(Reuters) – Cadence design systems predict that its annual revenue and profit will be below Tuesday's analyst estimates, in a sign of soft demand for its chip design software as clients tighten spending in a difficult economy.
The shares of San Jose's company, California fell by 5% in extended trading.
The company, which counts British chip designer Holdings, Nvidia and the Tesla electric vehicle manufacturer among its customers, makes software for designing everything from chips to jet machines. It also sells computer systems designed to run that complex software.
Analysts in Berenberg have said that demand and customer budgets for cadence system design and analysis products would be calmed throughout 2025 due to the continued decline of the industry in the automotive end market.
China accounts for a relevant proportion of Cadence business. Further restrictions from the US government on semi -conductor technology sales to Chinese entities could meaningfully reduce its business from the country, they said in a Note in January.
Cadence market share in the very intense industry is also threatened by the opponent's proposed synopsys purchase of Ansys engineering software company in a $ 35 billion money-and-stock deal.
The company expects its financial revenue 2025 to be between $ 5.14 billion and $ 5.22 billion, compared to an analyst average of $ 5.25 billion, according to LSEG -drawn data.
A cadence predicts its annual profit, excluding items, in the range of $ 6.65 to $ 6.75 per share, also lower than the estimated $ 6.83 share.
Its revenue was $ 1.36 billion for the quarter ending December 31, an increase of 26.8% over the year earlier.
With the exception of items, the company won $ 1.88 per share in the fourth quarter, compared to the estimated $ 1.82.
(Reported by Juby Babu in Mexico City; Edited by Shilpi Majumdar)