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

Cadence Design Systems (NASDAQ:CDNS) issued its quarterly earnings data on Tuesday. The software maker reported $1.99 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.91 by $0.08, FiscalAI reports. The firm had revenue of $1.44 billion during the quarter, compared to analysts’ expectations of $1.42 billion. Cadence Design Systems had a net margin of 20.35% and a return on equity of 30.13%. During the same period last year, the company earned $1.88 earnings per share. The business’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 Performance

Shares of Cadence Design Systems stock opened at $283.46 on Wednesday. Cadence Design Systems has a 12 month low of $221.56 and a 12 month high of $376.45. The business has a fifty day simple moving average of $309.88 and a two-hundred day simple moving average of $328.89. The firm has a market capitalization of $77.16 billion, a P/E ratio of 73.06, a P/E/G ratio of 3.33 and a beta of 1.01. The company has a current ratio of 3.05, a quick ratio of 2.84 and a debt-to-equity ratio of 0.48.

More Cadence Design Systems News

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

• Positive Sentiment: Q4 beat — Cadence reported Q4 EPS of $1.99 and revenue of $1.44B, topping consensus and showing y/y revenue growth (~6.2%), which validates steady demand. Cadence Reports Fourth Quarter and Fiscal Year 2025 Financial Results
• Positive Sentiment: Very strong FY26 guide — management raised FY‑2026 EPS to $8.05–8.15 (well above Street expectations) and set revenue guidance roughly $5.9–6.0B, signaling confidence in multi‑year demand drivers. Cadence Reports Fourth Quarter and Fiscal Year 2025 Financial Results
• Positive Sentiment: AI‑linked demand highlighted — management and several reports point to strong AI-related design demand as a growth driver underpinning the beat and the raised guidance. Cadence beats quarterly profit and revenue estimates on strong AI-linked demand
• Neutral Sentiment: Call transcript and details available — the earnings call provides management commentary on product demand, backlog and cadence of revenue recognition; read the transcript for execution risks and cadence on AI bookings. Cadence Design Systems, Inc. (CDNS) Q4 2025 Earnings Call Transcript
• Neutral Sentiment: Analyst views mixed but generally constructive — several buy/overweight ratings and price targets remain above current levels (median targets near $390), while a few firms remain cautious; analyst re‑ratings can amplify intraday moves. Analysts Set Cadence Design Systems, Inc. (NASDAQ:CDNS) PT at $379.59
• Negative Sentiment: Insider selling and institutional repositioning noted — recent reporting shows material insider sales and large institutional shifts that can create selling pressure even after a beat. Cadence Design Systems (CDNS) stock rises on Q4 2025 Earnings
• Negative Sentiment: Valuation and technicals may prompt profit‑taking — Cadence trades at a rich P/E (~73) and has recently been below its 50‑day and 200‑day moving averages, factors that can trigger rotation out of the name despite strong fundamentals.

Wall Street Analysts Forecast Growth

Several brokerages have recently commented on CDNS. Weiss Ratings reiterated a “hold (c)” rating on shares of Cadence Design Systems in a report on Monday, December 29th. Robert W. Baird boosted their price objective 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. KeyCorp reissued an “overweight” rating and set a $405.00 price objective on shares of Cadence Design Systems in a report on Tuesday, October 28th. Wells Fargo & Company restated an “overweight” rating on shares of Cadence Design Systems in a research report on Wednesday. Finally, Wolfe Research reaffirmed an “outperform” rating and issued a $385.00 target price on shares of Cadence Design Systems in a research note on Tuesday, October 28th. Thirteen investment analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average price target of $379.59.

Insider Transactions at Cadence Design Systems

In other news, Director Ita M. Brennan sold 180 shares of the firm’s stock in a transaction dated Wednesday, December 10th. The shares were sold at an average price of $337.48, for a total transaction of $60,746.40. Following the sale, the director owned 7,650 shares of the company’s stock, valued at $2,581,722. This trade represents a 2.30% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, VP Paul Scannell sold 5,490 shares of the business’s stock in a transaction that occurred on Wednesday, December 10th. The shares were sold at an average price of $339.43, for a total transaction of $1,863,470.70. Following the transaction, the vice president directly owned 20,321 shares of the company’s stock, valued at $6,897,557.03. The trade was a 21.27% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 56,475 shares of company stock worth $18,505,486 over the last quarter. Corporate insiders own 0.37% of the company’s stock.

Institutional Investors Weigh In On Cadence Design Systems

Hedge funds have recently added to or reduced their stakes in the stock. Scge Management L.P. purchased a new position in shares of Cadence Design Systems in the 2nd quarter worth $187,663,000. Amundi lifted its holdings in Cadence Design Systems by 32.8% in the fourth quarter. Amundi now owns 1,984,842 shares of the software maker’s stock valued at $620,430,000 after acquiring an additional 489,930 shares during the period. CIBC Private Wealth Group LLC boosted its position in Cadence Design Systems by 164.0% in the fourth quarter. CIBC Private Wealth Group LLC now owns 331,882 shares of the software maker’s stock worth $103,740,000 after purchasing an additional 206,163 shares during the last quarter. First Trust Advisors LP grew its stake in shares of Cadence Design Systems by 50.7% during the 4th quarter. First Trust Advisors LP now owns 601,812 shares of the software maker’s stock valued at $188,114,000 after purchasing an additional 202,396 shares during the period. Finally, Caisse de depot et placement du Quebec increased its position in shares of Cadence Design Systems by 1,129.2% during the 4th quarter. Caisse de depot et placement du Quebec now owns 210,564 shares of the software maker’s stock valued at $65,818,000 after purchasing an additional 193,434 shares during the last quarter. 84.85% of the stock is currently owned by hedge funds and other institutional investors.

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.