Synopsys, a prominent player in the electronic design automation software industry, has announced a fiscal year 2025 revenue target of $6.8 billion. This projection reflects the company's cautious outlook amid recent U.S. government actions affecting its business in China. Specifically, the U.S. Department of Commerce has mandated that EDA software providers, including Synopsys, halt sales to Chinese firms as part of efforts to slow China's technological progress.

The company's revenue forecast of $6.75 billion to $6.8 billion slightly undercuts Wall Street's expectation of $6.91 billion, as reported by Reuters. China is a significant market for Synopsys, contributing approximately 16% to its overall revenue. The U.S. export restrictions are anticipated to decrease Synopsys’s revenue from the region. In response to the announcement of these restrictions, Synopsys’s share prices fell by 6.6% but saw a 3% recovery in after-hours trading.

In a strategic move to bolster its market position, Synopsys is pursuing the acquisition of Ansys, another engineering software company, for $35 billion. The U.S. Federal Trade Commission, however, has required that both companies divest certain assets to alleviate antitrust concerns. Amid these changes, Synopsys is closely monitoring geopolitical developments, particularly those affecting its operations in China.