Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Synopsys, Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Synopsys, Inc. and subsidiaries (the Company) as of October 31, 2025 and November 2, 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended October 31, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of October 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 31, 2025 and November 2, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended October 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired ANSYS, Inc. during fiscal 2025, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of October 31, 2025, total assets and total revenue of ANSYS, Inc. which represented approximately 21% of the Company’s total consolidated assets and 11% of total consolidated revenue included in the consolidated financial statements of the Company as of and for the year ended October 31, 2025. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of ANSYS, Inc.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Table of Contents

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of the Company's analysis of terms and conditions in software and intellectual property license contracts with customers

As discussed in Notes 2 and 5 to the consolidated financial statements, the Company generates revenue from the sale of products that include software and intellectual property (IP) licenses, hardware products, maintenance and services. The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. Arrangements with customers can involve hundreds of products and various license rights, and customers negotiate with the Company over many aspects of these arrangements. The Company’s customers often request a broader portfolio of solutions, support and services and seek more favorable terms such as expanded license usage, future purchase rights and other unique rights at an overall lower total cost. The Company recognized total revenue of $7,054.2 million for the fiscal year ended October 31, 2025, which included revenue related to software and IP licenses.

We identified the evaluation of the Company’s analysis of terms and conditions in software and IP license contracts with customers and their effect on revenue recognition as a critical audit matter. Complex auditor judgment was required to assess the Company’s judgments made in applying revenue recognition requirements to certain terms and conditions.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s revenue recognition process, including the Company’s analysis of terms and conditions in software and IP license contracts with customers and their effect on revenue recognition. We tested certain significant software and IP license customer contracts by inspecting the underlying customer agreements and evaluating the Company’s assessment of the contractual terms and conditions in accordance with revenue recognition requirements. For a selection of software and IP license contracts with customers entered during the year, we inquired of personnel outside of the accounting function to corroborate our understanding of certain terms and conditions.

Evaluation of the acquisition-date fair value of certain intangible assets acquired in a business combination

As described in Note 4 to the consolidated financial statements, the Company completed the acquisition of Ansys for aggregate purchase consideration of approximately $34.9 billion on July 17, 2025. The Company accounted for the acquisition using the acquisition method of accounting that requires allocation of the fair value of the purchase consideration to assets acquired (including identified intangible assets) and liabilities assumed

Table of Contents

at their estimated fair value on the acquisition date. The fair values of certain acquired intangible assets were determined using the relief-from-royalty method and the multi-period excess earnings method. The Company recorded estimated intangible assets attributable to the transaction of $13.0 billion, which included core/developed technologies, customer relationships, and trademarks and trade names with acquisition-date fair values of $6,500,000 thousand, $5,100,000 thousand, and $950,000 thousand, respectively.

We identified the evaluation of the acquisition-date fair value of the core/developed technologies, customer relationships, and trademarks and trade names intangible assets as a critical audit matter. Subjective and complex auditor judgment was required to evaluate certain key assumptions used in the measurement of acquisition-date fair values, including the determination of royalty rates, projected revenue and discount rate. Changes to those key assumptions could have had a significant effect on the determination of the fair value of the intangible assets. In addition, specialized skills and knowledge were needed to evaluate such assumptions.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition process. This included controls over the development and selection of the key assumptions used in the valuation of the acquired intangible assets. We performed sensitivity analyses over the key assumptions to assess the impact of changes in those assumptions on the Company’s determination of the acquisition-date fair values. We evaluated the reasonableness of projected revenue by comparing the information underlying this assumption to industry benchmarks, recent market data or historical results of the acquired business. In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

• evaluating the Company’s royalty rates by comparing such royalty rates to publicly available data for comparable companies

• evaluating the Company’s discount rate by comparing the Company’s inputs to the discount rate to publicly available data for comparable entities and assessing the resulting discount rate.

/s/ KPMG LLP

We have served as the Company’s auditor since 1992.

Santa Clara, California

December 19, 2025

Table of Contents

SYNOPSYS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value amounts)

			October 31,
			2025						2024
ASSETS
Current assets:
Cash and cash equivalents			$	2,888,030					$	3,896,532
Short-term investments			72,929						153,869
Total cash, cash equivalents and short-term investments			2,960,959						4,050,401
Accounts receivable, net			1,505,427						934,470
Inventories			365,190						361,849
Prepaid and other current assets			1,180,526						1,122,946
Total current assets			6,012,102						6,469,666
Property and equipment, net			696,693						563,006
Operating lease right-of-use assets, net			702,008						565,917
Goodwill			26,899,215						3,448,850
Intangible assets, net			12,679,591						195,164
Deferred income taxes			112,159						1,247,258
Other long-term assets			1,122,693						583,700
Total assets			$	48,224,461					$	13,073,561
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities			$	1,326,211					$	1,163,592
Operating lease liabilities			128,205						94,791
Deferred revenue			2,245,961						1,391,737
Short-term debt			22,117						—
Total current liabilities			3,722,494						2,650,120
Long-term operating lease liabilities			680,698						574,065
Long-term deferred revenue			382,557						340,831
Long-term debt			13,462,398						15,601
Other long-term liabilities			1,649,299						469,738
Total liabilities			19,897,446						4,050,355
Redeemable non-controlling interest			—						30,000
Stockholders’ equity:
Preferred stock, $0.01 par value: 2,000 shares authorized; none outstanding			—						—
Common stock, $0.01 par value: 400,000 shares authorized; 185,994 and 154,112 shares outstanding, respectively			1,860						1,541
Capital in excess of par value			18,640,947						1,211,206
Retained earnings			10,315,487						8,984,105
Treasury stock, at cost: 1,222 and 3,148 shares, respectively			(398,278)						(1,025,770)
Accumulated other comprehensive income (loss)			(232,414)						(180,380)
Total Synopsys stockholders’ equity			28,327,602						8,990,702
Non-controlling interest			(587)						2,504
Total stockholders’ equity			28,327,015						8,993,206
Total liabilities, redeemable non-controlling interest and stockholders’ equity			$	48,224,461					$	13,073,561

See the accompanying Notes to Consolidated Financial Statements.

Table of Contents

SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

			Year Ended October 31,
			2025						2024						2023
Revenue:
Time-based products			$	3,489,609					$	3,224,299					$	3,016,256
Upfront products			2,010,602						1,802,222						1,400,125
Total products revenue			5,500,211						5,026,521						4,416,381
Maintenance and service			1,553,967						1,100,915						901,633
Total revenue			7,054,178						6,127,436						5,318,014
Cost of revenue:
Products			867,165						770,238						697,686
Maintenance and service			444,526						367,055						287,876
Amortization of acquired intangible assets			311,858						107,996						45,281
Total cost of revenue			1,623,549						1,245,289						1,030,843
Gross margin			5,430,629						4,882,147						4,287,171
Operating expenses:
Research and development			2,479,338						2,082,360						1,849,935
Sales and marketing			1,074,191						859,342						724,934
General and administrative			769,648						568,496						376,677
Amortization of acquired intangible assets			192,525						16,238						9,295
Restructuring charges			—						—						53,091
Total operating expenses			4,515,702						3,526,436						3,013,932
Operating income			914,927						1,355,711						1,273,239
Interest expense			(446,729)						(36,829)						(2,703)
Other income (expense), net			924,944						194,976						34,934
Income before income taxes			1,393,142						1,513,858						1,305,470
Provision for income taxes			55,991						99,718						90,188
Net income from continuing operations			1,337,151						1,414,140						1,215,282
Income (loss) from discontinued operations, net of income taxes			(3,900)						821,670						2,843
Net income			1,333,251						2,235,810						1,218,125
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest			1,031						(27,570)						(11,763)
Net income attributed to Synopsys			$	1,332,220					$	2,263,380					$	1,229,888
Net income (loss) attributed to Synopsys:
Continuing operations			$	1,336,120					$	1,441,710					$	1,227,045
Discontinued operations			(3,900)						821,670						2,843
Net income			$	1,332,220					$	2,263,380					$	1,229,888
Net income (loss) per share attributed to Synopsys - basic:
Continuing operations			$	8.15					$	9.41					$	8.06
Discontinued operations			(0.02)						5.37						0.02
Basic net income per share			$	8.13					$	14.78					$	8.08
Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations			$	8.07					$	9.25					$	7.91
Discontinued operations			(0.03)						5.26						0.01
Diluted net income per share			$	8.04					$	14.51					$	7.92
Shares used in computing per share amounts:
Basic			163,947						153,138						152,146
Diluted			165,656						155,944						155,195

Table of Contents

See the accompanying Notes to Consolidated Financial Statements.

Table of Contents

SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

			Year Ended October 31,
			2025						2024						2023
Net income			$	1,333,251					$	2,235,810					$	1,218,125
Other comprehensive income (loss):
Change in foreign currency translation adjustment			24,497						8,150						(13,912)
Change in unrealized gains (losses) on available-for-sale securities, net of tax of $0 for periods presented			(173)						1,460						1,513
Cash flow hedges:
Deferred gains (losses), net of tax of $21,418, $(3,052), and $(8,940) for fiscal years 2025, 2024 and 2023, respectively			(80,074)						9,625						24,986
Reclassification adjustment on deferred (gains) losses included in net income, net of tax of $(1,339), $(446), and $(10,053) for fiscal years 2025, 2024 and 2023, respectively			3,716						(3,201)						25,276
Other comprehensive income (loss), net of tax effects			(52,034)						16,034						37,863
Comprehensive income			1,281,217						2,251,844						1,255,988
Less: Net income (loss) attributed to non-controlling interest and redeemable non-controlling interest			1,031						(27,570)						(11,763)
Comprehensive income attributed to Synopsys			$	1,280,186					$	2,279,414					$	1,267,751

See the accompanying Notes to Consolidated Financial Statements.

Table of Contents

SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

															Capital in Excess of Par Value						Retained Earnings						Treasury Stock						Accumulated Other Comprehensive Income (Loss)						Total Synopsys Stockholders’ Equity						Non-controlling Interest						Stockholders' Equity
			Common Stock
			Shares						Amount
Balance at October 31, 2022			152,375						$	1,524					$	1,487,126					$	5,534,307					$	(1,272,955)					$	(234,277)					$	5,515,725					$	4,801					$	5,520,526
Net income																					1,229,888																		1,229,888						(1,761)						1,228,127
Other comprehensive income (loss), net of tax effects																																	37,863						37,863												37,863
Purchases of treasury stock			(2,992)						(30)						30												(1,160,724)												(1,160,724)												(1,160,724)
Equity forward contract, net															(45,000)																								(45,000)												(45,000)
Common stock issued, net of shares withheld for employee taxes			2,670						27						(725,211)						(19,108)						758,029												13,737												13,737
Stock-based compensation															558,078																								558,078						5,214						563,292
Adjustments to redeemable non-controlling interest																					(3,388)																		(3,388)												(3,388)
Recognition of non-controlling interest upon issuance of subsidiary stock															1,129																								1,129						(2,304)						(1,175)
Balance at October 31, 2023			152,053						$	1,521					$	1,276,152					$	6,741,699					$	(1,675,650)					$	(196,414)					$	6,147,308					$	5,950					$	6,153,258
Net income																					2,263,380																		2,263,380						(5,552)						2,257,828
Other comprehensive income (loss), net of tax effects																																	16,034						16,034												16,034
Purchases of treasury stock			(74)						(1)						1												(45,000)												(45,000)												(45,000)
Equity forward contract, net															45,000																								45,000												45,000
Common stock issued, net of shares withheld for employee taxes			2,133						21						(799,210)												694,880												(104,309)												(104,309)
Stock-based compensation															687,765																								687,765						4,551						692,316
Adjustments to redeemable non-controlling interest																					(20,974)																		(20,974)												(20,974)
Recognition of non-controlling interest upon issuance of subsidiary stock															1,498																								1,498						(2,445)						(947)
Balance at October 31, 2024			154,112						$	1,541					$	1,211,206					$	8,984,105					$	(1,025,770)					$	(180,380)					$	8,990,702					$	2,504					$	8,993,206
Net income																					1,332,220																		1,332,220						1,870						1,334,090
Other comprehensive income (loss), net of tax effects																																	(52,034)						(52,034)												(52,034)
Common stock issued upon the acquisition of Ansys			29,955						300						17,105,238																								17,105,538												17,105,538
Assumption of equity awards in connection with the acquisition of Ansys															130,963																								130,963												130,963
Common stock issued, net of shares withheld for employee taxes			1,927						19						(704,679)												627,492												(77,168)												(77,168)
Stock-based compensation															892,585																								892,585						709						893,294
Adjustments to redeemable non-controlling interest																					(838)																		(838)												(838)
Deconsolidation of non-controlling interest upon the sale of subsidiary															5,634																								5,634						(5,670)						(36)
Balance at October 31, 2025			185,994						$	1,860					$	18,640,947					$	10,315,487					$	(398,278)					$	(232,414)					$	28,327,602					$	(587)					$	28,327,015

See the accompanying Notes to Consolidated Financial Statements.

Table of Contents

SYNOPSYS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

			Year Ended October 31,
			2025						2024						2023
Cash flows from operating activities:
Net income			$	1,333,251					$	2,235,810					$	1,218,125
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation			660,430						295,065						247,120
Reduction of operating lease right-of-use assets			117,273						97,273						97,705
Amortization of capitalized costs to obtain revenue contracts			53,237						73,587						82,190
Stock-based compensation			893,294						692,316						563,292
Allowance for credit losses			50,891						19,724						19,932
(Gain) loss on sale of strategic investments			3,635						(55,077)						—
Gain on sale of building			(51,385)						(1,906)						—
Gain on divestitures, net of transaction costs			(508,044)						(868,830)						—
Amortization of bridge financing costs			41,996						33,677						—
Amortization of debt issuance costs			13,847						—						—
Deferred income taxes			(470,693)						(407,649)						(211,045)
Other			(888)						611						13,295
Net changes in operating assets and liabilities, net of effects from acquisitions and dispositions:
Accounts receivable			(174,140)						(103,460)						(178,432)
Inventories			(22,517)						(51,449)						(123,752)
Prepaid and other current assets			66,918						(410,432)						(106,396)
Other long-term assets			(481,376)						(168,255)						(100,618)
Accounts payable and accrued liabilities			(13,487)						187,564						170,496
Operating lease liabilities			(113,603)						(96,966)						(73,281)
Income taxes			6,351						(73,215)						198,078
Deferred revenue			235,261						8,641						(113,435)
Unrealized loss on settlement of interest rate treasury lock			(121,643)						—						—
Net cash provided by operating activities			1,518,608						1,407,029						1,703,274
Cash flows from investing activities:
Proceeds from maturities of short-term investments			58,016						126,703						127,128
Proceeds from sales of short-term investments			157,204						12,258						3,307
Purchases of short-term investments			(65,708)						(136,821)						(131,079)
Proceeds from sales of strategic investments			3,566						55,696						8,492
Purchases of strategic investments			(4,100)						(1,293)						(435)
Purchases of property and equipment, net			(169,454)						(139,500)						(189,618)
Proceeds from sale of building			74,279						16,339						—
Acquisitions, net of cash acquired			(16,681,257)						(156,947)						(297,692)
Proceeds from business divestitures, net of cash divested			746,550						1,446,578						—
Capitalization of software development costs			—						—						(2,204)
Other			(365)						—						—
Net cash provided by (used in) investing activities			(15,881,269)						1,223,013						(482,101)
Cash flows from financing activities:
Proceeds from debt, net of issuance costs			14,329,340						—						—
Repayment of debt			(863,637)						(2,607)						(2,603)
Payment of bridge financing and term loan costs			—						(72,265)						—
Issuances of common stock			228,418						232,212						252,986
Payments for taxes related to net share settlement of equity awards			(305,501)						(337,541)						(241,408)
Purchase of equity forward contract			—						—						(45,000)
Purchases of treasury stock			—						—						(1,160,724)
Redemption of redeemable non-controlling interest			(30,000)						—						—
Other			(2,863)						(1,096)						(122)
Net cash provided by (used in) financing activities			13,355,757						(181,297)						(1,196,871)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			1,896						8,797						(2,979)

Table of Contents

Net change in cash, cash equivalents and restricted cash			(1,005,008)						2,457,542						21,323
Cash, cash equivalents and restricted cash, beginning of year, including cash from discontinued operations			3,898,729						1,441,187						1,419,864
Cash, cash equivalents and restricted cash, end of year, including cash from discontinued operations			2,893,721						3,898,729						1,441,187
Less: Cash, cash equivalents and restricted cash from discontinued operations			—						—						4,947
Cash, cash equivalents and restricted cash from continuing operations			$	2,893,721					$	3,898,729					$	1,436,240
Supplemental disclosure of cash flow information:
Cash paid for income taxes during the year:			$	512,705					$	680,064					$	97,956
Interest payments during the year:			$	353,773					$	814					$	996
Non-cash activities:
Issuance of common stock for the acquisition of Ansys			$	17,105,538					$	—					$	—
Fair value of replacement equity awards in connection with the acquisition of Ansys			$	130,963					$	—					$	—
Purchase of property and equipment included in accounts payable			$	24,314					$	32,014					$	21,672
Conversion of notes receivable to non-marketable equity securities			$	—					$	—					$	2,000
Contingent consideration receivable in connection with divestiture			$	—					$	22,202					$	—

See the accompanying Notes to Consolidated Financial Statements.

Table of Contents

SYNOPSYS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Description of Business

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. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow.

We are a global leader in supplying the mission-critical electronic design automation (EDA) software 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. 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 design flow to boost chip-design development productivity. We also provide technical services and support to help our customers develop advanced chips and electronic systems.

Following the completion of the Ansys Merger (as defined below), we are 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. 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. These products and services are part of our Design Automation segment.

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. To accelerate IP integration and silicon bring-up, our IP Accelerated initiative provides architecture design expertise, customized IP subsystems, hardening, and signal and power integrity analysis. These products and services are part of our Design IP segment.

Note 2. Summary of Significant Accounting Policies and Basis of Presentation

Basis of Presentation and Principles of Consolidation. Historically, our fiscal years have been 52- or 53-week periods ending on the Saturday nearest to October 31. Fiscal 2024 was a 53-week year ended on November 2, 2024, and fiscal 2023 was a 52-week year ended on October 28, 2023.

We have changed our fiscal year end from the Saturday nearest to October 31 and consisting of 52 or 53 fiscal weeks to a fiscal year end of October 31 each year. The fiscal year change became effective with our fiscal 2025, which began on November 3, 2024. Our fiscal quarters end on January 31, April 30, July 31 and October 31 of each year.

Our results of operations for the fiscal 2025, fiscal 2024 and fiscal 2023 included 363 days, 371 days, and 364 days respectively. For presentation purposes, the consolidated financial statements and accompanying notes refer to the closest calendar month end.

The consolidated financial statements include our accounts and the accounts of our wholly and majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates. To prepare financial statements in conformity with U.S. GAAP, management must make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from these estimates and could have a material impact on our operating results and financial position.

Acquisition of Ansys. On July 17, 2025 (the Acquisition Date), we completed the acquisition of ANSYS, Inc. (Ansys), a provider of broad engineering simulation and analysis software and services for $199.91 in cash and 0.3399 of a share of our common stock in exchange for each ordinary share of Ansys for a total consideration of $34.9 billion.

Table of Contents

We accounted for the acquisition of Ansys by applying the acquisition method of accounting for business combinations. The consolidated financial statements include the financial results of Ansys prospectively from the Acquisition Date. See Note 4. Business Combinations and Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in this Annual Report.

Cash Equivalents and Short-term Investments**.** We consider all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents, as well as time deposits which can be withdrawn at any time without penalty to be cash equivalents. Our investments in debt securities with remaining maturities greater than three months at the date of purchase are designated as available-for-sale securities as we may convert these investments into cash at any time to fund general operations, and included in short-term investments in the consolidated balance sheets. Our debt securities generally have an effective maturity term of less than three years and are carried at fair value, with unrealized gains and losses included in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). For available-for-sale debt securities in an unrealized loss position, we evaluate whether a current expected credit loss exists based on available information relevant to the credit rating of the security, current economic conditions and reasonable and supportable forecasts. The allowance for credit loss is recorded in other income (expense), net, in the consolidated statements of income, not to exceed the amount of the unrealized loss. Any excess unrealized loss other than the credit loss is recognized in accumulated other comprehensive income or loss in the stockholders' equity section of the consolidated balance sheets. The cost of securities sold is based on the specific identification method and realized gains and losses are included in other income (expense), net. See Note 8. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements in this Annual Report.

Investments in Equity Securities. We hold equity securities in privately held companies for the promotion of business and strategic objectives. We account for these investments using either the measurement alternative approach when the fair value of the investment is not readily determinable and we do not have the ability to exercise significant influence, or the equity method of accounting when it is determined that we have the ability to exercise significant influence. Investments accounted for using the measurement alternative approach are initially recorded at cost and adjusted for changes in fair value from observable transactions. For investments accounted for using the equity method of accounting, we record our proportionate share of the investee’s income or loss to other income (expense), net, in our consolidated statements of income. These investments are subject to a periodic impairment review, and are included in other long-term assets in the consolidated balance sheets.

Accounts Receivable, Net. The balances consist of billed accounts receivable and current portion of unbilled accounts receivable. Trade accounts receivables are recorded at the invoiced amount and do not bear interest.

Allowance for Credit Losses. We maintain an allowance for credit losses for expected uncollectible accounts receivable and contract assets, which is recorded as an offset to accounts receivable or contract assets and provisions for credit losses are recorded in general and administrative expense in the consolidated statements of income. The allowance for current expected credit losses is based on a review of customer accounts and considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. The following table presents the changes in the allowance for credit losses:

Fiscal Year			Balance at Beginning of Period						Provisions						Write-offs/Adjustments						Balance at End of Period
			(in thousands)
2025			$	64,043					$	50,891					$	(9,097)					$	105,837
2024			$	50,366					$	19,286					$	(5,609)					$	64,043
2023			$	38,586					$	18,345					$	(6,565)					$	50,366

Inventories. Inventories are computed at standard costs which approximate actual costs, on a first-in, first-out basis and valued at the lower of cost or net realizable value. Inventories primarily include components and finished goods for complex emulation and prototyping hardware systems. The valuation process includes a review of the forecasts based upon future demand and market conditions. Inventory provisions are recorded when gross inventory may be in excess of anticipated demand or considered obsolete. Inventory provisions are impacted by market and economic conditions, technology changes, new product introductions and changes in strategic direction, and require estimates that may include uncertain elements.

Table of Contents

Fair Values of Financial Instruments. Our cash equivalents, short-term investments, marketable securities and foreign currency contracts are carried at fair value. The fair value of our accounts receivable and accounts payable approximates the carrying amount due to their short duration. Non-marketable equity securities are accounted for using either the measurement alternative or equity method of accounting. We perform periodic impairment analysis on these non-marketable equity securities. The carrying amount of the short-term and long-term debt approximates the estimated fair value. See Note 9. Fair Value Measurements of the Notes to Consolidated Financial Statements in this Annual Report.

Foreign Currency Contracts. We operate internationally and are exposed to potentially adverse movements in currency exchange rates. We enter into hedges in the form of foreign currency forward contracts to reduce our exposure to foreign currency rate changes on non-functional currency denominated forecasted transactions and balance sheet positions. The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or accrued liabilities in the consolidated balance sheets.

The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. See Note 8. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements in this Annual Report.

Concentration of Credit Risk. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash equivalents, short-term investments, foreign currency contracts, and trade accounts receivable. We maintain cash equivalents primarily in highly rated taxable and tax-exempt money market funds located in the U.S. and in various overseas locations. Our short-term investments include a variety of financial instruments, such as corporate debt and municipal securities, U.S. Treasury and Government agency securities. By policy, we limit the amount of credit exposure with any one issue, issuer and type of instrument.

We sell our products worldwide primarily to customers in the global electronics market. We perform on-going credit evaluations of our customers’ financial condition and do not require collateral. We establish reserves for potential credit losses and such losses have been within management’s expectations.

Income Taxes. We account for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We account for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. An uncertain tax position is considered effectively settled on completion of an examination by a taxing authority if certain other conditions are satisfied.

Property and Equipment. Property and equipment is recorded at cost less accumulated depreciation. Assets, excluding land, are depreciated using the straight-line method over their estimated useful lives. Depreciation expenses were $171.9 million, $162.9 million and $141.4 million in fiscal 2025, 2024 and 2023, respectively. Repair and maintenance costs are expensed as incurred and such costs were $104.7 million, $89.4 million and $74.4 million in fiscal 2025, 2024 and 2023, respectively.

Table of Contents

The useful lives of depreciable assets are as follows:

			Useful Life in Years
Computer and other equipment			3 - 8
Buildings			30
Furniture and fixtures			5
Leasehold improvements			Shorter of the lease term or the estimated useful life

Leases**.** We determine if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. A contract is or contains a lease when we have the right to control the use of an identified asset for a period of time. The commencement date of the lease is the date that the lessor makes an underlying asset available for use by the lessee. On the commencement date, leases are evaluated for classification and assets and liabilities are recognized based on the present value of lease payments over the lease term.

The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The right of use (ROU) asset is initially measured as the amount of lease liability, adjusted for any initial lease costs, prepaid lease payments and any lease incentives. Variable lease payments, consisting primarily of reimbursement of costs incurred by lessors for common area maintenance, real estate taxes and insurance, are not included in the lease liability and are recognized as they are incurred.

As most of our leases do not provide an implicit rate, we use the incremental borrowing rate at lease commencement to measure ROU assets and lease liabilities. We use a benchmark senior unsecured yield curve for debt instruments over the similar term, and consider specific credit quality, market conditions, tenor of lease arrangements, and quality of collateral to determine the incremental borrowing rate.

Operating lease expense is generally recognized on a straight-line basis over the lease term. We have elected the practical expedient to account for the lease and non-lease components as a single lease component for the majority of our asset classes. For leases with an initial term of one year or less, we have elected not to record the ROU asset or liability.

Business Combinations. We allocate the purchase price of acquired companies to the tangible and intangible assets acquired and liabilities assumed based on their acquisition-date fair values with the exception of contract assets and contract liabilities (deferred revenue) which are recognized and measured on the acquisition date in accordance with our “Revenue Recognition” policy, as if we had originated the contracts. The excess of the purchase consideration over the fair value of these identifiable assets and liabilities is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. We include the results of operations of the businesses that are acquired from the acquisition date.

Goodwill. Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired by us. All goodwill acquired in a business combination is assigned to one or more reporting units as of acquisition date. We have two reportable segments, and reporting units are determined to be the same as reportable segments. The carrying amount of goodwill at each reporting unit is tested for impairment annually on the first day of the fourth fiscal quarter, or more frequently if facts and circumstances warrant a review. We perform either a qualitative or quantitative assessment for goodwill impairment test. When a quantitative goodwill impairment assessment is performed, we use an income approach based on discounted cash flow analysis, a market approach based on market multiples, or a combination of both. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment loss is recorded for the difference.

Intangible Assets. Intangible assets consist of acquired technology, certain contract rights, customer relationships, trademarks and trade names, and capitalized software. These intangible assets are acquired through business combinations, direct purchases, or internally developed capitalized software. Intangible assets are amortized on a straight-line basis over their estimated useful lives which range from one to twenty-three years.

We review the carrying values of long-lived assets including intangible assets whenever events or changes in circumstances indicate that the carrying value may not be fully recoverable. Recoverability of long-lived assets is

Table of Contents

measured by comparing the carrying value of such asset group to the future undiscounted cash flows that asset group is expected to generate. If the undiscounted future cash flow is less than the carrying amount of the asset group, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the asset group.

Redeemable Non-controlling Interest. Non-controlling interest that is not solely redeemable within our control is reported as temporary equity in our consolidated balance sheets. The carrying value of the redeemable non-controlling interest equals the redemption value at the end of each reporting period, after giving effect to the change from the net income (loss) attributable to the redeemable non-controlling interest. We remeasure the redemption value of the non-controlling interest on a quarterly basis and changes in the estimated redemption value are recognized through retained earnings and may also impact the net income or loss attributable to common stockholders of Synopsys if the redemption value falls below a stated threshold. See Note 4. Business Combinations of the Notes to Consolidated Financial Statements in this Annual Report for more information regarding the redeemable non-controlling interests.

Revenue Recognition. We recognize revenue for the transfer of services or products to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those services or products. The principle is achieved through the following five-step approach:

• Identification of the contract, or contracts, with the customer

• Identification of the performance obligation in the contract

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Recognition of revenue when, or as, we satisfy a performance obligation

Nature of Products and Services

We generate revenue from the licensing of our EDA software, IP products and S&A software solutions, as well as sale of hardware products, and maintenance and services. The various types are set forth below.

Electronic Design Automation

Software license revenue consists of fees associated with the licensing of our software and Ansys semiconductor products primarily through Technology Subscription License (TSL) contracts. TSLs are time-based licenses for a finite term and generally provide the customer with limited rights to receive, or to exchange certain quantities of licensed software for, unspecified future technology. The majority of our arrangements are TSLs due to the nature of our business and customer requirements. In addition to the licenses, the arrangements also include: post-contract customer support, which includes providing frequent updates and upgrades to maintain the utility of the software due to rapid changes in technology; other intertwined services such as multiple copies of the tools; assisting our customers in applying our technology in the customers' development environment; and rights to remix licenses for other licenses. Payments are generally received in equal or near equal installments over the term of the arrangement. We have concluded that our software licenses in TSL contracts are not distinct from our obligation to provide unspecified software updates to the licensed software throughout the license term. Such updates represent inputs to a single, combined performance obligation, commencing upon the later of the arrangement effective date or transfer of control to the software license. Remix rights are not an additional promised good or service in the contract, and where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same pattern of transfer to the customer over the duration of the subscription term.

Design IP Products

We generally license IP under nonexclusive license agreements that provide usage rights for specific applications. Additionally, for certain IP license agreements, royalties are collected as customers sell their own products that incorporate our IP. These arrangements generally have two distinct performance obligations that consist of transferring the licensed IP and the post contract support service. Support services consist of a stand-ready

Table of Contents

obligation to provide technical support and software updates over the support term. Revenue allocated to the IP license is recognized at a point in time upon the later of the delivery date or the beginning of the license period, and revenue allocated to support services is recognized ratably over the support term. Royalties are recognized as revenue is earned, generally when the customer sells its products that incorporate our IP.

Simulation and Analysis

S&A solutions allow engineers to virtually test and optimize designs across various physics domains, such as structural analysis, thermal analysis, and computational fluid dynamics (CFD). S&A software solutions are offered as subscription solutions and also as perpetual licenses. Software subscription arrangements include bundles of time-based software licenses with support services, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. In such subscription arrangements, the updates to time-based software licenses are not considered integral to maintaining the utility of the software. We consider the license and support services as separate performance obligations. In these instances, we allocate the total consideration received for the revenue arrangement to the separate performance obligations based on the standalone selling prices of the time-based software license and support service. The time-based software license revenue is presented as upfront products revenue, recognized at a point of time upon the later of the delivery date or the beginning of the license period, and the revenue related to the support service is presented as maintenance and service revenue and is recognized over the term of the arrangement. Perpetual license arrangements typically include a perpetual license sold with support services, which includes a stand-ready obligation to provide technical support and software updates over the support term. We allocate the total consideration received for the bundled perpetual and support service arrangements based on the standalone selling prices of the perpetual license and support service. Revenue from perpetual licenses is presented as upfront product revenue and is recognized at a point in time upon the later of the delivery date or the beginning of the license period. Revenue from support service is classified as maintenance and service revenue and is recognized ratably over the term of the contract, as we satisfy the support service performance obligation.

Hardware

We generally have two performance obligations in arrangements involving the sale of hardware products. The first performance obligation is to transfer the hardware product, which includes embedded software integral to the functionality of the hardware product. The second performance obligation is to provide maintenance on the hardware and our embedded software, including rights to technical support, hardware repairs and software updates that are all provided over the same term and have the same time-based pattern of transfer to the customer. The portion of the transaction price allocated to the hardware product is recognized as revenue at a point in time when control of the hardware is transferred to the customer. We have concluded that control generally transfers upon shipment because the customer has the ability to direct the use of the asset and an obligation to pay for the hardware. The portion of the transaction price allocated to maintenance is recognized as revenue that is ratable over the maintenance term.

Professional Services

Our arrangements often include service elements other than maintenance and support services. These services include training, design assistance, and consulting. These services are generally performed on a time and materials basis, and are recognized over time, as the customer simultaneously receives and consumes the benefit provided. Certain arrangements also include the customization or modification of licensed IP. Revenue from these contracts is recognized over time as the services are performed, when the development is specific to the customer’s needs and we have enforceable rights to payment for performance completed. Inputs such as costs incurred and hours expended are used in order to measure progress of performance. We have a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances, specification and testing requirement changes, and changes in customer delivery priorities. Payments for services are generally due upon milestones in the contract or upon consumption of the hourly resources.

Flexible Spending Accounts

Our customers frequently enter into non-cancelable Flexible Spending Account arrangements (FSA) whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of our products or services. These arrangements do not meet the definition of a revenue contract until the customer

Table of Contents

executes a separate order (pulldown request) to identify the required products and services that they are purchasing. The combination of the FSA arrangement and the subsequent order creates enforceable rights and obligations, thus meeting the definition of a revenue contract. Each separate order under the agreement is treated as an individual contract and accounted for based on the respective performance obligations included within the pulldown requests.

Significant Judgments

Our contracts with customers often include promises to transfer multiple products and services to a customer. Customers can negotiate for a broad portfolio of solutions, and favorable terms along with future purchase options to manage their overall costs. Analysis of the terms and conditions in these contracts and their effect on revenue recognition may require significant judgment. We have concluded that (1) our EDA software licenses in TSL contracts and software licenses in certain Ansys' semiconductor industry subscription products are not distinct from our obligation to provide unspecified software updates to the licensed software throughout the license term, because those promises represent inputs to a single, combined performance obligation, and (2) where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support, because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer. In reaching this conclusion, we considered the nature of the obligation to customers, which is to provide an ongoing right to use the most up to date and relevant software. As EDA customers operate in a rapidly changing and competitive environment, satisfying the obligation requires providing critical updates to the existing software products, including ongoing iterative interaction with customers to make the software relevant to customers’ ability to meet the time to go to market with advanced products.

Software subscription arrangements for S&A solutions include bundles of time-based software licenses with support services, which includes rights to technical support and software updates that are provided over the support term and are transferred to the customer over time. We have concluded that the updates to time-based software licenses are not considered integral to maintaining the utility of the software and hence the license and support services as separate performance obligations. We also license S&A software on a perpetual basis with support services, which includes a stand-ready obligation to provide technical support and software updates over the support term. We allocate the total consideration received for the bundled perpetual and support service arrangements based on the standalone selling prices of the perpetual license and support service.

Our contracts with customers can involve hundreds of products and various license rights. Customers often negotiate a broad portfolio of solutions, and favorable terms along with future purchase options to manage their overall costs. Determining whether the purchase options are considered distinct performance obligations that should be accounted for separately as material rights versus combined together may require significant judgment.

Judgment is also required to determine the standalone selling price (SSP) for each distinct performance obligation. For non-software performance obligations (IP, Hardware, and services), SSP is established based on observable prices of products and services sold separately. SSP for license (and related updates and support) in a contract with multiple performance obligations is determined by applying a residual approach whereby all other non-software performance obligations within a contract are first allocated a portion of the transaction price based upon their respective SSP, using observable prices, with any residual amount of the transaction price allocated to the license because we do not sell the license separately, and the pricing is highly variable. For S&A product subscription sales, we use all information reasonably available to us to determine the estimated SSP of time-based software license and support services.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing customers, resulting in receivables, contract assets, or contract liabilities (deferred revenue) in our consolidated balance sheets. For specific software, hardware, and IP agreements with payment plans, we record an unbilled receivable associated with revenue recognized upon transfer of control, as it holds an unconditional right to invoice and receive payment in the future for those transferred products or services. A contract asset is recorded when revenue is recognized before we have the unconditional right to invoice or retain performance risk concerning that performance obligation. These contract assets transition to receivables when the rights become unconditional, generally upon the completion of a milestone. A deferred revenue is recorded when revenue is recognized subsequent to invoicing.

Table of Contents

Warranties and Indemnities

Warranties. We generally warrant our products to be free from defects in media and to substantially conform to material specifications for a period of 90 days for our software products and for up to six months for our hardware products.

Indemnities. In addition to such warranties, in certain cases, we provide our customers with limited indemnification with respect to claims that their use of our software products infringes on patents, copyrights, trademarks or trade secrets. We are unable to estimate the potential impact of these commitments on the future results of operations.

Net Income Per Share. We compute basic net income per share by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the dilution from potential common shares outstanding such as stock options and unvested restricted stock units (RSUs) and awards during the period using the treasury stock method. See Note 16. Net Income (Loss) Per Share of the Notes to Consolidated Financial Statements in this Annual Report*.*

Foreign Currency Translation. The functional currency of the majority of our active foreign subsidiaries is the foreign subsidiary’s local currency. Assets and liabilities that are not denominated in the functional currency are remeasured into the functional currency with any related gains or losses recorded in earnings. We translate assets and liabilities of our non-U.S. dollar functional currency foreign operations into the U.S. dollar reporting currency at exchange rates in effect at the balance sheet date. We translate income and expense items of such foreign operations into the U.S. dollar reporting currency at average exchange rates for the period. Accumulated translation adjustments are reported in stockholders’ equity, as a component of accumulated other comprehensive income (loss).

Recently Adopted Accounting Pronouncements

In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which applies to all equity securities measured at fair value that are subject to contractual sale restrictions. This change prohibits entities from taking into account contractual restrictions on the sale of equity securities when estimating fair value and introduces required disclosures for such transactions. We adopted the standard as of the beginning of fiscal 2025 on a prospective basis and the adoption did not have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the Chief Operating Decision Maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The ASU is effective for our annual reports beginning in fiscal 2025 and interim period reports beginning in fiscal 2026. We adopted the standard during fiscal 2025, on a retrospective basis, and the adoption provided more granular disclosure of significant operating expenses within our segment disclosure. See Note 19. Segment Disclosure of the Notes to Consolidated Financial Statements in this Annual Report for further details.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. The ASU will be effective for us beginning in fiscal 2026 and will be applied on a prospective basis. Early adoption is permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income-Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU also requires disclosure of the total amount of selling expenses and our definition of selling expenses. The ASU will be effective for our annual reports beginning in fiscal 2028, and interim period reports

Table of Contents

beginning in fiscal 2029 either on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU allows companies to apply a practical expedient when estimating credit losses on current accounts receivable and contract assets. The ASU will be effective for us beginning in fiscal 2027 and will be applied on a prospective basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs and clarifies the criteria for capitalization. The ASU will be effective for us beginning in fiscal 2029, either on a prospective, retrospective, or a modified basis. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU on our consolidated financial statements and related disclosures.

Note 3. Discontinued Operations

On September 30, 2024, we completed the sale of our former Software Integrity business (the Software Integrity Divestiture) to entities controlled by funds affiliated with Clearlake Capital Group, L.P. and Francisco Partners (together, the Sponsors). The aggregate consideration for the sale was $1.65 billion, comprised of (i) cash of $1.48 billion received upon closing; (ii) $121.5 million reflecting the present value of $125.0 million in deferred consideration receivable in equal installments over five fiscal quarters beginning on January 17, 2025, subject to acceleration at our option prior to the closing of the Ansys Merger; (iii) $22.2 million reflecting the fair value of contingent consideration of up to $475.0 million receivable upon the Sponsors achieving a specified rate of return in the event of one or more potential liquidity transactions; and (iv) additional consideration receivable of $27.1 million as a result of net working capital adjustments. As a result of the Software Integrity Divestiture, we derecognized net assets of $720.5 million and incurred transaction costs of $61.7 million, resulting in a pre-tax gain of $868.8 million in fiscal 2024.

In the second quarter of fiscal 2025, we finalized the working capital adjustments and received $20.0 million from the Sponsors. The remainder receivable balance of $7.1 million was recorded as a reduction to the previously recorded gain from the Software Integrity Divestiture. We recorded a total pre-tax gain, net of transaction costs, of $860.5 million from the Software Integrity Divestiture.

We have received the entire deferred consideration installment payments of $125.0 million in fiscal 2025. There was no material change to the fair value of the contingent consideration receivable as of October 31, 2025.

Table of Contents

The financial results of the Software Integrity business are presented as income from discontinued operations, net of income taxes in our consolidated statements of income. The following table presents the major components of financial results of our Software Integrity business for the periods presented:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Revenue			$	—					$	468,720					$	524,605
Cost of revenue			—						153,081						191,350
Operating expenses			—						265,029						337,235
Other income (expense), net			—						2,003						292
Income (loss) from discontinued operations			—						52,613						(3,688)
Gain (loss) on Software Integrity Divestiture			(8,299)						868,830						—
Income (loss) from discontinued operations before income taxes			(8,299)						921,443						(3,688)
Income tax provision (benefit)			(4,399)						99,773						(6,531)
Income (loss) from discontinued operations, net of income taxes			$	(3,900)					$	821,670					$	2,843

The following table presents significant non-cash items and capital expenditures of discontinued operations for the periods presented:

			Year Ended October 31,
			2025						2024						2023
			( in thousands)
Amortization and depreciation			$	—					$	16,317					$	51,971
Reduction of operating lease right-of-use assets			$	—					$	2,162					$	5,120
Amortization of capitalized costs to obtain revenue contracts			$	—					$	25,051					$	30,071
Stock-based compensation			$	—					$	34,381					$	50,198
Deferred income taxes			$	(6,933)					$	(31,679)					$	(3,136)
Purchases of property and equipment			$	—					$	1,487					$	3,232

Note 4. Business Combinations

Fiscal 2025

On July 17, 2025, we completed our acquisition of Ansys pursuant to the terms of the previously announced Agreement and Plan of Merger, dated as of January 15, 2024 (the Merger Agreement) by and among Synopsys, Ansys and ALTA Acquisition Corp. (Merger Sub), a Delaware corporation and a wholly owned subsidiary of Synopsys. Pursuant to the Merger Agreement, Merger Sub merged with and into Ansys (the Ansys Merger), with Ansys surviving the Ansys Merger as a wholly owned subsidiary of Synopsys. At the effective time of the Ansys Merger (the Effective Time), each share of common stock, par value $0.01 per share, of Ansys (Ansys Common Stock) issued and outstanding immediately prior to the Effective Time (subject to certain exceptions) was converted into the right to receive (i) 0.3399 (the Exchange Ratio) of a share of common stock, par value $0.01 per share, of Synopsys (Synopsys Common Stock) (in the aggregate, the Stock Consideration) and (ii) $199.91 in cash, without interest (the Per Share Cash Amount, and in the aggregate, the Cash Consideration) (the Stock Consideration and the Cash Consideration, collectively, the Merger Consideration). In addition, we assumed certain outstanding Ansys options and other outstanding unvested Ansys equity awards held by continuing Ansys employees.

The aggregate purchase consideration was approximately $34.9 billion, consisting of cash of $17.6 billion, Synopsys Common Stock with a fair value of $17.1 billion, and the balance related to the assumption of certain outstanding Ansys equity awards and the settlement of pre-existing relationships. We acquired Ansys to combine

Table of Contents

Synopsys’ semiconductor electronic design automation expertise with Ansys’ S&A capabilities to address the growing demand for integrated design and simulation tools across various industries.

We funded the Cash Consideration in the Ansys Merger through a combination of cash on hand, the net proceeds from the issuance of the Senior Notes, and the borrowings under the Term Loan Agreement, each as defined and discussed in Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in this Annual Report.

The aggregate purchase consideration was preliminarily allocated as follows:

						(in thousands)
Cash for outstanding Ansys Common Stock(1)						$	17,613,185
Fair value of Synopsys Common Stock issued for outstanding Ansys Common Stock(2)						17,105,538
Fair value of assumed Ansys equity awards attributable to pre-combination services(3)						130,963
Settlement of pre-existing relationships						8,794
Total purchase consideration						34,858,480
Less: cash acquired						(931,740)
Total purchase consideration, net of cash acquired						$	33,926,740
Allocations
Total current assets						$	898,127
Property and equipment						106,209
Goodwill						23,442,889
Intangible assets						12,990,000
Other long-term assets						253,815
Deferred revenue						(637,076)
Other current liabilities						(303,526)
Long-term deferred revenue						(34,070)
Long-term deferred tax liabilities						(2,624,094)
Other long-term liabilities						(165,534)
						$	33,926,740

(1) Represents the total cash paid to settle 88.1 million outstanding shares of Ansys Common Stock as of the Acquisition Date at $199.91 per share and for the settlement of fractional shares.

(2) Represents the fair value of 30.0 million shares of Synopsys Common Stock issued to settle 88.1 million outstanding shares of Ansys Common Stock. Synopsys issued 0.3399 of a share of Synopsys Common Stock for each Ansys share. The fair value of Synopsys Common Stock was $571.20 per share as of the Acquisition Date.

(3) Represents the fair value of assumed Ansys options and RSUs attributed to pre-combination services. See Note 15. Employee Benefit Plans for additional information.

We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on their preliminary estimated fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of acquisition. These estimates and assumptions are believed to be reasonable, but they are inherently uncertain and may be subject to material change as additional information becomes available during the respective measurement period, which will not exceed 12 months from applicable acquisition date. The primary areas that are preliminary relate to the fair values of goodwill, intangible assets, certain tangible assets and liabilities, and income taxes.

Goodwill is primarily attributed to the assembled workforce and anticipated synergies and economies of scale expected from the integration of the Ansys business. The synergies include certain cost savings, operating efficiencies and other strategic benefits projected to be achieved as a result of the Ansys Merger. The goodwill was assigned to the Design Automation reporting unit and the amount recognized was not deductible for tax purposes.

Table of Contents

The operating results of Ansys have been included in our consolidated financial statements for the fiscal year ended October 31, 2025 from the Acquisition Date.

Intangible Assets

The estimated fair value and weighted average useful life of the Ansys intangible assets were as follows:

			Fair value						Useful Lives
			(in thousands)						(in years)
Core/developed technologies(1)			$	6,500,000					6 - 9
Customer relationships(2)			5,100,000						9
Contract rights intangible(3)			440,000						2
Trademarks and trade names(4)			950,000						23
Total identified intangible assets			$	12,990,000

(1) Core/developed technology was identified from the products of Ansys and its preliminary fair value was determined using the relief-from-royalty method under the income approach. The relief-from-royalty method applies a royalty rate to projected income to quantify the benefit of owning the intangible asset rather than paying a royalty for use of the asset. The discount rate was determined at the time of measurement based on an analysis of the implied internal rate of return of the transaction, weighted-average cost of capital, and weighted-average return on assets. The economic useful life was determined based on the technology cycle related to each developed technology, as well as the cash-flows over the forecast period.

(2) Customer relationships represent the preliminary fair value of future projected revenue that will be derived from sales of products to existing Ansys customers. The fair value was determined using the multi-period excess earnings method under the income approach, which involves isolating the net earnings attributable to the asset being measured based on present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. The economic useful life was determined based on historical customer turnover rates and the useful life of developed technology.

(3) Contract rights intangible, which represents contracted but unsatisfied or partially unsatisfied performance obligations, primarily relates to the dollar value of purchase arrangements with customers. The preliminary fair value was determined using the multi-period excess earnings method under the income approach. The economic useful life is based on the time to fulfill the outstanding order backlog obligation.

(4)Trademarks and trade names refers to Ansys brand assets. The preliminary fair value was determined by applying the relief-from-royalty method under the income approach. This method is based on the application of a royalty rate to forecasted revenue attributable to Ansys brand assets. The economic useful life was determined based on the expected usage period of the brand assets and the anticipated cash flows over the forecast period.

We believe the amounts of purchased intangible assets recorded above represent the fair values of and approximate the amounts a market participant would pay for these intangible assets as of the date of the Ansys Merger.

The Optical Solutions Group and PowerArtist RTL Divestitures

Following the determination that it was a necessary step towards obtaining governmental approval of and successfully closing the Ansys Merger, on September 3, 2024, we signed a definitive agreement for the sale of our Optical Solutions Group (OSG) to Keysight Technologies, Inc. (such sale, the Optical Solutions Divestiture). Ansys has similarly entered into a definitive agreement with Keysight Technologies, Inc. for the sale of its PowerArtist RTL business (such sale, together with the Optical Solutions Divestiture, the Regulatory Divestitures).

The Regulatory Divestitures did not represent a strategic shift in operations that would have a major effect on Synopsys' business and are also not material to our financial results, and therefore, are not presented as discontinued operations. The assets and liabilities of OSG and PowerArtist were classified as assets held for sale as of the Acquisition Date. OSG and PowerArtist were included in our Design Automation segment.

On October 17, 2025, we completed the Regulatory Divestitures for cash consideration of $604.0 million. As the result of the Regulatory Divestitures, we disposed $55.1 million of net assets including goodwill of $19.5 million, and recognized a pre-tax gain on sale of $548.9 million, which was included in other income (expense), net in the

Table of Contents

consolidated statements of income. In addition, we incurred $32.6 million divestiture-related expenses, resulting in a net pre-tax gain on sale of $516.3 million.

Supplemental Pro Forma Information (Unaudited)

The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if Ansys had been acquired as of the beginning of fiscal year 2024.

									Year Ended October 31,
															2025						2024
															(in thousands)
Pro forma total revenue															$	8,920,890					$	8,450,296
Pro forma net income (loss)															$	743,822					$	651,499

The unaudited pro forma financial information reflects significant non-recurring adjustments, including transaction costs of $298.4 million, stock-based compensation costs of $71.5 million, and severance costs of $8.2 million. This information is provided for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2024, or of the results of our future operations of the combined business.

Fiscal 2024

During fiscal 2024, we completed several acquisitions for an aggregate purchase consideration of $159.3 million, net of cash acquired. We do not consider these acquisitions to be material, individually or in the aggregate, to our consolidated financial statements. The total purchase consideration was allocated as follows: $78.9 million to identifiable intangible assets, $96.1 million to goodwill, and $15.7 million to net tangible liabilities. The goodwill recognized from these acquisitions, of which $61.8 million was attributable to the Design Automation reporting unit, and $34.3 million was attributable to the Design IP reporting unit, was not deductible for income tax purposes.

Fiscal 2023

During fiscal 2023, we completed several acquisitions for an aggregate purchase consideration of $295.4 million, net of cash acquired. We do not consider these acquisitions to be material, individually or in the aggregate, to our consolidated financial statements. The total purchase consideration was allocated as follows: $95.8 million to identifiable intangible assets, $229.4 million to goodwill, and $29.8 million to net tangible liabilities. The goodwill recognized from these acquisitions was assigned to the Design Automation reporting unit, of which $5.7 million was deductible for income tax purposes.

Redeemable Non-controlling Interest

During the second quarter of fiscal 2022, we acquired a 75% equity interest in OpenLight Photonics, Inc. (OpenLight) for cash consideration of $90.0 million. The remaining 25% equity interest in OpenLight was held by Juniper Networks, Inc. (the Minority Investor) from their contribution of IP and certain tangible assets.

The agreement with the Minority Investor contained redemption features whereby the interest held by the Minority Investor was redeemable either (1) at the option of the Minority Investor on or after the third anniversary of the acquisition or sooner in certain circumstances or (2) at our option beginning on the third anniversary of the acquisition. This option was exercisable at the greater of fair value at the time of redemption or $30.0 million. The fair value of the option was initially valued at $10.1 million, resulting in a total consideration of $100.1 million.

As of the end of fiscal 2024, upon issuance of new OpenLight stock, our ownership interest in OpenLight was reduced to 71% and the Minority Investor was reduced to 24%. On December 23, 2024, we exercised the call option to purchase the remaining ownership interest held by the Minority Investor at a redemption price of $30.0 million, bringing our ownership interest in OpenLight to 95%.

Subsequently on December 30, 2024, we divested our entire ownership interest in OpenLight. We had previously recorded an impairment charge of $53.5 million related to acquired intangible assets in OpenLight in fiscal 2024. See Note 6. Goodwill and Intangible Assets of the Notes to Consolidated Financial Statements in this Annual Report for more information. The goodwill related to the OpenLight acquisition was assigned to our Design Automation

Table of Contents

reporting unit. The resulting loss on the OpenLight divestiture, included in other income (expense), net in the consolidated statements of income, was not material to our results of operation.

During fiscal 2025, 2024 and 2023, OpenLight incurred a net loss of $3.5 million, $91.7 million and $40.9 million, respectively, of which $0.8 million, $22.0 million and $10.0 million, respectively, was attributable to redeemable non-controlling interest. The carrying value of the redeemable non-controlling interest was recorded at its estimated fair value of $30.0 million as of October 31, 2024 in the consolidated balance sheets. We have excluded the financial results of OpenLight from our consolidated financial statements from the date of sale.

Transaction Costs

Transaction costs for acquisitions, primarily related to the Ansys Merger, were $267.1 million, $161.8 million and $13.8 million during fiscal 2025, 2024 and 2023, respectively. These costs mainly consisted of professional fees and administrative costs for closed and pending acquisitions, as well as the Bridge Commitment financing costs, and were expensed as incurred in our consolidated statements of income.

Note 5. Revenue

Disaggregated Revenue

The following table shows the percentage of revenue by product groups:

			Year Ended October 31,
			2025						2024						2023
EDA			62.0		%				66.4		%				69.2		%
Design IP			24.8		%				31.1		%				29.0		%
Ansys			10.7		%				—		%				—		%
Other			2.5		%				2.5		%				1.8		%
Total			100.0		%				100.0		%				100.0		%

For additional information on our product groups and the revenue attributable to them by product type, refer to Part I, Item 1, Business in this Annual Report.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing customers, resulting in receivables, contract assets, or contract liabilities (deferred revenue) in our consolidated balance sheets. For specific software, hardware, and IP agreements with payment plans, we record an unbilled receivable associated with revenue recognized upon transfer of control, as it holds an unconditional right to invoice and receive payment in the future for those transferred products or services.

A contract asset is recorded when revenue is recognized before we have the unconditional right to invoice or retains performance risk concerning that performance obligation. These contract assets transition to receivables when the rights become unconditional, generally upon the completion of a milestone. The contract assets listed below are included in prepaid and other current assets and other long-term assets in our consolidated balance sheets.

Table of Contents

Contract balances are as follows:

			As of October 31,
			2025						2024
			(in thousands)
Contract assets, net			$	1,222,029					$	757,075
Unbilled receivables			$	45,528					$	44,166
Deferred revenue			$	2,628,518					$	1,732,568

Long-term contract assets were $336.4 million as of October 31, 2025.

During fiscal 2025, we recognized revenue of $1.5 billion that was included in the deferred revenue balance as of October 31, 2024, including previously unfulfilled contracts that have expired and are no longer subject to an implied promise to provide future services. During fiscal 2024, we recognized revenue of $1.5 billion, that was included in the deferred revenue balance as of October 31, 2023, including previously unfulfilled contracts that have expired and are no longer subject to an implied promise to provide future services.

Contracted but unsatisfied or partially unsatisfied performance obligations (backlog) were approximately $11.4 billion as of October 31, 2025, which includes $2.0 billion in non-cancellable Flexible Spending Account (FSA) commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. We have elected to exclude future sales-based royalty payments from the remaining performance obligations. Approximately 45% of the backlog as of October 31, 2025, excluding non-cancellable FSA, is expected to be recognized as revenue over the next 12 months, with the remainder to be recognized thereafter. The majority of the remaining backlog is expected to be recognized in the following three years. The backlog was approximately $8.1 billion as of October 31, 2024, which included $1.2 billion in non-cancellable FSA commitments from customers.

During fiscal 2025 and 2024, we recognized $125.3 million and $104.4 million, respectively, from performance obligations satisfied from sales-based royalties earned during the periods.

Costs of Obtaining a Contract with Customer

The incremental costs of obtaining a contract with a customer, which consist primarily of direct sales commission earned upon execution of the contract, were capitalized in compliance with authoritative guidance, and amortized over the estimated period of which the benefit is expected to be received. As direct sales commission paid for renewals are commensurate with the amounts paid for initial contracts, the deferred incremental costs will be recognized over the contract term.

Capitalized commission costs, net of accumulated amortization, as of October 31, 2025 were $92.5 million, of which $13.4 million were included in prepaid and other current assets, and $79.1 million in other long-term assets in our consolidated balance sheets. Capitalized commission costs, net of accumulated amortization, as of October 31, 2024 were $72.8 million, included in other long-term assets in our consolidated balance sheets. Amortization of these assets were $53.2 million, $48.5 million and $52.1 million during fiscal 2025, 2024 and 2023, respectively, and are included in sales and marketing expense in our consolidated statements of income.

Note 6. Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired in business combination. The change in the goodwill during fiscal 2025 resulted primarily from $23.4 billion related to the Ansys Merger. For additional information, refer to Note 4. Business Combination of the Notes to Consolidated Financial Statements in this Annual Report.

We performed the required annual goodwill assessment in the fourth quarter of fiscal 2025, and concluded the goodwill was not impaired. There was no goodwill impairment in fiscal 2025, 2024 and 2023.

Goodwill activity by reportable segment consists of the following:

Table of Contents

			Design Automation						Design IP												Total
			(in thousands)
Balance at October 31, 2023			$	2,400,682					$	945,383											$	3,346,065
Additions			61,803						34,339												96,142
Adjustments			170						—												170
Effect of foreign currency translation			6,602						(129)												6,473
Balance at October 31, 2024			2,469,257						979,593												3,448,850
Additions			23,442,889						—												23,442,889
Adjustments (OSG Divestiture)			(19,471)						—												(19,471)
Effect of foreign currency translation			24,255						2,692												26,947
Balance at October 31, 2025			$	25,916,930					$	982,285											$	26,899,215

Intangible Assets

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. The change in the gross carrying amounts of intangible assets in fiscal 2025 was due to the Ansys Merger. For additional information, refer to Note 4. Business Combination of the Notes to Consolidated Financial Statements in this Annual Report.

During the fourth quarter of fiscal 2024, we assessed long-lived assets for impairment and recorded an impairment charge of $53.5 million related to acquired intangible assets. The impairment charge was triggered by a decline in estimated fair value resulting from the reductions in the expected future cash flows associated with our core/developed technology intangible assets related to our OpenLight business. There were no other impairment charges for long-lived assets in fiscal 2025, 2024 and 2023.

Intangible assets as of October 31, 2025 consists of the following:

			Gross Carrying Amount						Accumulated Amortization						Net Amount
			(in thousands)
Core/developed technology			$	7,309,753					$	929,901					$	6,379,852
Customer relationships			5,415,558						428,377						4,987,181
Contract rights intangible			614,358						239,808						374,550
Trademarks and trade names			962,925						24,917						938,008
Total			$	14,302,594					$	1,623,003					$	12,679,591

Intangible assets as of October 31, 2024 consists of the following:

Table of Contents

			Gross Carrying Amount						Accumulated Amortization and Impairment						Net Amount
			(in thousands)
Core/developed technology			$	904,347					$	777,518					$	126,829
Customer relationships			314,140						247,025						67,115
Contract rights intangible			176,382						175,170						1,212
Trademarks and trade names			12,925						12,917						8
Total			$	1,407,794					$	1,212,630					$	195,164

Amortization expense related to acquired intangible assets, including the impairment charge, consists of the following:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Core/developed technology			$	247,210					$	104,797					$	42,892
Customer relationships			180,525						15,550						9,288
Contract rights intangible			64,648						3,872						2,389
Trademarks and trade names			12,000						15						7
Capitalized software development costs(1)			—						—						4,770
Total			$	504,383					$	124,234					$	59,346

*(1)*Amortization of capitalized software development costs is included in cost of products revenue in the consolidated statements of income.

The following table presents the estimated future amortization of acquired intangible assets as of October 31, 2025:

Fiscal Year			(in thousands)
2026			$	1,613,410
2027			1,544,994
2028			1,384,004
2029			1,381,360
2030			1,375,519
2031 and thereafter			5,380,304
Total			$	12,679,591

Table of Contents

Note 7. Balance Sheet Components

			As of October 31,
			2025						2024
			(in thousands)
Accounts receivable, net:
Accounts receivable			$	1,548,858					$	941,312
Unbilled accounts receivable			45,528						44,166
Total accounts receivable			1,594,386						985,478
Less: allowance for credit losses			(88,959)						(51,008)
Total			$	1,505,427					$	934,470
Property and equipment, net:
Computer and other equipment			$	1,150,804					$	1,011,712
Buildings			100,016						103,779
Furniture and fixtures			101,183						87,524
Land			13,888						18,219
Leasehold improvements			295,917						271,753
Total property and equipment			1,661,808						1,492,987
Less: accumulated depreciation (1)			(965,115)						(929,981)
Total			$	696,693					$	563,006
Accounts payable and accrued liabilities:
Payroll and related benefits			$	822,575					$	624,823
Accounts payable			164,766						207,333
Accrued income taxes			94,664						147,115
Interest payable			49,826						—
Other accrued liabilities			194,380						184,321
Total			$	1,326,211					$	1,163,592
Other long-term liabilities:
Deferred tax liability			$	1,001,070					$	36,557
Deferred compensation plan liabilities			447,232						386,757
Other			200,997						46,424
Total			$	1,649,299					$	469,738

*(1)*Accumulated depreciation includes write-offs due to retirement of fully depreciated fixed assets.

Note 8. Financial Assets and Liabilities

Cash Equivalents and Short-term Investments

Table of Contents

As of October 31, 2025, the balances of our cash equivalents and short-term investments are as follows:

			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses Less Than 12 Continuous Months						Gross Unrealized Losses 12 Continuous Months or Longer						Estimated Fair Value**(1)**
			(in thousands)
Cash equivalents:
Money market funds			$	52,978					$	—					$	—					$	—					$	52,978
Total:			$	52,978					$	—					$	—					$	—					$	52,978
Short-term investments:
U.S. Treasury, agency & T-bills			$	6,661					$	19					$	—					$	—					$	6,680
Municipal bonds			22,004						61						—						—						22,065
Corporate debt securities			43,878						139						(18)						—						43,999
Other			185						—						—						—						185
Total:			$	72,728					$	219					$	(18)					$	—					$	72,929

*(1)*See Note 9. Fair Value Measurements for further discussion on fair values.

Our short-term investment portfolio includes both corporate and government debt securities that have a maximum maturity of three years. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. Most of our unrealized losses are due to changes in market interest rates, and bond yields. We believe that we have the ability to realize the full value of all of these investments upon maturity. As of October 31, 2025, our investments that were in a continuous loss position of 12 months or more, as well as the unrealized losses on those investments, were immaterial.

The contractual maturities of our available-for-sale debt securities as of October 31, 2025 are as follows:

			Amortized Cost						Fair Value
			(in thousands)
Less than 1 year			$	26,944					$	27,014
1-5 years			45,784						45,915
Total			$	72,728					$	72,929

Table of Contents

As of October 31, 2024, the balances of our cash equivalents and short-term investments are as follows:

			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses Less Than 12 Continuous Months						Gross Unrealized Losses 12 Continuous Months or Longer						Estimated Fair Value**(1)**
			(in thousands)
Cash equivalents:
Money market funds			$	869,972					$	—					$	—					$	—					$	869,972
U.S. Treasury, agency & T-bills			7,984						1						—						—						7,985
Total:			$	877,956					$	1					$	—					$	—					$	877,957
Short-term investments:
U.S. Treasury, agency & T-bills			$	19,411					$	44					$	(6)					$	—					$	19,449
Corporate debt securities			105,024						349						(115)						(2)						105,256
Asset-backed securities			29,061						130						(7)						(20)						29,164
Total:			$	153,496					$	523					$	(128)					$	(22)					$	153,869

*(1)*See Note 9. Fair Value Measurements for further discussion on fair values.

Restricted cash

We include amounts generally described as restricted cash in cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown in the consolidated statements of cash flows. Restricted cash is primarily associated with deposits for office leases and employee loan programs.

The following table provides a reconciliation of cash, cash equivalents and restricted cash included in the consolidated balance sheets and the consolidated statements of cash flows:

			As of October 31,
			2025						2024
			(in thousands)
Cash and cash equivalents			$	2,888,030					$	3,896,532
Restricted cash included in prepaid and other current assets			4,680						1,529
Restricted cash included in other long-term assets			1,011						668
Cash, cash equivalents and restricted cash			$	2,893,721					$	3,898,729

Non-marketable equity securities

Our portfolio of non-marketable equity securities consists of strategic investments in privately held companies. During the first quarter of fiscal 2024, we completed the sale of certain strategic investments in privately-held companies. The gain recognized from the sales was $55.1 million and included in other income (expense), net, in our consolidated statements of income. There were no material impairments of non-marketable equity securities in fiscal 2025, 2024, and 2023.

Derivatives

We recognize derivative instruments as either assets or liabilities in the consolidated balance sheets at fair value and provide qualitative and quantitative disclosures about such derivatives. We operate internationally and are exposed to potentially adverse movements in foreign currency exchange and interest rates. We enter into hedges in the form of foreign currency forward contracts to reduce our exposure to foreign currency rate changes on non-functional currency denominated forecasted transactions and balance sheet positions including: (1) certain assets and liabilities, (2) shipments forecasted to occur within approximately one month, (3) future billings and revenue on previously shipped orders, and (4) certain future intercompany invoices denominated in foreign currencies.

Table of Contents

The majority of the forward contracts are short-term with maturity of up to 30 months at inception. We do not use foreign currency forward contracts for speculative or trading purposes. We enter into foreign exchange forward contracts with high credit quality financial institutions that are rated "A" or above and to date have not experienced nonperformance by counterparties. In addition, we mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty and anticipate continued performance by all counterparties to such agreements.

The assets or liabilities associated with the forward contracts are recorded at fair value in other current assets or accrued liabilities in the consolidated balance sheets. The accounting for gains and losses resulting from changes in fair value depends on the use of the foreign currency forward contract and whether it is designated and qualifies for hedge accounting. The cash flow impact upon settlement of the derivative contracts is included in net cash provided by operating activities in the consolidated statements of cash flows.

Additionally, in order to manage interest rate exposure related to anticipated debt transactions, in the first quarter of fiscal 2025, we entered into treasury rate lock agreements to hedge against unfavorable interest rate changes. The accounting for gains and losses resulting from changes in fair value depends on whether these are designated and qualify for hedge accounting. The assets or liabilities associated with these derivatives are recorded at fair value in other current assets or accrued liabilities in the consolidated balance sheets. The cash flow impact upon settlement of these derivative contracts is included in net cash used in operating activities in the consolidated statements of cash flows.

Cash Flow Hedging Activities

Certain foreign exchange forward contracts are designated and qualify as cash flow hedges. These contracts have durations of up to 30 months or less. Certain forward contracts are rolled over periodically to capture the full length of exposure to our foreign currency risk, which can be up to three years. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. The related gains or losses resulting from changes in fair value of these hedges is initially reported, net of tax, as a component of other comprehensive income (loss) (OCI) in stockholders’ equity and reclassified into revenue or operating expenses, as appropriate, at the time the hedged transactions affect earnings. We expect a majority of the hedge balance in OCI to be reclassified to the statements of income within the next 12 months.

We did not record any gains or losses related to discontinuation of foreign exchange forward contracts cash flow hedges for fiscal years 2025, 2024 and 2023.

During the first quarter of fiscal 2025, we entered into 6-month interest rate hedge contracts (the 2025 Rate Lock Agreements) with notional value of $2.0 billion to lock the benchmark interest rate prior to expected debt issuances with 10-year and 30-year terms. The objective of the 2025 Rate Lock Agreements was to hedge the risk associated with the variability in interest rates due to the changes in the benchmark rate leading up to the closing of the intended financing on the notional amount being hedged. To receive hedge accounting treatment, the hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on the hedged transactions. These derivatives are designated as cash flow hedges with unrealized gains and losses deferred in OCI. The 2025 Rate Lock Agreements terminated and settled in the second quarter of fiscal 2025, and we recorded the fair value of $121.6 million as a loss within OCI. The unrealized loss of $121.6 million is being amortized to interest expense over the life of the related debt. We expect $7.0 million of the unrealized loss to be amortized to interest expense over the next 12 months. As of October 31, 2025, the unamortized portion of the fair value of the 2025 Rate Lock Agreements was $117.0 million. We had no interest rate hedge contracts outstanding as of October 31, 2025.

During the second quarter of fiscal 2025, we entered into a deferred payment agreement with the counterparty bank to defer the cash settlement of 2025 Rate Lock Agreements over a period of 5.5 years with installments due semi-annually. The implied interest rate is 3.45%. This liability is recognized in our consolidated balance sheets as short-term debt for the portion due within the next 12 months and as long-term debt for the remaining portion. There were no debt covenants applicable to the deferred payment agreement.

Table of Contents

Non-designated Hedging Activities

Our foreign exchange forward contracts that are used to hedge non-functional currency denominated balance sheet assets and liabilities are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of the forward contracts are recorded in other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the underlying assets and liabilities, which are also recorded in other income (expense), net. The duration of the forward contracts for hedging our balance sheet exposure is approximately one month.

We also have certain foreign exchange forward contracts for hedging certain international revenues and expenses that are not designated as hedging instruments. Accordingly, any gains or losses from changes in the fair value of these forward contracts are recorded in other income (expense), net. The gains and losses on these forward contracts generally offset the gains and losses associated with the foreign currency in operating income. The duration of these forward contracts is usually less than one year. The overall goal of our hedging program is to minimize the impact of currency fluctuations on the net income over the fiscal year.

The effects of the non-designated foreign currency derivative instruments in the consolidated statements of income are summarized as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Gains (losses) recorded in other income (expense), net			$	(5,492)					$	(307)					$	(5,899)

The notional amounts in the table below for foreign currency derivative instruments provide one measure of the transaction volume outstanding:

			As of October 31,
			2025						2024
			(in thousands)
Total gross notional amounts			$	1,587,863					$	1,686,341
Net fair value			$	(1,234)					$	1,819

Our exposure to the market gains or losses will vary over time as a function of currency exchange rates. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.

The following table represents the consolidated balance sheets location and amount of foreign currency derivative instrument fair values segregated between designated and non-designated hedge instruments:

			Fair values of derivative instruments designated as hedging instruments						Fair values of derivative instruments not designated as hedging instruments
			(in thousands)
Balance at October 31, 2025
Other current assets			$	8,598					$	265
Accrued liabilities			$	9,504					$	593
Balance at October 31, 2024
Other current assets			$	8,839					$	12
Accrued liabilities			$	6,918					$	114

Table of Contents

The following table represents the location of the amount of gains and losses on derivative instrument fair values for designated hedge instruments, net of tax in the consolidated statements of income:

			Location of gains (losses) recognized in OCI on derivatives						Amount of gains (losses) recognized in OCI on derivatives (effective portion)						Location of gains (losses) reclassified from OCI						Amount of gains (losses) reclassified from OCI (effective portion)
			(in thousands)
Fiscal year ended October 31, 2025
Foreign exchange contracts			Revenue						$	20,434					Revenue						$	3,155
Foreign exchange contracts			Operating expenses						(7,292)						Operating expenses						(3,320)
Interest rate contracts			Interest expense						(93,216)						Interest expense						(3,551)
Total									$	(80,074)											$	(3,716)
Fiscal year ended October 31, 2024
Foreign exchange contracts			Revenue						$	3,940					Revenue						$	3,089
Foreign exchange contracts			Operating expenses						5,685						Operating expenses						112
Total									$	9,625											$	3,201
Fiscal year ended October 31, 2023
Foreign exchange contracts			Revenue						$	8,390					Revenue						$	(9,942)
Foreign exchange contracts			Operating expenses						16,596						Operating expenses						(15,334)
Total									$	24,986											$	(25,276)

Note 9. Fair Value Measurements

ASC 820-10, Fair Value Measurements and Disclosures, defines fair value, establishes guidelines and enhances disclosure requirements for fair value measurements. The accounting guidance requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The accounting guidance also establishes a fair value hierarchy based on the independence of the source and objective evidence of the inputs used. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical instruments in active markets;

Level 2—Observable inputs other than quoted prices for identical instruments in active markets, quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in inactive markets, and model-driven valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3—Unobservable inputs derived from fair valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

On a recurring basis, we measure the fair value of certain assets and liabilities, which include cash equivalents, short-term investments, marketable securities, non-qualified deferred compensation plan assets, contingent consideration receivable, and foreign currency derivative contracts.

Our cash equivalents, short-term investments and marketable securities are classified within Level 1 or Level 2 because they are valued using quoted market prices in an active market or alternative independent pricing sources and models utilizing market observable inputs.

Our non-qualified deferred compensation plan assets consist of money market and mutual funds invested in domestic and international marketable securities that are directly observable in active markets and are therefore classified within Level 1.

Our foreign currency derivative contracts are classified within Level 2 because these contracts are not actively traded and the valuation inputs are based on quoted prices and market observable data of similar instruments.

Table of Contents

Our borrowings under our Credit and Term Loan facilities are classified within Level 2 because these borrowings are not actively traded and have a variable interest rate structure based upon market rates currently available to us for debt with similar terms and maturities. See Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in this Annual Report for more information on these borrowings.

Our contingent consideration receivable, which was recorded in connection with the Software Integrity Divestiture, was classified within Level 3 because it was estimated using significant inputs that were not observable in the market. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in this Annual Report for additional information.

Assets/Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2025:

									Fair Value Measurement Using
Description			Total						Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
			(in thousands)
Assets
Cash equivalents:
Money market funds			$	52,978					$	52,978					$	—					$	—
Short-term investments:
U.S. Treasury, agency & T-bills			6,680						—						6,680						—
Municipal bonds			22,065						—						22,065						—
Corporate debt securities			43,999						—						43,999						—
Others			185						—						185						—
Prepaid and other current assets:
Foreign currency derivative contracts			8,863						—						8,863						—
Contingent consideration receivable			22,202						—						—						22,202
Other long-term assets:
Deferred compensation plan assets			447,232						447,232						—						—
Marketable equity securities			785						785						—						—
Total assets			$	604,989					$	500,995					$	81,792					$	22,202
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts			$	10,097					$	—					$	10,097					$	—
Other long-term liabilities:
Deferred compensation plan liabilities			447,232						447,232						—						—
Total liabilities			$	457,329					$	447,232					$	10,097					$	—

Assets and liabilities measured at fair value on a recurring basis are summarized below as of October 31, 2024:

Table of Contents

Description			Total						Fair Value Measurement Using
Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)
			(in thousands)
Assets
Cash equivalents:
Money market funds			$	869,972					$	869,972					$	—					$	—
U.S. Treasury, agency & T-bills			7,985						—						7,985						—
Short-term investments:
U.S. Treasury, agency & T-bills			19,449						—						19,449						—
Corporate debt securities			105,256						—						105,256						—
Asset-backed securities			29,164						—						29,164						—
Prepaid and other current assets:
Foreign currency derivative contracts			8,851						—						8,851						—
Contingent consideration receivable			22,202						—						—						22,202
Other long-term assets:
Deferred compensation plan assets			386,757						386,757						—						—
Total assets			$	1,449,636					$	1,256,729					$	170,705					$	22,202
Liabilities
Accounts payable and accrued liabilities:
Foreign currency derivative contracts			$	7,032					$	—					$	7,032					$	—
Other long-term liabilities:
Deferred compensation plan liabilities			386,757						386,757						—						—
Total liabilities			$	393,789					$	386,757					$	7,032					$	—

Assets/Liabilities Measured at Fair Value on a Non-Recurring Basis

Non-Marketable Equity Securities

Non-marketable equity securities are classified within Level 3 as they are valued using a combination of observable transaction price and unobservable inputs or data in an inactive market due to the absence of market price and inherent lack of liquidity.

Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities

The following table summarizes our borrowings as of October 31, 2025:

Table of Contents

						Effective Interest Rate						Amount (in thousands)
Fixed-rate 4.550% Senior Notes due on April 1, 2027						4.840		%				$	1,000,000
Fixed-rate 4.650% Senior Notes due on April 1, 2028						4.850		%				1,000,000
Fixed-rate 4.850% Senior Notes due on April 1, 2030						4.980		%				2,000,000
Fixed-rate 5.000% Senior Notes due on April 1, 2032						5.150		%				1,500,000
Fixed-rate 5.150% Senior Notes due on April 1, 2035						5.270		%				2,400,000
Fixed-rate 5.700% Senior Notes due on April 1, 2055						5.800		%				2,100,000
Term Loan due on July 17, 2027						5.390		%				600,000
Term Loan due on July 17, 2028						5.480		%				2,850,000
Total												13,450,000
Unamortized discount and issuance costs												(89,156)
Total Senior Notes and Term Loan												13,360,844
Deferred payment on settlement of interest rate treasury lock												110,585
Other borrowings												13,086
Total												$	13,484,515
Reported as:
Short-term debt												$	22,117
Long-term debt												13,462,398
Total												$	13,484,515

Senior Notes

On March 17, 2025, we issued $10.0 billion in aggregate principal amount of senior, unsecured and unsubordinated long-term notes, including $1.0 billion aggregate principal amount of 4.550% Senior Notes due April 1, 2027 (the 2027 Senior Notes), $1.0 billion aggregate principal amount of 4.650% Senior Notes due April 1, 2028 (the 2028 Senior Notes), $2.0 billion aggregate principal amount of 4.850% Senior Notes due April 1, 2030 (the 2030 Senior Notes), $1.5 billion aggregate principal amount of 5.000% Senior Notes due April 1, 2032 (the 2032 Senior Notes), $2.4 billion aggregate principal amount of 5.150% Senior Notes due April 1, 2035 (the 2035 Senior Notes) and $2.1 billion aggregate principal amount of 5.700% Senior Notes due April 1, 2055 (the 2055 Senior Notes and together with the 2027 Senior Notes, 2028 Senior Notes, 2030 Senior Notes, 2032 Senior Notes and 2035 Senior Notes, the Senior Notes). Our total proceeds were approximately $9.9 billion, net of original issuance discount of $17.0 million and total issuance costs of $70.2 million. Interest on the Senior Notes is payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2025. The discount and issuance costs on our Senior Notes are amortized to interest expense over the terms of the respective notes using the effective interest method. The effective rates for the Senior Notes include the interest on the notes, the accretion of the discount and the amortization of issuance costs.

The Senior Notes were issued under an indenture, dated as of March 17, 2025 (the Base Indenture), as supplemented by the first supplemental indenture, dated as of March 17, 2025 (the Supplemental Indenture and, together with the Base Indenture, the Indenture), each between Synopsys and U.S. Bank Trust Company, National Association, as trustee.

The net proceeds of the Senior Notes were used to fund a portion of the Cash Consideration in the Ansys Merger and pay related transaction fees and expenses.

At any time and from time to time prior to their respective par call dates (as defined in the Indenture and applicable series of Senior Notes or, in the case of the 2027 Senior Notes, prior to the maturity date), Synopsys may redeem the applicable series of the Senior Notes at its option, in whole or in part, at any time and from time to time, at the “make-whole” redemption price (calculated as set forth in the Indenture and applicable series of Senior Notes), plus, in each case, accrued and unpaid interest, if any, on the Senior Notes being redeemed to, but excluding, the redemption date. In addition, on or after the applicable par call date, Synopsys may redeem the 2028 Senior Notes, 2030 Senior Notes, 2032 Senior Notes, 2035 Senior Notes or 2055 Senior Notes at its option, in whole or in part, at

Table of Contents

any time and from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes being redeemed plus accrued and unpaid interest, if any, thereon to, but excluding, the applicable redemption date.

The Indenture contains covenants limiting Synopsys’ ability to create certain liens and enter into certain sale and leaseback transactions. These covenants are subject to important limitations and exceptions as set forth in the Indenture.

Based on the trading prices of the Senior Notes, the fair value of our Senior Notes was $10.1 billion as of October 31, 2025. While the Senior Notes are recorded at cost, the fair value of long-term debt was determined based on observable market prices in less active markets and categorized as Level 2 for purposes of the fair value measurement hierarchy.

As of October 31, 2025 , we were in compliance with all of our covenants under the Indenture.

During the first quarter of fiscal 2025, we entered into 6-month interest rate hedge contracts with an aggregate notional amount of $2.0 billion to manage the variability in cash flows due to changes in benchmark interest rates related to the Senior Notes. These interest rate hedge contracts were terminated and settled during the second quarter of fiscal 2025, and we entered into a deferred payment agreement with the counterparty bank to defer the cash settlement. See Note 8. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements for more information on these cash flow hedging activities.

Bridge Commitment

On January 15, 2024, we entered into the Bridge Commitment Letter with certain financial institutions that committed to provide, subject to the satisfaction of customary closing conditions, the bridge commitment (the Bridge Commitment) for the purpose of financing a portion of the aggregate Cash Consideration in the Ansys Merger and paying related fees and expenses in connection with the Ansys Merger and the other transactions contemplated by the Merger Agreement.

On October 3, 2024, we reduced the Bridge Commitment by $1.1 billion to $10.6 billion following the closing of the Software Integrity Divestiture. On March 17, 2025, we further reduced the Bridge Commitment by $9.9 billion following the issuance of the Senior Notes. On the Acquisition Date, we terminated the approximately $690.0 million in remaining Bridge Commitment, reducing the Bridge Commitment to $0.

Term Loan

On February 13, 2024, we entered into a term loan facility credit agreement (the Term Loan Agreement) in connection with the financing of the Ansys Merger. On July 17, 2025, we borrowed the full $4.3 billion available under the Term Loan Agreement to fund a portion of the Cash Consideration in the Ansys Merger and to pay transaction fees, premiums and expenses related to the Ansys Merger.

The Term Loan Agreement provides for two tranches of senior unsecured term loans: a $1.45 billion tranche (Tranche 1) that matures on July 17, 2027 and a $2.85 billion tranche (Tranche 2) that matures on July 17, 2028. On October 17, 2025, we made an early repayment of $850.0 million on the Tranche 1 Term Loan. The outstanding balance under the Term Loan Agreement as of October 31, 2025 was $3.45 billion.

Under the Term Loan Agreement, borrowings will bear interest on the principal amount outstanding at a floating rate based on, at Synopsys’ election, (i) the Adjusted Term SOFR Rate (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of Synopsys ranging from 0.875% to 1.375% (in the case of Tranche 1) or 1.000% to 1.500% (in the case of Tranche 2) or (ii) the ABR (as defined in the Term Loan Agreement) plus an applicable margin based on the credit ratings of Synopsys ranging from 0.000% to 0.375% (in the case of Tranche 1) or 0.000% to 0.500% (in the case of Tranche 2).

The Term Loan Agreement contains a financial covenant requiring that Synopsys maintain a maximum consolidated leverage ratio, as well as certain other non-financial covenants. As of October 31, 2025, we were in compliance with the financial covenant as well as the other covenants.

Table of Contents

Subsequent Event

On November 17, 2025, we made an early repayment of $600.0 million on the Tranche 1 Term Loan, which reduced the Tranche 1 outstanding balance to $0, and an early repayment of $300.0 million on the Tranche 2 Term Loan. On December 17, 2025 we made another early repayment of $2.2 billion on the Tranche 2 Term Loan, which reduced the Tranche 2 outstanding balance to $350.0 million.

Revolving Credit Facilities

On February 13, 2024, we entered into a Sixth Amendment Agreement (the Sixth Amendment), which amended and restated our previous revolving credit agreement, dated as of December 14, 2022 (as amended and restated, the Revolving Credit Agreement).

The Revolving Credit Agreement provides an unsecured $850.0 million committed multicurrency revolving credit facility and an unsecured uncommitted incremental revolving loan facility of up to $150.0 million. The maturity date of the revolving credit facility is December 14, 2027, which may be extended at our option.

Under the Sixth Amendment, certain amendments became effective on February 13, 2024 and certain additional amendments became effective on the Acquisition Date. The Sixth Amendment amended the financial covenant to allow netting of the cash proceeds of certain debt incurred to finance the Ansys Merger as well as certain other modifications set forth therein. The Sixth Amendment, among other things, also amended: (i) the applicable margin used to determine the interest that accrues on loans and the facility fee payable under the revolving credit facility to be based on our credit ratings, (ii) the financial covenant thresholds under the financial covenant in the Revolving Credit Agreement requiring us to maintain a maximum consolidated leverage ratio and (iii) certain conditions to borrowing, other non-financial covenants and events of default.

The Revolving Credit Agreement contains a financial covenant requiring us to maintain a maximum consolidated leverage ratio, as well as other non-financial covenants. As of October 31, 2025, we were in compliance with the financial covenant.

Interest under the Revolving Credit Agreement accrues on dollar-denominated loans at a floating rate based on, at Synopsys’ election, (i) the Adjusted Term SOFR Rate (as defined in the Revolving Credit Agreement) plus an applicable margin based on our credit ratings ranging from 0.795% to 1.200% or (ii) the ABR (as defined in the Revolving Credit Agreement) plus an applicable margin based on our credit ratings ranging from 0.000% to 0.200%. In addition to the interest on any outstanding loans, Synopsys is also required to pay a facility fee on the entire portion of the revolving credit facility ranging from 0.080% to 0.175% based on the credit ratings of Synopsys on the daily amount of the revolving commitment.

There was no outstanding balance under the Revolving Credit Agreement as of October 31, 2025 and October 31, 2024.

Other Borrowings

In July 2018, we entered into a 12-year 220.0 million Renminbi (approximately $33.0 million) credit agreement with a lender in China to support our facilities expansion. Borrowings bear interest at a floating rate based on the 5-year Loan Prime Rate plus 0.74%. As of October 31, 2025, we had $13.1 million outstanding balance under the agreement.

The carrying amount of the short-term and long-term debt approximates the estimated fair value.

The future principal payments of debt as of October 31, 2025 are as follows:

Table of Contents

			Principal Payments
Fiscal year			(in thousands)
2026			$	24,734
2027			1,624,734
2028			3,874,734
2029			24,734
2030			2,024,735
2031 and thereafter			6,000,000
Total			$	13,573,671

Note 11. Leases

We have operating lease arrangements for office space, data center, equipment and other corporate assets. These leases have various expiration dates through December 31, 2042, some of which include options to extend the leases for up to 15 years. We consider the lease renewal options in determining the lease term and include associated potential option payments in lease payments when it is reasonably certain that the renewal options will be exercised.

The components of our lease expense during the period presented are as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Operating lease expense (1)			$	117,722					$	92,222					$	90,680
Variable lease expense (2)			32,389						23,835						20,395
Total lease expense			$	150,111					$	116,057					$	111,075

*(1)*Operating lease expense includes immaterial amounts of short-term leases, net of sublease income.

*(2)*Variable lease expense includes payments to lessors that are not fixed or determinable at lease commencement date. These payments primarily consist of maintenance, property taxes, insurance and variable indexed based payments.

Supplemental cash flow information during the period presented is as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Cash paid for amounts included in the measurement of operating lease liabilities(1)			$	115,481					$	99,905					$	88,983
ROU assets obtained in exchange for operating lease liabilities(2)			$	153,178					$	100,480					$	101,390

(1) Cash paid for amounts included in the measurement of operating lease liabilities included cash from discontinued operations of $5.2 million and $5.7 million in fiscal 2024 and 2023.

(2) ROU assets obtained in exchange for operating lease liabilities included ROU assets from discontinued operations of $2.2 million and $1.2 million in fiscal 2024 and 2023.

Lease term and discount rate information related to our operating leases as of the end of the period presented are as follows:

			As of October 31,
			2025						2024
Weighted-average remaining lease term (in years)			6.88						7.59
Weighted-average discount rate			3.40		%				2.86		%

Table of Contents

The following table represents the maturities of our future lease payments due under operating leases as of October 31, 2025:

			Lease Payments
Fiscal year			(in thousands)
2026			$	151,583
2027			154,521
2028			140,001
2029			130,259
2030			101,406
2031 and thereafter			232,094
Total future minimum lease payments			909,864
Less: Imputed interest			100,961
Total lease liabilities			$	808,903

In addition, the sublease income from facilities leased by us, due to us as of October 31, 2025, are as follows:

			Lease Receipts
			(in thousands)
Fiscal year
2026			$	18,767
2027			19,689
2028			20,280
2029			20,888
2030			17,867
Total			$	97,491

Note 12. Contingencies

Legal Proceedings

We are subject to routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate outcome of any litigation is often uncertain and unfavorable outcomes could have a negative impact on our results of operations and financial condition. We regularly review the status of each significant matter and assess its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount is estimable, we accrue a liability for the estimated loss. Legal proceedings are inherently uncertain and as circumstances change, it is possible that the amount of any accrued liability may increase, decrease, or be eliminated.

We have determined that no disclosure of estimated loss is required for a claim against us because: (1) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (2) a reasonably possible loss or range of loss cannot be estimated; or (3) such estimate is immaterial.

Tax Matters

We undergo examination from time to time by U.S. and foreign authorities for non-income based taxes, such as sales, use and value-added taxes, and are currently under examination by tax authorities in certain jurisdictions. If the potential loss from such examinations is considered probable and the amount or the range of loss could be estimated, we would accrue a liability for the estimated expense. In addition to the foregoing, we are, from time to time, party to various other claims and legal proceedings in the ordinary course of our business, including with tax and other governmental authorities. For a description of certain of these other matters, refer to Note 17. Income Taxes of the Notes to Consolidated Financial Statements in this Annual Report*.*

Table of Contents

Note 13. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss), on an after-tax basis where applicable, are as follows:

			As of October 31,
			2025						2024
			(in thousands)
Cumulative currency translation adjustments			$	(137,457)					$	(161,954)
Unrealized gains (losses) on derivative instruments, net of taxes			(95,158)						(18,800)
Unrealized gains (losses) on available-for-sale securities, net of taxes			201						374
Total			$	(232,414)					$	(180,380)

The effect of amounts reclassified out of each component of accumulated other comprehensive income (loss) into net income is as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Reclassifications:
Gains (losses) on cash flow hedges, net of taxes
Revenues			$	3,155					$	3,089					$	(9,942)
Operating expenses			(3,320)						112						(15,334)
Interest expense			(3,551)						—						—
Total			$	(3,716)					$	3,201					$	(25,276)

Amounts reclassified in fiscal 2025, 2024, and 2023 primarily consisted of gains (losses) from our cash flow hedging activities. See Note 8. Financial Assets and Liabilities of the Notes to Consolidated Financial Statements in this Annual Report*.*

Note 14. Stock Repurchase Program

In fiscal 2022, our Board of Directors approved a stock repurchase program (the Program) with authorization to purchase up to $1.5 billion of our common stock. As of October 31, 2025, $194.3 million remained available for future repurchases under the Program. However, in connection with the Ansys Merger, we have suspended the Program until we reduce our expected debt levels.

Stock repurchase activities as well as the reissuance of treasury stock for employee stock-based compensation purposes are as follows:

			Year Ended October 31,
			2025						2024						2023 (1)
			(in thousands, except per share price)
Shares repurchased			—						74						2,992
Average purchase price per share			—						$	608.91					$	387.92
Aggregate purchase price			—						$	45,000					$	1,160,724
Reissuance of treasury stock			1,927						2,133						2,670

(1) Excludes 73,903 shares and $45.0 million equity forward contract that was settled in November 2023.

Table of Contents

Note 15. Employee Benefit Plans

Employee Stock Purchase Plan

Under our Employee Stock Purchase Plan (ESPP), participating employees are granted the right to purchase shares of common stock at a price per share that is 85% of the lesser of the fair market value of the shares at (1) the beginning of an offering period (generally, a rolling two year period) or (2) the purchase date (generally occurring at the end of each semi-annual purchase period), subject to the terms of ESPP, including a limit on the number of shares that may be purchased in a purchase period.

On April 10, 2025, our stockholders approved amendments to the ESPP to increase the number of shares of common stock authorized for issuance under the plan by 2.2 million shares. During fiscal 2025, 2024 and 2023, we issued 0.5 million, 0.5 million, and 0.6 million shares, respectively, under the ESPP at average per share prices of $375.72, $315.24 and $266.82, respectively. As of October 31, 2025, 14.7 million shares of common stock were reserved for future issuance under the ESPP.

Equity Incentive Plans

2006 Employee Equity Incentive Plan. On April 25, 2006, our stockholders approved the 2006 Employee Equity Incentive Plan (2006 Employee Plan), which provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, RSU awards, stock appreciation rights and other forms of equity compensation, including performance stock awards and performance cash awards, as determined by the plan administrator. The terms and conditions of each type of award are set forth in the 2006 Employee Plan and in the award agreements governing particular awards.

RSUs are granted under the 2006 Employee Plan as part of our incentive compensation program. In general, RSUs vest over three to four years and are subject to the employee's continuing service with us. RSUs granted with specific performance criteria and certain market conditions vest to the extent the performance and market conditions are met. For each RSU granted under the 2006 Employee Plan, a share reserve ratio of 1.70 is applied for the purpose of determining the remaining number of shares reserved for future grants under the plan. Options granted under this plan generally have a contractual term of seven years and generally vest over four years.

On April 10, 2025, our stockholders amended the 2006 Employee Plan to, among other things, increase the number of shares of common stock reserved for future issuance under the plan by 1.6 million shares. As of October 31, 2025, an aggregate of 1.1 million stock options and 3.4 million RSUs were outstanding, and 14.1 million shares were available for future issuance under the 2006 Employee Plan.

2017 Non-Employee Directors Equity Incentive Plans. On April 6, 2017, our stockholders approved the 2017 Non-Employee Directors Equity Incentive Plan (2017 Directors Plan). The 2017 Directors Plan provides for equity awards to non-employee directors in the form of stock options, RSUs, restricted stock or a combination thereof. On April 6, 2017, our stockholders approved an aggregate of 0.45 million shares of common stock reserved under the 2017 Directors Plan.

We grant restricted stock awards and options under the 2017 Directors Plan. Restricted stock awards generally vest on an annual basis and options vest over a period of three years. As of October 31, 2025, 9,395 stock options were outstanding, and a total of 359,486 shares of common stock were reserved for future issuance under the 2017 Directors Plan.

Assumed Equity Plans

As of the Acquisition Date, we assumed outstanding equity incentive awards under the following Ansys equity incentive plans: (i) the Fourth Amended and Restated Ansys, Inc. 1996 Stock Option and Grant Plan, (ii) the Fifth Amended and Restated Ansys, Inc. 1996 Stock Option and Grant Plan, and (iii) the Ansys, Inc. 2021 Equity and Incentive Compensation Plan (each, an Assumed Equity Plan, and collectively the Assumed Equity Plans). The awards under the Assumed Equity Plans, previously issued in the form of stock options and RSUs, were generally settled as follows:

(1) Each award of Ansys RSUs held by non-employee directors and specified employees that were outstanding immediately prior to the Acquisition Date (the specified RSUs), including any RSUs deferred as part of Ansys'

Table of Contents

director deferred compensation program, was canceled and terminated and converted into the right to receive the Merger Consideration as of the Acquisition Date.

(2) Each award of Ansys stock options and RSUs (other than specified RSUs) that was outstanding and unvested immediately prior to the Acquisition Date was assumed by us (each, an Assumed Option and Assumed RSU, and collectively, the Assumed Equity Awards) and converted to stock options exercisable and RSUs settleable in the number of shares of our common stock equal to the product of (i) the number of Ansys shares underlying such Assumed Equity Awards as of immediately prior to the Acquisition Date multiplied by (ii) the conversion ratio defined in the Merger Agreement. Any Ansys performance-based RSUs that were assumed by us will only be subject to time-based vesting. The number of Ansys shares underlying the performance-based RSUs for which the performance period was not complete as of the Acquisition Date was based on the target level of performance, and the number of Ansys shares underlying the performance-based RSUs for which the performance period was complete as of the Acquisition Date was based on the actual level of performance. The Assumed Equity Awards generally retain all of the rights, terms and conditions of the respective plans under which they were originally granted, including the same service-based vesting schedule, applicable thereto.

If these assumed equity awards are cancelled, forfeited or expire unexercised, the underlying shares do not become available for future issuance.

As of the Acquisition Date, the estimated fair value of the Assumed Equity Awards was $639.7 million, of which $131.0 million was recognized as goodwill and the balance of $508.7 million is being recognized as stock-based compensation expense over the remainder term of the Assumed Equity Awards. The fair value of the Assumed Equity Awards for services rendered through the Acquisition Date was recognized as a component of the purchase consideration, with the remaining fair value related to the post-combination services to be recorded as stock-based compensation over the remaining vesting period.

A total of 1.1 million shares of our common stock underlying the Assumed Equity Awards that is being recognized as stock-based compensation expense had an estimated weighted average fair value at the Acquisition Date of $453.83 per share. As of October 31, 2025, there were 0.9 million shares of our common stock underlying the outstanding Assumed Equity Awards under the Assumed Equity Plans.

Other Assumed Stock Plans through Acquisitions. In addition, we have assumed certain outstanding stock awards of other acquired companies, including restricted stock units and options. If these assumed equity awards are canceled, forfeited or expire unexercised, the underlying shares do not become available for future grant. As of October 31, 2025, 235 shares of our common stock remained subject to such outstanding assumed equity awards.

Equity Incentive Plans - General Information

Restricted Stock Units. The following table contains information concerning activities related to restricted stock units granted under the 2006 Employee Plan and assumed from acquisitions including those associated with our discontinued operations:

Table of Contents

			Restricted Stock Units Outstanding						Weighted Average Grant Date Fair Value						Weighted Average Remaining Contractual Life (In Years)						Aggregate Fair Value
			(in thousands, except per share amounts and years)
Balance at October 31, 2022(1)			4,638						$	265.76					1.32
Granted(2)			2,083						$	394.34
Vested(3)			(1,839)						$	237.19											$	706,136
Forfeited			(365)						$	283.29
Balance at October 31, 2023(1)			4,517						$	335.26					1.41
Granted(2)			1,620						$	543.69
Vested(3)			(1,778)						$	303.23											$	962,127
Forfeited			(460)						$	395.74
Balance at October 31, 2024(1)			3,899						$	429.36					1.35
Assumed upon acquisition of Ansys			1,116						$	571.20
Granted(2)			1,280						$	494.29
Vested(3)			(1,753)						$	407.12											$	865,731
Forfeited			(224)						$	466.51
Balance at October 31, 2025			4,318						$	492.36					1.05

*(1)*No restricted stock units were assumed in connection with acquisitions during these fiscal years.

*(2)*The number of granted restricted stock units includes those granted to senior management with market-based and performance-based vesting criteria in addition to service-based vesting criteria (market-based RSUs) reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.

*(3)*The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

Table of Contents

Stock Options. The following table summarizes stock option activity and includes stock options granted under all equity plans including those associated with our discontinued operations:

						Options Outstanding
			Shares Under Stock Option (1)						Weighted- Average Exercise Price per Share						Weighted- Average Remaining Contractual Life (In Years)						Aggregate Intrinsic Value
						(in thousands, except per share amounts and years)
Balance at October 31, 2022						2,160						$	150.37					3.57						$	328,120
Granted						294						$	361.64
Exercised						(849)						$	109.83
Canceled/forfeited/expired						(90)						$	245.86
Balance at October 31, 2023						1,515						$	208.49					3.70						$	376,563
Granted						238						$	551.41
Exercised						(429)						$	141.83
Canceled/forfeited/expired						(42)						$	376.97
Balance at October 31, 2024						1,282						$	288.91					3.63						$	301,781
Assumed upon acquisition of Ansys						5						$	124.53
Granted						232						$	502.29
Exercised						(323)						$	171.82
Canceled/forfeited/expired						(42)						$	463.57
Balance at October 31, 2025						1,154						$	357.66					3.74						$	141,969
Vested and expected to vest as of October 31, 2025						1,154						$	357.66					3.74						$	141,969
Exercisable at October 31, 2025						709						$	279.76					2.66						$	131,982

*(1)*The balance at fiscal year-end includes certain stock options that were previously assumed in connection with other acquisitions.

The aggregate intrinsic value in the preceding table represents the pre-tax intrinsic value based on stock options with an exercise price less than our closing stock price of $453.82 at the end of fiscal 2025. The pre-tax intrinsic value of options exercised and their average exercise prices including those associated with our discontinued operations are:

			Year Ended October 31,
			2025						2024						2023
			(in thousands, except per share price)
Intrinsic value			$	104,394					$	185,663					$	241,385
Average exercise price per share			$	171.82					$	141.83					$	109.83

Table of Contents

Restricted Stock Units and Stock Options. The following table contains additional information concerning activities related to stock options and restricted stock units that were granted under the 2006 Employee Plan and assumed from acquisitions, except for the Ansys Merger, including those associated with our discontinued operations:

			Available for Grant (1)(2)
			(in thousands)
Balance at October 31, 2022			13,111
Options granted(2)			(294)
Options canceled/forfeited/expired(2)			89
Restricted stock units granted(1)(3)			(3,540)
Restricted stock units forfeited(1)			620
Additional shares reserved			3,300
Balance at October 31, 2023			13,286
Options granted(2)			(238)
Options canceled/forfeited/expired(2)			40
Restricted stock units granted(1)(3)			(2,754)
Restricted stock units forfeited(1)			782
Additional shares reserved			3,400
Balance at October 31, 2024			14,516
Options granted(2)			(232)
Options canceled/forfeited/expired(2)			41
Restricted stock units granted(1)(3)			(2,176)
Restricted stock units forfeited(1)			365
Additional shares reserved			1,600
Balance at October 31, 2025			14,114

*(1)*Restricted stock units includes awards granted under the 2006 Employee Plan and assumed through acquisitions. The number of RSUs reflects the application of the award multiplier of 1.70 as described above. No additional options and RSUs will be granted under the Assumed Equity Plans.

*(2)*Options granted by us are not subject to the award multiplier ratio described above.

*(3)*The number of granted restricted stock units includes market-based RSUs reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.

Table of Contents

Restricted Stock Awards. The following table summarizes restricted stock award activities under the 2017 Directors Plan:

			Restricted Shares						Weighted-Average Grant Date Fair Value
			(in thousands, except per share amounts)
Unvested at October 31, 2022			5						$	310.02
Granted			5						$	387.79
Vested			(5)						$	310.02
Forfeited			—						$	—
Unvested at October 31, 2023			5						$	387.79
Granted			3						$	561.23
Vested			(4)						$	382.88
Forfeited			—						$	—
Unvested at October 31, 2024			4						$	541.51
Granted			6						$	419.34
Vested			(4)						$	550.58
Forfeited			—						$	—
Unvested at October 31, 2025			6						$	419.64

Valuation and Expense of Stock-Based Compensation. We estimate the fair value of stock options and employee stock purchase rights under the ESPP on the grant date. The value of awards expected to vest is recognized as expense over the applicable service periods. We use the Black-Scholes option-pricing model to determine the fair value of stock options and employee stock purchase plan rights*.* The Black-Scholes option-pricing model incorporates various assumptions including expected volatility, expected term and interest rates. The expected volatility for both stock options and employee stock purchase rights is estimated by a combination of implied volatility for publicly traded options of our common stock with a term of six months or longer and the historical stock price volatility over the estimated expected term of such awards, which is based on historical experience.

Restricted stock units are valued based on the closing price of our common stock on the grant date. We use the straight-line attribution method to recognize stock-based compensation costs over the service period of the award except for performance-based RSUs and market-based RSUs.

We estimated the fair value of market-based RSUs on the grant date using a Monte Carlo simulation model. Under the award agreements, the vesting of the market-based RSUs is contingent on achieving total stockholder return (TSR) relative to a peer index as well as revenue growth metrics. The maximum potential awards that may be earned are 187.5% of the target number of the initial awards. For market-based RSUs granted in February and August 2023, the performance period during which the achievement goals will be measured is fiscal 2023, fiscal 2024 and fiscal 2025. The awards will vest in December 2025 if the TSR target, revenue growth metrics, and service conditions are achieved. For market-based RSUs granted in December 2023, the performance period during which the achievement goals will be measured is fiscal 2024, fiscal 2025 and fiscal 2026. The awards will vest in December 2026 if the TSR target, revenue growth metrics, and service conditions are achieved. For market-based RSUs granted in January and February 2025, the performance period during which the achievement goals will be measured is fiscal 2025, fiscal 2026 and fiscal 2027. The awards will vest in December 2027 if the TSR target, revenue growth metrics, and service conditions are achieved.

We estimate the probability of achievement of applicable performance goals for performance-based and market-based RSUs in each reporting period and recognize related stock-based compensation expense using the graded-vesting method. The amount of stock-based compensation expense recognized in any period can vary based on the attainment or expected attainment of the various performance goals. If such performance goals are not ultimately met, no compensation expense is recognized and any previously recognized compensation expense is reversed.

Table of Contents

The assumptions presented in the following table are used to estimate the fair value of stock options and employee stock purchase rights granted under our stock plans:

			Year Ended October 31,
			2025						2024						2023
Stock Options:
Expected life (in years)			4.1						4.1						4.1
Risk-free interest rate			3.53%- 4.53%						3.62% - 4.61%						3.80% - 4.80%
Volatility			34.84% -42.33%						32.09% - 35.42%						32.74%- 36.16%
Weighted average estimated fair value			$170.77						$178.67						$120.33
ESPP:
Expected life (in years)			0.5 - 2.0						0.5 - 2.0						0.5 - 2.0
Risk-free interest rate			3.66% - 4.31%						3.88% - 5.27%						4.85% - 5.38%
Volatility			34.69% - 38.34%						31.40% - 34.39%						28.03% - 35.27%
Weighted average estimated fair value			$166.64						$179.10						$120.82

The grant date fair value of the market-based RSUs and the assumptions used in the Monte Carlo simulation model to determine the grant date fair value during the periods are as follows:

			Year Ended October 31,
			2025						2024						2023
Expected life (in years)			2.67 - 2.79						2.89						0.90 - 2.70
Risk-free interest rate			3.90% - 4.39%						4.41%						4.36% - 4.80%
Volatility			33.40% - 34.72%						34.03%						34.79% - 42.86%
Grant date fair value			$409.94 - $464.17						$600.29						$357.29 - $465.79

The compensation cost recognized in the consolidated statements of income for our stock compensation arrangements is as follows:

			Year Ended October 31,
			2025**(1)**						2024						2023
			(in thousands)
Cost of products			$	89,366					$	66,403					$	49,896
Cost of maintenance and service			41,897						32,189						29,572
Research and development expense			456,804						359,244						282,540
Sales and marketing expense			178,384						121,524						91,082
General and administrative expense			126,843						78,575						60,004
Stock-based compensation expense from continuing operations before taxes			893,294						657,935						513,094
Stock-based compensation expense from discontinued operations before taxes			—						34,381						50,198
Total stock-based compensation expense before taxes			893,294						692,316						563,292
Income tax benefit			(134,441)						(115,271)						(90,915)
Stock-based compensation expense after taxes			$	758,853					$	577,045					$	472,377

*(1)*Includes $150.5 million of stock-based compensation expense related to the Assumed Equity Awards in connection with the Ansys Merger.

As of October 31, 2025, we had $1.5 billion of total unrecognized stock-based compensation expense relating to options, RSUs and restricted stock awards, which is expected to be recognized over a weighted average period of 1.9 years. As of October 31, 2025, we had $88.2 million of total unrecognized stock-based compensation expense relating to the ESPP, which is expected to be recognized over a period of 2.0 years.

Table of Contents

Deferred Compensation Plan. We maintain the Synopsys Deferred Compensation Plan (Deferred Plan), which permits eligible employees to defer up to 50% of their annual cash base compensation and up to 100% of their eligible cash variable compensation. Amounts may be withdrawn from the Deferred Plan pursuant to elections made by the employees in accordance with the terms of the plan. Since the inception of the Deferred Plan, we have not made any matching or discretionary contributions to the Deferred Plan. There are no Deferred Plan provisions that provide for any guarantees or minimum return on investments. Undistributed amounts under the Deferred Plan are subject to the claims of our creditors.

Deferred plan assets and liabilities are as follows:

			As of October 31,
			2025						2024
			(in thousands)
Plan assets recorded in other long-term assets			$	447,232					$	386,757
Plan liabilities recorded in other long-term liabilities(1)			$	447,232					$	386,757

*(1)*Undistributed deferred compensation balances due to participants.

Income or loss from the change in fair value of the Deferred Plan assets is recorded in other income (expense), net. The increase or decrease in the fair value of the undistributed Deferred Plan obligation is recorded in total cost of revenue and operating expense. The following table summarizes the impact of the Deferred Plan:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Increase (reduction) to cost of revenue and operating expense			$	65,492					$	85,446					$	20,196
Interest and other income (expense), net			65,492						85,446						20,196
Net increase (decrease) to net income			$	—					$	—					$	—

Other Retirement Plans. We sponsor various defined contribution retirement plans for our eligible U.S. and non-U.S. employees. Total contributions to these plans were $80.7 million, $51.3 million, and $50.8 million in fiscal 2025, 2024, and 2023, respectively. For employees in the United States and Canada, we match pre-tax employee contributions up to a maximum of U.S. $7,500 and Canadian $4,000, respectively, per participant per year, except for legacy Ansys employees with maximum matching contributions of 4.25% of the employee's eligible compensation.

Certain of our international subsidiaries sponsor defined benefit retirement plans. The unfunded projected benefit obligation for these defined benefit retirement plans as of October 31, 2025 and 2024 was immaterial and recorded in other long-term liabilities in our consolidated balance sheets.

Table of Contents

Note 16. Net Income (Loss) Per Share

The table below reconciles the weighted average common shares used to calculate basic net income (loss) per share with the weighted average common shares used to calculate diluted net income (loss) per share:

			Year Ended October 31,
			2025						2024						2023
			(in thousands, except per share amounts)
Numerator:
Net income from continuing operations attributed to Synopsys			$	1,336,120					$	1,441,710					$	1,227,045
Net income (loss) from discontinued operations attributed to Synopsys			(3,900)						821,670						2,843
Net income attributed to Synopsys			$	1,332,220					$	2,263,380					$	1,229,888
Denominator:
Weighted average common shares for basic net income per share			163,947						153,138						152,146
Dilutive effect of common share equivalents from equity-based compensation			1,709						2,806						3,049
Weighted average common shares for diluted net income per share			165,656						155,944						155,195
Net income (loss) per share attributed to Synopsys - basic:
Continuing operations			$	8.15					$	9.41					$	8.06
Discontinued operations			(0.02)						5.37						0.02
Basic net income per share			$	8.13					$	14.78					$	8.08
Net income (loss) per share attributed to Synopsys - diluted:
Continuing operations			$	8.07					$	9.25					$	7.91
Discontinued operations			(0.03)						5.26						0.01
Diluted net income per share			$	8.04					$	14.51					$	7.92
Anti-dilutive employee stock-based awards excluded			427						229						475

Subsequent Event

In December 2025, we entered into a securities purchase agreement for a private placement with NVIDIA Corporation, pursuant to which we sold an aggregate of approximately 4.8 million shares of our common stock at a price of $414.79 per share for net proceeds of $2.0 billion.

Note 17. Income Taxes

The domestic and foreign components of our total income before provision for income taxes are as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
United States			$	983,195					$	1,333,132					$	1,144,410
Foreign			409,947						180,726						161,060
Total income before provision for income taxes			$	1,393,142					$	1,513,858					$	1,305,470

Table of Contents

The components of the provision (benefit) for income taxes are as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Current:
Federal			$	376,014					$	345,859					$	252,186
State			25,041						19,808						23,042
Foreign			118,696						110,021						22,869
			519,751						475,688						298,097
Deferred:
Federal			(339,076)						(312,677)						(191,249)
State			(109,078)						(39,164)						(219)
Foreign			(15,606)						(24,129)						(16,441)
			(463,760)						(375,970)						(207,909)
Provision (benefit) for income taxes			$	55,991					$	99,718					$	90,188

The provision (benefit) for income taxes differs from the taxes computed with the statutory federal income tax rate as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Statutory federal tax			$	292,560					$	317,912					$	274,149
State tax (benefit), net of federal effect			26,897						48,393						438
Federal tax credits			(64,818)						(70,119)						(60,500)
Tax (benefit) on foreign earnings			28,008						3,316						(17,571)
Foreign-derived intangible income deduction			(106,903)						(104,835)						(80,034)
Tax settlements			—						—						(23,752)
Stock-based compensation			20,583						(43,419)						(39,995)
Changes in valuation allowance			(148,006)						(57,371)						29,631
Capital loss on the sale of investments			(30,868)						—						—
Acquisition costs			17,877						—						—
Other			20,661						5,841						7,822
Provision (benefit) for income taxes			$	55,991					$	99,718					$	90,188

On December 22, 2017, the Tax Cuts and Jobs Act (Tax Act) was enacted, which significantly changed prior U.S. tax law and includes numerous provisions that affect our business. Effective in our fiscal 2023 year, the Tax Act requires that research and development expenditures be capitalized and amortized instead of being deducted when incurred. Domestic research is capitalized over five years and foreign research is capitalized over fifteen years. Capitalization of research and development expenditures also results in a corresponding deferred tax benefit and decreased our effective tax rate due to increasing the foreign-derived intangible income deduction.

We have provided for foreign withholding taxes on undistributed earnings of certain of our foreign subsidiaries to the extent such earnings are no longer considered to be indefinitely reinvested in the operations of those subsidiaries. Where foreign subsidiaries are considered indefinitely reinvested, and if the tax effect of undistributed earnings and other outside basis differences were recognized, the nature of taxes expected would primarily be withholding, taxes in non-conforming states, and taxes on intermediate holding companies outside of the U.S., net of foreign tax credits where available. As of October 31, 2025, the taxes due, after allowable foreign tax credits, are not expected to be material.

Table of Contents

The significant components of deferred tax assets and liabilities are as follows:

			As of October 31,
			2025						2024
			(in thousands)
Net deferred tax assets:
Deferred tax assets:
Deferred revenue			$	164,953					$	37,849
Deferred compensation			88,079						73,869
Intangible and depreciable assets			57,278						65,489
Capitalized research and development costs			1,352,914						978,085
Stock-based compensation			110,861						74,934
Tax loss carryovers			54,854						37,787
Foreign tax credit carryovers			43,342						42,534
Research and other tax credit carryovers			139,998						107,643
Operating lease liabilities			127,570						108,235
Accruals and reserves			117,113						49,935
Gross deferred tax assets			2,256,962						1,576,360
Valuation allowance			(38,900)						(170,672)
Total deferred tax assets			2,218,062						1,405,688
Deferred tax liabilities:
Intangible assets			2,982,708						80,034
Operating lease right-of-use-assets			104,486						84,512
Undistributed earnings of foreign subsidiaries			24,074						8,800
Other			269						21,641
Total deferred tax liabilities			3,111,537						194,987
Net deferred tax assets (liabilities)			$	(893,475)					$	1,210,701

It is more likely than not that the results of future operations will be able to generate sufficient taxable income to realize the net deferred tax assets. The valuation allowance provided against our deferred tax assets as of October 31, 2025 is mainly attributable to foreign tax credits available to non-U.S. subsidiaries. The valuation allowance decreased by a net of $131.8 million in fiscal 2025, primarily related to realization of California research credits.

We have the following tax loss and credit carryforwards available to offset future income tax liabilities:

Carryforward			Amount						Expiration Date
			(in thousands)
Federal net operating loss carryforward			$	11,531					2026-2042
Federal research credit carryforward			1,636						2026-2035
Federal foreign tax credit carryforward			35,780						2031
International foreign tax credit carryforward			3,170						Indefinite
International net operating loss carryforward			196,491						2027-Indefinite
California research credit carryforward			171,267						Indefinite
Other state research credit carryforward			29,849						2026-2045
State net operating loss carryforward			37,840						2032-2045

The federal and state net operating loss carryforward is from acquired companies and the annual use of such loss is subject to significant limitations under Internal Revenue Code Section 382. Foreign tax credits may only be used to offset tax attributable to foreign source income.

Table of Contents

The gross unrecognized tax benefits increased by approximately $111.9 million during fiscal 2025 resulting in gross unrecognized tax benefits of $173.7 million as of October 31, 2025. A reconciliation of the beginning and ending balance of gross unrecognized tax benefits is summarized as follows:

			As of October 31,
			2025						2024
			(in thousands)
Beginning balance			$	61,854					$	64,880
Increases in unrecognized tax benefits related to prior year tax positions			22,568						1,106
Decreases in unrecognized tax benefits related to prior year tax positions			(11,686)						(8,639)
Increases in unrecognized tax benefits related to current year tax positions			25,664						8,036
Reductions in unrecognized tax benefits due to lapse of applicable statute of limitations			(4,089)						(4,380)
Increases in unrecognized tax benefits acquired			79,321						161
Changes in unrecognized tax benefits due to foreign currency translation			102						690
Ending balance			$	173,734					$	61,854

As of October 31, 2025 and 2024, approximately $173.7 million and $61.9 million, respectively, of the unrecognized tax benefits would affect our effective tax rate if recognized upon resolution of the uncertain tax positions.

Interest and penalties related to estimated obligations for tax positions taken in our tax returns are recognized as a component of income tax expense (benefit) in the consolidated statements of income and totaled approximately $(0.2) million**,** $(1.0) million and $(10.6) million for fiscal years 2025, 2024 and 2023, respectively. As of October 31, 2025 and 2024, the combined amount of accrued interest and penalties related to tax positions taken on our tax returns were approximately $0.9 million and $1.1 million, respectively.

The timing of the resolution of income tax examinations, and the amounts and timing of various tax payments that are part of the settlement process, are highly uncertain. Variations in such amounts and/or timing could cause large fluctuations in the balance sheet classification of current and non-current assets and liabilities. During the next 12 months, it is reasonably possible that certain audits and ongoing tax litigation will be resolved, or that the statute of limitations on certain state and foreign income and withholding taxes will expire, or both. Given the uncertainty as to ultimate settlement terms, the timing of payment and the impact of such settlements on other uncertain tax positions, we estimate a potential decrease in underlying unrecognized tax benefits to be between $0.0 and $29.0 million.

We and/or our subsidiaries remain subject to tax examination in the following jurisdictions:

Jurisdiction			Year(s) Subject to Examination
United States			Fiscal years after 2021
California			Fiscal years after 2020
Ireland			Fiscal years after 2020
Japan			Fiscal years after 2020
Korea			Fiscal years after 2020
Taiwan			Fiscal years after 2023
China			Fiscal years after 2015
India			Fiscal years after 2018

In addition, we have made acquisitions with operations in several of our significant jurisdictions which may have years subject to examination different from the years indicated in the above table.

Non-U.S. Examinations

One of our Korean subsidiaries, Ansys Korea, is currently involved in various stages of Tax Tribunal and Korea's High Court appeals regarding Korea's National Tax Service assessments of withholding taxes against Ansys Korea

Table of Contents

for calendar tax years 2017-2023. In connection with this matter, we have recorded the net impact of the unrecognized tax benefit and offsetting foreign tax credit.

We are under examinations by the tax authorities in certain jurisdictions. No material assessments have been proposed in these examinations.

Legislative Developments

On July 4, 2025, U.S. President Donald J. Trump signed H.R. 1, the One Big Beautiful Bill Act (OBBB) into law. The OBBB includes many changes to corporate income tax law, including expensing for domestic research expenditures commencing in fiscal 2026 and changes to foreign-derived intangible income deduction in fiscal 2027. We are currently evaluating the impacts of OBBB.

Effective our fiscal 2024, we are subject to the new 15% corporate alternative minimum tax (CAMT) enacted as part of the Inflation Reduction Act of 2022 (the IR Act). As of October 31, 2025, this has not had an impact on our consolidated financial statements. We will monitor regulatory developments and will continue to evaluate the impact, if any, of the CAMT.

The IR Act imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. In general, the total taxable value of shares repurchased is reduced by the fair market value of any newly issued shares during the taxable year. As of October 31, 2025, this has not had an impact on our consolidated financial statements.

On June 27, 2024, California enacted SB-167, which suspends the use of California net operating loss and limits the use of California research tax credits to $5 million for our fiscal 2025-2027. On June 29, 2024, California enacted SB-175, which provides a refund mechanism effective beginning in our fiscal 2025 for the incremental tax that was paid as a result of SB-167.

The Organisation for Economic Co-operation and Development (the OECD) has model rules for a global minimum tax framework, which is a two-pillar solution to address tax challenges arising from digitalization of the economy. This two-pillar solution includes the Pillar Two Model Rules (Pillar 2) which define global minimum tax rules and imposes a 15% minimum tax rate. Various countries have started to enact new laws related to Pillar 2, including certain new laws effective beginning in fiscal 2025. As of fiscal 2025, the impact of Pillar 2 is not material.

Note 18. Other Income (Expense), Net

The following table presents the components of other income (expense), net:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Interest income			$	277,684					$	67,017					$	36,674
Gain on divestitures			548,906						—						—
Gains on assets related to deferred compensation plan			65,492						85,446						20,196
Gain on sale of building			51,385						1,906						—
Gain (loss) on sale of strategic investments			(3,635)						55,077						—
Foreign currency exchange gains (losses)			1,842						6,294						(1,529)
Other, net			(16,730)						(20,764)						(20,407)
Total			$	924,944					$	194,976					$	34,934

Assets Held for Sale

We commenced a plan to sell one office building with approximately 118,000 square feet during the first quarter of fiscal 2025. The carrying value of the building was included within prepaid and other current assets at the end of the first quarter. During the second quarter of fiscal 2025, we completed the sale of an office building for cash consideration of $74.3 million, net of selling costs. We recognized a pre-tax gain on sale of $51.4 million, which was included in other income (expense), net in the consolidated statements of income.

Table of Contents

Note 19. Segment Disclosure

Segment reporting is based upon the “management approach,” i.e., how management organizes our operating segments for which separate financial information is (1) available and (2) evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance. Our CODM is our CEO.

We have two reportable segments: (1) Design Automation, which includes our advanced silicon design, verification products and services, Ansys products, system integration products and services, digital, custom and field programmable gate array (FPGA) IC design software, verification software and hardware products, manufacturing software products and other; and (2) Design IP, which includes our interface, foundation, security, and embedded processor IP, IP subsystems, and IP implementation services.

We completed our assessment of our organizational structure after the Ansys Merger and concluded that Ansys is included within our Design Automation segment based on how our CODM evaluates the financial results in making operational decisions, allocating resources and assessing performance.

The financial information provided to and used by the CODM to assist in making operational decisions, allocating resources, and assessing performance includes consolidated financial information as well as revenue, adjusted operating income, and adjusted operating margin information for the Design Automation, and Design IP segments, accompanied by disaggregated information relating to revenue by geographic region.

The Software Integrity business constituted its own reportable segment under Topic 280. In accordance with applicable accounting guidance, the results of the Software Integrity business were presented as discontinued operations in the consolidated statements of income and, as such, have been excluded from both continuing operations and segment results for all periods presented. See Note 3. Discontinued Operations of the Notes to Consolidated Financial Statements in this Annual Report.

Information by reportable segment is as follows:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Total Segments:
Revenue			$	7,054,178					$	6,127,436					$	5,318,014
Cost of revenue and operating expenses			4,421,327						3,765,377						3,389,987
Adjusted operating income			2,632,851						2,362,059						1,928,027
Adjusted operating margin			37		%				39		%				36		%
Design Automation:
Revenue			$	5,302,340					$	4,221,122					$	3,775,288
Cost of revenue and operating expenses			3,088,814						2,589,237						2,361,362
Adjusted operating income			2,213,526						1,631,885						1,413,926
Adjusted operating margin			42		%				39		%				37		%
Design IP:
Revenue			$	1,751,838					$	1,906,314					$	1,542,726
Cost of revenue and operating expenses			1,332,513						1,176,140						1,028,625
Adjusted operating income			419,325						730,174						514,101
Adjusted operating margin			24		%				38		%				33		%

Certain operating expenses are not allocated to the segments and are managed at a consolidated level. The unallocated expenses managed at a consolidated level, including amortization of acquired intangible assets, stock-based compensation, changes in the fair value of deferred compensation plan, restructuring charges, and acquisition/divestiture related items, are presented in the table below to provide a reconciliation of the total adjusted operating income from segments to our consolidated operating income from continuing operations:

Table of Contents

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Total segment adjusted operating income			$	2,632,851					$	2,362,059					$	1,928,027
Reconciling items:
Amortization of acquired intangible assets			(504,383)						(124,234)						(54,576)
Stock-based compensation expense			(893,294)						(657,935)						(513,094)
Deferred compensation plan			(65,492)						(85,446)						(20,196)
Restructuring charges			—						—						(53,091)
Acquisition/divestiture related items			(254,755)						(138,733)						(13,831)
Total operating income			$	914,927					$	1,355,711					$	1,273,239

The CODM does not use total assets by segment to evaluate segment performance or allocate resources. As a result, total assets by segment are not disclosed.

In allocating revenue to particular geographic areas, the CODM considers where individual “seats” or licenses to our products are located. Revenue is defined as revenue from external customers. Revenue and property and equipment, net, related to operations in the United States and other geographic areas are:

			Year Ended October 31,
			2025						2024						2023
			(in thousands)
Revenue:
United States			$	3,100,095					$	2,739,756					$	2,462,009
Europe			888,524						614,584						514,780
China			814,324						989,524						855,023
Korea			946,999						773,018						625,502
Other			1,304,236						1,010,554						860,700
Consolidated			$	7,054,178					$	6,127,436					$	5,318,014

			As of October 31,
			2025						2024
			(in thousands)
Property and Equipment, net:
United States			$	327,803					$	335,306
Other			368,890						227,700
Total			$	696,693					$	563,006

Geographic revenue data for multi-regional, multi-product transactions reflect internal allocations and are therefore subject to certain assumptions and to our allocation methodology.

One customer, including its subsidiaries, accounted for 12.6%, and 13.5% of our consolidated revenue in fiscal 2024 and 2023, respectively. No customer accounted for over 10% of our accounts receivable as of October 31, 2025, and October 31, 2024.

Note 20. Restructuring Charges

In the first quarter of fiscal 2023, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2023 Plan). The 2023 Plan was substantially completed in the third quarter of fiscal 2023 and total charges under the 2023 Plan consisting primarily of severance costs and facility exit costs were $77.0 million, of which $23.9 million were related to discontinued operations.

Table of Contents

During fiscal 2025, we made payments of $0.8 million related to continuing operations under the 2023 Plan. As of October 31, 2025, $0.7 million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $3.1 million were recorded in other long-term liabilities in the consolidated balance sheets.

During fiscal 2024, we made payments of $3.6 million related to continuing operations and $0.5 million related to discontinued operations under the 2023 Plan. As of October 31, 2024, the payroll and related benefits liabilities of $0.8 million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $3.8 million were recorded in other long-term liabilities in the consolidated balance sheets.

During fiscal 2023, we recorded restructuring charges related to continuing operations of $53.1 million and made payments of $44.9 million under the 2023 Plan. We recorded restructuring charges related to discontinued operations of $23.9 million and made payments of $23.4 million under the 2023 Plan. As of October 31, 2023, the payroll and related benefits liabilities related to continuing operations of $3.7 million were recorded in accounts payable and accrued liabilities, and the remaining outstanding restructuring related liabilities of $4.5 million were recorded in other long-term liabilities in the consolidated balance sheets. The payroll and related benefits liabilities related to discontinued operations were $0.5 million.

Subsequent event

In November 2025, we initiated a restructuring plan for involuntary employee terminations as part of a business reorganization (the 2026 Plan) upon approval by the Board of Directors. The 2026 Plan will allow us to invest in key growth opportunities and drive business efficiencies following the completion of the Ansys Merger. Total charges under the 2026 Plan are expected to be in the range of $300.0 million and $350.0 million, and will consist primarily of severance costs, other one-time termination benefits and facility exit costs. The 2026 Plan is anticipated to be completed by the end of fiscal 2027, with majority of the workforce reduction in fiscal 2026.

Table of Contents