Synopsys Inc. has seen its stock slide following the release of a weaker-than-expected first-quarter forecast. Despite reporting a 15% increase in revenue for the fiscal year 2024, reaching $6.13 billion, and a 25% rise in non-GAAP earnings per share to $13.20, the company's outlook for the upcoming fiscal year has raised concerns among investors. The company anticipates revenue growth of 10.1% to 11.1% for FY25, which is a slowdown compared to previous years. This conservative guidance is attributed to macroeconomic uncertainties, particularly in China, and the integration challenges associated with its pending acquisition of ANSYS.
The company's management highlighted that the first half of FY25 is expected to be weaker due to fewer business days and the timing of customer pull-downs, leading to a more back-loaded revenue profile. CEO Sassine Ghazi noted that while the company has a strong backlog of $8.1 billion, indicating stability in future revenue streams, the macroeconomic environment and geopolitical factors remain areas of concern. The anticipated deceleration in the Chinese market and the cautious outlook on foundry investments have further contributed to the subdued forecast.
Synopsys (SNPS) shares are down 7.48% to $544 as of 6:30 am on December 5th, from its previous close of $588 on December 4th.