Synopsys, Inc. stock research
FY2025 Q4
Synopsys (SNPS) Gross Margin — Quarter Ended Oct 31, 2025
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose at a faster rate, causing gross margin to weaken. The relationship among revenue, gross profit, cost of revenue, and gross margin shows that higher revenue was accompanied by a proportionally larger increase in cost of revenue, which compressed margin.
Gross margin takeaway
Quarter ended Oct 31, 2025 · FY2025 Q4
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue rose at a faster rate, causing gross margin to weaken. The relationship among revenue, gross profit, cost of revenue, and gross margin shows that higher revenue was accompanied by a proportionally larger increase in cost of revenue, which compressed margin.
- The strongest observable margin driver is the change in cost of revenue relative to revenue, as cost of revenue increased more than revenue compared to both the prior quarter and the year-ago quarter, leading to a lower gross margin.
- Compared to the immediately preceding quarter, gross margin was lower, and compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons, while cost of revenue was higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
71.0%
Gross profit
$1.6B
Revenue
$2.3B
Cost of revenue
$654.7M
Quarter-over-quarter change
-7.2 pts
Year-over-year change
-6.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jan 31, 2025 | $1.5B | $1.2B | $270.0M | 81.4% |
| Apr 30, 2025 | $1.6B | $1.3B | $318.3M | 80.2% |
| Jul 31, 2025 | $1.7B | $1.4B | $380.6M | 78.1% |
| Oct 31, 2025 | $2.3B | $1.6B | $654.7M | 71.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jul 31, 2025
-7.2 pts
Year-over-year change
Oct 31, 2024
-6.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the change in cost of revenue relative to revenue, as cost of revenue increased more than revenue compared to both the prior quarter and the year-ago quarter, leading to a lower gross margin.
Compared to the immediately preceding quarter, gross margin was lower, and compared to the same quarter one year earlier, gross margin was also lower. Revenue and gross profit were higher in both comparisons, while cost of revenue was higher.
Monitor the trend in cost of revenue growth relative to revenue growth, as the current quarter shows a larger increase in cost of revenue that weakened gross margin.