Shares in Synopsys Inc. were up over 3% in late trading today after the electronic design automation company reported better-than-expected revenue in its first quarter and raised its full-year earnings outlook.

For the quarter that ended Jan. 31, Synopsys reported adjusted earnings per share of $3.56, up from $2.62 in the same quarter of last year, on revenue of $1.649 billion, up 21% year-over-year. The earnings figure was a beat, coming in ahead of the $3.43 per share expected by analysts and revenue was in line with expectations.

Synopsis saw revenue growth across its core segments, with electric design automation, which includes digital and custom integrated circuit design software, verification hardware and software products, manufacturing-related design products, field-programmable gate array design software, artificial intelligence-driven EDA solutions and professional services came in at $970.7 million in the quarter, up 11.03% year-over-year.

Design IP revenue jumped 53% year-over-year, to $525.7 million. Software integrity, which includes solutions that test software code for security vulnerabilities, rose 8%, to $138.2 million. Other revenue fell 6% to $96.6 million.

“The Synopsys team delivered a solid start to the year, achieving record quarterly revenue and non-GAAP earnings above the high end of our target range,” Shelagh Glaser, chief financial officer of Synopsys, said in the company’s earnings release. “These results reflect our execution and leadership position across segments and continued, robust design activity among our semiconductor and systems customers.”

For its fiscal second quarter, Synopsys expects adjusted earnings per share of $3.09 to $3.14 on revenue of $1.56 billion to $1.59 billion. For the full fiscal year to Oct. 31 and up from its previous outlook, the company expects earnings per share of $13.47 to $13.55 on revenue of $6.57 billion to $6.63 billion.

In an interview with Barron’s, Chief Executive Officer Sassine Ghazi said that AI is driving customer investments in silicon and systems, creating a combination of tailwinds that enhance the company’s growth.

Ghazi described AI as a megatrend that “is pushing compute complexity to its limits” and that a subsequent increase in “silicon proliferation” is seeing growth in semiconductor content in more devices. Another factor driving growth highlighted by Ghazi at Synopsys is “software-defined systems,” customized silicon being developed at cloud-computing providers, automakers and others.

Photo: Wikimedia Commons