The Electronic Design Automation (EDA) industry continues to evolve at a rapid pace, driven by semiconductor innovation, AI workloads, and increasingly complex system designs. In Q3 2025, the three dominant players—Synopsys, Cadence, and Siemens EDA (Mentor Graphics)—faced markedly different trajectories. While Cadence sustained strong growth momentum, Synopsys encountered export headwinds and integration costs, and Siemens struggled with software licensing dynamics.

Synopsys Q3 2025 Performance

1. Revenue: $1.74 billion, up 14% YoY from $1.526 billion in Q3 2024.
2. Earnings Context: The result slightly missed analyst expectations, largely due to weaker-than-anticipated performance in the Design IP segment.
3. Headwinds:
4. US-China export restrictions continued to weigh heavily on IP licensing revenues.
5. Integration costs from the recently closed Ansys acquisition (July 2025) also pressured margins.
6. Strategic Moves:
7. The Ansys acquisition expands Synopsys’ portfolio beyond traditional EDA, strengthening its presence in multiphysics simulation and system analysis.
8. CEO emphasized “long-term resilient growth,” focusing on leveraging Ansys’ synergies and diversifying away from geopolitically sensitive IP revenue streams.

Takeaway: Synopsys is balancing short-term turbulence with long-term strategic bets. While export restrictions dent near-term performance, Ansys integration could open a broader path to compete not just in EDA, but in full-stack semiconductor-to-system design.

Cadence Q3 2025 Performance

1. Revenue: Estimated around $1.3 billion, per July 2025 guidance, with momentum from Q2’s 20% YoY growth sustaining into Q3.
2. Growth Breakdown:
3. Core EDA: +16%
4. System Design & Analysis: +35%
5. IP: +25%
6. Profitability:
7. Strong non-GAAP operating margins (~42%).
8. EPS growth remained robust, demonstrating operational efficiency.
9. Challenges:
10. Like Synopsys, Cadence is exposed to geopolitical restrictions, but diversification of revenue streams mitigated the impact.
11. Execution Strength:
12. Cadence consistently beat estimates in recent quarters, establishing a reputation for disciplined execution and resilient growth.

Takeaway: Cadence continues to be the most balanced performer, with strong growth across all segments and high margins. Its ability to sidestep export-related headwinds better than Synopsys demonstrates the strength of its diversified portfolio.

Siemens EDA (Mentor Graphics Segment)

Mentor Graphics (Historical Context)

Before integration into Siemens, Mentor’s Q3 revenue typically stood around $323 million, growing at ~11% YoY, with strength in emulation systems and solid margins.

Siemens Q3 2025 Results

1. Overall Revenue: €19.4 billion, up 5% YoY.
2. Software Segment (including EDA): Down 30% YoY, due to tough prior-year comparisons and software licensing challenges.
3. Digital Industries:
4. Automation business grew, cushioning some of the software decline.
5. Siemens is heavily investing in AI integration and scientific intelligence to re-energize its software portfolio.

Takeaway: Siemens’ EDA business is now embedded within a much larger industrial software framework. While emulation and hardware-assisted verification remain valuable assets, standalone Mentor performance is no longer reported, and Siemens’ broader software decline highlights integration and execution challenges.

Comparative Revenue Summary: Q3 2025

*Cadence Q3 exact revenue pending final disclosure (expected near $1.3B per July guidance).

Why the Divergence in Q3 2025?

1. Synopsys:
2. Impacted by export restrictions limiting access to Chinese semiconductor customers.
3. IP licensing revenues took the hardest hit, magnifying the revenue miss.
4. Integration costs from Ansys created near-term margin pressure, even as the acquisition promises future expansion.
5. Cadence:
6. Benefited from diverse revenue sources, particularly high growth in system design & analysis.
7. Maintained operational discipline, enabling strong margins despite geopolitical headwinds.
8. Demonstrated a repeatable playbook for growth that reassures investors.
9. Siemens EDA:
10. Legacy Mentor businesses are overshadowed by Siemens’ broader software struggles.
11. A sharp 30% software revenue decline in digital industries shows execution risks in licensing models.
12. AI and scientific intelligence investments suggest Siemens is playing a longer game in integrating EDA into a broader industrial ecosystem.

Industry Outlook

1. EDA Remains Resilient: Despite export restrictions and integration costs, demand for advanced design tools is only increasing with AI, 2nm, and system-level complexity.
2. Synopsys vs. Cadence: The two remain the clear leaders, but Cadence currently enjoys stronger execution momentum, while Synopsys is betting big on portfolio expansion via acquisitions.
3. Siemens Positioning: As EDA becomes more interwoven with industrial automation and digital twins, Siemens may find long-term synergies, but near-term results show softness.

Final Takeaway

Q3 2025 underscores the bifurcation in the EDA market:

1. Synopsys: Short-term challenges but long-term strategic positioning with Ansys.
2. Cadence: Strong, consistent execution delivering above-market growth and high margins.
3. Siemens EDA: Struggling in the near term but investing for AI-driven, integrated future opportunities.

Investors and industry watchers will likely keep a close eye on how Synopsys integrates Ansys and whether Cadence’s growth momentum remains sustainable as export controls tighten further.