Cadence Design Systems, Inc. (CDNS)

Business

Source: FY2025 Form 10-K, accession 0000813672-26-000016.

Cadence sells the software, emulation and prototyping hardware, and silicon intellectual property (IP) that engineers use to design and verify semiconductors and the electronic systems built around them. Its customers are semiconductor companies and systems companies (hyperscalers, automotive, aerospace and defense, mobile, consumer and industrial manufacturers) that design electromechanical products containing chips. No single customer accounted for 10% or more of revenue in fiscal 2025 or 2024. Fiscal 2025 revenue was $5.297 billion, 91% of it product and maintenance and 9% services.

Most revenue is recurring. Software is licensed mainly under time-based licenses, typically two to three years with no right of return, often with the right to remix products during the term; a small portion is perpetual. Hardware is sold or leased, or reached through a Cadence-managed cloud. Design IP is licensed per design, sometimes with royalties as customers ship chips containing it. In fiscal 2025, 80% of revenue was recurring (recognized over time, plus short-term renewable and committed-spend arrangements) and 20% up-front, mainly hardware, individual IP licenses and certain multi-year software licenses. Contracted but unsatisfied performance obligations (backlog) were $7.8 billion at December 31, 2025, of which 53% (excluding $0.6 billion of non-cancelable commitments) was expected to be recognized within 12 months.

Cadence reports one operating segment and groups its offerings into three product categories, which made up these shares of fiscal 2025 revenue:

• Core EDA (70%), software and hardware for designing and verifying chips: the Virtuoso platform for custom and analog design, Innovus for large digital designs and signoff, Jasper formal verification and Xcelium simulation, and the Palladium emulation and Protium FPGA prototyping hardware that large AI, GPU and processor designs depend on. Fiscal 2025 additions included agentic-AI verification technology and VLAB Works virtual prototyping for automotive software.
• Semiconductor IP (14%), interface and memory controllers and PHYs (PCI Express, CXL, HBM, GDDR, SerDes, USB), Tensilica configurable DSPs and verification IP. In fiscal 2025 Cadence added the Arm Artisan foundation IP business (standard cells, memory compilers, I/Os) and Secure-IC (embedded security IP).
• System Design and Analysis (16%), PCB and advanced-packaging design (Allegro X, OrCAD X), signal and power integrity (Sigrity X), RF (AWR), electromagnetic, thermal and fluid-dynamics simulation (Clarity, Celsius, Fidelity), 3D-IC design (Integrity), the Millennium multiphysics platform and Reality digital-twin software for data centers, plus molecular simulation for drug discovery. The fiscal 2024 BETA CAE acquisition and the Hexagon design and engineering business (closed February 2026; see Current quarter) extend this category into structural and multibody simulation.

Management describes three demand horizons for its AI-driven strategy: infrastructure AI (high-performance computing and AI chips for data centers), physical AI (autonomous vehicles, robotics, industrial automation) and life-sciences AI. The underlying driver is rising design complexity. Customers buy tools that improve power, performance and area without a matching rise in engineering headcount.

Cadence names Synopsys (which now owns Ansys) and Siemens EDA as its key competitors, along with Keysight, Schrödinger, CEVA, Altium (owned by Renesas), Zuken, in-house tool teams at large electronics companies, and a growing group of Chinese EDA vendors including Huada Empyrean, Xpeedic, X-EPIC, Primarius, Univista and Giga Design Automation. Hardware is built by subcontractors. Cadence had approximately 13,800 employees at December 31, 2025, a substantial majority in engineering roles. It has never paid a dividend and returns capital through share repurchases.

Risk factors

Source: FY2025 Form 10-K, Item 1A, accession 0000813672-26-000016, with updates from the Q3 2026 Form 10-Q, Part II Item 1A, accession 0000813672-26-000121.

The risks below are the ones most specific to Cadence's economics and circumstances:

• Export controls and China. China is a large market for Cadence, and U.S. trade rules directly limit what it can sell there. On May 23, 2025 the Commerce Department's Bureau of Industry and Security (BIS) required licenses for EDA software exports to China. That requirement was rescinded on July 2, 2025, but it reduced China revenue while in force, and the company warns it could be reimposed. A BIS rule extending Entity List restrictions to entities 50% or more owned by listed parties took effect September 29, 2025, then was suspended through November 9, 2026. The Q3 2026 10-Q notes that a U.S.–China extension of trade arrangements to January 10, 2027 is expected to extend that suspension, but BIS had not formally done so. Restrictions also push Chinese customers toward domestic EDA vendors, consistent with China's stated goal of leading every segment of the semiconductor industry by 2030.
• The BIS/DOJ export settlement. In July 2025 Cadence settled export-control violations from 2015–2021 involving $45.3 million of sales by a subsidiary to a customer in China. It pleaded guilty to one count of conspiracy to commit export-control violations, paid aggregate net penalties and forfeitures of $140.6 million, and accepted a three-year probationary term with compliance, reporting, audit and cooperation obligations. Compliance with the BIS agreement is a condition of continued export privileges. The obligations extend to businesses Cadence acquires and to any acquirer of Cadence, which could limit or deter deals. The settlements also expose the company to further inquiries, including in China.
• Revenue timing and concentration in semiconductors. Hardware and IP revenue is recognized on delivery, so quarterly results swing with the timing of shipments. Recurring software revenue, recognized over time, makes it hard to accelerate growth quickly, and a bookings shortfall depresses future periods. Demand depends on new design starts in a cyclical semiconductor and electronics industry, where consolidation can concentrate bargaining power in fewer, larger customers.
• Competition and technology pace. Competitors include much larger combined rivals (Synopsys with Ansys), aggressive pricing, new entrants and customers' in-house tools. Cadence must keep pace with each new process node, 3D packaging and the shift to AI-driven design, and its R&D spending (33% of fiscal 2025 revenue) may not earn an adequate return.
• AI execution and regulation. Cadence is investing heavily in generative and agentic AI products. Rivals may move faster, the market may develop more slowly, and AI regulation (the EU AI Act carries fines up to 7% of worldwide turnover) and unsettled IP law around AI add compliance and litigation exposure.
• Acquisitions and integration. Cadence acquires businesses regularly, the largest being the roughly $3.0 billion Hexagon design and engineering purchase in 2026. Acquisitions can dilute margins and earnings at first, take time to integrate and to bring up to Cadence's security standards, and face growing antitrust and foreign-investment review, including U.S. outbound-investment rules effective January 2, 2025.
• Cybersecurity. Cadence holds customer design data and its own source code. The Q3 2026 10-Q discloses that, as first reported for the quarter ended March 31, 2026, a threat actor obtained a limited amount of test, configuration and source-code files that the company says are not material. Cadence says there was no operational disruption and customer environments were not affected.
• Supply chain for hardware. Palladium and Protium systems rely on single or limited suppliers and contract manufacturers. Disruptions have delayed deliveries before and could again.
• Geopolitics and international operations. More than half of revenue has historically come from outside the U.S., about a third of costs are in foreign currencies, and key R&D sites are abroad. The Q3 2026 10-Q's updated risk factor cites armed conflicts including in Iran, the Middle East and Ukraine, Taiwan's role in the chip supply chain, tariffs, and retaliatory Chinese measures such as export controls on rare earths and an "unreliable entity list".
• Cash location and debt. Cadence carries $2.5 billion of senior notes and a revolving credit facility whose covenants include a funded-debt-to-EBITDA ceiling. A large share of its cash is held by foreign subsidiaries: 29% at December 31, 2025 and about 85% at September 30, 2026, per the Q3 10-Q. If U.S. cash falls short of U.S. needs, Cadence may have to raise funds on less attractive terms. A credit-rating downgrade would raise borrowing costs.
• Tax. A significant share of earnings comes from subsidiaries in Ireland and Hungary. Cadence's tax rate is exposed to global minimum tax (Pillar Two) rules, audits, and lower-than-expected earnings in low-tax jurisdictions.

Management's discussion, fiscal 2025

Source: FY2025 Form 10-K, Item 7 and financial statements, accession 0000813672-26-000016.

Revenue grew 14% to $5,296.8 million from $4,641.3 million. Product and maintenance revenue rose 14% to $4,821.6 million on software, hardware and IP growth that management attributes to customers' continued investment in complex designs. Services rose 11% to $475.2 million on cloud and IP services. Every region grew: the United States rose 7% to $2,311.0 million (44% of revenue), China 19% to $680.0 million (13%), Other Asia 17% to $1,005.2 million, EMEA 13% to $790.6 million, Japan 31% to $341.7 million, and Other Americas 81% to $168.3 million. The China figure was achieved despite lower software deliveries there while the May–July 2025 BIS license requirement was in force. The recurring share of revenue fell to 80% from 83% as up-front hardware and IP grew faster.

Total operating expenses rose 12% to $2,884.8 million. Research and development increased 14% to $1,768.8 million, mostly on headcount, including from acquisitions. Marketing and sales rose 6% to $802.6 million, and general and administrative rose 14% to $313.4 million, partly on contributions to the Cadence Giving Foundation and acquisition-related professional fees. Income from operations was $1,492.0 million. Operating margin slipped to 28% from 29%, which management attributes primarily to the $128.5 million charge for the BIS/DOJ settlement. A restructuring plan begun in September 2025 added $29.2 million of charges for the year.

Interest expense rose to $116.5 million from $76.0 million, a full year of interest on the $2.5 billion of senior notes issued in September 2024. The effective tax rate was 27.1% versus 24.4%, including $33.4 million of tax expense because the settlement loss is not deductible. Net income was $1,108.9 million, or $4.06 per diluted share, versus $1,055.5 million, or $3.85.

Operating cash flow rose to $1,728.8 million from $1,260.6 million on higher business levels and timing of collections, partly offset by the settlement payments. The U.S. law enacted July 4, 2025 (the One Big Beautiful Bill Act) restored immediate expensing of U.S. R&D and cut fiscal 2025 cash taxes by about $151 million. Cash used for investing was $460.5 million and cash used for financing $949.0 million, mainly share repurchases. Cash and equivalents ended the year at $3,001.3 million, with no revolver borrowings.

Three tuck-in acquisitions closed in fiscal 2025, each disclosed with its consideration:

• VLAB Works, acquired May 29, 2025, for $121.1 million net of cash acquired (Core EDA).
• The Arm Artisan foundation IP business, acquired August 26, 2025, for $128.5 million (Semiconductor IP).
• Secure-IC, acquired October 30, 2025, for $139.6 million net of cash acquired (Semiconductor IP).

At year-end the pending Hexagon deal was valued at approximately €2.70 billion, about €1.89 billion in cash and the rest in Cadence shares, with closing expected in the first quarter of 2026. Management guided to a fiscal 2026 effective tax rate of about 27%.

Current quarter, Q3 fiscal 2026 (three months ended September 30, 2026)

Sources: Q3 2026 Form 10-Q, accession 0000813672-26-000121; Q3 2026 earnings release (Exhibit 99.01) and CFO commentary (Exhibit 99.02), Form 8-K accession 0000813672-26-000116.

Revenue grew 22%, helped by the Hexagon acquisition, while GAAP margin compressed. Revenue rose to $1,633.3 million from $1,338.8 million. Product and maintenance revenue grew 23% to $1,487.3 million and services 11% to $146.0 million. The 10-Q attributes product growth to software, hardware and IP demand from customers investing in complex designs. Contracts assumed with the Hexagon business are classified mainly in System Design and Analysis. By the earnings release's figures, Core EDA revenue grew 20%, IP 24% and System Design and Analysis 30% year over year, with hardware posting another record quarter. Category shares were 69% Core EDA, 15% IP and 16% System Design and Analysis. By region, the United States grew 27% to $674.1 million, EMEA 31% to $248.9 million, Other Asia 29% to $312.4 million and Japan 24% to $107.1 million. China grew 4% to $255.2 million, and Other Americas fell 17% to $35.6 million. Up-front revenue was 21% of the total versus 18% a year earlier. The trailing-twelve-month recurring share eased to 78%.

Costs grew faster than revenue. Total operating expenses rose 29% to $893.0 million. R&D was up 27% to $537.5 million, marketing and sales up 26% to $242.5 million, and general and administrative up 45% to $113.0 million, of which $25.4 million of the increase was higher charitable contributions. Amortization of acquired intangibles across cost of revenue and operating expense rose to $79.9 million from $26.0 million, mostly from Hexagon intangibles. Restructuring charges were $42.2 million under a plan begun in September 2026, consisting of severance from headcount reductions, with payments expected through September 2027. Operating margin fell to 26% from 32% (26.2% versus 31.8% in the release). The 10-Q gives three reasons: acquisition costs, including amortization, outpacing acquired revenue; the higher contributions; and product mix. Non-GAAP operating margin was 44.1% versus 47.6%.

Net income was $289.7 million versus $287.1 million, and diluted EPS was unchanged at $1.05. The effective tax rate was 29.0% versus 26.9%. Non-GAAP diluted EPS rose to $2.11 from $1.93. For the nine months, revenue rose 22% to $4,692.0 million and net income to $992.5 million ($3.61 per diluted share) from $720.8 million ($2.64). The nine-month gain partly reflects comparison with the 2025 settlement charge and includes $88.6 million of investment gains in other income. Nine-month operating margin was 28% versus 27%.

Hexagon design and engineering acquisition (closed February 23, 2026). Cadence acquired the design and engineering business of Hexagon Smart Solutions AB, including MSC Nastran structural analysis and Adams multibody dynamics software. Consideration was approximately $3.0 billion net of $154.6 million of cash acquired: $2.2 billion in cash plus 3.2 million Cadence shares valued at $902.2 million. The issuer's February 23, 2026 Form 8-K (accession 0000813672-26-000019) reports 3,224,473 shares issued to the seller. The preliminary allocation assigned $2,170.2 million to goodwill and $1,248.0 million to intangibles amortized over a weighted 7.8 years. On a pro forma basis, as if Hexagon had been owned throughout both periods, nine-month revenue would have been $4,755.6 million in 2026 versus $4,073.2 million in 2025. Cadence also completed three other, unnamed acquisitions in the first nine months of 2026 for an aggregate $83.8 million in cash, net of cash acquired.

Balance sheet and cash. Cash and equivalents fell to $1,452.0 million at September 30, 2026 from $3,001.3 million at year-end. Cash paid for business combinations, net of cash acquired, was $2,143.4 million for the nine months, mostly for Hexagon, and was the largest use of cash. About 85% of the remaining cash was held by foreign subsidiaries. Cadence borrowed $875.0 million and repaid $725.0 million on its revolver during the nine months, leaving $150.0 million outstanding. The $500 million of 4.200% notes due September 2027 are now classified as current. Debt principal stood at $2.65 billion. Nine-month operating cash flow was $1,414.4 million versus $1,175.3 million. For the third quarter alone, the CFO commentary reports operating cash flow of $424 million and free cash flow of $362 million. Cadence repurchased 1.3 million shares for $400.0 million in the quarter ($800.0 million year to date), leaving $601.6 million of authorization at quarter-end. Backlog reached a record $8.2 billion, of which about $4.2 billion was expected to be recognized in the next 12 months.

Guidance (from the October 26, 2026 release and CFO commentary). Management raised its fiscal 2026 revenue growth outlook for the third time this year:

• Revenue: $6.387–$6.417 billion, up from $6.260–$6.340 billion previously, about 21% growth at the midpoint.
• Operating margin: 28.2%–29.2% GAAP and 44.2%–45.2% non-GAAP.
• Diluted EPS: $4.84–$4.90 GAAP and $8.37–$8.43 non-GAAP.
• Cash and taxes: operating cash flow of about $2.0 billion, capital expenditures of about $240 million, and a GAAP tax rate of about 27%.
• Fourth quarter: revenue of $1.695–$1.725 billion, GAAP EPS of $1.23–$1.29 and non-GAAP EPS of $2.19–$2.25, with about $400 million of repurchases planned for the quarter.

On products, the release highlights the launch of Maestro, a set of AI models specialized for chip and system design, and more than 100 active customer engagements for its AI Super Agents.

Operating environment. In February 2026 the U.S. Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act. Tariffs under other statutes remain, and the administration has pursued new measures. Cadence says Middle East conflicts, including with Iran, have not materially affected its results to date.

Subsequent events

Source: Q3 2026 Form 10-Q, Note 8 and Part II Item 2, accession 0000813672-26-000121; Form 8-K Item 8.01, accession 0000813672-26-000116.

• Share repurchase authorization increased by $2.5 billion (October 23, 2026). After the quarter closed, the board approved up to an additional $2.5 billion of repurchases under the existing program, on top of the $601.6 million remaining at September 30, 2026. Repurchases may be made in the open market, in privately negotiated or accelerated transactions, or under Rule 10b5-1 plans. The program has no expiration date.

The 10-Q reports no other post-quarter acquisitions, divestitures, financings or litigation outcomes. The Hexagon acquisition and the other 2026 acquisitions closed within the reporting period and are covered above.

Filings that contain financial statements

Cadence is a domestic filer; its earnings releases (Exhibit 99.01 to Form 8-K Item 2.02) carry condensed income statements, balance sheets and non-GAAP reconciliations. Reader guidance for tracing numbers:

• Form 8-K filed 2026-10-26, accession 0000813672-26-000116: third quarter 2026 (three and nine months ended September 30, 2026). Balance sheet at September 30, 2026 and December 31, 2025, income statements, and GAAP to non-GAAP reconciliations.
• Form 8-K filed 2026-07-27, accession 0000813672-26-000089: second quarter 2026 (quarter and six months ended June 30, 2026) results tables.
• Form 8-K filed 2026-04-27, accession 0000813672-26-000044: first quarter 2026 (quarter ended March 31, 2026) results tables.
• Form 8-K filed 2026-02-17, accession 0000813672-26-000013: fourth quarter and fiscal year 2025 (year ended December 31, 2025) results tables.
• Form 8-K filed 2025-10-27, accession 0000813672-25-000144: third quarter 2025 (comparative period).
• Form 8-K filed 2025-07-28, accession 0000813672-25-000108: second quarter 2025 (comparative period).

Each earnings 8-K also furnishes a CFO commentary as Exhibit 99.02.

Earnings and guidance

• 2026-10-26 (Q3 2026), 0000813672-26-000116. Revenue $1.633 billion versus $1.339 billion in Q3 2025. GAAP operating margin 26.2% (31.8% a year earlier); non-GAAP operating margin 44.1% (47.6%). GAAP diluted EPS $1.05 (flat year over year); non-GAAP diluted EPS $2.11 (from $1.93). Backlog $8.2 billion, a record; revenue expected within 12 months from remaining performance obligations $4.2 billion. Full-year 2026 guidance raised: revenue $6.387 billion to $6.417 billion, GAAP operating margin 28.2% to 29.2%, non-GAAP operating margin 44.2% to 45.2%, GAAP EPS $4.84 to $4.90, non-GAAP EPS $8.37 to $8.43. The release states the revenue growth outlook is about 21% at the midpoint. The Q3 reconciliation shows amortization of acquired intangibles of $79.9 million (from $26.0 million) and restructuring of $42.2 million.
• 2026-07-27 (Q2 2026), 0000813672-26-000089. Revenue $1.584 billion versus $1.275 billion; GAAP EPS $1.33 versus $0.59 (Q2 2025 carried the export-settlement charge); non-GAAP EPS $2.11 versus $1.65; backlog $8.1 billion. Full-year revenue outlook raised to $6.26 billion to $6.34 billion (about 19% growth), non-GAAP EPS to $8.10 at the midpoint, operating cash flow to $2 billion at the midpoint.
• 2026-04-27 (Q1 2026), 0000813672-26-000044. Revenue $1.474 billion versus $1.242 billion; GAAP EPS $1.23 versus $1.00; non-GAAP EPS $1.96 versus $1.57; backlog $8.0 billion. Full-year revenue outlook raised to a range of $6.125 billion to $6.225 billion (about 17% growth).
• 2026-02-17 (Q4 and fiscal 2025), 0000813672-26-000013. Q4 revenue $1.440 billion versus $1.356 billion. Fiscal 2025 revenue $5.297 billion versus $4.641 billion; GAAP operating margin 28.2%; non-GAAP operating margin 44.6%; GAAP EPS $4.06; non-GAAP EPS $7.14. Year-end backlog $7.8 billion.
• 2025-10-27 (Q3 2025), 0000813672-25-000144. Revenue $1.339 billion versus $1.215 billion; GAAP EPS $1.05; non-GAAP EPS $1.93; backlog $7.0 billion; 2025 revenue outlook raised to about 14% growth.
• 2025-07-28 (Q2 2025), 0000813672-25-000108. Revenue $1.275 billion versus $1.061 billion; GAAP EPS $0.59 including a one-time charge for the $140.6 million DOJ and BIS settlements; non-GAAP EPS $1.65; backlog $6.4 billion. 2025 revenue outlook raised to 13% growth.

M&A

• Hexagon design and engineering business: signed 2025-09-04, closed 2026-02-23.
  • Signing (Form 8-K 0000813672-25-000126): Equity Purchase Agreement with Hexagon Smart Solutions AB at an enterprise value of EUR 2.70 billion, about EUR 1.89 billion in cash and about EUR 810 million in newly issued Cadence shares. Reverse termination fee of up to EUR 175 million if regulatory approvals fail. Closing was expected in the first quarter of 2026.
  • Closing: Form 8-K 0000813672-26-000019 reports that in connection with consummation of the acquisition on February 23, 2026, Cadence issued 3,224,473 shares of common stock to the seller. The Form 10-Q for the quarter ended September 30, 2026 (0000813672-26-000121) states Cadence "acquired all of the outstanding equity" of the business, with consideration net of $154.6 million cash acquired of approximately $3.0 billion: $2.2 billion cash plus 3.2 million shares valued at $902.2 million. Purchase price allocation is still preliminary at September 30, 2026. The acquisition expands the System Design and Analysis portfolio.
• Other 2026 acquisitions. The same 10-Q reports three other completed business combinations in the first three quarters of 2026 for aggregate cash consideration of $83.8 million, net of cash acquired. No separate 8-K covered them.

Capital actions

• 2026-10-23 board action, reported 2026-10-26 (0000813672-26-000116). Board approved an additional $2.5 billion for the share repurchase program. The release states $400 million was used for repurchases in Q3 2026; the 10-Q states $601.6 million of authorization remained at September 30, 2026, before the new $2.5 billion.
• 2025-05-08 (Form 8-K 0000813672-25-000061). Board approved up to an additional $1.5 billion of repurchases.
• Debt. The 10-Q (0000813672-26-000121) shows $150.0 million outstanding on the $1.25 billion revolving credit facility at September 30, 2026 (nine-month borrowings $875 million, repayments $725 million), and the $500 million 4.200% Senior Notes due September 2027 classified as current. No debt issuance 8-K was filed in the period; the financing of the cash portion of the Hexagon deal was described in the signing 8-K as cash on hand and existing debt facilities.

Legal and regulatory

• Export-control settlement, 2025-07-27 (Form 8-K 0000813672-25-000109). Cadence reached settlements with the Bureau of Industry and Security and the Department of Justice covering export violations from 2015 to 2021, involving sales of $45.3 million to a customer in China. Cadence agreed to plead guilty to one count of conspiracy to commit export controls violations (three-year probation, subject to court approval) and entered an administrative settlement with BIS. Aggregate net penalties and forfeitures of $140.6 million were due in the quarter ending September 30, 2025; the 10-Q confirms they were paid in that quarter and that a $128.5 million charge was recorded in the nine months ended September 30, 2025.
• China EDA license requirement, 2025-05-23 (Form 8-K filed 2025-05-29, 0000813672-25-000079), rescinded 2025-07-02 (Form 8-K filed 2025-07-03, 0000813672-25-000093). BIS required licenses for certain EDA software exports to parties in China or Chinese military end users; BIS rescinded the requirement effective immediately on July 2, 2025, and Cadence began restoring customer access.

Board and management

• 2025-11-17 (0000813672-25-000157): Dr. Luc Van den hove, then president and chief executive officer of imec (chair of imec's board from April 1, 2026), appointed a director effective January 1, 2026. Amended filing 0000813672-26-000066 (filed 2026-05-12) reports he joined the Compensation Committee on May 7, 2026.
• 2026-05-07 annual meeting (Form 8-K 0000813672-26-000067): eleven directors elected; stockholders approved an amendment to the Omnibus Equity Incentive Plan adding 5,000,000 shares and removing its fixed term.
• 2025-05-08 annual meeting (0000813672-25-000061): ten directors elected.

Other

• 2025-09-04 (0000813672-25-000126) also covers the unregistered share issuance for the Hexagon consideration under Item 3.02.
• Nothing in the 8-K record to date reports a new pending acquisition or a guidance cut.

About this file

CDNS annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

CDNS quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

CDNS year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

CDNS trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

Adjustments

Notes

• Template: a software company. Cadence reports revenue in two lines, product and maintenance and services, and lists its costs and expenses in one block. The income statement does not print a gross profit line.
• Sources: the three fiscal years come from the FY2025 Form 10-K (accession 0000813672-26-000016). The income statement and cash flow statement cover 2023, 2024 and 2025; the balance sheet covers December 31, 2025 and 2024, so FY2023 has no balance sheet here. The quarters, the nine-month periods and the September 30, 2026 balance sheet come from the Q3 2026 Form 10-Q (accession 0000813672-26-000121).
• cost_of_revenue is cost of product and maintenance plus cost of services, and gross_profit is total revenue less that sum. Both are derived. They give a GAAP gross margin of 85.6% for Q3 2026 and 86.4% for Q3 2025, the same as the company's CFO commentary for the quarter.
• Signs follow the statements: amounts printed in parentheses are stored as negative numbers. These include interest expense, treasury stock, capital expenditures, cash paid in business combinations, share repurchases and net investing or financing outflows.
• Quarterly cash flow: the 10-Q prints its cash flow statement for the nine months only. The three-month operating cash flow, capital expenditures and free cash flow for Q3 2026 and Q3 2025 come from the CFO commentary furnished as Exhibit 99.02 to the Form 8-K filed October 26, 2026 (accession 0000813672-26-000116), and each quarter records that accession as its cash_flow_source_accession. That table is in millions. It prints capital expenditures as a positive amount, which is stored here as a negative outflow to match the other periods.
• Free cash flow for the fiscal years and nine-month periods is derived: net cash provided by operating activities less purchases of property, plant and equipment. This is the definition used in the company's own quarterly free cash flow table.
• total_liabilities is derived as total current liabilities plus total long-term liabilities, because the balance sheet prints those two subtotals but no grand total. total_debt is the revolving credit facility plus the current portion of long-term debt plus long-term debt, at their balance sheet carrying amounts. At December 31, 2025 and 2024 the balance sheet shows long-term debt only. At September 30, 2026 it shows $150.0 million drawn on the revolving credit facility and a $498.8 million current portion of long-term debt.
• shares_outstanding is the share count closing each period in the statements of stockholders' equity, which are in thousands. The 274,379,000 shares at September 30, 2026 equal the count on the 10-Q cover.
• Trailing twelve months to September 30, 2026 is derived as FY2025 plus the nine months of 2026 less the nine months of 2025, using the 10-K and 10-Q figures. No trailing-twelve-month per-share figure is derived.
• Restructuring: the 10-Q prints $42.2 million for Q3 2026 and $41.8 million for the nine months of 2026. Both figures are recorded as filed. The nine-month figure is below the Q3 charge because the first two quarters of 2026 recorded small net restructuring credits totaling $0.4 million: $(5) thousand for the quarter ended March 31, 2026 (Q1 2026 earnings release, Exhibit 99.1 to accession 0000813672-26-000044) and $(352) thousand for the quarter ended June 30, 2026, $(357) thousand for the six months (Q2 2026 earnings release, Exhibit 99.1 to accession 0000813672-26-000089).
• The 2026 figures include the design and engineering business of Hexagon Smart Solutions AB, which Cadence acquired on February 23, 2026. The 10-Q puts the consideration at about $3.0 billion net of cash acquired: $2.2 billion in cash plus 3.2 million Cadence shares with an acquisition-date fair value of $902.2 million. Cash paid in business combinations, net of cash acquired, was $2.14 billion for the nine months.
• The FY2025 and nine-month 2025 income statements include a $128.5 million loss related to a contingent liability, a line the 10-Q's income statement cross-references to its Note 15. There is no such loss in 2026.
• No restatement: the December 31, 2025 balance sheet in the 10-Q matches the 10-K.
• No adjustments applied. The company reports in US dollars, its shares are not ADRs, and it had no stock splits in the periods presented. The cash flow statements show no dividend payments in any period.

Uncertainties

• The Q3 2026 and Q3 2025 operating cash flow, capital expenditures and free cash flow come from a millions-rounded table in the earnings-release CFO commentary, not from an audited or reviewed statement. The three 2026 quarters in that table sum to $1,415 million of operating cash flow and $164 million of capital expenditures. The 10-Q's nine-month statement prints $1,414.4 million and $163.3 million.

Company details

Fiscal period

Source filings