CADENCE DESIGN SYSTEMS (CDNS) Company Report

Cadence ended Q3 with a record backlog, achieved 14% year-to-date revenue growth, and anticipates another record backlog at Q4 close.
Management outlined three AI phases—infrastructure (now–5 years), physical AI (3–7 years), and sciences AI (5–10 years)—and is applying AI to its EDA tools to target 10× productivity improvements.
The Hexagon acquisition enhances Cadence’s systems segment by integrating multibody simulation for physical AI and complements its existing 3D IC offerings.
Cadence sustains a 44–45% operating margin with organic incremental margins near 60%, allocates half of free cash flow to share buybacks, and maintains disciplined capital deployment despite selective M&A.

3 days ago

Transcript

Cadence outlines AI-driven expansion at UBS 2025 tech conference

CDNS

Guidance Update

M&A

Cadence provides software, IP and hardware to design virtually all modern chips, with 45% of revenue from system companies such as automakers and hyperscalers.
The company ended Q3 with a record backlog, expects another record at Q4, and reiterated 2025 revenue growth of 14% with ~44.5% margins and a five-year CAGR of 14%.
Management highlighted three AI phases—infrastructure (current), physical (3–7 years out) and sciences (5–10 years out)—noting chip-design workload could grow 30–40× by 2030 and AI-augmented EDA tools can deliver 10× productivity gains.
Cadence is acquiring Hexagon’s D&E business to strengthen physical AI simulation and expand its systems segment alongside 3D-IC offerings.

3 days ago

Transcript

Cadence Design Systems CFO highlights AI-driven growth and backlog strength at Wells Fargo TMT Summit

CDNS

Guidance Update

M&A

CFO John Wall said Cadence raised its full-year revenue growth guidance to 14%, up from about 12% at the start of 2025, driven by surging AI workloads and cross-business strength in EDA, IP, and system design analysis.
The company exited Q3 with a record backlog, underpinned by multi-year contracts and broad-based demand, and expects to finish Q4 with another all-time high backlog.
Hardware systems demand (Z2/Z3) remains robust as customers upgrade for higher capacity within existing data-center footprints, with lead times managed at 8–22 weeks amid ongoing supply-chain expansions.
Cadence announced the pending acquisition of Hexagon’s MSC business (≈$280 million standalone revenue), targeting 50%+ incremental margin within 12–15 months post-close.
China operations have shown resilience post-restrictions, with prioritized hardware shipments for the region, though growth is expected to moderate due to limited access to leading-edge technology.

Nov 18, 2025, 4:45 PM

Transcript

Cadence Design Systems highlights AI-driven growth and M&A at TMT Summit

CDNS

Guidance Update

Revenue Acceleration/Inflection

M&A

CFO John Wall emphasized Cadence’s role as central to AI infrastructure, noting that its engineering software has driven low-teens revenue growth and improving operating leverage over the past decade.
2025 revenue guidance was raised to ~14% growth (from an initial 12%), reflecting broad strength in EDA, IP, and system design analysis fueled by complex AI and HPC workloads.
The company is exiting Q3 and Q4 with a record backlog of multi-year contracts across all businesses, underpinning strong visibility into 2026 demand.
The hardware emulation cycle remains in the “early innings,” with customers upgrading from Z2 to Z3 for double the capacity, prompting investments to maintain 8–22 weeks of lead time amid tight supply.
Cadence is expanding its SDNA portfolio through the planned acquisition of MSC (~$280 million annual revenue), targeting >50% incremental margin within 12–15 months and unlocking cross-sell opportunities.

Nov 18, 2025, 4:45 PM

Transcript

Cadence highlights AI-driven demand, record backlog, and strategic M&A at Wells Fargo TMT Summit

CDNS

Revenue Acceleration/Inflection

M&A

Cadence emphasized its central role in the AI infrastructure stack, achieving low-teens organic revenue growth over the past decade with improving operating leverage.
The company exited Q3 with a record backlog—the highest in 10 years—and expects to finish Q4 similarly, driven by escalating design complexity across EDA, IP, and system-design analysis.
Hardware emulation demand remains in the “early innings,” with Cadence managing lead times of 8–22 weeks by scaling production and maintaining a multiyear view on customer refresh cycles.
The planned acquisition of MSC (announced September 2025) will bolster Cadence’s System Design and Analysis portfolio, targeting 50%+ incremental margins within 12–15 months through revenue and cost synergies.

Nov 18, 2025, 4:45 PM

Transcript

Cadence Design Systems: NVIDIA and Samsung Build AI Factory

CDNS

New Projects/Investments

NVIDIA announced plans with Samsung to build a new AI factory powered by 50,000 NVIDIA GPUs, integrating accelerated computing directly into advanced chip manufacturing.
The collaboration aims to set a global benchmark for AI-driven semiconductor manufacturing, enabling predictive maintenance, process improvements and increased operational efficiency in autonomous fab environments.
The AI factory will harness NVIDIA GPUs, CUDA-X libraries and EDA solutions from Synopsys, Cadence and Siemens to accelerate circuit simulation, verification and manufacturing analysis.
Samsung is deploying NVIDIA Omniverse digital twins, RTX PRO servers and NVIDIA cuLitho, achieving 20x performance gains in computational lithography to shorten design-to-operations time.

Oct 31, 2025, 6:00 AM

Press Release

Cadence announces Q3 2025 results and raises full-year guidance

CDNS

Earnings

Guidance Update

Share Buyback

Cadence delivered Q3 revenue of $1.339 billion, with GAAP EPS $1.05 and non-GAAP EPS $1.93, and backlog grew to $7 billion.
Management raised its 2025 outlook to ~14% revenue growth and 18% EPS growth, targeting $5.262–$5.292 billion in revenue and $7.02–$7.08 non-GAAP EPS; Q4 revenue is guided at $1.405–$1.435 billion.
Q3 operating cash flow was $311 million; cash balance stood at $2.753 billion, debt at $2.5 billion, and Cadence repurchased $200 million of shares, planning to use >50% of free cash flow for buybacks.
Business momentum is driven by the AI megatrend across EDA, IP, hardware, and SDA, highlighted by the planned acquisition of Hexagon’s D&E unit to enhance physical AI capabilities.

Oct 27, 2025, 9:00 PM

Transcript

Cadence announces Q3 2025 earnings

CDNS

Earnings

Guidance Update

Share Buyback

Cadence reported Q3 2025 revenue of $1.339 B, GAAP operating margin 31.8%, non-GAAP operating margin 47.6%, GAAP EPS $1.05 and non-GAAP EPS $1.93, with backlog rising to $7.0 B.
Raised full-year 2025 revenue outlook to $5.262–$5.292 B (≈14% Y/Y growth) and non-GAAP EPS to $7.02–$7.08.
Q4 2025 guidance set at $1.405–$1.435 B revenue, GAAP EPS $1.17–$1.23 and non-GAAP EPS $1.88–$1.94.
Continued strong demand across AI-driven EDA, IP (tracking >20% growth) and hardware, supported by multi-year recurring EDA/IP backlog.
Ended Q3 with $2.753 B cash, $2.5 B debt, operating cash flow $311 M, and repurchased $200 M of shares, targeting ≥50% of free cash flow for buybacks.

Oct 27, 2025, 9:00 PM

Transcript

Cadence reports Q3 2025 results and raises full-year guidance

CDNS

Earnings

Guidance Update

Share Buyback

Cadence delivered Q3 revenue of $1.339 B, with 31.8% GAAP and 47.6% non-GAAP operating margins; EPS was $1.05 GAAP and $1.93 non-GAAP.
Cash balance stood at $2.753 B vs. debt of $2.5 B, operating cash flow was $311 M, and the company repurchased $200 M of shares; backlog grew to $7 B.
Raised full-year 2025 outlook to ~14% revenue growth and ~18% EPS growth, with revenue now expected at $5.262–5.292 B and non-GAAP EPS of $7.02–7.08.

Oct 27, 2025, 9:00 PM

Transcript

Cadence announces Q3 2025 results

CDNS

Earnings

Guidance Update

Share Buyback

Cadence reported Q3 revenue of $1.339 billion, GAAP operating margin of 31.8%, non-GAAP operating margin of 47.6%, GAAP EPS of $1.05, non-GAAP EPS of $1.93, and closed the quarter with cash of $2.753 billion and debt of $2.5 billion.
Q3 bookings lifted backlog to $7 billion, driven by broad-based demand in AI-related design across EDA, IP, hardware, and system analysis.
The company generated $311 million in operating cash flow and repurchased $200 million of shares during the quarter.
Cadence raised its full-year 2025 outlook to approximately 14% revenue growth and 18% EPS growth, with updated revenue guidance of $5.262 billion to $5.292 billion and non-GAAP EPS of $7.02 to $7.08.

Oct 27, 2025, 9:00 PM

Transcript

Earnings Transcripts

Quarterly earnings call transcripts for CADENCE DESIGN SYSTEMS.

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