Shares in Synopsys Inc. declined by over 1% in late trading today after the electronic design automation company reported mixed results in its fiscal second quarter, with revenue falling short but adjusted earnings per share beating expectations.

For the quarter that ended on April 30, Synopsys reported adjusted earnings per share of $466.9 million or $3.00 per share, up from $368.3 million or $2.38 per share in the same quarter of fiscal year 2023. Revenue came in at $1.455 billion, up 15.19% year-over-year. Analysts were looking for $2.95 per share on revenue of $1.53 billion.

Synopsis saw revenue growth across its core segments. 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 rose 12%, to $1.008 billion. It was the first time Synopsys broke the $1 billion mark in its EDA division.

Design IP revenue came in at $399.8 million, up from $335.3 million in the second quarter of 2023 but down from $525.7 million in the first quarter. Other revenue came in at $47.3 million, up from $26.7 million from the same quarter of last year.

In terms of product announcements, the quarter was a busy one for Synopsys.

In March, the company announced the availability of Synopsys fAST Dynamic, a dynamic application security testing offering that is optimized for modern web applications and DevSecOps workflows. On April 9, Synopsys announced the availability of Black Duck Supply Chain Edition, a software composition analysis offering that allows organizations to mitigate upstream risks in supply chain attacks. On April 30, the company announced Polaris Assist, an artificial intelligence-powered application security assistant that provides AI-augmented vulnerability summaries and code fixes.

Falling just after the end of the quarter but also notable was Synopsys’s announcement on May 6 that it entered an agreement to sell its Software Integrity Group to Clearlake Capital Group LP and Francisco Partners Management LP for up to $2.1 billion. The decision to sell part of the business was driven by Synopsys wanting to focus on more core offerings.

“Synopsys’ strong Q2 results were driven by our team’s relentless focus on execution, our leading technology that is mission-critical to customers and our resilient business model,” Chief Financial Officer Shelagh Glaser said in the company’s earnings release. “We remain confident in our business, and as a result, we are again raising our full-year targets for revenue and non-GAAP EPS.”

For its fiscal third quarter, Synopsys expects adjusted earnings per share of $3.25 to $3.30 on revenue of $1.505 billion to $1.535. For the full year, the company expects adjusted earnings per share of $12.90 to $12.98 on revenue of $6.09 billion to $6.15 billion.

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