Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Synopsys Inc., EBITDA calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-10-31), 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31).
EBITDA for the analyzed period demonstrates a consistent upward trajectory, albeit with some variation in the rate of growth. From 2020 to 2025, EBITDA increased substantially, indicating improving operational performance. However, a closer examination reveals fluctuations in growth rates across the years.
- Overall Trend
- The company experienced a steady increase in EBITDA from US$853.285 million in 2020 to US$2.500 billion in 2025. This represents a cumulative growth of approximately 193% over the six-year period. The most significant year-over-year increase occurred between 2023 and 2025.
- Growth Rate Analysis
- The growth rate of EBITDA was not uniform. From 2020 to 2021, EBITDA increased by approximately 18.6%. This growth accelerated to 32.8% between 2021 and 2022. The increase from 2022 to 2023 was approximately 15.3%, slowing down compared to the previous year. However, a substantial increase of 56.8% was observed between 2024 and 2025, indicating a significant boost in operational profitability during that period.
- Relationship to Other Metrics
- EBITDA consistently exceeded both Earnings Before Tax (EBT) and Earnings Before Interest and Tax (EBIT) in each year, as expected, due to the addition of depreciation and amortization expenses. The difference between EBITDA and EBIT narrowed slightly from 2020 to 2025, suggesting potential changes in the company’s depreciation and amortization policies or asset base. The growth in EBITDA also outpaced the growth in Net Income attributed to Synopsys, indicating improved operational efficiency and profitability before considering net income adjustments.
The observed trends suggest a strengthening of the company’s core earnings power. The substantial increase in EBITDA in 2025 warrants further investigation to determine the underlying drivers of this growth and its sustainability. The variations in growth rates across the years indicate that external factors or internal strategic decisions may be influencing the company’s operational performance.
AI Ask an analyst for more
Enterprise Value to EBITDA Ratio, Current
Synopsys Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 84,962,473) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 2,500,301) |
| Valuation Ratio | |
| EV/EBITDA | 33.98 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | 7.89 |
| Adobe Inc. | 10.10 |
| AppLovin Corp. | 30.81 |
| Cadence Design Systems Inc. | 49.81 |
| CrowdStrike Holdings Inc. | 1,040.67 |
| Datadog Inc. | 474.09 |
| International Business Machines Corp. | 14.88 |
| Intuit Inc. | 14.92 |
| Microsoft Corp. | 16.77 |
| Oracle Corp. | 14.40 |
| Palantir Technologies Inc. | 171.03 |
| Palo Alto Networks Inc. | 137.76 |
| Salesforce Inc. | 11.59 |
| ServiceNow Inc. | 36.47 |
| Workday Inc. | 25.27 |
| EV/EBITDA, Sector | |
| Software & Services | 22.85 |
| EV/EBITDA, Industry | |
| Information Technology | 34.16 |
Based on: 10-K (reporting date: 2025-10-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Synopsys Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Oct 31, 2025 | Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 102,592,942) | 72,228,982) | 84,619,155) | 49,419,269) | 54,103,071) | 36,044,325) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 2,500,301) | 1,844,084) | 1,550,080) | 1,345,617) | 1,012,555) | 853,285) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 41.03 | 39.17 | 54.59 | 36.73 | 53.43 | 42.24 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Accenture PLC | 11.82 | 19.87 | 17.26 | 14.25 | 23.31 | 17.46 | |
| Adobe Inc. | 12.68 | 22.06 | 34.07 | 22.32 | 35.44 | 43.06 | |
| AppLovin Corp. | 32.17 | 47.75 | 20.05 | 14.17 | 30.05 | — | |
| Cadence Design Systems Inc. | 42.96 | 42.25 | 55.61 | 42.11 | 39.61 | — | |
| CrowdStrike Holdings Inc. | 247.70 | 262.20 | — | — | — | — | |
| Datadog Inc. | 203.50 | 153.02 | 370.63 | 1,785.61 | 1,949.67 | — | |
| International Business Machines Corp. | 15.14 | 22.90 | 14.41 | 22.17 | 12.53 | — | |
| Intuit Inc. | 31.89 | 38.55 | 38.71 | 36.22 | 51.96 | 35.70 | |
| Microsoft Corp. | 23.79 | 23.66 | 22.92 | 20.17 | 24.59 | — | |
| Oracle Corp. | 28.10 | 21.81 | 21.80 | 17.12 | 13.78 | — | |
| Palantir Technologies Inc. | 184.77 | 551.39 | 175.93 | — | — | — | |
| Palo Alto Networks Inc. | 64.12 | 84.17 | 85.08 | 515.19 | — | 349.99 | |
| Salesforce Inc. | 24.64 | 31.64 | 38.31 | 38.88 | 33.83 | — | |
| ServiceNow Inc. | 38.82 | 87.89 | 96.48 | 104.31 | 147.45 | — | |
| Workday Inc. | 55.27 | 86.37 | 216.44 | 147.90 | 670.04 | — | |
| EV/EBITDA, Sector | |||||||
| Software & Services | 25.34 | 27.48 | 25.41 | 22.68 | 26.04 | — | |
| EV/EBITDA, Industry | |||||||
| Information Technology | 27.47 | 27.76 | 23.62 | 18.32 | 20.57 | — | |
Based on: 10-K (reporting date: 2025-10-31), 10-K (reporting date: 2024-10-31), 10-K (reporting date: 2023-10-31), 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31).
3 2025 Calculation
EV/EBITDA = EV ÷ EBITDA
= 102,592,942 ÷ 2,500,301 = 41.03
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA ratio exhibits fluctuations over the observed period. Initially, the ratio increased from 42.24 in 2020 to 53.43 in 2021, indicating a relative increase in enterprise value compared to EBITDA. A subsequent decrease to 36.73 was noted in 2022. The ratio then rose again in 2023 to 54.59, before declining to 39.17 in 2024. The most recent value, for 2025, shows a slight increase to 41.03.
- Enterprise Value (EV)
- Enterprise Value demonstrated a significant increase between 2020 and 2021, rising from US$36,044,325 thousand to US$54,103,071 thousand. A decrease was observed in 2022 to US$49,419,269 thousand, followed by a substantial increase to US$84,619,155 thousand in 2023. A decline to US$72,228,982 thousand occurred in 2024, with a further increase to US$102,592,942 thousand in 2025.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA consistently increased throughout the period. From US$853,285 thousand in 2020, it rose to US$1,012,555 thousand in 2021, US$1,345,617 thousand in 2022, and US$1,550,080 thousand in 2023. This upward trend continued with values of US$1,844,084 thousand in 2024 and US$2,500,301 thousand in 2025.
- EV/EBITDA Ratio – Overall Trend
- Despite the consistent growth in EBITDA, the EV/EBITDA ratio did not exhibit a strictly linear pattern. The initial increase, followed by a decrease and subsequent fluctuations, suggests that changes in Enterprise Value have a more pronounced effect on the ratio than changes in EBITDA alone. The ratio’s movement indicates periods where the market valuation (reflected in EV) grew at a different pace than the underlying earnings (EBITDA). The ratio remained within a range of approximately 36.73 to 54.59 over the analyzed timeframe.
The observed volatility in the EV/EBITDA ratio warrants further investigation into the factors driving changes in Enterprise Value, such as market sentiment, debt levels, and overall economic conditions. The consistent growth in EBITDA is a positive indicator, but its impact on the ratio is moderated by the fluctuations in Enterprise Value.
AI Ask an analyst for more