Synopsys’ (SNPS) shares were trending higher early Thursday after the software company lifted its fiscal full-year 2024 earnings outlook on the back of better-than-expected first-quarter results.
Per-share adjusted earnings are now set to come in between $13.47 and $13.55 for the fiscal year ending Oct. 31, the company said late Wednesday, up from its previous projections of $13.33 to $13.41. The consensus on Capital IQ is for normalized EPS of $13.46. The stock gained 4.7% in premarket trading.
The firm reiterated its full-year revenue guidance range of $6.57 billion to $6.63 billion, while the Street is looking for $6.62 billion. The company also continues to see its adjusted operating margin improving by roughly two percentage points, Chief Financial Officer Shelagh Glaser said on an earnings call, according to a Capital IQ transcript.
“We delivered a solid start to the year with revenue in the upper end of our guided range,” according to Glaser. “We remain confident in our business, and as a result, we are reaffirming our full-year 2024 targets for revenue and non-GAAP operating margin and raising our non-GAAP EPS guidance.”
For the three months through January, Synopsys reported adjusted earnings of $3.56 a share, up from $2.62 the year before, topping the Street’s view for $3.41. Revenue advanced about 21% to $1.65 billion, just ahead of analysts’ $1.64 billion estimate.
Revenue in the design automation segment climbed 11% to $985.3 million, with “strong design win activity across the business,” Chief Executive Sassine Ghazi said on the call. Design IP revenue surged 53% to $525.7 million, “driven by broad-based strength,” Glaser told analysts.
The software integrity business logged revenue growth of 8% to $138.2 million, despite a “challenging macroeconomic backdrop for enterprise software,” according to Ghazi. The company continues to evaluate strategic alternatives for the segment having launched a review process in November, the CEO said.
For the ongoing quarter, Synopsys anticipates adjusted EPS to be in a range of $3.09 to $3.14, while analysts polled by Capital IQ currently estimate $3.12. Revenue is pegged at $1.56 billion to $1.59 billion, while the Street’s forecast is for $1.57 billion.