The Synopsys CEO expressed confidence in achieving $9.6 billion revenue for fiscal year 2026, supported by a strong $11.5 billion backlog and a strategic $2 billion investment from Nvidia, despite challenges such as a 20% decline in the China market. He highlighted the company’s critical role in enabling advanced chip design through diverse customer strategies and emphasized the collaborative partnership with Nvidia to drive innovation and growth in semiconductor engineering solutions.
The Synopsys CEO addressed the company’s financial outlook, emphasizing a balanced and pragmatic approach to their full-year 2026 guidance. Despite some analysts suggesting the guidance might be conservative, the CEO reaffirmed confidence in reaching $9.6 billion in revenue for fiscal year 2026, up from $7 billion in fiscal year 2025. This optimism is grounded in the strong opportunities ahead in chip design, even as the industry navigates broader market uncertainties.
Regarding the company’s backlog and customer trends, the CEO highlighted a significant backlog of $11.5 billion entering fiscal year 2026, driven by strength across Synopsys’ portfolio. He explained that hyperscalers are adopting diverse strategies to optimize their technology stacks, including purchasing merchant chips from companies like AMD and Intel, developing custom chips in-house, and leveraging Synopsys’ tooling for chip design. This multi-vector approach underscores the essential role Synopsys plays in enabling silicon design through to system-level solutions.
The CEO also discussed the recent $2 billion strategic investment from Nvidia, framing it as a strong endorsement of Synopsys’ strategy to provide comprehensive engineering solutions from silicon to systems. He noted that physical simulation, a core capability of Synopsys, is critical for product development in the evolving semiconductor landscape, particularly as companies focus on physical API integration and advanced chip design.
Addressing challenges in the China market, the CEO acknowledged a 20% decline in business due to significant headwinds. He indicated that the fiscal year 2026 guidance assumes the current challenging environment in China will persist, and Synopsys has proactively de-risked its forecast to account for these conditions. This cautious stance reflects the company’s realistic assessment of geopolitical and market pressures impacting its operations in the region.
Finally, the CEO emphasized the strategic alignment between Synopsys and Nvidia, with Nvidia’s equity stake signaling a shared commitment to accelerating innovation and investment. He quoted Nvidia CEO Jensen Huang, who sees a great opportunity to generate value and strengthen collaboration between the two companies. This partnership is expected to drive growth and deliver on the expanding opportunities in semiconductor design and engineering solutions.