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Business Combinations
 12 Months Ended
Oct. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations Business Combinations
Fiscal 2025
On July 17, 2025, we completed our acquisition of Ansys pursuant to the terms of the previously announced Agreement and Plan of Merger, dated as of January 15, 2024 (the Merger Agreement) by and among Synopsys, Ansys and ALTA Acquisition Corp. (Merger Sub), a Delaware corporation and a wholly owned subsidiary of Synopsys. Pursuant to the Merger Agreement, Merger Sub merged with and into Ansys (the Ansys Merger), with Ansys surviving the Ansys Merger as a wholly owned subsidiary of Synopsys. At the effective time of the Ansys Merger (the Effective Time), each share of common stock, par value $0.01 per share, of Ansys (Ansys Common Stock) issued and outstanding immediately prior to the Effective Time (subject to certain exceptions) was converted into the right to receive (i) 0.3399 (the Exchange Ratio) of a share of common stock, par value $0.01 per share, of Synopsys (Synopsys Common Stock) (in the aggregate, the Stock Consideration) and (ii) $199.91 in cash, without interest (the Per Share Cash Amount, and in the aggregate, the Cash Consideration) (the Stock Consideration and the Cash Consideration, collectively, the Merger Consideration). In addition, we assumed certain outstanding Ansys options and other outstanding unvested Ansys equity awards held by continuing Ansys employees.
The aggregate purchase consideration was approximately $34.9 billion, consisting of cash of $17.6 billion, Synopsys Common Stock with a fair value of $17.1 billion, and the balance related to the assumption of certain outstanding Ansys equity awards and the settlement of pre-existing relationships. We acquired Ansys to combine
Synopsys’ semiconductor electronic design automation expertise with Ansys’ S&A capabilities to address the growing demand for integrated design and simulation tools across various industries.
We funded the Cash Consideration in the Ansys Merger through a combination of cash on hand, the net proceeds from the issuance of the Senior Notes, and the borrowings under the Term Loan Agreement, each as defined and discussed in Note 10. Senior Notes, Bridge Commitment Letter, Term Loan and Revolving Credit Facilities of the Notes to Consolidated Financial Statements in this Annual Report.
The aggregate purchase consideration was preliminarily allocated as follows:
(in thousands)
Cash for outstanding Ansys Common Stock(1)
$17,613,185 
Fair value of Synopsys Common Stock issued for outstanding Ansys Common Stock(2)
17,105,538 
Fair value of assumed Ansys equity awards attributable to pre-combination services(3)
130,963 
Settlement of pre-existing relationships8,794 
Total purchase consideration34,858,480 
Less: cash acquired(931,740)
Total purchase consideration, net of cash acquired$33,926,740 
Allocations
Total current assets$898,127 
Property and equipment106,209 
Goodwill23,442,889 
Intangible assets12,990,000 
Other long-term assets253,815 
Deferred revenue(637,076)
Other current liabilities(303,526)
Long-term deferred revenue(34,070)
Long-term deferred tax liabilities(2,624,094)
Other long-term liabilities(165,534)
$33,926,740 
(1) Represents the total cash paid to settle 88.1 million outstanding shares of Ansys Common Stock as of the Acquisition Date at $199.91 per share and for the settlement of fractional shares.
(2) Represents the fair value of 30.0 million shares of Synopsys Common Stock issued to settle 88.1 million outstanding shares of Ansys Common Stock. Synopsys issued 0.3399 of a share of Synopsys Common Stock for each Ansys share. The fair value of Synopsys Common Stock was $571.20 per share as of the Acquisition Date.
(3) Represents the fair value of assumed Ansys options and RSUs attributed to pre-combination services. See Note 15. Employee Benefit Plans for additional information.
We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on their preliminary estimated fair values, which were determined using generally accepted valuation techniques based on estimates and assumptions made by management at the time of acquisition. These estimates and assumptions are believed to be reasonable, but they are inherently uncertain and may be subject to material change as additional information becomes available during the respective measurement period, which will not exceed 12 months from applicable acquisition date. The primary areas that are preliminary relate to the fair values of goodwill, intangible assets, certain tangible assets and liabilities, and income taxes.
Goodwill is primarily attributed to the assembled workforce and anticipated synergies and economies of scale expected from the integration of the Ansys business. The synergies include certain cost savings, operating efficiencies and other strategic benefits projected to be achieved as a result of the Ansys Merger. The goodwill was assigned to the Design Automation reporting unit and the amount recognized was not deductible for tax purposes.
The operating results of Ansys have been included in our consolidated financial statements for the fiscal year ended October 31, 2025 from the Acquisition Date.
Intangible Assets
The estimated fair value and weighted average useful life of the Ansys intangible assets were as follows:
Fair value
Useful Lives
(in thousands)
(in years)
Core/developed technologies(1)
$6,500,000 
6 - 9
Customer relationships(2)
5,100,000 9
Contract rights intangible(3)
440,000 2
Trademarks and trade names(4)
950,000 23
Total identified intangible assets
$12,990,000 
(1) Core/developed technology was identified from the products of Ansys and its preliminary fair value was determined using the relief-from-royalty method under the income approach. The relief-from-royalty method applies a royalty rate to projected income to quantify the benefit of owning the intangible asset rather than paying a royalty for use of the asset. The discount rate was determined at the time of measurement based on an analysis of the implied internal rate of return of the transaction, weighted-average cost of capital, and weighted-average return on assets. The economic useful life was determined based on the technology cycle related to each developed technology, as well as the cash-flows over the forecast period.

(2) Customer relationships represent the preliminary fair value of future projected revenue that will be derived from sales of products to existing Ansys customers. The fair value was determined using the multi-period excess earnings method under the income approach, which involves isolating the net earnings attributable to the asset being measured based on present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. The economic useful life was determined based on historical customer turnover rates and the useful life of developed technology.

(3) Contract rights intangible, which represents contracted but unsatisfied or partially unsatisfied performance obligations, primarily relates to the dollar value of purchase arrangements with customers. The preliminary fair value was determined using the multi-period excess earnings method under the income approach. The economic useful life is based on the time to fulfill the outstanding order backlog obligation.

(4)Trademarks and trade names refers to Ansys brand assets. The preliminary fair value was determined by applying the relief-from-royalty method under the income approach. This method is based on the application of a royalty rate to forecasted revenue attributable to Ansys brand assets. The economic useful life was determined based on the expected usage period of the brand assets and the anticipated cash flows over the forecast period.
We believe the amounts of purchased intangible assets recorded above represent the fair values of and approximate the amounts a market participant would pay for these intangible assets as of the date of the Ansys Merger.
The Optical Solutions Group and PowerArtist RTL Divestitures
Following the determination that it was a necessary step towards obtaining governmental approval of and successfully closing the Ansys Merger, on September 3, 2024, we signed a definitive agreement for the sale of our Optical Solutions Group (OSG) to Keysight Technologies, Inc. (such sale, the Optical Solutions Divestiture). Ansys has similarly entered into a definitive agreement with Keysight Technologies, Inc. for the sale of its PowerArtist RTL business (such sale, together with the Optical Solutions Divestiture, the Regulatory Divestitures).
The Regulatory Divestitures did not represent a strategic shift in operations that would have a major effect on Synopsys' business and are also not material to our financial results, and therefore, are not presented as discontinued operations. The assets and liabilities of OSG and PowerArtist were classified as assets held for sale as of the Acquisition Date. OSG and PowerArtist were included in our Design Automation segment.
On October 17, 2025, we completed the Regulatory Divestitures for cash consideration of $604.0 million. As the result of the Regulatory Divestitures, we disposed $55.1 million of net assets including goodwill of $19.5 million, and recognized a pre-tax gain on sale of $548.9 million, which was included in other income (expense), net in the
consolidated statements of income. In addition, we incurred $32.6 million divestiture-related expenses, resulting in a net pre-tax gain on sale of $516.3 million.
Supplemental Pro Forma Information (Unaudited)
The following unaudited pro forma financial information presents combined results of operations for each of the periods presented, as if Ansys had been acquired as of the beginning of fiscal year 2024.
Year Ended October 31,
20252024
(in thousands)
Pro forma total revenue
$8,920,890 $8,450,296 
Pro forma net income (loss)
$743,822 $651,499 
The unaudited pro forma financial information reflects significant non-recurring adjustments, including transaction costs of $298.4 million, stock-based compensation costs of $71.5 million, and severance costs of $8.2 million. This information is provided for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition actually occurred at the beginning of fiscal year 2024, or of the results of our future operations of the combined business.
Fiscal 2024
During fiscal 2024, we completed several acquisitions for an aggregate purchase consideration of $159.3 million, net of cash acquired. We do not consider these acquisitions to be material, individually or in the aggregate, to our consolidated financial statements. The total purchase consideration was allocated as follows: $78.9 million to identifiable intangible assets, $96.1 million to goodwill, and $15.7 million to net tangible liabilities. The goodwill recognized from these acquisitions, of which $61.8 million was attributable to the Design Automation reporting unit, and $34.3 million was attributable to the Design IP reporting unit, was not deductible for income tax purposes.
Fiscal 2023
During fiscal 2023, we completed several acquisitions for an aggregate purchase consideration of $295.4 million, net of cash acquired. We do not consider these acquisitions to be material, individually or in the aggregate, to our consolidated financial statements. The total purchase consideration was allocated as follows: $95.8 million to identifiable intangible assets, $229.4 million to goodwill, and $29.8 million to net tangible liabilities. The goodwill recognized from these acquisitions was assigned to the Design Automation reporting unit, of which $5.7 million was deductible for income tax purposes.
Redeemable Non-controlling Interest
During the second quarter of fiscal 2022, we acquired a 75% equity interest in OpenLight Photonics, Inc. (OpenLight) for cash consideration of $90.0 million. The remaining 25% equity interest in OpenLight was held by Juniper Networks, Inc. (the Minority Investor) from their contribution of IP and certain tangible assets.
The agreement with the Minority Investor contained redemption features whereby the interest held by the Minority Investor was redeemable either (1) at the option of the Minority Investor on or after the third anniversary of the acquisition or sooner in certain circumstances or (2) at our option beginning on the third anniversary of the acquisition. This option was exercisable at the greater of fair value at the time of redemption or $30.0 million. The fair value of the option was initially valued at $10.1 million, resulting in a total consideration of $100.1 million.
As of the end of fiscal 2024, upon issuance of new OpenLight stock, our ownership interest in OpenLight was reduced to 71% and the Minority Investor was reduced to 24%. On December 23, 2024, we exercised the call option to purchase the remaining ownership interest held by the Minority Investor at a redemption price of $30.0 million, bringing our ownership interest in OpenLight to 95%.
Subsequently on December 30, 2024, we divested our entire ownership interest in OpenLight. We had previously recorded an impairment charge of $53.5 million related to acquired intangible assets in OpenLight in fiscal 2024. See Note 6. Goodwill and Intangible Assets of the Notes to Consolidated Financial Statements in this Annual Report for more information. The goodwill related to the OpenLight acquisition was assigned to our Design Automation
reporting unit. The resulting loss on the OpenLight divestiture, included in other income (expense), net in the consolidated statements of income, was not material to our results of operation.
During fiscal 2025, 2024 and 2023, OpenLight incurred a net loss of $3.5 million, $91.7 million and $40.9 million, respectively, of which $0.8 million, $22.0 million and $10.0 million, respectively, was attributable to redeemable non-controlling interest. The carrying value of the redeemable non-controlling interest was recorded at its estimated fair value of $30.0 million as of October 31, 2024 in the consolidated balance sheets. We have excluded the financial results of OpenLight from our consolidated financial statements from the date of sale.
Transaction Costs
Transaction costs for acquisitions, primarily related to the Ansys Merger, were $267.1 million, $161.8 million and $13.8 million during fiscal 2025, 2024 and 2023, respectively. These costs mainly consisted of professional fees and administrative costs for closed and pending acquisitions, as well as the Bridge Commitment financing costs, and were expensed as incurred in our consolidated statements of income.