Company: SNPS
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0000883241-25-000028
Chunk: 43

Company: SYNOPSYS INC
Filing Date: 2025-12-22
Form: 10-K
Item: Item 1A
Chunk 43
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•Failures or delays in completing sales due to our lengthy sales cycle, which often includes a substantial customer evaluation and approval process because of the complexity of our products and services;

•Our ability to implement effective cost control measures and business transformation initiatives, including those related to our workforce;

•Our dependence on a relatively small number of large customers for a large portion of our revenue, and the impact of timing requirements and the value of contract renewals; 

•Such key customers continuing to renew licenses and purchase additional products from us;

•Changes to the amount, composition and valuation of, and any impairments to or write-offs of, our assets or strategic investments;

•Changes in the mix of our products sold, as increased sales of our products with lower gross margins, such as our hardware products, may reduce our overall margins; 

•Natural variability in the timing of IP drawdowns, which can be difficult to predict; and

•Expenses related to our acquisition and integration of businesses and technologies, including those related to the Ansys Merger.

The timing of revenue recognition may also cause our revenue and earnings to fluctuate. The timing of revenue recognition is affected by factors including:

•Cancellations or changes in levels of orders or the mix between upfront products revenue and time-based products revenue;

•Delay of one or more orders for a particular period, particularly orders generating upfront products revenue, such as hardware;

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•Delay in the completion of professional services projects that require significant modification or customization and are accounted for using the percentage of completion method;

•Delay in the completion and delivery of IP products in development as to which customers have paid for early access;

•Customer contract amendments or renewals that provide discounts or defer revenue to later periods; and

•The levels of our hardware and IP revenues, which are generally recognized upfront and are primarily dependent upon our ability to provide the latest technology and meet customer requirements.

These factors, or any other factors or risks discussed herein, could negatively impact our backlog, revenue or earnings and cause our stock price to decline. Additionally, our results may fail to meet or exceed the expectations of securities analysts and investors, or such analysts may change their recommendation regarding our stock, which could cause our stock price to decline. Our stock price has been, and may continue to be, volatile, which may make it more difficult for our stockholders to sell their shares at a time or a price that is favorable to them.

We may not realize the potential financial or strategic benefits of the transactions we complete, including the An