What is the rule of 40 in Synopsys?

Written by Editorial Team | Last Updated: August 2026

For Synopsys, a leader in electronic design automation and semiconductor software, the Rule of 40 is calculated by combining its annual revenue expansion rate with its operating or free cash flow margins. The company frequently surpasses the standard 40 percent benchmark, reflecting its robust pricing power, high-margin software licensing models, and consistent ability to drive dual growth and profitability.

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