Cadence Design Systems Inc. (CDNS) shares plummeted over 5% in extended trading on Tuesday after the semiconductor design software provider issued a disappointing revenue and profit outlook for fiscal 2025, overshadowing its better-than-expected fourth-quarter results.
For the fourth quarter, Cadence reported revenue of $1.36 billion, up 26.9% year-over-year, in line with analysts' consensus estimates. Adjusted earnings per share came in at $1.88, beating expectations of $1.82.
However, the company's guidance for fiscal 2025 fell short of Wall Street's projections. Cadence expects full-year revenue in the range of $5.14 billion to $5.22 billion, missing the consensus estimate of $5.25 billion. The company also forecasted adjusted earnings per share between $6.65 and $6.75, lower than the consensus of $6.82.
Analysts expressed concerns over the weaker-than-expected guidance, with some citing the potential impact of macroeconomic headwinds on the semiconductor industry. "While Cadence's Q4 results were solid, the company's outlook for 2025 missed expectations, likely due to a more cautious stance amid the ongoing chip industry downturn," said one analyst at Evercore ISI.
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