MicroVision MOVIA lidar gains support on NVIDIA DRIVE AGX platform
SUNNYVALE, Calif. - Synopsys, Inc. (NASDAQ:SNPS), a prominent $70 billion market cap player in the semiconductor and electronics industry with impressive 81% gross margins, announced today that it is suspending its financial guidance for the third quarter and the entire fiscal year of 2025. This decision comes as a direct response to a recent communication from the U.S. government outlining new export restrictions. According to InvestingPro data, the stock has already taken an 8% hit over the past week on this news.
The Bureau of Industry and Security of the U.S. Department of Commerce sent Synopsys a letter on May 29, 2025, which has prompted the company to reevaluate its business projections. The letter, referred to as the "BIS Letter," details new export limitations specifically concerning China, which may significantly impact Synopsys’ operations and financial results. While the company maintains strong financial health with a current ratio of 7.02 and more cash than debt on its balance sheet, InvestingPro subscribers can access 14 additional key financial metrics and expert analysis in the comprehensive Pro Research Report.
As of now, Synopsys is in the process of assessing the potential effects these new restrictions could have on its business, operating results, and overall financial health. The company has not provided further details on the exact nature of the export restrictions or the possible outcomes of its ongoing evaluation.
Synopsys has a history of partnering with semiconductor and systems customers to enhance their research and development capabilities. Its role in facilitating innovation in various industries has been significant, and this recent development could present challenges for both the company and its partners.
The company’s cautionary statement regarding forward-looking statements emphasizes that the assessment of the impact of the BIS Letter involves risks, uncertainties, and other factors. These could cause actual results or assessments to differ materially from those projected or implied. Synopsys has made it clear that it does not intend to update any forward-looking statements unless required by law, as the information provided is current as of May 29, 2025.
This announcement is based on a press release statement from Synopsys, Inc., and the company has not issued any further comments on the matter. Investors and stakeholders in the semiconductor industry will be watching closely as Synopsys navigates these new regulatory challenges. The company’s next earnings report is scheduled for August 20, 2025, and InvestingPro analysis indicates the stock is currently trading near its Fair Value, with analysts maintaining a strong buy consensus and setting price targets up to $685.
In other recent news, Synopsys reported its second-quarter 2025 earnings, showcasing a non-GAAP EPS of $3.67, which exceeded the forecast of $3.39. The company’s revenue for the quarter was $1.6 billion, meeting expectations and reflecting a 10% year-over-year increase. Synopsys maintained its full-year revenue guidance, projecting between $6.745 billion and $6.805 billion. The company is also on track to finalize the acquisition of Ansys within the first half of the year, with approvals secured in all regions except China. Despite potential challenges in the Chinese market, Synopsys remains confident in its growth trajectory, particularly with strong performance in its Design IP segment, which grew by 21% year-over-year.
Analysts from Stifel, KeyBanc, and BofA Securities have maintained positive ratings on Synopsys, with price targets set at $550 and $575, respectively. Stifel reiterated a Buy rating, while KeyBanc and BofA maintained Overweight and Buy ratings, respectively. The analysts highlighted Synopsys’ robust second-quarter results and its strategic moves, including the pending acquisition of Ansys. However, they noted potential risks related to China, with Synopsys anticipating a decline in its China business by fiscal year 2025 due to possible regulatory challenges.
Despite these uncertainties, the company expects compensatory growth in other regions and sectors such as intellectual property and hardware. Synopsys has not received any official notice from the Bureau of Industry and Security regarding new export restrictions to China, although media speculation suggests such restrictions could be imminent. The company’s performance outside China has shown resilience, with sales increasing by approximately 7% on a rolling four-quarter basis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.