Synopsys, Inc.
Information Technology · Software
EDA duopoly with $CDNS - every fab-tapeout passes through one of two toolchains; switching cost is the entire RTL-to-GDSII flow + decades of validated IP. Subscription model (~90% recurring), 35%+ operating margin, mid-teens revenue growth pre-Ansys.
ai sell as priced add-ons; every hyperscaler custom-silicon program ($GOOGL TPU, $AMZN Trainium, $META MTIA, $MSFT Maia) is an EDA seat. 3B revenue, multiphysics moat, but raises leverage and integration risk.
- Duopoly pricing power; $CDNS + SNPS share ~75% of EDA TAM
- Custom silicon explosion = more tapeouts = more seat-licenses
- DesignWare IP attaches to every advanced-node SoC ($NVDA, $AVGO, $AMD, $TSM customers)
- Ansys closes simulation gap vs $CDNS; multiphysics is structural growth leg
- 90%+ recurring revenue, mid-30s operating margin, low capex
- China export controls; SNPS pulled FY25 guidance once over BIS uncertainty
- Ansys integration $35B deal, leverage up, dilution from stock portion
- EDA TAM growth ~8-10%/yr structurally; multiple compression risk if hyperscaler in-house silicon slows
- $CDNS competes seat-for-seat on every renewal
- Stock trades at ~35x forward earnings - priced for execution
No major news in the last 7 days for SNPS - only listicles and opinion pieces, which we filter out by default. See everything anyway.
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