Synopsys Inc. (NASDAQ:SNPS)

Gross Profit Margin

The gross profit margin shows a generally steady and slightly increasing pattern from early 2019 through 2025. Starting from approximately 77.6%, it gradually rises to peak around 80.25% in late 2024, with minor fluctuations observed thereafter. This suggests a consistent ability to manage cost of goods sold relative to revenue, maintaining strong profitability at the gross level over the periods analyzed.

Operating Profit Margin

The operating profit margin exhibits more variability compared to the gross margin. From early 2019 figures starting at about 15.48%, the margin initially dips to a low of 13.64% but later increases significantly to reach a peak exceeding 24% in late 2024. Following this peak, a decline is observed in early 2025 to around 17.16%. This pattern indicates fluctuations in operating efficiency or expenses, with periods of improved operational control leading to higher margins before recent contraction.

Net Profit Margin

The net profit margin follows an overall upward trajectory from approximately 15.84% in early 2019 to notable highs exceeding 36% in early 2025. This increase is indicative of enhanced overall profitability, likely driven by both operational gains and possible improvements in non-operating items such as tax management or financing costs. The net margin demonstrates some volatility but maintains a strong ascending trend into the last analyzed periods.

Return on Equity (ROE)

ROE values indicate moderate growth from a starting point around 13% in early 2019, rising steadily to peaks above 25% in early 2025. However, this is followed by a sharp decline to approximately 7.23% in the most recent quarter. The earlier rise suggests efficient use of shareholder equity in generating profits, while the recent drop may be reflecting one-off impacts, changes in net income, equity structure, or other operational challenges.

Return on Assets (ROA)

ROA also reflects an overall increasing trend from about 8.3% in early 2019 up to 17.3% in early 2025. Similar to ROE, there is a noticeable decline in the final periods, decreasing down to around 4.14%. This indicates improved asset utilization efficiency over most of the period, but the recent downturn could signify decreased profitability relative to asset base or higher asset levels not matched by earnings.

The financial data over the analyzed periods reflects notable trends and shifts in key performance indicators.

Revenue

Revenue has demonstrated a general upward trend from January 2019 through July 2025. Beginning at approximately 820 million US dollars, revenue increased progressively with some fluctuations, notably reaching peaks above 1.6 billion US dollars in the latter periods (October 2024 and July 2025). Some quarters show slight declines or stabilization, as seen in early 2025, but the overriding tendency is growth over time.

Gross Margin

Gross margin values exhibit steady growth aligned with revenue increases. Starting near 627 million US dollars in January 2019, margins increased to over 1.35 billion US dollars by July 2025. The gross margin rose consistently through most periods, with occasional minor dips—for example, in mid-2022—but generally maintained an upward trajectory supporting improved profitability.

Gross Profit Margin Percentage

The gross profit margin percentage remained relatively stable, fluctuating mildly between approximately 77.6% to just over 80.25% during the observed timeframe. Notably, from the first recorded percentage in January 2020 onward, the margin percentage shows a gradual increase, indicating improved cost efficiency or product mix, contributing to enhanced gross profitability as a proportion of revenue. The highest percentages occurred in late 2023 through early 2025, suggesting peak operational efficiency in these periods.

Overall, the data portrays a company expanding its revenue base while managing to improve both gross margin in absolute terms and gross profit margin percentage. This indicates effective cost control or value-added initiatives contributing to profitability. Minor fluctuations are present but do not detract from the prevailing positive trends in financial performance across the quarterly intervals.

The financial data presents a detailed view of the quarterly operating income, revenue, and operating profit margin over a series of periods extending from early 2019 through mid-2025.

Operating Income Trends

Operating income exhibits notable fluctuations across the quarters. Initially, it ranged between approximately $115 million and $210 million from 2019 through 2020, showing some volatility within that period. Beginning in early 2021, a significant upward movement is observed, with operating income peaking at over $430 million in the fourth quarter of 2023. After this peak, there is a general declining trend extending through 2024 and into early 2025, culminating in a substantial drop to around $165 million by July 2025. This volatile pattern indicates periods of strong profitability interspersed with substantial declines, suggesting the presence of significant operational or market influences affecting income generation.

Revenue Trends

Revenue demonstrates a generally consistent upward trajectory over the entire time frame. Starting at approximately $820 million in early 2019, revenue showed steady quarter-over-quarter growth, reaching surpassing $1.6 billion by the first half of 2025. Despite minor fluctuations and occasional periods of stabilization, the overall trend indicates strong sales growth. Notably, revenue peaks often precede or coincide with peaks in operating income, underscoring a correlation between sales volume and income performance. The continuous revenue growth reflects successful market expansion or increased demand for the company’s products and services.

Operating Profit Margin Analysis

The available data for operating profit margin covers only a subset of the overall time span but reveals an improving profitability metric from early 2020 onward. Margins start in the mid-teens percentage range around 15%, increasing steadily through 2022 with a notable rise above 20% in multiple quarters. The peak margin reaches above 24% in the fourth quarter of 2024, indicative of enhanced operational efficiency or favorable cost management during this period. However, by mid-2025, margin percentage declines back toward the 17% range. This suggests that while the company experienced improved margin performance for several years, recent quarters show some margin compression, potentially caused by increased expenses or pricing pressures.

Insights and Summary

The data set portrays sustained revenue growth accompanied by more volatile operating income performance and fluctuating profit margins. The surge in operating income and margins during 2021 to late 2023 indicates a period of strong operational leverage and cost efficiency. However, subsequent declines in mid-2024 to 2025 suggest emerging challenges affecting profitability despite continued revenue increases. Strategic focus on controlling costs and sustaining revenue momentum will be critical to maintaining healthy profit margins in forthcoming quarters. Overall, the financial trends reflect positive top-line expansion tempered by fluctuating income results requiring close management attention.

The financial data exhibits several discernible trends and patterns across the periods analyzed.

Net Income Attributed to Synopsys (US$ in thousands)

The net income shows considerable variability over the quarters with an overall upward trajectory. Initial values around 100,000 to 160,000 in 2019 fluctuate early on but show spikes notably in mid-2020 and again in early 2021. The period from 2021 to early 2023 demonstrates generally elevated net income, with multiple quarters exceeding 270,000 thousand US dollars. The most striking increase occurs towards late 2024 and early 2025, where net income jumps substantially, reaching over a million US dollars in one quarter before settling around 240,000 to 345,000 thousand US dollars. This indicates periods of exceptional profitability interspersed with relative stabilization.

Revenue (US$ in thousands)

Revenue maintains a consistent growth pattern over the entire period. Starting at approximately 820,000 thousand US dollars in early 2019, there is a general upward trend without sharp declines. Key increases are observed around mid-2020, early 2021, and continue steadily with peaks above 1.5 million thousand US dollars by late 2024 and early 2025. Despite some minor fluctuations, the growth in revenue is steady, reflecting an expanding business scale or improved sales performance.

Net Profit Margin (%)

Net profit margin data, available from early 2020, presents a fluctuating yet improving trend. Starting near 14-18%, margins peak close to 24.6% around late 2024. There is a notable spike exceeding 30% at the boundary of 2024 and 2025, correlating with the surge in net income for the same period. Margins generally hover in the high teens to low twenties percentage range throughout the data, indicating relatively stable profitability with enhanced efficiency or cost management in recent quarters.

In summary, the financial metrics reveal a company experiencing solid revenue growth accompanied by rising profitability. Periodic spikes in net income and margin suggest successful operational or strategic initiatives during select quarters. The consistent improvement in net profit margins alongside revenue growth points to improved cost control or higher value offerings contributing to earnings quality. The overall pattern suggests a positive financial performance trajectory with episodes of exceptional profitability.

Net Income Attributed to Synopsys

The net income exhibits a generally upward trend over the period analyzed, with some fluctuations. Starting at approximately $153.5 million in January 2019, it experienced a decline reaching below $100 million in mid-2019, before rising sharply toward late 2020 where values exceeded $250 million. This increase was maintained with some variability through 2021 and 2022, peaking significantly in early 2025 at over $1.1 billion, followed by a decrease but remaining above the earlier period levels through mid-2025. The data suggests periods of strong profitability growth interrupted by some volatility.

Total Synopsys Stockholders’ Equity

The stockholders’ equity displayed consistent growth throughout the timeline. Starting from around $3.78 billion in early 2019, equity values increased steadily each quarter, surpassing $9.9 billion by late 2024. A notable jump is observed between late 2024 and early 2025 where the amount abruptly rises to over $27.6 billion. This significant increase could indicate a major capital event such as equity issuance, acquisition, or revaluation. Overall, the equity growth reflects an expanding capital base and potentially increasing retained earnings or asset base over time.

Return on Equity (ROE)

The return on equity was recorded intermittently and shows a progressive increase from approximately 11-13% levels in early 2020 to a peak exceeding 25% in early 2025. It remains relatively high but slightly fluctuates, staying generally above 15% after early 2021. The sharp drop to around 7% in early 2025 corresponds temporally with the surge in equity, suggesting that the increase in equity may have temporarily diluted returns before ROE stabilized again at higher levels later in the period. The trend indicates improving profitability relative to equity over most of the period with some volatility possibly related to capital structure changes.

Overall Insights

The company demonstrates strong growth in net income and stockholders’ equity over the years, indicating operational expansion and likely improved financial performance. The increase in ROE, except for the early 2025 drop, generally denotes effective use of equity to generate profits. The abrupt and large rise in equity near the end of the dataset appears to influence the ROE and could be a significant strategic or financial event impacting the company’s capital structure and performance metrics. Continued growth in net income alongside increasing equity and high ROE suggests a favorable financial position despite the observed short-term fluctuations.

The analysis of the financial data reveals several important trends in the company's profitability and asset management over the observed periods.

Net Income Attributed to Synopsys (US$ thousands)

The net income figures demonstrate volatility with notable fluctuations in quarterly performance. Early periods show amounts ranging roughly from 99,929 to 160,714 thousand US dollars, followed by significant growth phases, peaking at over 1,114,106 thousand US dollars in the period ending January 2025. This indicates periods of substantial earnings increases, although some quarters exhibit decline or stabilization at lower values.

Total Assets (US$ thousands)

Total assets exhibit a generally upward trajectory from approximately 6.3 billion US dollars at the beginning of 2019 to an extraordinary rise reaching over 48 billion US dollars by the quarter ending July 2025. The growth is mostly steady but marked by an exceptional acceleration in the final periods, suggesting significant asset acquisition or revaluation.

Return on Assets (ROA, %)

The ROA values, which were unavailable for the first few quarters, show a presence from late 2019 onward, with values beginning around 6.7% and gradually increasing to peak values above 17% in early 2025. After this peak, ROA declines sharply to approximately 4.14% by the third quarter of 2025. This pattern reflects growing efficiency in asset use over time, followed by a rapid decrease, possibly tied to the exceptional asset growth noted, which might have diluted returns temporarily.

In summary, the company experienced robust income growth and substantial expansion of its asset base over the period analyzed. The gradually improving ROA until early 2025 reflects enhanced profitability relative to assets; however, the ensuing rapid decline in ROA coupled with the dramatic increase in total assets may indicate recent investment activity that has yet to yield commensurate income returns. These trends highlight dynamic operational and investment phases that warrant close monitoring going forward.