Cadence Design Systems (NASDAQ:CDNS) Posts Quarterly Earnings Results, Beats Expectations By $0.08 EPS

Cadence Design Systems (NASDAQ:CDNS) posted its earnings results on Tuesday. The software maker reported $1.99 earnings per share for the quarter, topping analysts’ consensus estimates of $1.91 by $0.08, FiscalAI reports. Cadence Design Systems had a net margin of 20.35% and a return on equity of 30.13%. The firm had revenue of $1.44 billion for the quarter, compared to analysts’ expectations of $1.42 billion. During the same quarter in the previous year, the firm posted $1.88 earnings per share. The company’s revenue was up 6.2% on a year-over-year basis. Cadence Design Systems updated its Q1 2026 guidance to 1.890-1.950 EPS and its FY 2026 guidance to 8.050-8.150 EPS.

Here are the key takeaways from Cadence Design Systems’ conference call:

• Cadence finished FY‑2025 with strong financials — 14% revenue growth, ~45% non‑GAAP operating margin, $1.73B operating cash flow for the year, and $925M of share repurchases, signaling strong cash generation and capital return to shareholders.
• The company entered 2026 with a record backlog of $7.8B (about 67% of 2026 revenue expected from beginning backlog), providing high revenue visibility into the coming year.
• Management is pushing agentic AI broadly — launching ChipStack AI Super Agent and expanding Cerebrus/Verisium/Allegro X AI — claiming up to 10x productivity gains and endorsements from major customers, which could drive increased tool usage and new monetization opportunities.
• Hardware and IP businesses remain a growth engine — a record hardware year with >30 new customers and IP revenue up ~25% in 2025 (new IP titles and memory IP like LPDDR6 highlighted), supporting expectations for continued multi‑product demand.
• Guidance and modeling caveats — 2026 outlook excludes the pending Hexagon D&E acquisition and assumes existing export controls remain similar; management also flagged prudent conservatism around China and hardware visibility, creating uncertainty around upside.

Cadence Design Systems Stock Down 5.3%

Shares of NASDAQ CDNS opened at $283.46 on Wednesday. The stock has a market capitalization of $77.16 billion, a PE ratio of 73.06, a P/E/G ratio of 3.33 and a beta of 1.01. Cadence Design Systems has a one year low of $221.56 and a one year high of $376.45. The company has a debt-to-equity ratio of 0.48, a current ratio of 3.05 and a quick ratio of 2.84. The business’s fifty day moving average price is $309.88 and its 200-day moving average price is $328.89.

Insider Activity at Cadence Design Systems

In other news, Director Ita M. Brennan sold 180 shares of the firm’s stock in a transaction on Wednesday, December 10th. The stock was sold at an average price of $337.48, for a total value of $60,746.40. Following the completion of the transaction, the director directly owned 7,650 shares of the company’s stock, valued at $2,581,722. This trade represents a 2.30% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CFO John M. Wall sold 27,805 shares of the company’s stock in a transaction dated Tuesday, December 16th. The shares were sold at an average price of $318.57, for a total value of $8,857,838.85. Following the sale, the chief financial officer owned 69,957 shares in the company, valued at approximately $22,286,201.49. This represents a 28.44% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 56,475 shares of company stock worth $18,505,486 in the last ninety days. Insiders own 0.37% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in the company. State Street Corp raised its position in shares of Cadence Design Systems by 1.2% in the 3rd quarter. State Street Corp now owns 12,468,162 shares of the software maker’s stock worth $4,379,567,000 after acquiring an additional 149,577 shares in the last quarter. Schroder Investment Management Group raised its holdings in Cadence Design Systems by 2.5% in the fourth quarter. Schroder Investment Management Group now owns 2,126,393 shares of the software maker’s stock worth $671,090,000 after purchasing an additional 52,458 shares in the last quarter. Amundi lifted its position in Cadence Design Systems by 32.8% during the fourth quarter. Amundi now owns 1,984,842 shares of the software maker’s stock valued at $620,430,000 after buying an additional 489,930 shares during the period. Charles Schwab Investment Management Inc. boosted its holdings in shares of Cadence Design Systems by 2.5% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 1,951,311 shares of the software maker’s stock valued at $609,941,000 after buying an additional 47,382 shares in the last quarter. Finally, Wells Fargo & Company MN grew its position in shares of Cadence Design Systems by 4.7% in the 4th quarter. Wells Fargo & Company MN now owns 708,823 shares of the software maker’s stock worth $221,564,000 after buying an additional 31,825 shares during the period. Institutional investors own 84.85% of the company’s stock.

Wall Street Analysts Forecast Growth

A number of research analysts have recently issued reports on CDNS shares. Rosenblatt Securities reiterated a “neutral” rating and issued a $335.00 price objective on shares of Cadence Design Systems in a research note on Tuesday. Wells Fargo & Company lifted their price target on shares of Cadence Design Systems from $405.00 to $410.00 and gave the company an “overweight” rating in a research note on Tuesday, October 28th. Citigroup began coverage on shares of Cadence Design Systems in a report on Monday, November 24th. They set a “buy” rating and a $385.00 price objective on the stock. Robert W. Baird raised their target price on Cadence Design Systems from $390.00 to $418.00 and gave the company an “outperform” rating in a research note on Tuesday, October 28th. Finally, JPMorgan Chase & Co. boosted their target price on Cadence Design Systems from $390.00 to $405.00 and gave the company an “overweight” rating in a research report on Tuesday, October 28th. Thirteen analysts have rated the stock with a Buy rating and four have given a Hold rating to the stock. Based on data from MarketBeat.com, Cadence Design Systems presently has an average rating of “Moderate Buy” and a consensus target price of $379.59.

More Cadence Design Systems News

Here are the key news stories impacting Cadence Design Systems this week:

• Positive Sentiment: Q4 results: Cadence beat EPS estimates and showed revenue growth (revenue $1.44B, +6.2% Y/Y; EPS $1.99 vs. $1.90 consensus). The quarter also featured stronger gross profit, operating cash flow and higher cash balances—fundamentals that support longer‑term growth expectations. Cadence Design Systems (CDNS) Beats Q4 Earnings and Revenue Estimates
• Positive Sentiment: Aggressive forward guidance: Management set FY2026 EPS guidance of $8.05–8.15 and Q1 FY2026 EPS of $1.890–1.950, both well above sell‑side consensus (FY consensus ~5.45; Q1 consensus ~1.74). That upside to guidance is material and could support higher valuation if sustained. (Company guidance release)
• Neutral Sentiment: Company press release: Full financial results and conference call are available; investors will parse the call for color on AI-driven demand, backlog, and customer cadence to judge sustainability of the elevated guidance. Cadence Reports Fourth Quarter and Fiscal Year 2025 Financial Results
• Neutral Sentiment: Analyst coverage is mixed: several firms maintain buy/overweight ratings and high price targets (median target cited ~$390), while some firms are cautious; Rosenblatt reaffirmed a neutral rating with a $335 PT. These divergent views leave near‑term reaction driven by guidance verification. Rosenblatt neutral rating
• Negative Sentiment: Insider selling and institutional reductions: recent filings and data show many insider sales (multiple senior execs) and large institutional trims (e.g., UBS, BlackRock reduced holdings materially), which can pressure the stock and signal profit‑taking. Quiver Quant: Q4 results, insider and institutional activity
• Negative Sentiment: Valuation and modest quarter-over-quarter growth: despite the beat, revenue growth was single‑digit (6.2% Y/Y) and the stock trades at a high multiple (PE ~73), which can amplify downside if investors doubt the sustainability of the lofty guidance. Zacks: Key metrics vs. estimates

Cadence Design Systems Company Profile

Cadence Design Systems, Inc (NASDAQ: CDNS) is a global provider of electronic design automation (EDA) software, hardware and intellectual property used to design and verify advanced semiconductor chips, systems-on-chip (SoCs), printed circuit boards (PCBs) and packaging. Headquartered in San Jose, California and founded in 1988, Cadence serves semiconductor companies, original equipment manufacturers and system designers across the globe, helping customers accelerate design cycles and manage the complexity of modern integrated systems.

The company’s offerings span software tools for digital, custom/analog and mixed-signal design, verification and signoff, as well as solutions for system-level modeling, thermal and signal integrity analysis, and PCB and package design.