Synopsys CEO on Earnings, Nvidia Investment

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00:00Even though your shares are down a little bit, the analysts seem to feel positively about these

00:04numbers. But JP Morgan asks that maybe you're being slightly conservative on your full year

00:082026 guidance. Are you? We're looking at it as being balanced and pragmatic regarding FY26,

00:16given the global and the overall environment. We guided at 9.6 billion, and that's after finishing

00:23up FY25 at 7 billion. So we're very excited about the opportunity ahead.

00:30Chip design right now, there are some bigger picture discussions to be had. A great debate

00:36about companies big and small looking at custom A6 through to doing more in-house versus not

00:42bothering. Because why? NVIDIA is doing such a full stack offering. What are the trends that

00:48you're seeing, particularly when you think about your backlog, Sassim? Because the analysts are also

00:52talking about your backlog ex-ansys. Yeah, we have a significant backlog entering FY26 at 11

00:59and a half billion. And what's driving that backlog is the strength across the portfolio. As for your

01:05question, most hyperscalers, they're looking for multiple alternatives to how to build and optimize

01:13along the stack. The silicon is an essential component, as you know. And almost every one of

01:20these hyperscalers, they have a strategy along three vectors. One, they buy merchant chips from NVIDIA,

01:26AMD, Intel, etc. And they build their software stack. Then there's the custom vector, or ASIC,

01:34and they have their own customer own tooling, what it's called, where design the chip all

01:38themselves. For synopsis, all three vectors are a fantastic opportunity because you need

01:44the essentialness of what we provide in order to achieve that silicon design all the way up to the

01:50system. It's the first time we've spoken to you since that $2 billion endorsement investment in your

01:56stock coming from NVIDIA. And at the same time, NVIDIA is trying to gain inroads once again back into

02:01China. You've got headwinds in the China part of the business. How do you see that part of the world

02:06evolving?

02:06So the NVIDIA investment was really driven, and it's a significant endorsement to our strategy to

02:16provide engineering solutions from silicon to systems, where NVIDIA has been talking about the

02:22whole physical AI, etc. That cannot happen without having physics simulation inside the product

02:29development. And that's what Synopsis provides. As far as the China market and opportunity, FY25,

02:38we faced a significant headwind in China. Our business declined by about 20 percent due to these

02:45headwinds. What we talked about in our FY26 guide is we'll continue on assuming that the environment in

02:53China will remain status quo, the same stress that we saw in 25, and we have de-risked it out of

02:59our forecast.

03:00Sassim, very, very quickly, 30 seconds. Why does NVIDIA need to have an equity stake in your company?

03:05It's exactly what Jensen said. He sees a great opportunity to make money and to make sure that

03:14he's participating and aligning both companies' roadmap in order to accelerate the investment and

03:21deliver to this opportunity.

03:22We'll see you in the next one.

03:23We'll see you, at least.

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