Synopsys Faces Securities Class Action Following Quarterly Miss and Downbeat Outlook
A securities class action lawsuit has been filed against Synopsys, Inc. (NasdaqGS: SNPS), a leading provider of electronic design automation (EDA) and semiconductor IP solutions. The lawsuit alleges securities fraud impacting investors who acquired Synopsys stock between December 4, 2024, and September 9, 2025, or who exchanged their Ansys, Inc. (NASDAQ: ANSS) shares for Synopsys stock during the acquisition period.
The core of the legal challenge stems from Synopsys’ third-quarter 2025 financial results. The company reported revenue of $1.74 billion, falling short of its previously issued guidance range of $1.755 billion to $1.785 billion. Furthermore, net income for the quarter was $242.5 million, a significant 43% year-over-year decrease from the $425.9 million recorded in the third quarter of 2024.
This financial performance has cast a shadow over the company’s future prospects. Specifically, the Design IP segment, which represents approximately 25% of Synopsys’ total revenue, saw a 7.7% year-over-year decline, bringing in $426.6 million. The company’s outlook suggests that Design IP revenues are expected to decline by at least 5% for the full fiscal year 2025.
The market reacted sharply to this news. On September 10, 2025, Synopsys shares plummeted $216.59, or 35.8%, to close at $387.78. This significant drop occurred on unusually high trading volume, indicating heightened investor concern.
This litigation arrives amid a period of strategic expansion for Synopsys. The company recently announced its full-year 2025 revenue reached $7.054 billion, with projections for fiscal year 2026 revenue to hit a midpoint of $9.61 billion. A pivotal development was the $2.0 billion strategic investment and multi-year partnership with NVIDIA (NASDAQ: NVDA) announced on December 1, 2025, aimed at advancing AI development. Prior to these recent events, Synopsys had engaged in other strategic partnerships and management changes, which had generally been met with positive or neutral market reception.
The lawsuit underscores the critical importance of accurate financial reporting and forward-looking guidance for publicly traded companies, particularly those in rapidly evolving technology sectors. Investors are keenly watching how Synopsys navigates this legal challenge while continuing to execute its growth strategy, including the integration of Ansys and the expansion of its AI-focused initiatives.
Investors who believe they have been adversely affected by Synopsys’ alleged securities fraud and suffered losses within the specified period are advised to consult with legal counsel. The deadline to request appointment as lead plaintiff in the class action is December 30, 2025.
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