Synopsys

“The rise of silicon-powered intelligent devices and AI has increased demand for chips and systems with greater functionality and performance, reduced size and lower power consumption. Our customers, who design silicon and software-defined systems, are facing intense pressure to deliver innovative offerings in shorter timeframes and at lower prices.”

Annual report 2025A · The company itself

“For example, while we have seen continued strength in the artificial intelligence and high-performance computing sectors, certain industries such as industrial, automotive and consumer electronics have recovered more slowly from recent macroeconomic uncertainty, which have affected our business and operating results.”

Annual report 2025A · The company itself

“The adoption of AI technologies have brought new demands and also challenges in terms of disruption to both our business models and existing technology offerings.”

Annual report 2025A · The company itself

“The techniques used to obtain unauthorized access to networks or to sabotage systems of companies such as ours change frequently, increasingly leverage technologies such as AI, and generally are not recognized until launched against a target.”

Annual report 2025A · The company itself

“If we fail to develop and timely offer products with AI features, if such products fail to meet our customers’ demands, if these products fail to operate as expected, or if our competitors incorporate AI into their products more quickly or more successfully than we do, we may experience brand or 22 Table of Contents reputational harm and lose our competitive position, our products may become obsolete, and our business, operating results or financial condition could be adversely affected.”

Annual report 2025A · The company itself

“While AI technology may drive future growth in the semiconductor and electronics industries as well as our business, worldwide markets for AI-enabled products may not develop in the manner or time periods we anticipate, or at all. If domestic or global economies worsen, overall spending on the development of AI-related products may decrease, which would adversely impact demand for our products in these markets.”

Annual report 2025A · The company itself

“Even if the demand for AI-enabled products develops in the manner or in the time periods we anticipate, if we do not have timely, competitively priced, market-accepted products available to meet our customers’ needs to develop products for the AI markets, we may miss a significant opportunity and our business, operating results and financial condition could be materially and adversely affected.”

Annual report 2025A · The company itself

“With ANSYS, Inc, (Ansys) now part of Synopsys, we can maximize the capabilities of product R&D teams broadly enabling them to rapidly innovate AI-powered products.”

Annual report 2025A · The company itself

“Synopsys enables its customers to realize the benefits of smart manufacturing by using advanced techniques in AI/ML and large data sets. These smart manufacturing solutions are built upon Synopsys’ extensive expertise in IC design, mask synthesis, process modeling, on-chip test and monitoring techniques and cloud-based data analytics.”

Annual report 2025A · The company itself

“This broad portfolio of IP has been optimized to address specific application requirements for the AI/data center, automotive, edge AI, digital home, Internet of things and mobile markets, enabling designers to quickly develop SoCs or multi-die designs in these areas.”

Annual report 2025A · The company itself

“These efforts are supported by the implementation of a new AI-powered performance management platform.”

Annual report 2025A · The company itself

“We have incorporated, and are continuing to develop and deploy, AI into our products and the operations of our business. While these AI initiatives can present significant benefits, the AI landscape is rapidly evolving and may create risks and challenges for our business.”

Annual report 2025A · The company itself

“Business Company and Segment Overview Synopsys, Inc. (Synopsys, we, our or us) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver trusted and comprehensive solutions spanning silicon design, silicon intellectual property (IP), simulation and analysis (S&A) as well as design services.”

Annual report 2025A · The company itself

“We are a global leader in supplying the mission-critical EDA solutions that engineers use to design and test integrated circuits (ICs), also known as chips or silicon, and we are pioneering artificial intelligence (AI) driven chip design across the full-stack EDA suite to improve efficiency and accelerate the design, verification testing and manufacturing of advanced digital and analog chips.”

Annual report 2025A · The company itself

“Synopsys is also the global leader in engineering S&A software. Our Ansys® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“Our solutions comprehensively address the design process, featuring a large number of EDA products that generally fall into the following categories: Table of Contents •Digital and custom IC design tools are used for designing and verifying complex chips, and for designing the advanced processes and models required to manufacture those chips; •Field programmable gate array (FPGA) design, which accelerate time-to-shipping hardware with deep debug visibility, incremental design, broad language support, and optimal performance and area for FPGA-based products. •Verification, which includes technology to verify that an IC design behaves as intended; •Manufacturing, which includes products that both enable early manufacturing process development and convert IC design layouts into the masks used to manufacture the chips; and •AI-driven EDA solutions, which include AI and machine learning capabilities to boost productivity and improve efficiency throughout the EDA flow.”

Annual report 2025A · The company itself

“The platform supports advanced nodes with collaborations on next-generation process technologies.”

Annual report 2025A · The company itself

“For example, challenges with a major foundry customer negatively impacted our financial results for fiscal year 2025.”

Annual report 2025A · The company itself

“Business Company and Segment Overview Synopsys, Inc. (Synopsys, we, our or us) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver trusted and comprehensive solutions spanning silicon design, silicon intellectual property (IP), simulation and analysis (S&A) as well as design services.”

Annual report 2025A · The company itself

“We are a global leader in supplying the mission-critical EDA solutions that engineers use to design and test integrated circuits (ICs), also known as chips or silicon, and we are pioneering artificial intelligence (AI) driven chip design across the full-stack EDA suite to improve efficiency and accelerate the design, verification testing and manufacturing of advanced digital and analog chips.”

Annual report 2025A · The company itself

“We provide software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them, including cloud-based digital and analog design flow to boost chip-design development productivity.”

Annual report 2025A · The company itself

“We also offer a broad and comprehensive portfolio of semiconductor IP solutions, which are pre-designed circuits that engineers use as components of larger chip designs to reduce development risk and speed time to market. Our high quality, silicon-proven semiconductor IP includes logic libraries, embedded memories, wired interface IP, memory interface IP, security IP, and embedded processors.”

Annual report 2025A · The company itself

“Design IP Solutions As functionality expands within a single chip or across a multi-die design, the number of third-party IP design blocks incorporated into these designs are rapidly increasing. We provide the broadest, most comprehensive portfolio of high-quality, silicon-proven IP solutions for SoCs.”

Annual report 2025A · The company itself

“Sales and Distribution Our EDA and Design IP customers are primarily semiconductor and electronics systems companies.”

Annual report 2025A · The company itself

“If these macroeconomic uncertainties persist or if economic conditions deteriorate, then the global economy, including the semiconductor and electronics industries that are the core customers for our Design Automation and Design IP segments, could see their growth slow or fail to grow at all.”

Annual report 2025A · The company itself

“Many of our customers outsource the manufacturing of their semiconductor designs to foundries.”

Annual report 2025A · The company itself

“Adverse economic conditions affect demand for devices that our products help create, such as the ICs incorporated in personal computers, smartphones, automobiles, servers and more.”

Annual report 2025A · The company itself

“This broad portfolio of IP has been optimized to address specific application requirements for the AI/data center, automotive, edge AI, digital home, Internet of things and mobile markets, enabling designers to quickly develop SoCs or multi-die designs in these areas.”

Annual report 2025A · The company itself

“Our Ansys® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“These solutions include Ansys Mechanical™, Ansys LS-DYNA, Ansys SherlockTM and more. •Electronics – Our electronics product suite provides electromagnetic field simulation software for designing high-performance electronic and electromechanical products. The software streamlines the design process and predicts performance of mobile communication and internet-access devices, broadband networking components and systems, ICs and printed circuit boards.”

Annual report 2025A · The company itself

“It is also used in low-frequency applications such as electromechanical systems, automotive components, industrial electric motors and power electronics equipment.”

Annual report 2025A · The company itself

“As the availability and amount of cloud-based data storage grows, customer interest in accessing EDA on the cloud is also increasing as customers seek to benefit from the scalability and flexibility that cloud computing can offer to their flows and engineering teams. Our Synopsys Cloud offering provides customers additional options for accessing our EDA products in their own cloud environments and in the industry’s first EDA Software-as-a-Service solution developed in partnership with Microsoft Azure.”

Annual report 2025A · The company itself

“We provide software and hardware used to validate the electronic systems that incorporate chips and the software that runs on them, including cloud-based digital and analog design flow to boost chip-design development productivity.”

Annual report 2025A · The company itself

“These products enable customers to analyze designs on-premises and/or via the cloud, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing, validation and deployment.”

Annual report 2025A · The company itself

“Our Ansys® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“Our S&A customers represent a broad spectrum of industries including high-tech, aerospace and defense (A&D), automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“Our Ansys® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“The Ansys S&A portfolio spans the entire range of physics, providing access to virtually any field of engineering simulation that a design process requires, including: •Structures – Our structural analysis product suite offers simulation tools for product design and optimization designed to increase productivity, reduce physical prototyping and help deliver better and more innovative products in less time.”

Annual report 2025A · The company itself

“Our Ansys® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“Our S&A customers represent a broad spectrum of industries including high-tech, aerospace and defense (A&D), automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“Our Ansys® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“It is also used in low-frequency applications such as electromechanical systems, automotive components, industrial electric motors and power electronics equipment.”

Annual report 2025A · The company itself

“Synopsys enables its customers to realize the benefits of smart manufacturing by using advanced techniques in AI/ML and large data sets. These smart manufacturing solutions are built upon Synopsys’ extensive expertise in IC design, mask synthesis, process modeling, on-chip test and monitoring techniques and cloud-based data analytics.”

Annual report 2025A · The company itself

“Our S&A customers represent a broad spectrum of industries including high-tech, aerospace and defense (A&D), automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“This broad portfolio of IP has been optimized to address specific application requirements for the AI/data center, automotive, edge AI, digital home, Internet of things and mobile markets, enabling designers to quickly develop SoCs or multi-die designs in these areas.”

Annual report 2025A · The company itself

“Our Ansys® solutions portfolio is widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including high-tech, aerospace and defense, automotive, energy, industrial equipment, materials and chemicals, consumer products, healthcare and construction.”

Annual report 2025A · The company itself

“As the availability and amount of cloud-based data storage grows, customer interest in accessing EDA on the cloud is also increasing as customers seek to benefit from the scalability and flexibility that cloud computing can offer to their flows and engineering teams. Our Synopsys Cloud offering provides customers additional options for accessing our EDA products in their own cloud environments and in the industry’s first EDA Software-as-a-Service solution developed in partnership with Microsoft Azure.”

Annual report 2025A · The company itself

“These solutions include Ansys Mechanical™, Ansys LS-DYNA, Ansys SherlockTM and more. •Electronics – Our electronics product suite provides electromagnetic field simulation software for designing high-performance electronic and electromechanical products. The software streamlines the design process and predicts performance of mobile communication and internet-access devices, broadband networking components and systems, ICs and printed circuit boards.”

Annual report 2025A · The company itself

“This uncertain macroeconomic environment has resulted in volatility in credit, equity and foreign currency markets and has led some of our customers to postpone their decision-making, delay their drawdowns under non-cancellable commitments, decrease their spending and/or delay their payments to us.”

Annual report 2025A · The company itself

“While AI technology may drive future growth in the semiconductor and electronics industries as well as our business, worldwide markets for AI-enabled products may not develop in the manner or time periods we anticipate, or at all. If domestic or global economies worsen, overall spending on the development of AI-related products may decrease, which would adversely impact demand for our products in these markets.”

Annual report 2025A · The company itself

“Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness will depend on, among other factors, our financial position and performance as well as prevailing market conditions and other factors beyond our control. We may not continue to generate cash flow from operations in the future sufficient to service our debt and make necessary capital expenditures and meet other liquidity needs.”

Annual report 2025A · The company itself

“Cybersecurity threats or other security breaches could compromise sensitive information belonging to us or our customers and could harm our business and our reputation. We store sensitive data, including intellectual property, our proprietary business information and that of our customers, and personal information, in our data centers, on our networks or on the cloud.”

Annual report 2025A · The company itself

“We are using an increasing number of third-party software solutions, including cloud-based solutions, which increase potential threat vectors, such as by exploitation of misconfigurations or vulnerabilities. We also use third-party vendors that provide software or hardware, have access to our network, and/or store sensitive data, and these third parties are subject to their own cybersecurity threats.”

Annual report 2025A · The company itself

“We are subject to export controls, laws and regulations that restrict selling, shipping or transmitting certain of our products and services and transferring certain of our technology outside the United States. We are also subject to certain requirements for enhanced denied party screening processes, which have led to, and, in the future may continue to lead to, elongated transaction cycles with certain customers. These requirements also restrict domestic release of software and technology to certain foreign nationals.”

Annual report 2025A · The company itself

“For example, the United States government has implemented controls on advanced computing ICs, computer commodities that contain such ICs, and certain semiconductor manufacturing items, as well as controls on transactions involving items for supercomputer and semiconductor manufacturing end-users. These controls expand the scope of foreign-produced items subject to license requirements for certain entities on the Entity List maintained by the BIS.”

Annual report 2025A · The company itself

“The current macroeconomic environment demonstrates the effects of, among other things, changes in U.S. and global trade policy, including the tariffs enacted in 2025 by the U.S. and other governments, sustained global inflationary pressures and elevated interest rates, potential economic slowdowns or recessions, supply chain disruptions, geopolitical pressures and fluctuations in foreign exchange rates.”

Annual report 2025A · The company itself

“We have incurred a substantial amount of debt in connection with the Ansys Merger, including the Senior Notes and the $4.3 billion term loan. Accordingly, as of October 31, 2025, we had approximately $13.5 billion of total debt.”

Annual report 2025A · The company itself

“If we fail to timely recruit and/or retain senior management and key employees globally, our business may be harmed. We depend in large part upon the services of our senior management team and key employees to drive our future success, and certain of these personnel depart our company from time to time, with the frequency and number of such departures varying widely.”

Annual report 2025A · The company itself

“There are a limited number of qualified engineers. Competition for these individuals and other qualified employees is intense and has increased globally, including in major markets such as Asia.”

Annual report 2025A · The company itself

“The rise of silicon-powered intelligent devices and AI has increased demand for chips and systems with greater functionality and performance, reduced size and lower power consumption. Our customers, who design silicon and software-defined systems, are facing intense pressure to deliver innovative offerings in shorter timeframes and at lower prices.”

Annual report 2025A · The company itself

“The current macroeconomic environment demonstrates the effects of, among other things, changes in U.S. and global trade policy, including the tariffs enacted in 2025 by the U.S. and other governments, sustained global inflationary pressures and elevated interest rates, potential economic slowdowns or recessions, supply chain disruptions, geopolitical pressures and fluctuations in foreign exchange rates.”

Annual report 2025A · The company itself

“The current macroeconomic environment demonstrates the effects of, among other things, changes in U.S. and global trade policy, including the tariffs enacted in 2025 by the U.S. and other governments, sustained global inflationary pressures and elevated interest rates, potential economic slowdowns or recessions, supply chain disruptions, geopolitical pressures and fluctuations in foreign exchange rates.”

Annual report 2025A · The company itself

“The technologies underlying AI and its uses are expected to be subject to new laws and regulations or new applications of existing laws and regulations, including in the areas of intellectual property, privacy, data protection and cybersecurity, among others. In addition, unfavorable developments with evolving laws and regulations affecting AI-related products may limit global adoption, impede our strategy and negatively impact our long-term expectations in this area.”

Annual report 2025A · The company itself

“For example, there is significant uncertainty in the U.S. courts as to how AI technologies affect IP ownership, including copyright protections, and the use of AI-related technology in the development of our products or implementation of AI features in our products could expose us or our customers to claims of copyright infringement or misappropriation.”

Annual report 2025A · The company itself

“Moreover, our corporate headquarters, a significant portion of our research and development activities, our data centers, and certain other critical business operations are located in California, near major earthquake faults and sites of recent wildfires, which may become more frequent, along with other extreme weather events, due to climate change. A catastrophic event or other extreme weather event that results in the destruction or disruption of our data centers or our critical business or IT systems would severely affect our ability to conduct normal business operations and, as a result, our operating results would be adversely affected.”

Annual report 2025A · The company itself

“In addition, the level and quality of our earnings, operations, business and management, among other things, will impact the determination of our credit ratings by credit rating agencies. A decrease in the ratings assigned to us may negatively impact our access to the debt capital markets and increase our cost of borrowing.”

Annual report 2025A · The company itself

“Many employees continue to work remotely based on a hybrid work model, which magnifies the importance of maintaining the integrity of our remote access security measures.”

Annual report 2025A · The company itself

“A weakening U.S. dollar relative to other currencies increases expenses of our foreign subsidiaries when they are translated into U.S. dollars in our consolidated statements of income. Likewise, a strengthening U.S. dollar relative to other currencies, including the renminbi or Yen, reduces revenue of our foreign subsidiaries upon translation and consolidation.”

Annual report 2025A · The company itself

“A weakening U.S. dollar relative to other currencies increases expenses of our foreign subsidiaries when they are translated into U.S. dollars in our consolidated statements of income. Likewise, a strengthening U.S. dollar relative to other currencies, including the renminbi or Yen, reduces revenue of our foreign subsidiaries upon translation and consolidation.”

Annual report 2025A · The company itself

“Outside the United States, we maintain sales, support or service offices in Canada, multiple countries in Europe, Israel and throughout Asia, including Japan, China, Korea, India and Taiwan.”

Annual report 2025A · The company itself

“We derive roughly half of our revenue from sales outside the United States, and we expect our orders and revenue to continue to depend on sales to customers outside the U.S.”

Annual report 2025A · The company itself

“We currently lease approximately 4 million square feet of space in 35 countries other than the United States, and own buildings in Wuhan, China and Hsinchu, Taiwan as well as office space in Xiamen, China, Pune, India, and Yongin-si, South Korea.”

Annual report 2025A · The company itself

“We market our products and services through direct sales in the United States and our principal foreign markets.”

Annual report 2025A · The company itself

“Outside the United States, we maintain sales, support or service offices in Canada, multiple countries in Europe, Israel and throughout Asia, including Japan, China, Korea, India and Taiwan.”

Annual report 2025A · The company itself

“We derive roughly half of our revenue from sales outside the United States, and we expect our orders and revenue to continue to depend on sales to customers outside the U.S.”

Annual report 2025A · The company itself

“We market our products and services through direct sales in the United States and our principal foreign markets.”

Annual report 2025A · The company itself

“We derive roughly half of our revenue from sales outside the United States, and we expect our orders and revenue to continue to depend on sales to customers outside the U.S.”

Annual report 2025A · The company itself

“Properties Our principal offices are currently located in Sunnyvale, California. We currently lease approximately 1.7 million square feet of space in 45 offices throughout the United States, of which we sublet 340,000 square feet to third parties.”

Annual report 2025A · The company itself

“Outside the United States, we maintain sales, support or service offices in Canada, multiple countries in Europe, Israel and throughout Asia, including Japan, China, Korea, India and Taiwan.”

Annual report 2025A · The company itself

“We currently lease approximately 4 million square feet of space in 35 countries other than the United States, and own buildings in Wuhan, China and Hsinchu, Taiwan as well as office space in Xiamen, China, Pune, India, and Yongin-si, South Korea.”

Annual report 2025A · The company itself

“Some foreign countries do not currently provide effective legal protection for intellectual property and our ability to prevent the unauthorized use of our products in those countries is therefore limited.”

Annual report 2025A · The company itself