Chip design software maker Cadence Design Systems on Monday predicted third-quarter revenue and profit below Wall Street estimates, hinting to intense rivalry from rival Synopsys.
In a hint of fierce competition from rival Synopsys (SNPS.O), chip design software manufacturer Cadence Design Systems (CDNS.O) forecasted third-quarter revenue and profit below Wall Street projections on Monday. In extended trading, shares of Cadence, a California company based in San Jose, fell 2.1%. The company produces software that engineers use to design semiconductors, and Siemens AG (SIEGn.DE) is one of its rivals. Siemens EDA, formerly Ansys, Synopsys, and Mentor Graphics.
In a $35 billion cash and equity deal, Synopsys is purchasing Ansys (ANSS.O.), opening a new tab that is expected to strengthen its position in an already extremely consolidated market. Carmaker Tesla (TSLA.O), British chip designer Arm Holdings, and semiconductor industry leader Taiwan Semiconductor Manufacturing Co. (2330.TW) are among Cadence’s clients. LSEG data shows that Cadence predicted third-quarter revenue between $1.165 billion and $1.195 billion, with the midpoint falling short of analysts’ consensus estimate of $1.20 billion.
It predicted third-quarter adjusted earnings per share of $1.39 to $1.49, which was less than the $1.60 prediction. The company revised its revenue estimate for the fiscal year 2024 from $4.56 billion to $4.62 billion to between $4.60 billion and $4.66 billion. Compared to its initial projection of $5.88 to $5.98, Cadence reduced its yearly profit per share estimate to between $5.77 and $5.97. The second quarter ended June 30th with $1.06 billion in revenue, somewhat exceeding $1.04 billion in projections. In contrast to projections of $1.22, the company’s adjusted profit per share for the reported quarter was $1.28.
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