Company Reports

Cadence Design Systems' second-quarter revenue grew 24% year over year to $1.58 billion, while non-GAAP operating margin expanded to 45.5%. Results were generally ahead of expectations, and management increased its full-year guidance.

Cadence Design Systems is a leading provider of electronic design automation software used by engineers to design semiconductor chips. EDA solutions are indispensable to major semiconductor design firms and a growing number of electronic systems companies that design products that use semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Cadence Design Systems is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to major semiconductor design firms, and increasingly a growing number of “electronic systems” companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Cadence reported a powerhouse first quarter to start 2026, with revenue growing 19% year over year and a record backlog of $8 billion. The firm raised its full-year revenue growth outlook to 17%.

Cadence Design Systems is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to major semiconductor design firms, and increasingly a growing number of “electronic systems” companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Cadence reported revenue growth of 6% and adjusted EPS growth of 6% in the fourth quarter of 2025. Meanwhile, the 2026 outlook was solid, reaffirming the firm's ability to grow revenue by double digits annually with margin expansion.

Cadence posted strong third-quarter results, with revenue up 10% year on year and non-GAAP operating margin coming in better than expected at 47.6%. China's revenue growth rate shot up to 53% year on year, and firmwide IP sales increased 10% over the previous year.

Cadence Design Systems is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to virtually every major semiconductor design company, and increasingly a growing number of “electronic systems” companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Cadence Design Systems is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to virtually every major semiconductor design company, and increasingly a growing number of “electronic systems” companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Cadence Design delivered strong second-quarter results, with revenue and profitability coming above the guided range and bookings stronger than expected. Additionally, broad-based strength in other regions offset the impact of the near-month-long export restrictions on China.

Leading electronic design automation companies Synopsys and Cadence Design have received approval from the US Department of Commerce to recommence their operations in China.

Cadence Design Systems is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to virtually every major semiconductor design company, and increasingly a growing number of “electronic systems” companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Reports have emerged suggesting that the Trump administration is asking semiconductor software design firms, known as electronic design automation, or EDA, to cease selling to China.

Cadence Design Systems is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to virtually every major semiconductor design company, and increasingly a growing number of “electronic systems” companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Wide-moat Cadence Design Systems reported first-quarter results that were largely in line with management’s guided range and our estimates, with no major surprises. After incorporating management’s slightly higher full-year guidance into our model, we maintain our fair value estimate of $300 per share. At current prices, we see the company as fairly valued. We believe that electronic design automation firms tend to be more stable than the semiconductor industry in general, given their placement in the value chain, an attractive feature in the current turbulence.

Wide-moat Cadence Design Systems reported 2024 results that were broadly in line with our expectations, but management’s cautious revenue outlook led us to reduce our near-term growth estimates. We've lowered our fair value estimate to $300 per share from $313, mainly driven by a deceleration of our 2025 revenue forecast to low-teens growth from midteens growth previously, as Cadence set a mild $5.18 billion 2025 guidance midpoint compared with our previous $5.46 billion estimate. With the stock falling roughly 12% in Feb. 19 trading, we view Cadence as mildly undervalued. We would not be surprised to see revenue growth outperform the initial outlook this year.

Cadence Design Systems is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to virtually every major semiconductor design company, and increasingly a growing number of “electronic systems” companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

Cadence is a leading provider of software tools used by engineers to design semiconductor chips. This software is referred to as electronic design automation software. EDA solutions are indispensable to virtually every major semiconductor design company, and increasingly a growing number of “electronic systems” companies, meaning companies that design a product that uses semiconductors, such as modern automobiles. The semiconductor industry does not function without companies like Cadence in the background.

We are raising our fair value estimate to $313 per share $250, as we transfer coverage to a new analyst, upgrade our moat rating to wide from narrow, and lower our cost of equity to 7.5% from 9%. With shares trading at close to $321, we now view shares as fairly valued.

Narrow-moat Cadence Design Systems delivered solid third-quarter results, surpassing our expectations on both the top and bottom lines. We have raised our fair value estimate to $250 per share from $240, reflecting management’s optimistic guidance for a strong year-end, driven by continued demand for hardware solutions and secular growth tailwinds. Our long-term outlook for Cadence remains positive, with artificial intelligence-driven chip demand fueling greater adoption of electronic design automation tools. The continued growth of generative AI trends is enhancing demand for Cadence’s digital and systems products, aligning with our double-digit revenue growth forecast.