#USA #Class Action #San Francisco #Synopsys #Hagens Berman

Synopsys Faces Class Action Amid Financial Woes

A securities fraud class action has been formally initiated against Synopsys, Inc. (NASDAQ: SNPS), as outlined in the case Kim v. Synopsys, Inc., et al., No. 26-cv-09410 (N.D. Cal.). This lawsuit aims to represent investors who purchased Synopsys securities between December 4, 2024, and September 9, 2025. The legal action comes on the heels of Synopsys reporting disheartening third-quarter results for 2025, which displayed significant weaknesses within their Intellectual Property (IP) business.

On September 10, 2025, Synopsys announced its earnings per share had plummeted to $1.50, representing a staggering 45% decline from the previous year's quarter and a decrease of 33% sequentially. Notably, this financial dip was largely attributed to an almost 8% reduction in revenues related to its Design IP segment compared to the prior year. Following this revelation, the market reacted starkly, with Synopsys shares losing 35% of their value in just one day, marking the largest single-day percentage loss since the company became public in 1992.

Background on the Lawsuit

The lawsuit has been prompted by allegations that Synopsys provided misleading information to investors regarding the robustness of its customer base and the expected growth of its Design IP business. Hagens Berman, a national law firm focused on shareholders' rights, is spearheading the investigation into these claims. They urge any investors who have suffered substantial losses during the affected class period to come forward and submit their information, as well as to assist in the ongoing investigation if they possess relevant knowledge.

Historically, Synopsys has boasted about its double-digit revenue growth in the Design IP sector, emphasizing how its offerings play a crucial role for customers striving to minimize integration risks and accelerate their time to market. The segments under scrutiny primarily include the company’s foundation, interface, and embedded processor IP products and related services. However, amidst its increased emphasis on artificial intelligence customers—which demand advanced customization—the viability of the Design IP business model seems to be under threat. These shifts are purportedly leading to detrimental impacts, undermining long-term revenue growth prospects.

Investor Reactions and the Path Ahead

The revelation of deteriorating financial performance and the potential fallout has made investors wary. Reed Kathrein, a partner at Hagens Berman leading the investigation, has publicly stated that they are probing into whether Synopsys may have concealed various material risks that could jeopardize sustained revenues in the Design IP segment. Investors were reportedly blindsided by the drastic downturn, illustrating a potential breach of trust that may have broader implications for corporate governance and accountability.

In light of these issues, shareholders are left contemplating the viability of their investments and the steps they should take moving forward. Those adversely affected by Synopsys’s recent performance are encouraged to gather evidence of losses and consider their options, especially with the forthcoming deadline for lead plaintiff applications set for December 30, 2025.

Conclusion

As the landscape for Synopsys continues to shift amidst ongoing scrutiny, the outcome of this class action could yield significant insights into corporate practices related to transparency in communications with investors. The case not only represents a critical juncture for those invested in Synopsys but also serves as a reminder of the inherent risks tied to rapid industry changes, particularly in technology segments pivoting to artificial intelligence. Stakeholders are advised to stay informed about the proceedings, as they could reshape the narrative surrounding Synopsys's investor relations and future strategic positioning.

For anyone with information that may aid in the investigation, Hagens Berman is open to contact via their website or direct outreach channels.