# Cadence Design Systems Inc. (CDNS) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-12  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/CDNS/thesis · /stocks/CDNS/memo

## 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 ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/CDNS/fundamental

## Navigation

- Overview: /stocks/CDNS
- Financials (this page): /stocks/CDNS/financials
- Thesis: /stocks/CDNS/thesis
- Investment Memo: /stocks/CDNS/memo
- Coverage universe: /stocks