Under our Employee Stock Purchase Plan (ESPP), participating employees are granted the right to purchase shares of common stock at a price per share that is 85% of the lesser of the fair market value of the shares at (1) the beginning of an offering period (generally, a rolling two year period) or (2) the purchase date (generally occurring at the end of each semi-annual purchase period), subject to the terms of ESPP, including a limit on the number of shares that may be purchased in a purchase period.

On April 10, 2025, our stockholders approved amendments to the ESPP to increase the number of shares of common stock authorized for issuance under the plan by 2.2 million shares. During fiscal 2025, 2024 and 2023, we issued 0.5 million, 0.5 million, and 0.6 million shares, respectively, under the ESPP at average per share prices of $375.72, $315.24 and $266.82, respectively. As of October 31, 2025, 14.7 million shares of common stock were reserved for future issuance under the ESPP.

2006 Employee Equity Incentive Plan. On April 25, 2006, our stockholders approved the 2006 Employee Equity Incentive Plan (2006 Employee Plan), which provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, RSU awards, stock appreciation rights and other forms of equity compensation, including performance stock awards and performance cash awards, as determined by the plan administrator. The terms and conditions of each type of award are set forth in the 2006 Employee Plan and in the award agreements governing particular awards.

RSUs are granted under the 2006 Employee Plan as part of our incentive compensation program. In general, RSUs vest over three to four years and are subject to the employee's continuing service with us. RSUs granted with specific performance criteria and certain market conditions vest to the extent the performance and market conditions are met. For each RSU granted under the 2006 Employee Plan, a share reserve ratio of 1.70 is applied for the purpose of determining the remaining number of shares reserved for future grants under the plan. Options granted under this plan generally have a contractual term of seven years and generally vest over four years.

On April 10, 2025, our stockholders amended the 2006 Employee Plan to, among other things, increase the number of shares of common stock reserved for future issuance under the plan by 1.6 million shares. As of October 31, 2025, an aggregate of 1.1 million stock options and 3.4 million RSUs were outstanding, and 14.1 million shares were available for future issuance under the 2006 Employee Plan.

2017 Non-Employee Directors Equity Incentive Plans. On April 6, 2017, our stockholders approved the 2017 Non-Employee Directors Equity Incentive Plan (2017 Directors Plan). The 2017 Directors Plan provides for equity awards to non-employee directors in the form of stock options, RSUs, restricted stock or a combination thereof. On April 6, 2017, our stockholders approved an aggregate of 0.45 million shares of common stock reserved under the 2017 Directors Plan.

We grant restricted stock awards and options under the 2017 Directors Plan. Restricted stock awards generally vest on an annual basis and options vest over a period of three years. As of October 31, 2025, 9,395 stock options were outstanding, and a total of 359,486 shares of common stock were reserved for future issuance under the 2017 Directors Plan.

As of the Acquisition Date, we assumed outstanding equity incentive awards under the following Ansys equity incentive plans: (i) the Fourth Amended and Restated Ansys, Inc. 1996 Stock Option and Grant Plan, (ii) the Fifth Amended and Restated Ansys, Inc. 1996 Stock Option and Grant Plan, and (iii) the Ansys, Inc. 2021 Equity and Incentive Compensation Plan (each, an Assumed Equity Plan, and collectively the Assumed Equity Plans). The awards under the Assumed Equity Plans, previously issued in the form of stock options and RSUs, were generally settled as follows:

(2) Each award of Ansys stock options and RSUs (other than specified RSUs) that was outstanding and unvested immediately prior to the Acquisition Date was assumed by us (each, an Assumed Option and Assumed RSU, and collectively, the Assumed Equity Awards) and converted to stock options exercisable and RSUs settleable in the number of shares of our common stock equal to the product of (i) the number of Ansys shares underlying such Assumed Equity Awards as of immediately prior to the Acquisition Date multiplied by (ii) the conversion ratio defined in the Merger Agreement. Any Ansys performance-based RSUs that were assumed by us will only be subject to time-based vesting. The number of Ansys shares underlying the performance-based RSUs for which the performance period was not complete as of the Acquisition Date was based on the target level of performance, and the number of Ansys shares underlying the performance-based RSUs for which the performance period was complete as of the Acquisition Date was based on the actual level of performance. The Assumed Equity Awards generally retain all of the rights, terms and conditions of the respective plans under which they were originally granted, including the same service-based vesting schedule, applicable thereto.

As of the Acquisition Date, the estimated fair value of the Assumed Equity Awards was $639.7 million, of which $131.0 million was recognized as goodwill and the balance of $508.7 million is being recognized as stock-based compensation expense over the remainder term of the Assumed Equity Awards. The fair value of the Assumed Equity Awards for services rendered through the Acquisition Date was recognized as a component of the purchase consideration, with the remaining fair value related to the post-combination services to be recorded as stock-based compensation over the remaining vesting period.

A total of 1.1 million shares of our common stock underlying the Assumed Equity Awards that is being recognized as stock-based compensation expense had an estimated weighted average fair value at the Acquisition Date of $453.83 per share. As of October 31, 2025, there were 0.9 million shares of our common stock underlying the outstanding Assumed Equity Awards under the Assumed Equity Plans.

Other Assumed Stock Plans through Acquisitions. In addition, we have assumed certain outstanding stock awards of other acquired companies, including restricted stock units and options. If these assumed equity awards are canceled, forfeited or expire unexercised, the underlying shares do not become available for future grant. As of October 31, 2025, 235 shares of our common stock remained subject to such outstanding assumed equity awards.


	Restricted Stock Units Outstanding	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Life (In Years)	Aggregate Fair Value
	(in thousands, except per share amounts and years)
Balance at October 31, 2022(1)	4,638	$	265.76	1.32
Granted(2)	2,083	$	394.34
Vested(3)	(1,839)	$	237.19		$	706,136
Forfeited	(365)	$	283.29
Balance at October 31, 2023(1)	4,517	$	335.26	1.41
Granted(2)	1,620	$	543.69
Vested(3)	(1,778)	$	303.23		$	962,127
Forfeited	(460)	$	395.74
Balance at October 31, 2024(1)	3,899	$	429.36	1.35
Assumed upon acquisition of Ansys	1,116	$	571.20
Granted(2)	1,280	$	494.29
Vested(3)	(1,753)	$	407.12		$	865,731
Forfeited	(224)	$	466.51
Balance at October 31, 2025	4,318	$	492.36	1.05

(2)The number of granted restricted stock units includes those granted to senior management with market-based and performance-based vesting criteria in addition to service-based vesting criteria (market-based RSUs) reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.


	Options Outstanding
	Shares Under Stock Option (1)	Weighted- Average Exercise Price per Share		Weighted- Average Remaining Contractual Life (In Years)	Aggregate Intrinsic Value
	(in thousands, except per share amounts and years)
Balance at October 31, 2022	2,160	$	150.37	3.57	$	328,120
Granted	294	$	361.64

Exercised	(849)	$	109.83
Canceled/forfeited/expired	(90)	$	245.86
Balance at October 31, 2023	1,515	$	208.49	3.70	$	376,563
Granted	238	$	551.41

Exercised	(429)	$	141.83
Canceled/forfeited/expired	(42)	$	376.97
Balance at October 31, 2024	1,282	$	288.91	3.63	$	301,781
Assumed upon acquisition of Ansys	5	$	124.53
Granted	232	$	502.29

Exercised	(323)	$	171.82
Canceled/forfeited/expired	(42)	$	463.57
Balance at October 31, 2025	1,154	$	357.66	3.74	$	141,969
Vested and expected to vest as of October 31, 2025	1,154	$	357.66	3.74	$	141,969
Exercisable at October 31, 2025	709	$	279.76	2.66	$	131,982

The aggregate intrinsic value in the preceding table represents the pre-tax intrinsic value based on stock options with an exercise price less than our closing stock price of $453.82 at the end of fiscal 2025. The pre-tax intrinsic value of options exercised and their average exercise prices including those associated with our discontinued operations are:

Restricted Stock Units and Stock Options. The following table contains additional information concerning activities related to stock options and restricted stock units that were granted under the 2006 Employee Plan and assumed from acquisitions, except for the Ansys Merger, including those associated with our discontinued operations:


			Available for Grant (1)(2)

			(in thousands)
Balance at October 31, 2022			13,111
Options granted(2)			(294)


Options canceled/forfeited/expired(2)			89
Restricted stock units granted(1)(3)			(3,540)
Restricted stock units forfeited(1)			620
Additional shares reserved			3,300
Balance at October 31, 2023			13,286
Options granted(2)			(238)


Options canceled/forfeited/expired(2)			40
Restricted stock units granted(1)(3)			(2,754)
Restricted stock units forfeited(1)			782
Additional shares reserved			3,400
Balance at October 31, 2024			14,516
Options granted(2)			(232)


Options canceled/forfeited/expired(2)			41
Restricted stock units granted(1)(3)			(2,176)
Restricted stock units forfeited(1)			365
Additional shares reserved			1,600
Balance at October 31, 2025			14,114

(1)Restricted stock units includes awards granted under the 2006 Employee Plan and assumed through acquisitions. The number of RSUs reflects the application of the award multiplier of 1.70 as described above. No additional options and RSUs will be granted under the Assumed Equity Plans.

(3)The number of granted restricted stock units includes market-based RSUs reported at the maximum possible number of shares that may ultimately be issuable if all applicable market-based and performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied.


	Restricted Shares	Weighted-Average Grant Date Fair Value
	(in thousands, except per share amounts)
Unvested at October 31, 2022	5	$	310.02
Granted	5	$	387.79
Vested	(5)	$	310.02
Forfeited	—	$	—
Unvested at October 31, 2023	5	$	387.79
Granted	3	$	561.23
Vested	(4)	$	382.88
Forfeited	—	$	—
Unvested at October 31, 2024	4	$	541.51
Granted	6	$	419.34
Vested	(4)	$	550.58
Forfeited	—	$	—
Unvested at October 31, 2025	6	$	419.64

Valuation and Expense of Stock-Based Compensation. We estimate the fair value of stock options and employee stock purchase rights under the ESPP on the grant date. The value of awards expected to vest is recognized as expense over the applicable service periods. We use the Black-Scholes option-pricing model to determine the fair value of stock options and employee stock purchase plan rights. The Black-Scholes option-pricing model incorporates various assumptions including expected volatility, expected term and interest rates. The expected volatility for both stock options and employee stock purchase rights is estimated by a combination of implied volatility for publicly traded options of our common stock with a term of six months or longer and the historical stock price volatility over the estimated expected term of such awards, which is based on historical experience.

Restricted stock units are valued based on the closing price of our common stock on the grant date. We use the straight-line attribution method to recognize stock-based compensation costs over the service period of the award except for performance-based RSUs and market-based RSUs.

We estimated the fair value of market-based RSUs on the grant date using a Monte Carlo simulation model. Under the award agreements, the vesting of the market-based RSUs is contingent on achieving total stockholder return (TSR) relative to a peer index as well as revenue growth metrics. The maximum potential awards that may be earned are 187.5% of the target number of the initial awards. For market-based RSUs granted in February and August 2023, the performance period during which the achievement goals will be measured is fiscal 2023, fiscal 2024 and fiscal 2025. The awards will vest in December 2025 if the TSR target, revenue growth metrics, and service conditions are achieved. For market-based RSUs granted in December 2023, the performance period during which the achievement goals will be measured is fiscal 2024, fiscal 2025 and fiscal 2026. The awards will vest in December 2026 if the TSR target, revenue growth metrics, and service conditions are achieved. For market-based RSUs granted in January and February 2025, the performance period during which the achievement goals will be measured is fiscal 2025, fiscal 2026 and fiscal 2027. The awards will vest in December 2027 if the TSR target, revenue growth metrics, and service conditions are achieved.

We estimate the probability of achievement of applicable performance goals for performance-based and market-based RSUs in each reporting period and recognize related stock-based compensation expense using the graded-vesting method. The amount of stock-based compensation expense recognized in any period can vary based on the attainment or expected attainment of the various performance goals. If such performance goals are not ultimately met, no compensation expense is recognized and any previously recognized compensation expense is reversed.


	Year Ended October 31,
	2025	2024	2023
Stock Options:
Expected life (in years)	4.1	4.1	4.1
Risk-free interest rate	3.53%- 4.53%	3.62% - 4.61%	3.80% - 4.80%
Volatility	34.84% -42.33%	32.09% - 35.42%	32.74%- 36.16%
Weighted average estimated fair value	$170.77	$178.67	$120.33
ESPP:
Expected life (in years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0
Risk-free interest rate	3.66% - 4.31%	3.88% - 5.27%	4.85% - 5.38%
Volatility	34.69% - 38.34%	31.40% - 34.39%	28.03% - 35.27%
Weighted average estimated fair value	$166.64	$179.10	$120.82


	Year Ended October 31,
	2025	2024	2023
Expected life (in years)	2.67 - 2.79	2.89	0.90 - 2.70
Risk-free interest rate	3.90% - 4.39%	4.41%	4.36% - 4.80%
Volatility	33.40% - 34.72%	34.03%	34.79% - 42.86%
Grant date fair value	$409.94 - $464.17	$600.29	$357.29 - $465.79


	Year Ended October 31,
	2025(1)		2024		2023
	(in thousands)
Cost of products	$	89,366	$	66,403	$	49,896
Cost of maintenance and service	41,897		32,189		29,572
Research and development expense	456,804		359,244		282,540
Sales and marketing expense	178,384		121,524		91,082
General and administrative expense	126,843		78,575		60,004
Stock-based compensation expense from continuing operations before taxes	893,294		657,935		513,094
Stock-based compensation expense from discontinued operations before taxes	—		34,381		50,198
Total stock-based compensation expense before taxes	893,294		692,316		563,292
Income tax benefit	(134,441)		(115,271)		(90,915)
Stock-based compensation expense after taxes	$	758,853	$	577,045	$	472,377

As of October 31, 2025, we had $1.5 billion of total unrecognized stock-based compensation expense relating to options, RSUs and restricted stock awards, which is expected to be recognized over a weighted average period of 1.9 years. As of October 31, 2025, we had $88.2 million of total unrecognized stock-based compensation expense relating to the ESPP, which is expected to be recognized over a period of 2.0 years.

Deferred Compensation Plan. We maintain the Synopsys Deferred Compensation Plan (Deferred Plan), which permits eligible employees to defer up to 50% of their annual cash base compensation and up to 100% of their eligible cash variable compensation. Amounts may be withdrawn from the Deferred Plan pursuant to elections made by the employees in accordance with the terms of the plan. Since the inception of the Deferred Plan, we have not made any matching or discretionary contributions to the Deferred Plan. There are no Deferred Plan provisions that provide for any guarantees or minimum return on investments. Undistributed amounts under the Deferred Plan are subject to the claims of our creditors.

Income or loss from the change in fair value of the Deferred Plan assets is recorded in other income (expense), net. The increase or decrease in the fair value of the undistributed Deferred Plan obligation is recorded in total cost of revenue and operating expense. The following table summarizes the impact of the Deferred Plan:


	Year Ended October 31,
	2025		2024		2023
	(in thousands)
Increase (reduction) to cost of revenue and operating expense	$	65,492	$	85,446	$	20,196
Interest and other income (expense), net	65,492		85,446		20,196
Net increase (decrease) to net income	$	—	$	—	$	—

Other Retirement Plans. We sponsor various defined contribution retirement plans for our eligible U.S. and non-U.S. employees. Total contributions to these plans were $80.7 million, $51.3 million, and $50.8 million in fiscal 2025, 2024, and 2023, respectively. For employees in the United States and Canada, we match pre-tax employee contributions up to a maximum of U.S. $7,500 and Canadian $4,000, respectively, per participant per year, except for legacy Ansys employees with maximum matching contributions of 4.25% of the employee's eligible compensation.

Certain of our international subsidiaries sponsor defined benefit retirement plans. The unfunded projected benefit obligation for these defined benefit retirement plans as of October 31, 2025 and 2024 was immaterial and recorded in other long-term liabilities in our consolidated balance sheets.