   19,897,446  

Stockholders’ equity:
Preferred stock, $ 0.01 par value: 2,000 shares authorized; none outstanding
—   —  
Common stock, $ 0.01 par value: 400,000 shares authorized; 191,444 and 185,994 shares outstanding, respectively
1,928   1,860  
Capital in excess of par value 20,565,562   18,640,947  
Retained earnings 10,397,550   10,315,487  
Treasury stock, at cost: 593 and 1,222 shares, respectively
( 242,827 ) ( 398,278 )
Accumulated other comprehensive loss ( 244,082 ) ( 232,414 )
Total Synopsys stockholders’ equity 30,478,131   28,327,602  
Non-controlling interest ( 1,066 ) ( 587 )
Total stockholders’ equity 30,477,065   28,327,015  
Total liabilities and stockholders’ equity
$ 46,889,027   $ 48,224,461  

See the accompanying Notes to Condensed Consolidated Financial Statements (unaudited) .
1

SYNOPSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands, except per share amounts)
2

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
Revenue:
Time-based products $ 945,624   $ 828,326   $ 1,897,165   $ 1,656,564  
Upfront products 546,252   510,676   1,287,782   878,800  
Total products revenue 1,491,876   1,339,002   3,184,947   2,535,364  
Maintenance and service 784,109   265,264   1,499,836   524,217  
Total revenue 2,275,985   1,604,266   4,684,783   3,059,581  
Cost of revenue:
Products 232,897   216,216   475,299   385,058  
Maintenance and service 148,597   94,471   295,335   187,008  
Amortization of acquired intangible assets
248,356   7,660   496,598   16,256  
Total cost of revenue 629,850   318,347   1,267,232   588,322  
Gross margin 1,646,135   1,285,919   3,417,551   2,471,259  
Operating expenses:
Research and development 700,124   553,979   1,415,112   1,107,195  
Sales and marketing 381,998   215,021   778,373   424,220  
General and administrative 172,418   136,497   355,150   303,583  
Amortization of acquired intangible assets
155,275   3,996   311,268   7,996  
Restructuring charges 115,894   —   234,176   —  
Total operating expenses 1,525,709   909,493   3,094,079   1,842,994  
Operating income 120,426   376,426   323,472   628,265  
Interest expense
( 133,364 ) ( 94,336 ) ( 296,079 ) ( 105,475 )
Other income (expense), net
32,214   114,101   70,936   164,518  
Income before income taxes 19,276   396,191   98,329   687,308  
Provision for income taxes 2,408   47,181   16,745   40,887  
Net income from continuing operations
16,868   349,010   81,584   646,421  
Loss from discontinued operations, net of income taxes —   ( 3,900 ) —   ( 3,900 )
Net income
16,868   345,110   81,584   642,521  
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest
( 237 ) ( 222 ) ( 479 ) 1,506  
Net income attributed to Synopsys $ 17,105   $ 345,332   $ 82,063   $ 641,015  

Net income (loss) attributed to Synopsys:
Continuing operations
$ 17,105   $ 349,232   $ 82,063   $ 644,915  
Discontinued operations
—   ( 3,900 ) —   ( 3,900 )
Net income
$ 17,105   $ 345,332   $ 82,063   $ 641,015  

Net income (loss) per share attributed to Synopsys - basic:
Continuing operations
$ 0.09   $ 2.25   $ 0.43   $ 4.17  
Discontinued operations
—   ( 0.02 ) —   ( 0.03 )
Basic net income per share $ 0.09   $ 2.23   $ 0.43   $ 4.14  

Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations
$ 0.09   $ 2.24   $ 0.43   $ 4.13  
Discontinued operations
—   ( 0.03 ) —   ( 0.03 )
Diluted net income per share $ 0.09   $ 2.21   $ 0.43   $ 4.10  

Shares used in computing per share amounts:
Basic 191,464   154,927   190,513   154,666  
Diluted 192,144   156,088   191,580   156,218  

See the accompanying Notes to Condensed Consolidated Financial Statements (unaudited) .
3

SYNOPSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands)

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
Net income $ 16,868   $ 345,110   $ 81,584   $ 642,521  
Other comprehensive income (loss):
Change in foreign currency translation adjustment ( 37,947 ) 44,764   586   16,127  
Change in unrealized gains (losses) on available-for-sale securities, net of tax of $ 0 for periods presented
( 281 ) 52   ( 207 ) 9  
Cash flow hedges:
Deferred gains (losses), net of tax of $ 1,789 and $ 5,332 for the three and six months ended April 30, 2026, respectively, and of $ 10,507 and $ 22,002 for each of the same periods in fiscal 2025, respectively
( 5,763 ) ( 45,708 ) ( 17,299 ) ( 82,155 )
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $( 1,350 ) and $( 2,003 ) for the three and six months ended April 30, 2026, respectively, and of $( 783 ) and $( 2,186 ) for each of the same periods in fiscal 2025, respectively
3,592   2,675   5,252   6,263  
Other comprehensive income (loss), net of tax effects ( 40,399 ) 1,783   ( 11,668 ) ( 59,756 )
Comprehensive income (loss) ( 23,531 ) 346,893   69,916   582,765  
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest ( 237 ) ( 222 ) ( 479 ) 1,506  
Comprehensive income (loss) attributed to Synopsys $ ( 23,294 ) $ 347,115   $ 70,395   $ 581,259  

See the accompanying Notes to Condensed Consolidated Financial Statements (unaudited) .

4

SYNOPSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, in thousands)

  Capital in
Excess of
Par
Value Retained
Earnings Treasury
Stock Accumulated
Other
Comprehensive
Income (Loss) Total 
Synopsys
Stockholders’
Equity Non-controlling
Interest Total
Stockholders’
Equity

Common Stock
  Shares Amount
Balance at January 31, 2026
191,449   $ 1,915   $ 20,562,001   $ 10,380,445   $ ( 191,851 ) $ ( 203,683 ) $ 30,548,827   $ ( 829 ) $ 30,547,998  
Net income 17,105   17,105   ( 237 ) 16,868  
Other comprehensive income (loss), net of tax effects ( 40,399 ) ( 40,399 ) ( 40,399 )
Purchases of treasury stock ( 640 ) 6   ( 6 ) ( 262,500 ) ( 262,500 ) ( 262,500 )
Equity forward contract, net ( 37,500 ) ( 37,500 ) ( 37,500 )

Common stock issued, net of shares withheld for employee taxes 635   7   ( 181,236 ) 211,524   30,295   30,295  
Stock-based compensation 222,303   222,303   222,303  

Balance at April 30, 2026
191,444   $ 1,928   $ 20,565,562   $ 10,397,550   $ ( 242,827 ) $ ( 244,082 ) $ 30,478,131   $ ( 1,066 ) $ 30,477,065  

Balance at October 31, 2025
185,994   $ 1,860   $ 18,640,947   $ 10,315,487   $ ( 398,278 ) $ ( 232,414 ) $ 28,327,602   $ ( 587 ) $ 28,327,015  
Net income 82,063   82,063   ( 479 ) 81,584  
Other comprehensive income (loss), net of tax effects ( 11,668 ) ( 11,668 ) ( 11,668 )
Purchases of treasury stock ( 640 ) 6   ( 6 ) ( 262,500 ) ( 262,500 ) ( 262,500 )
Equity forward contract, net ( 37,500 ) ( 37,500 ) ( 37,500 )

Common stock issued for private placement 4,822   48   1,999,952   2,000,000   2,000,000  
Common stock issued for prior acquisition 1   1   189   478   668   668  
Common stock issued, net of shares withheld for employee taxes 1,267   13   ( 519,047 ) 417,473   ( 101,561 ) ( 101,561 )
Stock-based compensation 481,027   481,027   481,027  

Balance at April 30, 2026
191,444   $ 1,928   $ 20,565,562   $ 10,397,550   $ ( 242,827 ) $ ( 244,082 ) $ 30,478,131   $ ( 1,066 ) $ 30,477,065  

Capital in
Excess of
Par
Value Retained
Earnings Treasury
Stock Accumulated
Other
Comprehensive
Income (Loss) Total 
Synopsys
Stockholders’
Equity Non-controlling
Interest Total
Stockholders’
Equity

Common Stock
  Shares Amount
Balance at January 31, 2025
154,618   $ 1,547   $ 1,127,181   $ 9,278,950   $ ( 860,967 ) $ ( 241,919 ) $ 9,304,792   $ 109   $ 9,304,901  
Net income 345,332   345,332   ( 222 ) 345,110  
Other comprehensive income (loss), net of tax effects 1,783   1,783   1,783  

Common stock issued, net of shares withheld for employee taxes 528   5   ( 109,883 ) 171,966   62,088   62,088  
Stock-based compensation 201,723   201,723   201,723  

Balance at April 30, 2025
155,146   $ 1,552   $ 1,219,021   $ 9,624,282   $ ( 689,001 ) $ ( 240,136 ) $ 9,915,718   $ ( 113 ) $ 9,915,605  

Balance at October 31, 2024
154,112   $ 1,541   $ 1,211,206   $ 8,984,105   $ ( 1,025,770 ) $ ( 180,380 ) $ 8,990,702   $ 2,504   $ 8,993,206  
Net income 641,015   641,015   2,344   643,359  
Other comprehensive income (loss), net of tax effects ( 59,756 ) ( 59,756 ) ( 59,756 )

Common stock issued, net of shares withheld for employee taxes 1,034   11   ( 385,296 ) 336,769   ( 48,516 ) ( 48,516 )
Stock-based compensation 387,477   387,477   709   388,186  
Adjustments for redeemable non-controlling interest ( 838 ) ( 838 ) ( 838 )
Deconsolidation of non-controlling interest upon the sale of subsidiary 5,634   5,634   ( 5,670 ) ( 36 )
Balance at April 30, 2025
155,146   $ 1,552   $ 1,219,021   $ 9,624,282   $ ( 689,001 ) $ ( 240,136 ) $ 9,915,718   $ ( 113 ) $ 9,915,605  

See the accompanying Notes to Condensed Consolidated Financial Statements (unaudited) .
5

SYNOPSYS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
6

  Six Months Ended 
 April 30,
  2026 2025
Cash flows from operating activities:
Net income $ 81,584   $ 642,521  
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation 907,177   96,838  
Reduction of operating lease right-of-use assets 72,852   51,728  
Amortization of capitalized costs to obtain revenue contracts 41,158   25,405  
Stock-based compensation 481,027   388,186  
Allowance for credit losses 14,842   15,940  
Loss on sale of strategic investments —   2,435  
Gain on sale of building
—   ( 51,385 )
Loss on divestitures, net of transaction costs
—   8,299  
Amortization of bridge financing costs
—   40,411  
Amortization of debt issuance costs
16,903   2,348  
Deferred income taxes ( 121,045 ) ( 237,170 )
Other ( 153 ) ( 181 )
Net changes in operating assets and liabilities, net of effects from acquisitions and dispositions:

Accounts receivable 234,512   ( 74,098 )
Inventories ( 85,832 ) ( 39,766 )
Prepaid and other current assets 44,649   ( 140,472 )
Other long-term assets ( 87,060 ) ( 36,058 )
Accounts payable and accrued liabilities ( 114,629 ) ( 242,529 )
Operating lease liabilities ( 74,166 ) ( 48,617 )
Income taxes ( 122,420 ) ( 36,870 )
Deferred revenue 196,367   ( 37,412 )
Unrealized loss on settlement of interest rate treasury lock
—   ( 121,643 )
Net cash provided by operating activities 1,485,766   207,910  
Cash flows from investing activities:
Proceeds from maturities of short-term investments
11,180   35,461  
Proceeds from sales of short-term investments
3,656   22,015  
Purchases of short-term investments ( 13,903 ) ( 47,558 )

Purchases of strategic investments
( 781 ) ( 3,368 )
Purchases of property and equipment, net ( 89,518 ) ( 96,303 )
Proceeds from sale of building
—   74,279  

Proceeds from business divestiture, net of cash divested
—   70,082  
Other —   ( 611 )
Net cash provided by (used in) investing activities ( 89,366 ) 53,997  
Cash flows from financing activities:
Proceeds from debt, net of issuance costs
—   10,034,464  
Repayment of debt
( 3,462,369 ) ( 1,289 )

Issuances of common stock 116,136   118,308  
Payments for taxes related to net share settlement of equity awards ( 217,884 ) ( 166,872 )
Common stock issuance for private placement
2,000,000   —  
Purchase of equity forward contract ( 37,500 ) —  
Purchases of treasury stock ( 262,500 ) —  
Redemption of redeemable non-controlling interest
—   ( 30,000 )

Net cash provided by (used in) financing activities ( 1,864,117 ) 9,954,611  
Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 9,247 ) 8,186  
Net change in cash, cash equivalents and restricted cash ( 476,964 ) 10,224,704  
Cash, cash equivalents and restricted cash, beginning of year 2,893,721   3,898,729  
Cash, cash equivalents and restricted cash, end of period $ 2,416,757   $ 14,123,433  

See the accompanying Notes to Condensed Consolidated Financial Statements (unaudited) .
7

SYNOPSYS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1. Description of Business
Synopsys, Inc. (Synopsys, we, our or us) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, intellectual property (IP), simulation and analysis (S&A) solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow.
We are a global leader in supplying the mission-critical electronic design automation (EDA) software that engineers use to design and test integrated circuits (ICs), also known as chips or silicon, and we are pioneering artificial intelligence (AI) driven chip design across the full-stack EDA suite to improve efficiency and accelerate the design, verification testing and manufacturing of advanced digital and analog chips. We provide software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them, including cloud-based digital design flow to boost chip-design development productivity. We also provide technical services and support to help our customers develop advanced chips and electronic systems.
We are the global leader in engineering S&A software. Our Ansys ® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction. These products enable customers to analyze designs on-premises and/or via the cloud, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing, validation and deployment. These products and services are part of our Design Automation segment.
We also offer a broad and comprehensive portfolio of semiconductor IP solutions, which are pre-designed circuits that engineers use as components of larger chip designs to reduce development risk and speed time to market. Our high quality, silicon-proven semiconductor IP includes logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors. To accelerate IP integration and silicon bring-up, our IP Accelerated initiative provides architecture design expertise, customized IP subsystems, hardening, and signal and power integrity analysis. These products and services are part of our Design IP segment.

Note 2. Summary of Significant Accounting Policies and Basis of Presentation
We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The condensed consolidated financial statements are unaudited but, in management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary for a fair presentation of our quarterly results. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025 as filed with the SEC on December 22, 2025 (our Annual Report).
Use of Estimates. To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates and could have a material impact on our operating results and financial position.
Principles of Consolidation. The condensed consolidated financial statements include our accounts and the accounts of our wholly and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
Fiscal Year and Fiscal Quarter End. Our fiscal year end is October 31 and our fiscal quarters end on January 31, April 30, and July 31 of each year.
8

Acquisition of Ansys. On July 17, 2025 (the Acquisition Date), we completed the acquisition of ANSYS, Inc. (Ansys), a provider of broad engineering simulation and analysis software and services for $ 199.91 in cash and 0.3399 of a share of our common stock in exchange for each ordinary share of Ansys for a total consideration of $ 34.9  billion .
We accounted for the acquisition of Ansys by applying the acquisition method of accounting for business combinations. See Note 4. Business Combination and Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in our Annual Report for additional information.
Significant Accounting Policies. There have been no material changes to our significant accounting policies included in our Annual Report.
Recent Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. The ASU is effective for our annual reports beginning in fiscal 2026 with early adoption permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. The ASU will be effective for our annual reports beginning in fiscal 2028, and interim period reports beginning in fiscal 2029 either on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU allows companies to apply a practical expedient when estimating credit losses on current accounts receivable and contract assets. The ASU will be effective for us beginning in fiscal 2027 and will be applied on a prospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs and clarifies the criteria for capitalization. The ASU will be effective for us beginning in fiscal 2029, either on a prospective, retrospective, or a modified basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements. The ASU is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. The ASU will be effective for us beginning in fiscal 2029, either on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Note 3. Discontinued Operations
On September 30, 2024, we completed the sale of our former Software Integrity business (the Software Integrity Divestiture) to entities controlled by funds affiliated with Clearlake Capital Group, L.P. and Francisco Partners (together, the Sponsors). The financial results of the Software Integrity business were presented as income from discontinued operations, net of income taxes in our condensed consolidated statements of income.
9

As a result of the Software Integrity Divestiture, we derecognized net assets of $ 720.5  million and incurred transaction costs of $ 61.7  million, resulting in a pre-tax gain , net of transaction costs, of $ 868.8  million recorded in fiscal 2024. In the second quarter of fiscal 2025, we finalized some working capital adjustments and recorded $ 8.3 million as a reduction to the previously recorded gain, resulting in a total pre-tax gain, net of transaction costs, of $ 860.5  million from the Software Integrity Divestiture. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in our Annual Report for additional information.
There was no Software Integrity related activity for the three and six months ended April 30, 2026.

Note 4. Acquisition of Ansys
On the Acquisition Date, we completed the acquisition of Ansys (the Ansys Merger) for approximately $ 34.9  billion, consisting of cash of $ 17.6  billion (the Cash Consideration), S ynopsys Common Stock with a fair value of $ 17.1  billion, and the balance related to the assumption of certain outstanding Ansys equity awards and the settlement of pre-existing relationships. We acquired Ansys to combine Synopsys’ semiconductor electronic design automation expertise with Ansys’ S&A capabilities to address the growing demand for integrated design and simulation tools across various industries.
We funded the Cash Consideration in the Ansys Merger through a combination of cash on hand, the net proceeds from the issuance of the Senior Notes, and the borrowings under the Term Loan Agreement, each as defined and discussed in Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Condensed Consolidated Financial Statements .
We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on their preliminary estimated fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of acquisition. These estimates and assumptions are believed to be reasonable, but they are inherently uncertain and may be subject to material change as additional information becomes available during the respective measurement period, which will not exceed 12 months from applicable acquisition date. The primary areas that are preliminary relate to the fair values of goodwill, intangible assets, certain tangible assets and liabilities, and income taxes.
Transaction Costs
Transaction costs for acquisitions, primarily related to the Ansys Merger, were $ 7.6 million and $ 18.2 million during the three and six months ended April 30, 2026, respectively. Transaction costs for acquisitions were $ 65.0  million and $ 121.8  million during the three and six months ended April 30, 2025, respectively. These costs mainly consisted of professional fees, administrative costs for closed and pending acquisitions, as well as the Bridge Commitment financing costs, and were expensed as incurred in our condensed consolidated statements of income.
Supplemental Pro Forma Information (Unaudited)
The following unaudited pro forma financial information presents combined results of operations for the period presented, as if Ansys had been acquired as of the beginning of fiscal year 2024.

Three Months Ended 
April 30, Six Months Ended 
 April 30,
2025
2025

(in thousands)
Pro forma total revenue
$ 2,157,992   $ 4,375,675  
Pro forma net income
$ 18,614   $ 74,980  

This information is provided for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2024, or of the results of our future operations of the combined business.

Note 5. Revenue
Disaggregated Revenue
10

The following table shows the percentage of revenue by product groups:

Three Months Ended 
 April 30, Six Months Ended 
 April 30,
2026 2025 2026 2025
EDA 51.0   % 66.9   % 48.3   % 67.1   %
Design IP 20.0   % 30.0   % 18.4   % 30.0   %
Ansys 28.7   % —   % 32.8   % —   %
Other 0.3   % 3.1   % 0.5   % 2.9   %
Total 100.0   % 100.0   % 100.0   % 100.0   %

Contract Balances
The timing of revenue recognition may differ from the timing of invoicing customers, resulting in receivables, contract assets, or contract liabilities (deferred revenue) in our condensed consolidated balance sheets. For specific software, hardware, and IP agreements with payment plans, we record an unbilled receivable associated with revenue recognized upon transfer of control, as it holds an unconditional right to invoice and receive payment in the future for those transferred products or services. Unbilled receivables are presented as accounts receivable, net, in the condensed consolidated balance sheets.
A contract asset is recorded when revenue is recognized before we have the unconditional right to invoice or retain performance risk concerning that performance obligation. These contract assets transition to receivables when the rights become unconditional, generally upon the completion of a milestone. The contract assets listed below are included in prepaid and other current assets and other long-term assets in the condensed consolidated balance sheets.
Contract balances are as follows:
As of
April 30, 2026 October 31, 2025
  (in thousands)
Contract assets, net $ 1,119,650   $ 1,222,029  
Unbilled receivables $ 28,620   $ 45,528  
Deferred revenue $ 2,809,295   $ 2,628,518  

Long-term contract assets were $ 359.7 million and $ 336.4 million as of April 30, 2026 and October 31, 2025, respectively.
During the three and six months ended April 30, 2026, we recognized revenue of $ 598.7 million and $ 1.7 billion, respectively, that was included in the deferred revenue balance as of October 31, 2025, including previously unfulfilled contracts that have expired and are no longer subject to an implied promise to provide future services.
Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) were approximately $ 11.0 billion as of April 30, 2026, which includes $ 1.8 billion in non-cancellable Flexible Spending Account (FSA) commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 49 % of the backlog as of April 30, 2026, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder to be recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years .
During the three and six months ended April 30, 2026, we recognized $ 27.9 million and $ 61.7 million , respectively, from performance obligations satisfied from sales-based royalties earned during the periods. During the three and six months ended April 30, 2025, we recognized $ 25.7 million and $ 50.7 million, respectively, from performance obligations satisfied from sales-based royalties earned during the periods.
Costs of Obtaining a Contract with Customer
Capitalized commission costs, net of accumulated amortization, as of April 30, 2026 were $ 119.1 million, of which $ 31.8 million are included in prepaid and other current assets, and $ 87.3 million in other long-term assets in our
11

condensed consolidated balance sheets. Amortization of these assets were $ 21.9 million and $ 41.2 million during the three and six months ended April 30, 2026, respectively, and are included in sales and marketing expense in our condensed consolidated statements of income. Amortization of these assets were $ 12.9 million and $ 25.4 million during the three and six months ended April 30, 2025, respectively, and are included in sales and marketing expense in our condensed consolidated statements of income.

Note 6. Goodwill and Intangible Assets
Goodwill
The changes in the carrying amount of goodwill during the six months ended April 30, 2026 are as follows:
  (in thousands)

Balance at October 31, 2025
$ 26,899,215  

Adjustments ( 43,278 )
Effect of foreign currency translation ( 2,130 )
Balance at April 30, 2026
$ 26,853,807  

Intangible Assets
Intangible assets as of April 30, 2026 consist of the following:

Gross Carrying Amount Accumulated
Amortization Net Carrying Amount

  (in thousands)
Core/developed technology $ 7,314,600   $ 1,317,353   $ 5,997,247  
Customer relationships 5,415,568   718,972   4,696,596  
Contract rights intangible 612,855   348,636   264,219  

Trademarks and trade names 962,925   45,569   917,356  

Total $ 14,305,948   $ 2,430,530   $ 11,875,418  

Intangible assets as of October 31, 2025 consist of the following:

Gross Carrying Amount Accumulated
Amortization Net Carrying 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  

12

Amortization expense related to intangible assets consists of the following:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Core/developed technology $ 193,619   $ 7,337   $ 387,142   $ 15,526  
Customer relationships 144,949   3,993   290,616   7,989  
Contract rights intangible 54,737   323   109,456   730  

Trademarks and trade names 10,326   3   20,652   7  

Total $ 403,631   $ 11,656   $ 807,866   $ 24,252  

The following table presents the estimated future amortization of acquired intangible assets as of April 30, 2026:

Fiscal year (in thousands)
Remainder of fiscal 2026 $ 805,653  
2027 1,545,111  
2028 1,384,601  
2029 1,381,906  
2030 1,376,058  
2031 and thereafter 5,382,089  

Total $ 11,875,418  

Note 7. Balance Sheet Components

As of
April 30, 2026 October 31, 2025
(in thousands)

Accounts payable and accrued liabilities:
Payroll and related benefits $ 701,291   $ 822,575  
Accounts payable 179,257   164,766  
Accrued income taxes 45,020   94,664  
Interest payable
42,603   49,826  
Other accrued liabilities 217,033   194,380  
Total $ 1,185,204   $ 1,326,211  

Other long-term liabilities:
Deferred tax liability
$ 877,749   $ 1,001,070  
Deferred compensation plan liabilities 468,523   447,232  
Other 201,319   200,997  
Total $ 1,547,591   $ 1,649,299  

Assets Held for Sale
On January 14, 2026, we entered into a definitive agreement for the sale of our Processor IP Solutions (Processor IP) business to GlobalFoundries Inc. as part of our reallocation of resources to the highest growth opportunities in our Design IP segment.
The Processor IP business is part of the Design IP segment and we have determined that we met the criteria to classify the assets and liabilities of this business as held for sale. The divestiture does not represent a strategic shift in operations that would have a major effect on our business and is also not material to our business and therefore does not meet the criteria to be classified as discontinued operations.
13

The sale is expected to be completed in June 2026, subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals.
The following table presents the major classes of assets and liabilities classified as held for sale as of April 30, 2026:

(in thousands)
Assets:
Accounts receivable, net $ 541  
Inventories 72  
Prepaid and other assets
5,623  
Property and equipment, net 2,127  
Operating lease right-of-use assets, net 1,870  
Goodwill 38,015  

Total current assets held for sale $ 48,248  
Liabilities:
Accounts payable and accrued liabilities $ 1,841  
Operating lease liabilities 1,744  
Deferred revenue 24,327  
Total current liabilities held for sale $ 27,912  

Note 8. Financial Assets and Liabilities
Cash Equivalents and Short-term Investments
As of April 30, 2026, 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 $ 196,433   $ —  $ —  $ —  $ 196,433  

U.S. Treasury, agency & T-bills 1,645   —  —  —  1,645  
Total: $ 198,078   $ —  $ —  $ —  $ 198,078  
Short-term investments:
U.S. Treasury, agency & T-bills $ 5,656   $ 5   $ —   $ —   $ 5,661  
Municipal bonds 23,442   23   ( 51 ) —   23,414  

Corporate debt securities 42,697   98   ( 81 ) —   42,714  

Other 177   —   —   —   177  
Total: $ 71,972   $ 126   $ ( 132 ) $ —   $ 71,966  

(1) See Note 9. Fair Value Measurements for further discussion on fair values.
14

The contractual maturities of our available-for-sale debt securities as of April 30, 2026 are as follows:

Amortized Cost Fair Value
(in thousands)
1 year or less
$ 28,479   $ 28,515  
1-5 years 43,493   43,451  

Total $ 71,972   $ 71,966  

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.
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 condensed 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 condensed consolidated balance sheets and the condensed consolidated statements of cash flows:
As of
April 30, 2026 October 31, 2025
(in thousands)
Cash and cash equivalents $ 2,412,472   $ 2,888,030  
Restricted cash included in prepaid and other current assets 3,270   4,680  
Restricted cash included in other long-term assets 1,015   1,011  
Cash, cash equivalents and restricted cash
$ 2,416,757   $ 2,893,721  

Non-marketable equity securities. Our portfolio of non-marketable equity securities consists of strategic investments in privately held companies. There were no material impairments of non-marketable equity securities during the three and six months ended April 30, 2026 and 2025.
Derivatives
We recognize derivative instruments as either assets or liabilities in the condensed 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.
15

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 condensed 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 condensed 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 condensed consolidated balance sheets. The cash flow impact upon settlement of these derivative contracts is included in net cash provided by operating activities in the condensed 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 after the next 12 months.
We did not record any gains or losses related to discontinuation of foreign exchange forward contracts cash flow hedges during the six months ended April 30, 2026 and 2025.
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 manage the variability in cash flows due to changes in benchmark interest rate related to the Senior Notes (as defined in Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Condensed Consolidated Financial Statements ). These derivatives were 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 April 30, 2026, the unamortized portion of the fair value of the 2025 Rate Lock Agreements was $ 113.5  million. We had no interest rate hedge contracts outstanding as of April 30, 2026.
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 condensed 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.
16

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 condensed consolidated statements of income are summarized as follows:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Gains (losses) recorded in other income (expense), net
$ ( 7,790 ) $ 11,186   $ ( 12,087 ) $ 6,765  

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

As of
April 30, 2026 October 31, 2025
  (in thousands)
Total gross notional amounts $ 1,780,365   $ 1,587,863  
Net fair value $ ( 23,220 ) $ ( 1,234 )

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 condensed 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 April 30, 2026

Other current assets $ 15,619   $ 184  
Accrued liabilities $ 38,174   $ 849  
Balance at October 31, 2025

Other current assets $ 8,598   $ 265  
Accrued liabilities $ 9,504   $ 593  

17

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 condensed 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)
Three months ended 
 April 30, 2026
Foreign exchange contracts Revenue $ 7,720   Revenue $ 1,085  
Foreign exchange contracts Operating expenses ( 13,483 ) Operating expenses ( 3,346 )
Interest rate contracts Interest expense
—   Interest expenses ( 1,331 )
Total $ ( 5,763 ) $ ( 3,592 )
Three months ended 
 April 30, 2025
Foreign exchange contracts Revenue $ 12,689   Revenue $ 1,282  
Foreign exchange contracts Operating expenses 14,749   Operating expenses ( 3,069 )
Interest rate contracts Interest expense ( 73,146 ) Interest expense ( 888 )
Total $ ( 45,708 ) $ ( 2,675 )
Six months ended 
 April 30, 2026
Foreign exchange contracts Revenue $ 10,647   Revenue $ 2,275  
Foreign exchange contracts Operating expenses ( 27,946 ) Operating expenses ( 4,864 )
Interest rate contracts Interest expense
—   Interest expenses ( 2,663 )
Total $ ( 17,299 ) $ ( 5,252 )
Six months ended 
 April 30, 2025
Foreign exchange contracts Revenue $ 13,203   Revenue $ 280  
Foreign exchange contracts Operating expenses ( 2,142 ) Operating expenses ( 5,655 )
Interest rate contracts Interest expense ( 93,216 ) Interest expense ( 888 )
Total $ ( 82,155 ) $ ( 6,263 )

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.
18

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.
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 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Condensed Consolidated Financial Statements 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.
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 April 30, 2026:

    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 $ 196,433   $ 196,433   $ —   $ —  

U.S. Treasury, agency & T-bills 1,645   —   1,645   —  
Short-term investments:
U.S. Treasury, agency & T-bills 5,661   —   5,661   —  
Municipal bonds 23,414   —   23,414   —  

Corporate debt securities 42,714   —   42,714   —  

Other 177   —   177   —  
Prepaid and other current assets:
Foreign currency derivative contracts 15,803   —   15,803   —  
Contingent consideration receivable 22,202   —   —   22,202  
Other long-term assets:
Deferred compensation plan assets 468,523   468,523   —   —  
Marketable equity securities
515   515   —   —  
Total assets $ 777,087   $ 665,471   $ 89,414   $ 22,202  

Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts $ 39,023   $ —   $ 39,023   $ —  

Other long-term liabilities:
Deferred compensation plan liabilities 468,523   468,523   —   —  
Total liabilities $ 507,546   $ 468,523   $ 39,023   $ —  

19

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   —  

Other 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/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. Restructuring Charges
In November 2025, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2026 Plan). Total charges under the 2026 Plan are expected to be in the range of $ 300.0 million to $ 350.0 million, and consist primarily of severance costs and other one-time termination benefits. The 2026 Plan is anticipated to be completed by the end of fiscal 2027, with majority of the workforce reduction in fiscal 2026.
During the three and six months ended April 30, 2026 , we recorded restructuring charges of $ 115.9 million and $ 234.2 million, respectively, and made payments of $ 44.2 million and $ 130.2 million, respectively, under the 2026 Plan. As of April 30, 2026, the outstanding restructuring related liabilities were $ 104.0 million and recorded in accounts payable and accrued liabilities in the condensed consolidated balance sheets.

Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities
The following table summarizes our borrowings as of April 30, 2026:
20

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  

Total 10,000,000  
Unamortized discount and issuance costs
( 75,729 )
Total Senior Notes
9,924,271  
Deferred payment on settlement of interest rate treasury lock
99,526  
Other borrowings
12,165  
Total
$ 10,035,962  
Reported as:

Short-term debt
$ 22,117  
Long-term debt 10,013,845  
Total $ 10,035,962  

Senior Notes:
On March 17, 2025, we issued $ 10.0  billion in aggregate principal amount of senior, unsecured and unsubordinated long-term notes, which mature on various dates from April 1, 2027 to April 1, 2055 (collectively, 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.
The Indenture contains provisions for early redemption of the Senior Notes and also 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 $ 10.0  billion as of April 30, 2026. 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 April 30, 2026, 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 Condensed Consolidated Financial Statements for more information on these cash flow hedging activities.
Bridge Commitment:
21

On January 15, 2024, we entered into a bridge commitment letter with certain financial institutions that committed to provide, subject to the satisfaction of customary closing conditions, an aggregate principal amount of $ 16.0 billion (the Bridge Commitment) for the purpose of financing a portion of the aggregate Cash Consideration and related fees and expenses in connection with the Ansys Merger, as well as the other transactions contemplated pursuant to the terms of the Agreement and Plan of Merger, dated as of January 15, 2024 . On the Acquisition Date, we reduced the total 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 the Acquisition Date, we borrowed the full $ 4.3  billion available under the Term Loan Agreement to fund a portion of the Cash Consideration 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. During the first quarter of fiscal 2026, we paid off the remaining $ 3.5  billion, and the Term Loans were terminated upon repayment.
Under the Term Loan Agreement, borrowings 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 contained a financial covenant requiring that Synopsys maintain a maximum consolidated leverage ratio, as well as certain other non-financial covenants. As of April 30, 2026, the term loans were fully paid and terminated.
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 April 30, 2026, we were in compliance with the financial covenant as well as the other covenants.
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 April 30, 2026 and October 31, 2025.
22

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 April 30, 2026, we had $ 12.2 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 April 30, 2026 are as follows:

Principal Payments

Fiscal year (in thousands)
Remainder of fiscal 2026 $ 12,411  
2027 1,024,820  
2028 1,024,820  
2029 24,820  
2030 2,024,820  
2031 and thereafter 6,000,000  
Total $ 10,111,691  

Note 12. 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:
Three Months Ended April 30, Six Months Ended April 30,
2026 2025 2026 2025
(in thousands)
Operating lease expense (1)
$ 37,244   $ 26,063   $ 74,451   $ 51,115  

Variable lease expense (2)
12,105   6,797   22,622   13,557  
Total lease expense $ 49,349   $ 32,860   $ 97,073   $ 64,672  

(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:
Six Months Ended April 30,
2026 2025
(in thousands)
Cash paid for amounts included in the measurement of operating lease liabilities $ 69,942   $ 52,374  
ROU assets obtained in exchange for operating lease liabilities $ 70,891   $ 70,957  

Lease term and discount rate information related to our operating leases as of the end of the period presented are as follows:
As of
April 30, 2026 October 31, 2025
Weighted-average remaining lease term (in years) 6.54 6.88
Weighted-average discount rate 3.46   % 3.40   %

23

The following table represents the maturities of our future lease payments due under operating leases as of April 30, 2026:
Lease Payments
Fiscal year (in thousands)
Remainder of fiscal 2026 $ 76,968  
2027 166,029  
2028 152,626  
2029 140,668  
2030 111,140  
2031 and thereafter 256,469  
Total future minimum lease payments
903,900  
Less: Imputed interest 97,902  
Total lease liabilities
$ 805,998  

In addition, the sublease income from facilities leased by us, due to us as of April 30, 2026 are as follows:

Lease Receipts
Fiscal year (in thousands)
Remainder of fiscal 2026 $ 9,558  
2027 19,689  
2028 20,280  
2029 20,888  
2030 17,867  

Total $ 88,282  

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
April 30, 2026 October 31, 2025
  (in thousands)
Cumulative currency translation adjustments $ ( 136,871 ) $ ( 137,457 )
Unrealized gains (losses) on derivative instruments, net of taxes ( 107,205 ) ( 95,158 )
Unrealized gains (losses) on available-for-sale securities, net of taxes ( 6 ) 201  
Total $ ( 244,082 ) $ ( 232,414 )

24

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

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Reclassifications:
Gains (losses) on cash flow hedges, net of taxes
Revenues $ 1,085   $ 1,282   $ 2,275   $ 280  
Operating expenses ( 3,346 ) ( 3,069 ) ( 4,864 ) ( 5,655 )
Interest expense
( 1,331 ) ( 888 ) ( 2,663 ) ( 888 )

Total $ ( 3,592 ) $ ( 2,675 ) $ ( 5,252 ) $ ( 6,263 )

Amounts reclassified during the six months ended April 30, 2026 and 2025 primarily consisted of gains (losses) from our cash flow hedging activities. See Note 8. Financial Assets and Liabilities of the Notes to Condensed Consolidated Financial Statements.

Note 14. Stock Repurchase Program
In fiscal 2022, our Board of Directors (the Board) approved and publicly announced a stock repurchase program (the Program) with authorization to purchase up to $ 1.5 billion of our common stock. In February 2026, the Board approved a replenishment of the Program with authorization to purchase up to $ 2.0  billion of our common stock. As of April 30, 2026, $ 1.7  billion remained available for future stock repurchases under the Program.
In March 2026, we entered into an accelerated stock repurchase agreement (the March 2026 ASR) to repurchase an aggregate of $ 250.0  million of our common stock. Pursuant to the March 2026 ASR, we made a prepayment of $ 250.0  million to receive initial deliveries of shares valued at $ 212.5  million. The remaining share repurchase of $ 37.5  million will be completed no later than June 1, 2026. Under the terms of the March 2026 ASR, the specific number of shares that we will ultimately repurchase will be based on the volume-weighted average share price of our common stock during the repurchase period, less a discount.
During the three months ended April 30, 2026, we also repurchased on the open market approximately 126.7  thousand shares of our common stock pursuant to the Program, at an average price of $ 394.78 per share for an aggregate purchase price of $ 50.0  million.
Stock repurchase activities as well as the reissuance of treasury stock for employee stock-based compensation purposes are as follows:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Shares repurchased
640   —   640   —  

Aggregate purchase price
$ 262,500   $ —   $ 262,500   $ —  
Reissuance of treasury stock 635   528   1,268   1,034  

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Note 15. Stock-Based Compensation
The compensation cost recognized in the condensed consolidated statements of income for our stock compensation arrangements is as follows:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Cost of products $ 18,506   $ 23,050   $ 38,479   $ 43,527  
Cost of maintenance and service 11,411   9,502   24,551   18,493  
Research and development expense 110,694   109,717   233,909   212,413  
Sales and marketing expense 51,150   36,700   111,717   71,650  
General and administrative expense 30,542   22,754   72,371   42,103  
Stock-based compensation expense before taxes
222,303   201,723   481,027   388,186  
Income tax benefit ( 33,768 ) ( 32,659 ) ( 73,068 ) ( 62,847 )
Stock-based compensation expense after taxes $ 188,535   $ 169,064   $ 407,959   $ 325,339  

During the three and six months ended April 30, 2026 and 2025, we recognized stock-based compensation expense relating to restricted stock units (RSUs) granted to senior executives with certain market, performance and service conditions (market-based RSUs). 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:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
Expected life (in years) 1.67 2.67 1.67 - 2.87
2.67 - 2.79

Risk-free interest rate 3.38   % 3.90   % 3.38 % - 3.48 %
3.90 % - 4.39 %

Volatility 55.12   % 33.40   % 44.90 % - 55.12 %
33.40 % - 34.72 %

Weighted average grant date fair value per share
$ 322.60 $ 409.94
$ 454.13
$ 458.66

As of April 30, 2026, we had $ 1.1 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 1.7 years. As of April 30, 2026, we had $ 146.4 million of unrecognized stock-based compensation expense relating to our Employee Stock Purchase Plan, which is expected to be recognized over a period of approximately 2.0 years.
The intrinsic values of equity awards exercised during the periods are as follows:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Intrinsic value of awards exercised $ 14,240   $ 34,479   $ 24,602   $ 54,837  

Note 16. Net Income (Loss) Per Share
We compute basic net income per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the dilution from potential common shares outstanding such as stock options and unvested RSUs and awards during the period using the treasury stock method.
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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:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands, except per share amounts)
Numerator:
Net income from continuing operations attributed to Synopsys
$ 17,105   $ 349,232   $ 82,063   $ 644,915  
Net loss from discontinued operations attributed to Synopsys —   ( 3,900 ) —   ( 3,900 )
Net income attributed to Synopsys $ 17,105   $ 345,332   $ 82,063   $ 641,015  
Denominator:
Weighted average common shares for basic net income per share 191,464   154,927   190,513   154,666  
Dilutive effect of common share equivalents from equity-based compensation 680   1,161   1,067   1,552  
Weighted average common shares for diluted net income per share 192,144   156,088   191,580   156,218  
Net income (loss) per share attributed to Synopsys - basic:
Continuing operations
$ 0.09   $ 2.25   $ 0.43   $ 4.17  
Discontinued operations
—   ( 0.02 ) —   ( 0.03 )
Basic net income per share $ 0.09   $ 2.23   $ 0.43   $ 4.14  
Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations
$ 0.09   $ 2.24   $ 0.43   $ 4.13  
Discontinued operations
—   ( 0.03 ) —   ( 0.03 )
Diluted net income per share $ 0.09   $ 2.21   $ 0.43   $ 4.10  
Anti-dilutive employee stock-based awards excluded 1,720   1,897   781   413  

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

Note 17. 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 our chief operating decision maker (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 logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors.
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.
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Information by reportable segment is as follows:
  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Total Segments:
Revenue $ 2,275,985   $ 1,604,266   $ 4,684,783   $ 3,059,581  
Cost of revenue and operating expenses
1,376,269   994,996   2,771,415   1,919,094  
Adjusted operating income 899,716   609,270   1,913,368   1,140,487  
Adjusted operating margin 40   % 38   % 41   % 37   %
Design Automation:
Revenue $ 1,821,776   $ 1,122,235   $ 3,823,594   $ 2,142,451  
Cost of revenue and operating expenses
1,032,718   663,479   2,087,004   1,279,025  
Adjusted operating income 789,058   458,756   1,736,590   863,426  
Adjusted operating margin 43   % 41   % 45   % 40   %
Design IP:
Revenue $ 454,209   $ 482,031   $ 861,189   $ 917,130  
Cost of revenue and operating expenses
343,551   331,517   684,411   640,069  
Adjusted operating income 110,658   150,514   176,778   277,061  
Adjusted operating margin 24   % 31   % 21   % 30   %

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:
  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Total segment adjusted operating income $ 899,716   $ 609,270   $ 1,913,368   $ 1,140,487  
Reconciling items:
Amortization of acquired intangible assets
( 403,631 ) ( 11,656 ) ( 807,866 ) ( 24,252 )
Stock-based compensation expense ( 222,303 ) ( 201,723 ) ( 481,027 ) ( 388,186 )
Restructuring charges ( 115,894 ) —   ( 234,176 ) —  
Acquisition/divestiture related items
( 23,649 ) ( 39,571 ) ( 39,241 ) ( 100,252 )
Deferred compensation plan ( 13,813 ) 20,106   ( 27,586 ) 468  
Total operating income $ 120,426   $ 376,426   $ 323,472   $ 628,265  

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 related to operations in the United States and other geographic areas are: 
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  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Revenue:
United States $ 974,422   $ 649,299   $ 2,070,507   $ 1,260,009  
Europe 378,077   194,843   845,110   348,514  
China 240,402   157,506   451,485   331,454  
Korea 265,418   257,595   512,034   507,980  
Other 417,666   345,023   805,647   611,624  
Consolidated $ 2,275,985   $ 1,604,266   $ 4,684,783   $ 3,059,581  

Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.

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

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Interest income $ 12,885   $ 89,890   $ 30,319   $ 125,611  

Gains (losses) on assets related to deferred compensation plan 13,813   ( 20,106 ) 27,586   ( 468 )
Foreign currency exchange gains (losses) ( 1,542 ) ( 178 ) ( 7,369 ) ( 115 )
Loss on sale of strategic investments —   ( 2,435 ) —   ( 2,435 )
Gain on sale of building
—   51,385   —   51,385  
Other, net 7,058   ( 4,455 ) 20,400   ( 9,460 )
Total $ 32,214   $ 114,101   $ 70,936   $ 164,518  

Note 19. Income Taxes
Effective Tax Rate
We estimate our annual effective tax rate at the end of each fiscal quarter. The effective tax rate reflects our estimations of annual pre-tax income, the geographic mix of pre-tax income, interpretations of applicable tax laws and the potential outcomes of audits.
The following table presents the provision for income taxes and the effective tax rates:

  Three Months Ended 
 April 30, Six Months Ended 
 April 30,
  2026 2025 2026 2025
  (in thousands)
Income before income taxes $ 19,276   $ 396,191   $ 98,329   $ 687,308  
Provision for income taxes $ 2,408   $ 47,181   $ 16,745   $ 40,887  
Effective tax rate 12.5   % 11.9   % 17.0   % 5.9   %

Our effective tax rate increased in the three and six months ended April 30, 2026, as compared to the same periods in fiscal 2025, primarily due to the reduced benefit from stock-based compensation and the foreign-derived intangible income deduction. The benefit of the capital loss on the sale of our ownership in OpenLight was included in the first quarter of 2025.
Our effective tax rate for the six months ended April 30, 2026, is lower than the statutory federal corporate tax rate of 21 % primarily due to U.S. federal research tax credits, the foreign-derived intangible income deduction, and U.S. foreign tax credits, partially offset by the effect of non-deductible stock-based compensation.
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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 and $ 28.0 million.
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 for calendar tax years 2017 to 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 tax authorities in certain jurisdictions. No material assessments have been proposed in connection with these examinations.
Legislative Developments
On July 4, 2025, President Donald J. Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBB) into law. The legislation includes corporate income tax changes, including the restoration of immediate expensing for domestic research and experimental expenditures effective beginning in our fiscal 2026, resulting in a decrease to our current cash tax liabilities. Immediate expensing of research and development expenditures also results in a corresponding increase to our effective tax rate due to decreasing the foreign-derived intangible income deduction. The most significant effects began in our fiscal 2026, with certain provisions extending into fiscal 2027.
Effective in fiscal 2024, we are subject to the new 15% corporate alternative minimum tax (CAMT) enacted as part of the Inflation Reduction Act of 2022 (IR Act). We do not expect to be subject to CAMT in fiscal 2026, due to our regular tax liability exceeding CAMT. The details of the computation will be subject to final regulations issued by the U.S. Department of the Treasury. 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. Based on an evaluation of our stock repurchase and issuance activity, no excise tax liability has been recorded as of April 30, 2026.
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 of fiscal 2025. As of April 30, 2026, the impact of Pillar 2 is not material.

Note 20. 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. For more detail on currently pending legal proceedings, see Part II, Item 1, Legal Proceedings . 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 the 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.
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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, see Note 19. Income Taxes of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q (this Quarterly Report) includes forward-looking statements, which involve risks, uncertainties and other factors that could cause Synopsys, Inc.'s (Synopsys, we, our or us) actual results, time frames or achievements to differ materially from those expressed or implied in such forward-looking statements. Readers are urged to carefully review and consider the various disclosures regarding these risks and uncertainties made in this Quarterly Report, including those identified below in Part II, Item 1A, Risk Factors, and in other documents we file from time to time with the Securities and Exchange Commission (SEC). Forward-looking statements include any statements that are not statements of historical fact and include, but are not limited to, statements concerning our short-term and long-term financial targets, expectations and objectives; our businesses, business segments, strategies, partnerships, initiatives and opportunities, including, among other things, the reallocation of resources in our Design IP segment to higher growth opportunities and planned restructuring activities; industry growth and technological trends, such as artificial intelligence (AI), including our development and planned commercialization thereof; business and market outlook; the potential impact of the uncertain macroeconomic environment and global economic conditions on our financial results; the impact of current and future U.S. and foreign trade regulations, government actions and regulatory changes, such as export control restrictions and tariffs; the ANSYS, Inc. (Ansys) integration and its expected impact, including expected synergies and the timing thereof, our ability to create joint solutions as a combined company, and related accounting changes; planned acquisitions or divestitures, including the expected completion of the sale of the Processor IP Solutions (Processor IP) business, and their anticipated timing and impact; our key customers, customer concentration, customer engagement, customer demand and market expansion; results and strategies related to our products, technology and services, including product development and our planned product releases and capabilities; the expected realization of our contracted but unsatisfied or partially unsatisfied performance obligations (backlog); planned stock repurchases; our expected tax rate; and the status, expected outcome or expected impact of litigation and/or regulatory investigations. Forward-looking statements may be identified by words including, but not limited to, “may,” “will,” “could,” “would,” “can,” “should,” “anticipate,” “expect,” “intend,” “believe,” “estimate,” “project,” “continue,” “forecast,” "likely," "potential," "seek," or the negatives of such terms and similar expressions. The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. All subsequent written or oral forward-looking statements attributable to Synopsys or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.
The following summary and overview of our financial condition and results of operations are qualified in their entirety by the more complete discussions and should be read together with our condensed consolidated financial statements and the related notes thereto contained in Part I, Item 1 of this Quarterly Report, the risk factors set forth in Part II, Item 1A of this Quarterly Report, and with our audited consolidated financial statements and the related notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025, as filed with the SEC on December 22, 2025 (our Annual Report).

Overview
Financial Performance Summary
For the second quarter of fiscal 2026, our results reflect continued, strong execution and the resiliency of our business, including 42% revenue growth compared to the second quarter of fiscal 2025, primarily due to strength across our business and Ansys' contribution of $652.4 million in revenue, partially offset by weakness in our Design IP segment.

The following table sets forth some of our key quarterly unaudited financial information:

Three Months Ended April 30, Six Months Ended April 30,
2026 2025 2026 2025
(in millions, except per share amounts)

Revenue $ 2,276.0  $ 1,604.3  $ 4,684.8  $ 3,059.6 
Cost of revenue $ 629.9  $ 318.3  $ 1,267.2  $ 588.3 
Operating expenses $ 1,525.7  $ 909.5  $ 3,094.1  $ 1,843.0 
Operating income $ 120.4  $ 376.4  $ 323.5  $ 628.3 

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Net income from continuing operations attributed to Synopsys $ 17.1  $ 349.2  $ 82.1  $ 644.9 
Net loss from discontinued operations attributed to Synopsys
$ —  $ (3.9) $ —  $ (3.9)
Diluted net income (loss) per share attributed to Synopsys:
Continuing operations $ 0.09  $ 2.24  $ 0.43  $ 4.13 
Discontinued operations $ —  $ (0.03) $ —  $ (0.03)

Financial performance summary for the three months ended April 30, 2026 compared to the same period of fiscal 2025:
• Revenues were $2.3 billion, an increase of $671.7 million or 42%, which includes revenues from Ansys of $652.4 million. The remaining growth came organically due to strength across our business, partially offset by weakness in our Design IP segment.
• Total cost of revenue and operating expenses was $2.2 billion, an increase of $927.8 million or 76%, reflecting $394.2 million of amortization expense related to intangible assets acquired from the acquisition of Ansys (the Ansys Merger), as well as an increase of $244.5 million in employee-related costs primarily due to the headcount increases as a result of the Ansys Merger.
Financial performance summary for the six months ended April 30, 2026 compared to the same period of fiscal 2025:
• Revenues were $4.7 billion, an increase of $1.6 billion or 53%, which includes revenues from Ansys of $1.5 billion. The remaining growth came organically due to strength across our business, partially offset by weakness in our Design IP segment.
• Total cost of revenue and operating expenses was $4.4 billion, an increase of $1.9 billion or 79%, reflecting $788.3 million of amortization expense related to intangible assets acquired from the Ansys Merger, as well as an increase of $594.7 million in employee-related costs primarily due to the headcount increases as a result of the Ansys Merger.
Business Summary
Synopsys delivers industry-leading silicon design, IP, simulation and analysis (S&A) solutions and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. For more information about our business segments and product groups, see Part I, Item 1, Business in our Annual Report.
We have consistently grown our revenue since 2005, despite periods of global economic uncertainty. We achieved these results because of our solid execution, leading technologies and strong customer relationships, and because we generally recognize our revenue for software licenses over the arrangement period, which typically approximates two to three years. See Note 2. Summary of Significant Accounting Policies and Basis of Presentation of the Notes to Consolidated Financial Statements in our Annual Report for a discussion on our revenue recognition policy . The revenue we recognize in a particular period generally results from selling efforts in prior periods rather than the current period. As a result, decreases as well as increases in customer spending do not immediately affect our revenue in a significant way.
Our growth strategy is focused on expanding our total addressable market by maximizing the capabilities of R&D teams across industries spanning semiconductor, high-tech, industrial, aerospace, and more with engineering solutions from silicon to systems. Our priorities are to maintain and expand our technology leadership, drive sustainable growth and efficiently scale to accelerate our strategy. Our revenue growth from period to period is expected to vary based on the mix of our time-based and upfront products. Our upfront products have grown at a faster rate than our time-based products in recent periods, which has resulted in, and may in the future result in, increased fluctuation in our business, operating results and overall financial position on a quarterly basis. Such fluctuation may be more pronounced depending on demand from our larger customers. See Part II, Item 1A, Risk Factors, " Our operating results may fluctuate in the future, which may adversely affect our stock price" of this Quarterly Report for further discussion on potential fluctuations in our operating results. Based on our leading
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technologies, customer relationships, business model, diligent expense management, and acquisition strategy, we believe that we will continue to execute our strategies successfully.
Acquisition of Ansys
On July 17, 2025 (the Acquisition Date), we completed our acquisition of ANSYS, Inc. (Ansys) pursuant to the terms of the previously announced Agreement and Plan of Merger, dated as of January 15, 2024 (the Merger Agreement) by and among Synopsys, Ansys and ALTA Acquisition Corp. (Merger Sub), a Delaware corporation and a wholly owned subsidiary of Synopsys (the Ansys Merger). See Note 4. Acquisition of Ansys of the Notes to Condensed Consolidated Financial Statements for more information on the Ansys Merger.
See Part II, Item 1A, Risk Factors for more on risks related to the Ansys Merger.
Impact of the Current Macroeconomic Environment
The current macroeconomic environment reflects the effects of, among other things, changes in U.S. and global trade policy, including the tariffs enacted beginning in 2025 by the U.S. and other governments and subsequent tariff and trade policy revisions, sustained global inflationary pressures and elevated interest rates, potential economic slowdowns or recessions, supply chain disruptions, geopolitical pressures and instability, and fluctuations in foreign exchange rates. This uncertain macroeconomic environment has resulted in increased volatility in global markets. While we have seen continued strength in the artificial intelligence and high-performance computing sectors, certain industries such as industrial, automotive and consumer electronics have experienced more modest growth. The current uncertain macroeconomic environment has led some of our customers to postpone their decision making, delay their drawdowns under non-cancellable commitments, decrease their spending and/or delay their payments to us.
We expect growth across most geographies in fiscal 2026; however, we are expecting a challenging near-term environment, including in China, due to macroeconomic factors and Trade Restrictions (as defined below). See the discussion below under the heading "Impact of Global Trade Policy and the Current Geopolitical Environment" and in Part II, Item 1A, Risk Factors, " We are subject to governmental export and import requirements that could subject us to liability and restrict our ability to sell our products and services, which could impair our ability to compete in international markets " for further discussion of the impact of Trade Restrictions, including export control regulations and geopolitical events, on Synopsys.

While our time-based model provides stability to our business, operating results and overall financial position, the broader implications of these macroeconomic or geopolitical events, particularly in the long term, remain uncertain. Further, the negative impact of these events or disruptions may be deferred due to our business model. See Part II, Item 1A, Risk Factors, “ Uncertainty in the macroeconomic environment, and its potential impact on the semiconductor and electronics industries, may negatively affect our business, operating results and financial condition ” and " Our operating results may fluctuate in the future, which may adversely affect our stock price " for further discussion of the impact of global economic uncertainty on our business, operations and financial condition and potential fluctuations in our operating results, respectively.
Impact of Global Trade Policy and the Current Geopolitical Environment
We are actively monitoring changes to global trade policy, such as changes to U.S. Export Regulations (as defined below) and developments related to the tariffs enacted by the U.S. government. Beginning in fiscal 2025, the U.S. government has imposed a number of new and higher U.S. tariffs on imports from countries around the world. Certain countries responded to the U.S. tariffs by imposing or threatening retaliatory tariffs. There may be additional changes to tariffs or new tariffs and other aspects of global trade policy in fiscal 2026 in the U.S. and other countries due to global trade negotiations and other factors. These changes in global trade policy have not had a material impact on our business, operating results or financial condition to date.

The Bureau of Industry and Security of the U.S. Department of Commerce (BIS) has continued to publish changes to U.S. export control regulations (the U.S. Export Regulations), including, among other things, the inclusion of certain Chinese technology companies on the Entity List, restrictions on the export of electronic computer-aided design (ECAD) software specially designed for the development of certain ICs, as well as controls on ECAD software for advanced semiconductor packaging involving multiple chips or chiplets, and certain other restrictions on China’s access to certain semiconductor and advanced computing technology. U.S.-China relations remain fluid, in particular with respect to trade policy and export restrictions relating to dual-use technologies. China export control restrictions, including certain BIS restrictions that were imposed in the third quarter of 2025 and
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subsequently rescinded as disclosed in our prior filings, negatively impacted our business in China, including in our Design IP segment, and may continue to impact design starts or other aspects of our business in China in the future. The evolving nature of U.S. Export Regulations, including the potential for new and expanded license requirements of this or similar nature, creates uncertainty regarding the current and future impacts on our business. We anticipate additional changes to the U.S. Export Regulations or other U.S. or non-U.S. export, sanctions, or similar trade requirements (collectively, the Trade Restrictions) in the future, but we cannot forecast the scope or timing of such changes, nor the impact on our business. We will continue to monitor such developments, including potential additional Trade Restrictions, new or expanded license requirements, and other regulatory or policy changes by the U.S. and foreign governments.

For more on risks related to government export and import restrictions such as the U.S. government’s Entity List and other U.S. Export Regulations, see Part II, Item 1A, Risk Factors, “ We are subject to governmental export and import requirements that could subject us to liability and restrict our ability to sell our products and services, which could impair our ability to compete in international markets. ”

We are also monitoring other geopolitical pressures around the world, including, among others, changes in China-Taiwan and U.S.-China relations, the conflicts in Ukraine and the Middle East and other regional or global military conflicts or instability. Any significant disruption caused by these or other geopolitical pressures or conflicts could materially affect our employees, business, operating results, financial condition or customers in those regions of the world. For example, Synopsys has employees, operations, customers and strategic partners in the Middle East. While we are actively monitoring the ongoing conflicts, they have not had a material impact on our business, operating results or financial condition to date.
See Part II, Item 1A, Risk Factors for further discussion of the impact of global economic and geopolitical uncertainty on our business, operations and financial condition.
Business Segments
Design Automation. This segment includes our advanced silicon design, verification products and services, and Ansys products, and system integration products and services. This segment also includes digital, custom and field programmable gate array (FPGA) integrated circuit (IC) design software, verification software and hardware products, and manufacturing software products. Designers use our electronic design automation (EDA) products to accelerate and automate the chip design process, reduce errors and enable more powerful and robust designs, with improved productivity for faster time to market. Engineers use our S&A solutions to virtually test and optimize designs across various physics domains, such as structural analysis, thermal analysis, and computational fluid dynamics (CFD).

Design IP. This segment includes our logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors that serve companies primarily in the semiconductor and electronics industries. We are a leading provider of high-quality, silicon-proven IP solutions for system-on-chips (SoCs). This includes IP that has been optimized to address specific application requirements for the mobile, automotive, digital home, Internet of Things and AI/data center markets, enabling designers to quickly develop SoCs in these areas.

Critical Accounting Estimates
A critical accounting estimate is defined as one that has a material impact on our financial condition and results of operations and requires us to make difficult, complex or subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain. Where applicable, we base these estimates and assumptions on historical experience and evaluate them on an ongoing basis to ensure that they remain reasonable under current conditions. Actual results could differ from those estimates.
We believe the critical accounting policies that reflect more significant judgments and estimates used in the preparation of our consolidated financial statements regarding critical accounting estimates are Revenue Recognition and Business Combinations. There have been no material changes in our critical accounting estimates during the six months ended April 30, 2026 since our Annual Report for fiscal 2025.

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Results of Operations
Our results of operations for the three and six months ended April 30, 2026 reflect the inclusion of Ansys' results of operations. As discussed above, we completed the Ansys Merger on July 17, 2025 and therefore our results of operations for the three and six months ended April 30, 2025 do not include Ansys' results of operations for such time periods, impacting the period comparisons discussed below.
Revenue
Our revenues are generated from two business segments: the Design Automation segment and the Design IP segment. See Note 17. Segment Disclosure of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for more information about our reportable segments and revenue by geographic regions.
Further disaggregation of the revenues into various products and services within these two segments is summarized as follows:
Design Automation Segment
• EDA solutions include digital, custom and FPGA IC design software, verification software and hardware products, Ansys semiconductor products, system integration products and services, and obligations to provide unspecified updates and support services. EDA products and services are typically sold through Technology Subscription License (TSL) arrangements that grant customers the right to access and use all of the licensed products at the outset of an arrangement; software updates are generally made available throughout the entire term of the arrangement. The duration of our TSL contracts is generally two to three years, though it may vary for specific arrangements. We have concluded that the software licenses in TSL contracts are not distinct from the obligation to provide unspecified software updates to the licensed software throughout the license term, because the multiple software licenses and support represent inputs to a single, combined offering, and timely, relevant software updates are integral to maintaining the utility of the software licenses. We recognize revenue for the combined performance obligation under TSL contracts ratably over the term of the license.
• In the case of arrangements involving the sale of hardware products, we generally have two performance obligations. The first performance obligation is to transfer the hardware product, which includes software integral to the functionality of the hardware product. The second performance obligation is to provide maintenance on the hardware and its embedded software, which includes rights to technical support, hardware repairs and software updates that are all provided over the same term and have the same time-based pattern of transfer to the customer. The portion of the transaction price allocated to the hardware product is generally recognized as revenue at the time of shipment because the customer obtains control of the product at that point in time. We have concluded that control generally transfers at that point in time because the customer has the ability to direct the use of the asset and an obligation to pay for the hardware. The portion of the transaction price allocated to the maintenance obligation is recognized as revenue ratably over the maintenance term.
• S&A solutions allow engineers to virtually test and optimize designs across various physics domains, such as structural analysis, thermal analysis, and CFD. S&A software solutions are offered as subscription solutions and also as perpetual licenses. Software subscription arrangements include bundles of time-based software licenses with support services, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. In such subscription arrangements, the updates to time-based software licenses are not considered integral to maintaining the utility of the software. We consider the license and support services as separate performance obligations. In these instances, we allocate the total consideration received for the revenue arrangement to the separate performance obligations based on the standalone selling prices of the time-based software license and support service. The time-based software license revenue is presented as upfront products revenue, recognized at a point of time upon the later of the delivery date or the beginning of the license period, and the revenue related to the support service is presented as maintenance and service revenue and is recognized over the term of the arrangement. Perpetual license arrangements typically include a perpetual license sold with support services, which includes a stand-ready obligation to provide technical support and software updates over the support term. We allocate the total consideration received for the bundled perpetual and support service arrangements based on the standalone selling prices of the perpetual license and support service. Revenue from perpetual licenses is presented as upfront product revenue and is
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recognized at a point in time upon the later of the delivery date or the beginning of the license period. Revenue from support service is classified as maintenance and service revenue and is recognized ratably over the term of the contract, as we satisfy the support service performance obligation. For our reseller business, we evaluate whether we are the principal or agent for reporting purposes. Beginning in the second quarter of fiscal 2026, we have enhanced our channel partner arrangements to improve oversight and pricing visibility. Specifically, we now have visibility into end-customer pricing, improved delivery control over key distributors, and are able to provide routine maintenance to the end customers. As a result, we report our revenue from reseller arrangements on a gross basis beginning in the second quarter of fiscal 2026.
• Revenue from professional service contracts is recognized over time, generally using costs incurred or hours expended to measure progress. We have a history of reasonably estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes.
Design IP Segment
• Design IP includes our logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors. These arrangements generally have two performance obligations which consist of transferring of the licensed IP and providing related support, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. Revenue allocated to the IP licenses is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support is recognized over the support term. Royalties are recognized as revenue in the quarter in which the applicable customer sells its products that incorporate our IP. Payments for IP contracts are generally received upon delivery of the IP. Revenue related to the customization of certain IP is recognized over time, generally using costs incurred or hours expended to measure progress.
Our customer arrangements can involve multiple products and various license rights, and our customers negotiate with us over many aspects of these arrangements. For example, they generally request a broader portfolio of solutions, support and services and seek more favorable terms such as expanded license usage, future purchase rights and other unique rights at an overall lower total cost. No single factor typically drives our customers’ buying decisions, and we compete on all fronts to serve customers in highly competitive markets. Customers generally negotiate the total value of the arrangement rather than just unit pricing or volumes.
Total Revenue

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended
Design Automation $ 1,821.8  $ 1,122.3  $ 699.5  62  %
Design IP 454.2  482.0  (27.8) (6) %
Total $ 2,276.0  $ 1,604.3  $ 671.7  42  %
Six months ended
Design Automation $ 3,823.6  $ 2,142.5  $ 1,681.1  78  %
Design IP 861.2  917.1  (55.9) (6) %
Total $ 4,684.8  $ 3,059.6  $ 1,625.2  53  %

Our revenues are subject to fluctuations, primarily due to customer requirements including customer demand, timing requirements and the value of contract renewals. For example, we experience fluctuations in our revenues due to factors such as the timing of IP product sales, Flexible Spending Account (FSA) drawdowns, royalties, and hardware products sales. As revenues from sales of IP products, hardware products and S&A product licenses are recognized upfront, customer demand and timing requirements for such IP products, hardware products and S&A product licenses could result in increased variability of our total revenues.
Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) were $11.0 billion as of April 30, 2026, which includes $1.8 billion in non-cancellable FSA commitments from customers where actual product
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selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 49% of the backlog as of April 30, 2026, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder to be recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years.
The amount and composition of unsatisfied performance obligations will fluctuate period to period. We do not believe the amount of unsatisfied performance obligations is indicative of future sales or revenue, or that such obligations at the end of any given period correlates with actual sales performance of a particular geography or particular products and services. For more information regarding our revenue during the three and six months ended April 30, 2026, including our contract balances as of such date, see Note 5. Revenue of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report .
The increase in total revenues for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to Ansys' contribution of $652.4 million and $1.5 billion in revenue, respectively, for the three and six months ended April 30, 2026, including a $12.5 million increase due to the accounting change in Ansys' channel partner business, and strength across our business, partially offset by weakness in our Design IP segment.
For a discussion of revenue by geographic areas, see Note 17. Segment Disclosure of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report.
Time-Based Products Revenue

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended $ 945.6  $ 828.3  $ 117.3  14  %
Percentage of total revenue 42  % 52  %
Six months ended $ 1,897.2  $ 1,656.6  $ 240.6  15  %
Percentage of total revenue 41  % 54  %

The increase in time-based products revenue for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily attributable to Ansys' contribution of $78.7 million and $157.1 million in time-based products revenue, respectively for the three and six months ended April 30, 2026, and an increase in TSL license revenue from arrangements booked in prior periods.
Upfront Products Revenue

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended $ 546.3  $ 510.7  $ 35.6  7  %
Percentage of total revenue 24  % 32  %
Six months ended $ 1,287.8  $ 878.8  $ 409.0  47  %
Percentage of total revenue 27  % 29  %

Changes in upfront products revenue are generally attributable to normal fluctuations in the extent and timing of customer requirements, which can drive the amount of upfront orders and revenue in any particular period.
The increase in upfront products revenue for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to Ansys' contribution of $149.3 million and $532.3 million, respectively for the three and six months ended April 30, 2026 in upfront products revenue , partially offset by a decrease in license revenue due to timing of customer requirements for IP products and the Optical Solutions Group divestiture.
Upfront products revenue as a percentage of total revenue will likely fluctuate based on the timing of IP, hardware and S&A product sales. Such fluctuations will continue to be impacted by the timing of shipments and FSA drawdowns due to customer requirements.
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Maintenance and Service Revenue

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended
Maintenance revenue $ 539.9  $ 117.8  $ 422.1  358  %
Professional service and other revenue 244.2  147.4  96.8  66  %
Total $ 784.1  $ 265.2  $ 518.9  196  %
Percentage of total revenue 34  % 16  %
Six months ended
Maintenance revenue $ 1,077.6  $ 235.0  $ 842.6  359  %
Professional service and other revenue 422.2  289.2  133.0  46  %
Total $ 1,499.8  $ 524.2  $ 975.6  186  %
Percentage of total revenue 32  % 17  %

The increase in maintenance revenue for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to an increase in the volume of arrangements that include maintenance largely due to Ansys' contribution of $402.9 million and $807.3 million in maintenance revenue, respectively, for the three and six months ended April 30, 2026.
The increase in professional service and other revenue for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to Ansys' contribution of $21.5 million and $41.3 million in professional service and other revenue, respectively, for the three and six months ended April 30, 2026 and the timing of IP customization projects.
Cost of Revenue

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended
Cost of products revenue $ 232.9  $ 216.2  $ 16.7  8  %
Cost of maintenance and service revenue 148.6  94.4  54.2  57  %
Amortization of acquired intangible assets
248.4  7.7  240.7  3,126  %
Total $ 629.9  $ 318.3  $ 311.6  98  %
Percentage of total revenue 28  % 20  %
Six months ended
Cost of products revenue $ 475.3  $ 385.0  $ 90.3  23  %
Cost of maintenance and service revenue 295.3  187.0  108.3  58  %
Amortization of acquired intangible assets 496.6  16.3  480.3  2,947  %
Total $ 1,267.2  $ 588.3  $ 678.9  115  %
Percentage of total revenue 27  % 19  %

Our cost of revenue is comprised of three categories: cost of products revenue, cost of maintenance and service revenue, and amortization of acquired intangible assets.
Cost of products revenue. Cost of products revenue includes costs related to products sold and software licensed, hardware-related costs including inventory provisions, allocated operating costs related to product support and distribution, and royalties paid to third-party vendors.
Cost of maintenance and service revenue. Cost of maintenance and service revenue includes costs to deliver our maintenance services, such as hotline and on-site support, production services and documentation of maintenance updates.
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Amortization of acquired intangible assets. Amortization of acquired intangible assets, included in cost of revenue, consists of the amortization of core/developed technology and certain contract rights intangible assets related to acquisitions.
The increase in costs of products revenue and costs of maintenance and service revenue for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases in employee-related costs as a result of headcount increases from the Ansys Merger, which contributed $25.9 million, $16.1 million in costs to fulfill IP consulting arrangements, and $10.2 million in IT and facility costs. The increase in amortization of acquired intangible assets for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to an increase of $242.3 million in connection with the Ansys Merger.
The increase in costs of products revenue and costs of maintenance and service revenue for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases in employee-related costs as a result of headcount increases from the Ansys Merger, which contributed $54.6 million, $31.0 million in costs to fulfill IP consulting arrangements, $22.3 million in IT and facility costs and $22.3 million in hardware-related costs including inventory provisions. The increase in amortization of acquired intangible assets for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to an increase of $484.4 million in connection with the Ansys Merger.

Operating Expenses
Research and Development

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended $ 700.1  $ 554.0  $ 146.1  26  %
Percentage of total revenue 31  % 35  %
Six months ended $ 1,415.1  $ 1,107.2  $ 307.9  28  %
Percentage of total revenue 30  % 36  %

The increase in research and development expenses for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $116.2 million in employee-related costs due to headcount increases from the Ansys Merger, $36.7 m illion in IT and facility costs, and $20.5 million in the change in the fair value of our executive deferred compensation plan assets, partially offset by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan (as defined in Restructuring Charges below).
The increase in research and development expenses for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $243.2 million in employee-related costs due to headcount increases from the Ansys Merger, $74.3 million in IT and facility costs and $15.8 million in the change in the fair value of our executive deferred compensation plan assets, partially offset by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan.
Sales and Marketing

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended $ 382.0  $ 215.0  $ 167.0  78  %
Percentage of total revenue 17  % 13  %
Six months ended $ 778.4  $ 424.2  $ 354.2  83  %
Percentage of total revenue 17  % 14  %

The increase in sales and marketing expenses for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $123.8 million in employee-related costs due to headcount increases from the Ansys Merger, $19.5 million in IT and facility costs and $7.3 million in the change in the fair value of our executive deferred compensation plan assets, partially offset by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan.
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The increase in sales and marketing expenses for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $267.6 million in employee-related costs due to headcount increases from the Ansys Merger, $38.9 million in IT and facility costs and $6.9 million in the change in the fair value of our executive deferred compensation plan assets, offset in part by a decrease in employee-related costs due to headcount decreases as a result of the 2026 Plan.
General and Administrative

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended $ 172.4  $ 136.5  $ 35.9  26  %
Percentage of total revenue 8  % 9  %
Six months ended $ 355.2  $ 303.6  $ 51.6  17  %
Percentage of total revenue 8  % 10  %

The increase in general and administrative expenses for the three months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $23.6 million in employee-related costs due to headcount increases from the Ansys Merger, $4.3 million in the change in the fair value of our executive deferred compensation plan assets, $3.9 million in depreciation and maintenance expense and $2.2 million in IT and facility costs, partially offset by a decrease of $12.0 million in consulting and other professional fees.
The increase in general and administrative expenses for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to increases of $63.3 million in employee-related costs due to headcount increases from the Ansys Merger, $7.3 million in depreciation and maintenance expense and $4.2 million in IT and facility costs, partially offset by a decrease of $54.0 million in consulting and other professional fees.
Amortization of Acquired Intangible Assets
Amortization of acquired intangible assets, included in operating expenses, consists of the amortization of trademarks, trade names and customer relationships intangible assets related to acquisitions.

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended 155.3  4.0  151.3  3,783  %
Percentage of total revenue 7  % —  %
Six months ended 311.3  8.0  303.3  3,791  %
Percentage of total revenue 7  % —  %

The increase in amortization of acquired intangible assets for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to amortization expense related to intangible assets acquired from the Ansys Merger. See Note 6. Goodwill and Intangible Assets of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for a schedule of future amortization amounts.
Restructuring Charges
In November 2025, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2026 Plan). Total charges under the 2026 Plan are expected to be in the range of $300.0 million to $350.0 million, and consist primarily of severance costs and other one-time termination benefits. The 2026 Plan is anticipated to be completed by the end of fiscal 2027, with majority of the workforce reduction in fiscal 2026. We recorded restructuring charges of $115.9 million and $234.2 million for the three and six months ended April 30, 2026, respectively . See Note 10. Restructuring Charges of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for more information.
Interest Expense
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April 30,
2026 2025 $ Change % Change
(dollars in millions)
Three months ended $ (133.4) $ (94.3) $ (39.1) 41  %
Percentage of total revenue (6) % (6) %
Six months ended $ (296.1) $ (105.5) $ (190.6) 181  %
Percentage of total revenue (6) % (3) %

The increase in interest expense for the three months ended April 30, 2026 as compared to the same period in fiscal 2025 was primarily due to interest on the Senior Notes issued in the second quarter of fiscal 2025 in connection with the Ansys Merger.
The increase in interest expense for the six months ended April 30, 2026 as compared to the same period in fiscal 2025 was primarily due to interest on the Senior Notes issued in the second quarter of fiscal 2025 and the borrowing under the Term Loan Agreement in the third quarter of fiscal 2025 in connection with the Ansys Merger. See Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further detail on our debt obligations .
Other Income (Expense), Net

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended
Interest income $ 12.9  $ 89.9  $ (77.0) (86) %
Gains (losses) on assets related to deferred compensation plan 13.8  (20.1) 33.9  (169) %
Foreign currency exchange losses (1.5) (0.2) (1.3) 650  %
Loss on sale of strategic investments —  (2.4) 2.4  (100) %
Gain on sale of building
—  51.4  (51.4) (100) %
Other, net 7.0  (4.5) 11.5  (256) %
Total $ 32.2  $ 114.1  $ (81.9) (72) %
Six months ended
Interest income $ 30.3  $ 125.6  $ (95.3) (76) %
Gains (losses) on assets related to deferred compensation plan 27.6  (0.5) 28.1  (5,620) %
Foreign currency exchange losses (7.4) (0.1) (7.3) 7,300  %
Loss on sale of strategic investments —  (2.4) 2.4  (100) %
Gain on sale of building
—  51.4  (51.4) (100) %
Other, net 20.4  (9.5) 29.9  (315) %
Total $ 70.9  $ 164.5  $ (93.6) (57) %

The decrease in other income (expense), net for the three and six months ended April 30, 2026 as compared to the same periods in fiscal 2025 was primarily due to the gain recognized from the sale of an office building for the three and six months ended April 30, 2025, lower interest income as a result of lower average cash balances, partially offset by an increase in the change in fair value of our executive deferred compensation plan assets.
Segment Operating Results
We do not allocate certain operating expenses managed at a consolidated level to our reportable segments. These unallocated expenses consist primarily of amortization of acquired intangible assets , stock-based compensation expense, changes in the fair value of deferred compensation plan , restructuring charges, and acquisition/divestiture related items. See Note 17. Segment Disclosure of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for more information.
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Design Automation Segment

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended
Adjusted operating income $ 789.1  $ 458.8  $ 330.3  72  %
Adjusted operating margin 43  % 41  % 2  % 5  %
Six months ended
Adjusted operating income $ 1,736.6  $ 863.4  $ 873.2  101  %
Adjusted operating margin 45  % 40  % 5  % 13  %

The increase in adjusted operating income for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primaril y due to an increase in revenue from arrangements booked in prior periods.
Design IP Segment

  April 30,    
  2026 2025 $ Change % Change
  (dollars in millions)
Three months ended
Adjusted operating income $ 110.7  $ 150.5  $ (39.8) (26) %
Adjusted operating margin 24  % 31  % (7) % (23) %
Six months ended
Adjusted operating income $ 176.8  $ 277.1  $ (100.3) (36) %
Adjusted operating margin 21  % 30  % (9) % (30) %

The decrease in adjusted operating income for the three and six months ended April 30, 2026 compared to the same periods in fiscal 2025 was primarily due to lower revenue as we continue to reallocate resources to the highest growth opportunities .
Income Taxes
Our effective tax rate increased in the three and six months ended April 30, 2026, as compared to the same periods in fiscal 2025, primarily due to the reduced benefit from stock-based compensation and foreign-derived intangible income deduction. The capital loss on the sale of our ownership in OpenLight was included in the first quarter of 2025.
See Note 19. Income Taxes of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further discussion.

Liquidity and Capital Resources
Our principal sources of liquidity are funds generated from our business operations and funds that may be drawn down under our revolving credit facility.
As of April 30, 2026, we held $2.5 billion in cash, cash equivalents and short-term investments. We also held $4.3 million in restricted cash primarily associated with deposits for office leases and employee loan programs. Our cash equivalents consisted primarily of taxable money market mutual funds, time deposits and highly liquid investments with maturities of three months or less. Our short-term investments include U.S. government and municipal obligations, and investment-grade available-for-sale debt with an overall weighted-average credit rating of approximately AA.
As of April 30, 2026, approximately $1.5 billion of our cash and cash equivalents were domiciled in various foreign jurisdictions. We have provided for foreign withholding taxes on the 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.
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Our debt and liquidity needs increased as a result of completing the Ansys Merger. We funded the cash consideration in the Ansys Merger (the Cash Consideration) from the issuance of the Senior Notes and the borrowings under the Term Loan Agreement. See Note 11. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further discussion.
During the second quarter of fiscal 2025, we entered into a deferred payment agreement to defer the cash settlement of the 2025 Rate Lock Agreements over a period of 5.5 years. As of April 30, 2026, we had $99.5 million outstanding balance under the deferred payment agreement related to the 2025 Rate Lock agreements. See Note 8. Financial Assets and Liabilities of the Notes to Condensed Consolidated Financial Statements in this Quarterly Report for further discussion.
There were no other significant changes to our material cash requirements, including contractual and other obligations, as presented in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report.
Based on past performance and current expectations, we believe that our existing cash, cash equivalents and short-term investments and sources of liquidity, as well as the debt financing, will be sufficient to satisfy our cash requirements, including repayment of outstanding debt, over the next twelve-month period and beyond. Our future cash requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our spending to support our research and development efforts, and our investments in or acquisitions of businesses, applications or technologies.
The following sections discuss changes in our condensed consolidated statements of cash flows and other commitments of our liquidity and capital resources during the six months ended April 30, 2026.

Cash Flows

  Six Months Ended 
 April 30,  
  2026 2025 $ Change
  (dollars in millions)
Cash provided by operating activities $ 1,485.8  $ 207.9  $ 1,277.9 
Cash provided by (used in) investing activities $ (89.4) $ 54.0  $ (143.4)
Cash provided by (used in) financing activities $ (1,864.1) $ 9,954.6  $ (11,818.7)

Cash Provided by Operating Activities
We expect cash from our operating activities to fluctuate as a result of a number of factors, including the timing of billings and collections, operating results, and the timing and amount of tax and other liability payments. Cash provided by operations is dependent primarily upon the payment terms of our license agreements. We generally receive cash from upfront arrangements much sooner than from time-based products revenue, in which the license fee is typically paid either quarterly or annually over the term of the license.
The increase in net cash provided by operating activities for the six months ended April 30, 2026 compared to the same period in fiscal 2025 was primarily due to contributions from Ansys, organic growth in our business (excluding Ansys), higher accounts receivable collections, and the non-recurring unrealized loss from settlement of the interest rate treasury lock of $121.6 million in the second quarter of fiscal 2025, partially offset by higher disbursements for operations, including vendor and tax payments, and lower net income of $560.9 million .
Cash Provided by (Used in) Investing Activities
Net cash used in investing activities was $89.4 million for the six months ended April 30, 2026 compared to net cash provided by investing activities of $54.0 million for the same period in fiscal 2025. The increase in cash used in investing activities was driven by net cash proceeds from the sale of an office building of $74.3 million in the second quarter of fiscal year 2025, proceeds of $70.1 million from the deferred consideration and final working capital adjustment payment received in connection with the S oftware Integrity Divestiture in the first half of fiscal 2025, and lower cash inflows of $6.4 million from the net proceeds from the purchases, sales and maturities of investments, partially offset by a decrease in the purchases of property and equipment of $6.8 million.
Cash Provided by (Used in) Financing Activities
44

Net cash used in financing activities was $1.9 billion for the six months ended April 30, 2026 compared to net cash provided by financing activities of $10.0 billion for the same period in fiscal 2025. In the first half of fiscal 2026, the cash used in financing activities consisted of the repayment of the remaining $3.5 billion of the Term Loans, purchases of treasury stock of $262.5 million and purchase of equity forward contract of $37.5 million in the second quarter of fiscal 2026, partially offset by net proceeds of $2.0 billion from the sale of our common stock pursuant to a securities purchase agreement with NVIDIA Corporation in the first quarter of fiscal 2026. In the first half of fiscal 2025, the cash provided by financing activities was primarily driven by the non-recurring net cash proceeds of $10.0 billion from our debt issuance.