Feb 25 (Reuters) - Synopsys' ( SNPS ) second-quarter revenue forecast fell short of investor expectations on Wednesday, as the chip design software maker navigates export restrictions in China and ​broader economic uncertainty.

Shares fell more than ‌5% in extended trading.

The company has faced a slowdown in China as ⁠export restrictions have prevented customers from starting new chip ⁠design projects, alongside weaker-than-expected demand from ‌a major foundry ‌customer.

Analysts have also flagged that the capacity shift toward AI chips is ​squeezing production of consumer ‌devices such as smartphones and PCs, hurting the company's IP segment, which licenses pre-made circuit designs.

Revenue ​from that segment fell ​more than ‌6% to $407 million in the first quarter from $435.1 million a year earlier.

"Excluding Ansys, China revenue declined slightly ⁠year-over-year, consistent with our outlook," CFO Shelagh Glaser ⁠said on the earnings call. Ansys contributed approximately $886 million to first-quarter revenue.

For the second quarter, the company forecast revenue of $2.23 billion to $2.28 billion, compared with analysts' consensus ⁠estimate ‌of $2.24 billion, according to data compiled by ‌LSEG. 

It projected adjusted earnings of $3.11 to $3.17 per share, against ⁠estimates of $3.09.

First-quarter revenue came in at $2.41 billion, beating estimates of $2.39 billion. Adjusted profit was $3.77 per share, topping the $3.56 consensus.

The company is also managing a heavy debt load taken on to fund its $35 billion acquisition of engineering simulation software firm Ansys, which ​closed in July 2025. 

In November, Synopsys ( SNPS ) initiated a restructuring plan to cut about 10% of its workforce and ​redirect investment toward other ‌opportunities.