(Reuters) - Chip design software maker Cadence Design (NASDAQ:CDNS) Systems forecast third-quarter revenue and profit below Wall Street estimates on Monday, indicating stiff competition from rival Synopsys (NASDAQ:SNPS).
San Jose, California-based Cadence's shares were down 2.1% in extended trading.
The company makes software used by engineers for designing semiconductors and its competitors include Siemens AG (ETR:SIEGn)'s Siemens EDA, formerly Mentor Graphics, Ansys (NASDAQ:ANSS) and Synopsys.
Synopsys is buying Ansys in a $35 billion cash-and-stock deal that is likely to consolidate its foothold in an already highly concentrated industry.
Among Cadence's customers are British chip designer Arm Holdings (NASDAQ:ARM), automaker Tesla (NASDAQ:TSLA) and chip industry bellwether Taiwan Semiconductor Manufacturing Co.
Cadence forecast third-quarter revenue between $1.165 billion and $1.195 billion, the mid-point of which is below analysts' average estimate of $1.20 billion, according to LSEG data.
It forecast adjusted earnings per share between $1.39 and $1.49 for the third quarter, below estimates of $1.60.
The company raised its fiscal 2024 revenue forecast to between $4.60 billion and $4.66 billion, compared with its prior expectations of $4.56 billion to $4.62 billion.
Cadence trimmed its annual profit per share forecast to between $5.77 and $5.97, compared with its earlier expectations of $5.88 to $5.98.
Revenue for the second quarter ended June 30 came in at $1.06 billion, slightly beating estimates of $1.04 billion.
The company's adjusted profit per share for the reported quarter came in at $1.28, compared with estimates of $1.22.