(Reuters) – Synopsys Inc on Wednesday forecast third-quarter profit above Wall Street estimates after posting upbeat second-quarter results as increased use of artificial intelligence and automation boosts the chip-design software firm’s business.
The company last month said it had rolled out new artificial intelligence tools meant to get better results faster through all stages of designing computing chips.
Semiconductor firms rely on software from companies such as Synopsys to help them design faster and smaller chips.
Chip firms tend to continue investing in their research and development initiatives even during a semiconductor industry downturn, benefiting companies such as Synopsys.
Synopsys forecast adjusted earnings per share for the quarter ending July 31 of $2.70 to $2.75, the mid-point of which is above analysts’ average estimate of $2.70 per share.
It expects third-quarter revenue between $1.47 billion and $1.50 billion. Analysts on average estimate revenue of $1.48 billion, according to Refinitiv data.
Revenue in the second quarter ended April 30 came in at $1.4 billion, beating estimates of $1.38 billion. Adjusted profit per share of $2.54 was also above expectations of $2.46.
Revenue from Design Automation, its largest segment, rose 13.4% to $927.6 million from $817.8 million, a year ago.
Shares of the company rose 1.5% in extended trading.
(Reporting by Chavi Mehta and Manya Saini in Bengaluru; Editing by Vinay Dwivedi)
