← All companies ← SNOW Manual SNV → ← SNOW Software SOGP →

SNPS, Synopsys Inc.

Software asset-light

Synopsys Inc. 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.

Latest annual: FY2025 10-K

SNPS · Synopsys Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$7.1B

+15.1% YoY · 14% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $8.7B 5-yr avg $5.5B

Gross margin 73% 5-yr avg 79%

Operating margin 7.0% 5-yr avg 20.3%

ROIC 2% 5-yr avg 19%

Owner-earnings margin 30% 5-yr avg 27%

Free cash flow margin 30% 5-yr avg 27%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is Design Automation (75%) and Design IP (25%).
What moves the needle: Gross margin has run about 78% and operating margin about 15% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. Stock-based pay runs about 6.7% of sales, a real and recurring claim on owners that the GAAP margin understates. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run in the teens (median 15%, above 15% in 5 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 21% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

The biggest segment, Design Automation, is also where the profit is made: 75% of revenue and 84% of segment operating profit.

Revenue by reportable segment, FY2025

Operating profit same segments

Design Automation75%$5.3B84% of profit
Design IP25%$1.8B16% of profit

By geographyUnited States44%Other18%South Korea13%Europe13%China12%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMApr 2026
											Income statement
$2.4B	$2.7B	$3.1B	$3.4B	$3.7B	$4.2B	$4.6B	$5.3B	$6.1B	$7.1B	$8.7B	RevenueRevenue
78%	76%	76%	78%	78%	80%	81%	81%	80%	77%	73%	Gross marginGross mgn
7%	7%	8%	7%	8%	8%	7%	7%	9%	11%	9%	SG&A / revenueSG&A/rev
35%	33%	35%	34%	35%	36%	34%	35%	34%	35%	32%	R&D / revenueR&D/rev
$317M	$348M	$360M	$520M	$620M	$735M	$1.1B	$1.3B	$1.4B	$915M	$610M	Operating incomeOp. inc.
13.1%	12.8%	11.5%	15.5%	16.8%	17.5%	24.9%	23.9%	22.1%	13.0%	7.0%	Operating marginOp. mgn
$267M	$137M	$433M	$532M	$664M	$758M	$985M	$1.2B	$2.3B	$1.3B	$773M	Net incomeNet inc.
19%	—	—	2%	-4%	6%	12%	7%	4%	4%	4%	Effective tax rateTax rate
											Cash flow & returns
$587M	$632M	$424M	$801M	$991M	$1.5B	$1.7B	$1.7B	$1.4B	$1.5B	$2.8B	Operating cash flowOp. cash
$207M	$189M	$209M	$202M	$210M	$204M	$228M	$247M	$295M	$660M	$1.5B	DepreciationDeprec.
$15M	$198M	($357M)	($89M)	($132M)	$186M	$67M	($337M)	($1.8B)	($1.4B)	($434M)	Working capital & otherWC & other
$67M	$70M	$99M	$198M	$155M	$94M	$137M	$190M	$140M	$169M	$163M	CapexCapex
2.8%	2.6%	3.2%	5.9%	4.2%	2.2%	3.0%	3.6%	2.3%	2.4%	1.9%	Capex / revenueCapex/rev
$520M	$562M	$325M	$602M	$837M	$1.4B	$1.6B	$1.5B	$1.3B	$1.3B	$2.6B	Owner earningsOwner earn.
21.5%	20.6%	10.4%	17.9%	22.7%	33.3%	34.7%	28.5%	20.7%	19.1%	30.3%	Owner earnings marginOE mgn
$520M	$562M	$325M	$602M	$837M	$1.4B	$1.6B	$1.5B	$1.3B	$1.3B	$2.6B	Free cash flowFCF
21.5%	20.6%	10.4%	17.9%	22.7%	33.3%	34.7%	28.5%	20.7%	19.1%	30.3%	Free cash flow marginFCF mgn
$400M	$380M	$400M	$329M	$242M	$753M	$1.1B	$1.2B	$0	$0	—	BuybacksBuybacks
11%	7%	11%	15%	16%	17%	24%	25%	25%	2%	2%	ROICROIC
8%	4%	12%	13%	14%	14%	18%	20%	25%	5%	3%	Return on equityROE
8%	4%	12%	13%	14%	14%	18%	20%	25%	5%	3%	Retained to equityRetained/eq
											Balance sheet
$1.1B	$1.0B	$723M	$729M	$1.2B	$1.6B	$1.6B	$1.6B	$4.1B	$3.0B	$2.5B	Cash & investmentsCash+inv
$439M	$451M	$554M	$554M	$781M	$569M	$796M	$857M	$934M	$1.5B	$1.3B	ReceivablesReceiv.
—	$62M	$122M	$142M	$192M	$229M	$212M	$326M	$362M	$365M	$442M	InventoryInvent.
$14M	$20M	$85M	$20M	$30M	$27M	$38M	$155M	$207M	$165M	$179M	Accounts payablePayables
$425M	$493M	$592M	$676M	$943M	$770M	$970M	$1.0B	$1.1B	$1.7B	$1.5B	Operating working capitalOper. WC
$1.7B	$1.7B	$1.5B	$1.7B	$2.5B	$2.8B	$3.0B	$3.4B	$6.5B	$6.0B	$5.4B	Current assetsCur. assets
$1.7B	$1.6B	$2.1B	$1.8B	$2.1B	$2.4B	$2.8B	$3.0B	$2.7B	$3.7B	$3.8B	Current liabilitiesCur. liab.
1.0×	1.0×	0.7×	1.0×	1.2×	1.2×	1.1×	1.1×	2.4×	1.6×	1.4×	Current ratioCurr. ratio
$2.5B	$2.7B	$3.1B	$3.2B	$3.4B	$3.6B	$3.1B	$3.3B	$3.4B	$26.9B	$26.9B	GoodwillGoodwill
$5.2B	$5.4B	$6.1B	$6.4B	$8.0B	$8.8B	$9.4B	$10.3B	$13.1B	$48.2B	$46.9B	Total assetsAssets
$205M	$144M	$469M	$138M	$128M	$100M	$21M	$18M	$16M	$13.5B	$10.0B	Total debtDebt
($912M)	($904M)	($254M)	($591M)	($1.1B)	($1.5B)	($1.5B)	($1.6B)	($4.0B)	$10.5B	$7.6B	Net debt / (cash)Net debt
84.2×	47.6×	23.1×	44.6×	120.7×	218.4×	676.5×	1080.8×	36.8×	2.0×	1.0×	Interest coverageInt. cov.
$3.2B	$3.3B	$3.5B	$4.1B	$4.9B	$5.3B	$5.5B	$6.1B	$9.0B	$28.3B	$30.5B	Shareholders’ equityEquity
4.0%	4.0%	4.5%	4.6%	6.7%	8.2%	9.9%	10.6%	11.3%	12.7%	11.4%	Stock comp / revenueSBC/rev
											Per share
155M	155M	153M	154M	156M	157M	156M	155M	156M	166M	192M	Shares out (diluted)Shares
$15.66	$17.59	$20.35	$21.80	$23.67	$26.72	$29.50	$34.27	$39.29	$42.58	$45.30	Revenue / shareRev/sh
$1.72	$0.88	$2.82	$3.45	$4.27	$4.81	$6.29	$7.92	$14.51	$8.04	$4.04	EPS (diluted)EPS
$3.36	$3.63	$2.12	$3.91	$5.37	$8.89	$10.24	$9.75	$8.13	$8.14	$13.75	Owner earnings / shareOE/sh
$3.36	$3.63	$2.12	$3.91	$5.37	$8.89	$10.24	$9.75	$8.13	$8.14	$13.75	Free cash flow / shareFCF/sh
$0.43	$0.45	$0.65	$1.28	$0.99	$0.60	$0.87	$1.22	$0.89	$1.02	$0.85	Cap. spending / shareCapex/sh
$20.65	$21.15	$22.68	$26.48	$31.52	$33.65	$35.25	$39.61	$57.65	$171.00	$159.09	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+11.8%/yr	+12.5%/yr
Owner earnings / share	+10.3%/yr	+8.7%/yr
EPS	+18.7%/yr	+13.5%/yr
Capital spending / share	+10.0%/yr	+0.6%/yr
Book value / share	+26.5%/yr	+40.2%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

166Mpeak FY2025

ROIC

2%low FY2025

Gross margin

77%low FY2017

Net debt ÷ owner earnings

7.8×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.3Bowner earningsvs.$1.3Bnet incomelow FY2018

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned $1.3B of profit into $1.3B of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$1.3B

Owner earnings$1.3B · 19% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$1.3B	$2.3B	$1.2B	$985M	$758M
Depreciation & amortizationnon-cash charge added back	+$660M	+$295M	+$247M	+$228M	+$204M
Stock-based compensationreal costnon-cash, but a real cost	+$893M	+$692M	+$563M	+$459M	+$345M
Working capital & othertiming of cash in and out, other non-cash items	−$1.4B	−$1.8B	−$337M	+$67M	+$186M
Cash from operations	$1.5B	$1.4B	$1.7B	$1.7B	$1.5B
Capital expenditurecash put back in to keep running and to grow	−$169M	−$140M	−$190M	−$137M	−$94M
Owner earnings	$1.3B	$1.3B	$1.5B	$1.6B	$1.4B
Owner-earnings marginowner earnings ÷ revenue	19%	21%	28%	35%	33%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $893M), owner earnings is nearer $456M.

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 2.0×

Adequate

Operating income $915M ÷ interest expense $447M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $10.5B · 11.5× operating profit

Heavy net debt

Cash $2.9B + ST investments $73M − debt $13.5B

What this means
Netting $3.0B of cash and short-term investments against $13.5B of debt leaves $10.5B owed, about 11.5× a year's operating profit (14.7× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 123d

Long (60+ days)

DSO 78 + DIO 82 − DPO 37 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 15%

Solid through the cycle

10-yr median, range 2%–25%; 2% latest = NOPAT $878M ÷ invested capital $38.9B

Industry peers: median 19%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 2% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 21%

High through the cycle

10-yr median margin, range 10%–35%; latest $1.3B = operating cash $1.5B − maintenance capex $169M

Industry peers: median 27%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 19% of revenue this year, a 21% median across 10 years. Treating stock comp as the real expense it is (less $893M of SBC) leaves $456M.
Are earnings backed by cash? 1.14×

Cash-backed

Cash from ops $1.5B ÷ net income $1.3B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 0%

Reinvests most of it

Dividends + buybacks $0 ÷ Owner Earnings $1.3B

What this means
Of $1.3B Owner Earnings, $0 (0%) went back to shareholders, $0 dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.26×

Harvesting

Capex $169M ÷ depreciation $660M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $7.1B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Near

Current ratio ≥ 2× · 1.62×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $13.5B vs $2.3B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +477%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $8.40/share (latest year $6.96), the averaged base the calculator's gate runs on, and book value is $147.94/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 5 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 12% → 20% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 12% early to 20% lately, median 15% — pricing power intact or improving.
Reinvestment, incremental ROIC 6%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +10%/yr

What this means
Owner earnings grew about 10% a year over the record.
Worst year 2018 · 11.5% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count +0.8%/yr

What this means
Roughly flat share count, little dilution, little buyback.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing Named as a competitive risk

Its FY2025 10-K names artificial intelligence as a competitive threat.

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

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Apr 30, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$5.4B

Cash & short-term investments$2.5B
Receivables$1.3B
Inventory$442M
Other current assets$1.2B

Current liabilities$3.8B

Debt due within a year$22M
Accounts payable$179M
Other current liabilities$3.6B

Current ratio1.43×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.32×stricter: inventory excluded

Cash ratio0.66×strictest: cash alone against what's due

Working capital$1.6Bthe cushion left after near-term bills

Debt due this year vs. cash$22M due · $2.5B cash covered by cash on hand, no refinancing forced · both figures from the Apr 30, 2026 balance sheet

Revenue, latest quarter vs. a year ago+41.9%the freshest read on whether the business is still growing

Current ratio, recent quarters2.0× → 1.4×

Deeper floors

Tangible book value($8.3B)equity stripped of goodwill & intangibles

Net current asset value($11.0B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$10.8B$806M of it operating leases

Deferred revenue$2.8Bcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $11.3B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$1.3B · 12%
Buybacks$4.8B · 42%
Retained (debt / cash)$5.2B · 46%

Returned to owners$4.8B
48% of the owner earnings the business produced over the span, $0 as dividends and $4.8B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $9.8B and cash and short-term investments rose $1.4B.
Average price paid for buybacks$147.50
Across the years where the filing reports a share count, 32M shares were bought for $4.8B, about $147.50 each. Year to year the price paid ranged from $47.03 (2016) to $387.94 (2023), and 2023, near the top of that range, was also its heaviest buyback year ($1.2B).
Net change in share count23.8%
The diluted count rose from 155M to 192M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained24%
Of the earnings it kept rather than paid out ($3.8B over the span), annual owner earnings (first three years vs last three) grew $908M, so each retained $1 added about 0.24 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$39.6B82% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity95%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$0over 10 years buying other businesses, against $1.3B of capital spent building

None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Chi-Foon Chan	$10.0M	$34.7M	$1.4B
2021	Dr. Aart J. de Geus	$10.0M	$34.7M	$1.4B
2022	Chi-Foon Chan	$360k	−$23.9M	$1.6B
2022	Dr. Aart J. de Geus	$10.1M	$10.9M	$1.6B
2023	Dr. Aart J. de Geus	$12.7M	$34.1M	$1.5B
2024	Dr. Aart J. de Geus	$9.0M	$15.5M	$1.3B
2024	Sassine Ghazi	$27.4M	$30.5M	$1.3B
2025	Sassine Ghazi	$19.6M	−$15.6M	$1.3B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
CEO pay ratio210:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio alone settles nothing; some businesses are genuinely top-heavy in scarce skill. A runaway figure is where Buffett starts asking whether the board is doing its job.
Stock-based compensation$893M
The slice of the business handed to employees in shares this year, 13% of revenue, equal to 98% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Synopsys Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 5 tests turned up something to look into; the other 3 came back clean.

Look hereDid the share count rise anyway?23.8%
Diluted shares grew 23.8% over 2016–2025, even as the company spent $4.8B on buybacks. The repurchases were a treadmill: stock issued to staff outran them, so owners' slice still shrank. Read the buyback line beside this one, not on its own.
Look hereDid debt outgrow the business?$205M → $10.0B
Debt rose from $205M to $10.0B while owner earnings went from about $469M to $1.4B — about 0.4 years of owner earnings in debt then, about 7.3 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.

And these came back clean

Is it less profitable than it was?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition, Acquisitions as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Software

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
EAElectronic Arts	$7.5B	75%	20.1%	19%	29%
ADSKAutodesk Inc.	$7.2B	90%	15.3%	33%	29%
SNPSSynopsys Inc.	$7.1B	78%	16.2%	15%	21%
TTWOTake-Two Interactive	$6.7B	50%	6.3%	18%	14%
SSNCSS&C Technologies	$6.3B	47%	21.8%	7%	25%
CDNSCadence Design Systems Inc.	$5.3B	99%	24.1%	28%	28%
TEAMAtlassian	$5.2B	83%	-2.5%	—	27%
TWLOTwilio Inc.	$5.1B	52%	-19.4%	-7%	-1%
Group median	—	77%	15.7%	18%	26%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Synopsys Inc. has delivered.

Today’s price $

Through the cycle, Synopsys Inc. earns about $1.5B on its 21.1% median owner-earnings margin. This year’s 19.1% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.5B) Net of stock comp (−$986M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−3%/yr

Owner-earnings growth · ’16→’25+10%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $2.6B on 191M shares outstanding, per the 10-Q cover, as of 2026-05-22; net debt $7.6B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh SNPS against another business →

Cite: Owner Scorecard, "Synopsys Inc. (SNPS), the owner's record," https://ownerscorecard.com/c/SNPS, data as of 2026-07-09.

Manual order: ← SNOW its page in the Manual SNV →

Industry order: ← SNOW the Software chapter SOGP →