Synopsys, Inc. Faces Class Action Lawsuit Following Disappointing Q3 2025 Results

Overview of the Situation Facing Synopsys, Inc.

In a significant escalation following disappointing financial outcomes, Synopsys, Inc. (NASDAQ: SNPS) is embroiled in a securities fraud class action lawsuit initiated by investors. The lawsuit, titled Kim v. Synopsys, Inc. et al., registered in the Northern District of California as No. 26-cv-09410, aims to represent shareholders who acquired Synopsys securities between December 4, 2024, and September 9, 2025.

Details of the Lawsuit

The catalyst for this legal action can be traced back to the company’s concerning Q3 2025 earnings report, which revealed that Synopsys had not only missed projections but also experienced a significant downturn in its Intellectual Property (IP) business. Reports indicate that the decline in earnings, particularly a 45% drop in earnings per share (EPS) compared to the same period the previous year, was primarily driven by an approximately 8% decrease in revenues from their Design IP segment. This segment is a pivotal part of Synopsys' operations, which delivers essential design, simulation, and analysis tools in the field of silicon design.

The share price reaction was dramatic, with Synopsys stock plummeting by around 36% the day after the earnings announcement, marking the worst single-day decline since the company's IPO in 1992.

Key Allegations

Central to the legal claims are assertions that Synopsys misled its investors concerning the sustainability and projected growth of revenues within its Design IP business. Allegedly, Synopsys had previously boasted of robust growth stemming from clients relying on their IP offerings to reduce integration risks and accelerate time-to-market for new products. However, this optimistic financial narrative now appears increasingly fragile.

The lawsuit contends that the company's shift in focus toward accommodating AI customers—demanding more customization—has negatively impacted the profitability dynamics of their Design IP segment. This situation raises concerns about the efficacy of the decisions reflected in Synopsys' product roadmap and resource allocation, suggesting that expected outcomes may not materialize as anticipated.

The Road Ahead for Investors

For shareholders who have faced significant losses due to this turn of events, the law firm Hagens Berman is actively inviting those affected to come forward. Investors who purchased shares during the specified class period are encouraged to report their losses, as the firm seeks to hold Synopsys accountable for any alleged misrepresentation. The deadline for appointing a lead plaintiff in this lawsuit is set for December 30, 2025.

Individuals possessing additional insights or information pertinent to this case are equally urged to coordinate with Hagens Berman, which has a track record of successful advocacy for investors' rights.

Hagens Berman: Who They Are

Hagens Berman Sobol Shapiro LLP is recognized for its focus on corporate accountability and safeguarding the rights of investors, consumers, and employees through complex litigation. The firm has previously secured over $2.9 billion for clients, emphasizing its commitment to fighting against corporate malfeasance.

Conclusion

As Synopsys navigates this challenging scenario, the outcomes of the pending lawsuit will likely reshape the company's approach to investor communication and business strategy moving forward. Stakeholders in Synopsys, whether directly or indirectly affected by these developments, will be keenly observing how this legal dispute unfolds and what it means for the future of the company's market position.

For more information on the ongoing investigation or if you wish to explore your options as a potential impacted investor, contact Hagens Berman at [email protected] or call 844-916-0895.