Cadence Design Systems Inc.
CDNSFinancial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$1.5B
Q4 2025 · +13% YoY
TTM ROIC
40%
FY2025 · Non-GAAP NOPAT / Invested Capital (Equity + Debt - Cash) · WACC ~8.5% · Moat spread +31.5pp
Financial Snapshot
ticker: CDNS step: 04 generated: 2026-05-12 source: quick-research
Cadence Design Systems (CDNS) — Financial Snapshot
Income Statement Summary
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | YoY (25) |
|---|---|---|---|---|---|
| Revenue | $3.56B | $4.09B | $4.64B | $5.29B | +14% |
| Gross Margin | 89.5% | 89.4% | 86.4% | 86.1% | |
| Non-GAAP Op Margin | 42.0% | 42.4% | 42.5% | 44.6% | |
| Net Income (GAAP) | $0.85B | $1.04B | $1.06B | $1.30B | |
| Diluted EPS (GAAP) | $3.06 | $3.78 | $3.85 | $4.71 | |
| Adjusted EPS | $4.13 | $5.15 | $5.81 | $6.95 | +20% |
Cadence delivered 14% revenue growth in 2025 with a 44.6% non-GAAP operating margin — best-in-class profitability for software. Record $7.8B exiting backlog.
Cash Flow & Balance Sheet (FY2024)
| Metric | Value |
|---|---|
| Operating Cash Flow | ~$1.25B |
| Free Cash Flow | ~$1.12B |
| FCF Margin | ~24% |
| Cash & Equivalents | ~$2.6B |
| Total Debt | ~$2.5B (post 2024 debt issue) |
| Stock-based Comp | ~$350M |
Key Ratios (approximate)
- P/E: ~75x GAAP / ~50x Adj | EV/EBITDA: ~38x | FCF Yield: ~1.2%
- Revenue Growth (TTM): ~14% | Op Margin: ~45%
- Forward P/E: ~40x | EV/Revenue: ~15x
Growth Profile
Cadence has compounded revenue at 12-15% annually over the past decade. The AI inflection (chiplet design + HBM4/PCIe IP + agentic AI workflows) is structural — every leading AI chip uses Cadence tools. Backlog $7.8B provides ~1.5 years revenue visibility. Hardware (Palladium emulation) demand is structurally accelerating with AI chip verification complexity.
Forward Estimates
- FY 2026 (raised): Revenue $6.13-6.23B (~16% growth); GAAP diluted EPS $4.39-4.49; non-GAAP EPS ~$8.05-8.15
- FY 2027: Consensus ~$7.0B+ revenue; adj EPS ~$9.50
- AI design tailwind + IP segment +20% drive multi-year outlook
Deeper Financial Analysis
The fundamental tier adds 9 additional research dimensions for $CDNS.
Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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