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Shares of software and services provider to the semiconductor industry Synopsys (NASDAQ: SNPS) jumped on Thursday following the release of the company's fiscal first-quarter report. The company beat analyst estimates for both revenue and earnings, and it increased its guidance for the full year. The stock was up as much as 10.3% soon after the market open, settling into an 8.8% gain by 12:30 p.m. EST.
Synopsis reported first-quarter revenue of $652.8 million, up 14.8% year over year and $15 million higher than the average analyst estimate. The Core EDA product group, which includes integrated circuit design software and verification products, grew revenue by 8.5% year over year to $368.5 million. The IP, systems, and software integrity product group produced revenue of $214.2 million, up 28.3% year over year.
Image source: Synopsys.
Non-GAAP EPS was $0.94, up from $0.68 in the prior-year period and $0.16 higher than analysts were expecting. GAAP EPS grew to $0.56, up from $0.39. Higher revenue was the main driver of the earnings increase, while a higher tax rate worked in the opposite direction.
Synopsys co-CEO Aart de Geus announced that the company was raising its annual targets thanks to a strong first quarter:
Synopsys now expects to produce between $2.58 billion and $2.61 billion of revenue in 2017, along with non-GAAP EPS between $3.21 and $3.26. Previously, the company had provided guidance ranges of $2.57 billion to $2.60 billion and $3.16 to $3.20 for revenue and non-GAAP EPS, respectively.
With a better-than-expected first quarter in the bag and a slight increase to the full-year outlook, investors had plenty of reasons to bid up the stock on Thursday.
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