Synopsys Inc (NASDAQ:SNPS) Stock Plummets After Q3 Earnings Miss Estimates

Synopsys Inc (NASDAQ:SNPS), a leading provider of electronic design automation software and intellectual property, reported its third quarter fiscal 2025 earnings on September 9, 2025. The results fell notably short of analyst expectations, triggering a sharp negative reaction in after-hours trading.

Earnings and Revenue Performance

The company reported revenue of $1.74 billion for the quarter, representing growth compared to the $1.53 billion reported in the same period last year. However, this figure came in below the consensus estimate of $1.80 billion. Similarly, non-GAAP earnings per share (EPS) of $3.39 missed the analyst forecast of $3.84.

• Reported Revenue: $1.74 billion

• Estimated Revenue: $1.80 billion

• Variance: -$60.26 million (-3.3%)

• Reported EPS (non-GAAP): $3.39

• Estimated EPS (non-GAAP): $3.84

• Variance: -$0.45 (-11.7%)

Market Reaction

The market's response was swift and negative. Following the earnings release, the stock tumbled over 10% in after-hours trading. This significant drop reflects investor disappointment with the company's failure to meet both top and bottom-line estimates for the quarter. The immediate sell-off suggests concerns over near-term growth momentum and profitability.

Forward-Looking Estimates

Looking ahead, analyst estimates for the upcoming quarter and full year provide a benchmark for future performance. The company's own guidance, if provided in the press release, would typically be measured against these figures. However, no specific forward-looking numbers from management were detailed in the provided press release summary.

• Q4 2025 Revenue Estimate: $2.14 billion
• Q4 2025 EPS Estimate: $4.60
• FY 2025 Revenue Estimate: $7.04 billion
• FY 2025 EPS Estimate: $15.31

Press Release Summary

The primary takeaway from the earnings announcement is the year-over-year growth in revenue, which increased by approximately 14%. The press release highlighted this growth but did not provide further context on the factors leading to the miss against estimates or a detailed forward outlook, leaving investors to focus solely on the raw numbers versus expectations.

Conclusion

Synopsys's Q3 2025 earnings report delivered growth in absolute terms but fell short of the market's elevated expectations. The double miss on revenue and EPS has clearly shaken investor confidence, as evidenced by the steep after-hours decline. The lack of specific forward guidance in the provided release summary leaves questions about the company's ability to rebound in the next quarter. Investors will be keenly awaiting management's commentary on the earnings call for explanations behind the shortfall and its strategy for the remainder of the fiscal year.

For a more detailed look at historical earnings, future estimates, and analyst projections, you can review the data here.

Disclaimer: This article is for informational purposes only and is not intended as investment advice. The analysis does not constitute a recommendation to buy, sell, or hold any security. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.