Cadence Design Systems (NASDAQ:CDNS) Releases Quarterly Earnings Results, Beats Expectations By $0.06 EPS

Cadence Design Systems (NASDAQ:CDNS) announced its quarterly earnings data on Monday. The software maker reported $2.11 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.05 by $0.06, FiscalAI reports. Cadence Design Systems had a net margin of 23.60% and a return on equity of 29.34%. The business had revenue of $1.58 billion for the quarter, compared to the consensus estimate of $1.58 billion. During the same quarter last year, the company posted $1.65 earnings per share. Cadence Design Systems’s quarterly revenue was up 24.2% on a year-over-year basis. Cadence Design Systems updated its FY 2026 guidance to 8.050-8.150 EPS and its Q3 2026 guidance to 2.010-2.070 EPS.

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

• Cadence exceeded Q2 guidance, reporting 24% year-over-year revenue growth to $1.584 billion, a 45.5% non-GAAP operating margin, and record backlog of $8.1 billion.
• Management raised 2026 guidance to approximately 19% revenue growth, with revenue of $6.26 billion-$6.34 billion, non-GAAP EPS of $8.05-$8.15, and operating cash flow of about $2 billion.
• Demand for AI-driven design tools is accelerating, with Cadence citing strong early customer results for its agentic AI products, including productivity gains ranging from 2x to more than 40x; management views these tools as a long-term market expansion opportunity.
• Growth was broad-based, with IP revenue up more than 40%, core EDA up 18%, system design and analysis up 37%, and hardware reaching another record quarter; the company also highlighted a new multi-year Intel collaboration and deeper Samsung engagement.
• Cadence expects second-half margins to be somewhat lower as it invests in the Intel opportunity, agentic AI, and the integration of Hexagon’s design and engineering business; its outlook also assumes current export-control regulations remain substantially unchanged.

Cadence Design Systems Price Performance

Shares of Cadence Design Systems stock opened at $344.72 on Wednesday. The company has a debt-to-equity ratio of 0.38, a quick ratio of 1.32 and a current ratio of 1.47. The firm’s 50-day simple moving average is $373.90 and its 200-day simple moving average is $329.80. Cadence Design Systems has a twelve month low of $262.75 and a twelve month high of $416.69. The firm has a market cap of $95.08 billion, a P/E ratio of 68.53, a price-to-earnings-growth ratio of 4.01 and a beta of 1.15.

Analyst Ratings Changes

A number of analysts have weighed in on the stock. Needham & Company LLC reissued a “buy” rating and issued a $400.00 price target on shares of Cadence Design Systems in a report on Tuesday. Piper Sandler boosted their price objective on shares of Cadence Design Systems from $325.00 to $349.00 and gave the stock a “neutral” rating in a report on Tuesday. Oppenheimer reaffirmed a “market perform” rating and set a $300.00 price objective on shares of Cadence Design Systems in a research report on Tuesday. Rosenblatt Securities increased their target price on shares of Cadence Design Systems from $410.00 to $420.00 and gave the company a “buy” rating in a research note on Tuesday. Finally, Stifel Nicolaus lifted their target price on Cadence Design Systems from $395.00 to $432.00 and gave the stock a “buy” rating in a research report on Tuesday, June 9th. Thirteen equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company has an average rating of “Moderate Buy” and an average price target of $403.81.

Key Headlines Impacting Cadence Design Systems

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

• Positive Sentiment: Cadence reported second-quarter EPS of $2.11, exceeding the $2.05 consensus estimate, while revenue reached $1.58 billion and increased 24.2% year over year. Cadence Design Systems Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Management raised its full-year 2026 outlook, including revenue guidance of approximately $6.3 billion and EPS guidance of $8.05 to $8.15. Third-quarter EPS guidance of $2.01 to $2.07 also came in above the $1.84 analyst consensus. Cadence Raises Annual Forecasts as Demand Booms for AI Chip Design
• Positive Sentiment: Demand for AI-powered chip-design software and expanding “agentic AI” applications is driving broader use of Cadence’s core tools. The company also reported a record $8.1 billion backlog, supporting visibility into future growth. Cadence Stock Surges on Q2 Results and Record Backlog
• Positive Sentiment: Bank of America, Rosenblatt Securities and Robert W. Baird each raised their price targets to $420 and maintained bullish ratings. Needham reaffirmed its $400 Buy rating, signaling continued analyst confidence in Cadence’s earnings trajectory.
• Neutral Sentiment: Piper Sandler raised its price target from $325 to $349 but retained a Neutral rating, suggesting some analysts view the improved outlook as largely reflected in the stock’s valuation.

Insider Transactions at Cadence Design Systems

In other news, CEO Anirudh Devgan sold 51,887 shares of the company’s stock in a transaction that occurred on Friday, May 22nd. The stock was sold at an average price of $370.00, for a total value of $19,198,190.00. Following the sale, the chief executive officer directly owned 303,525 shares in the company, valued at approximately $112,304,250. This represents a 14.60% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director James D. Plummer sold 1,511 shares of the company’s stock in a transaction that occurred on Thursday, June 11th. The shares were sold at an average price of $381.34, for a total value of $576,204.74. Following the completion of the sale, the director owned 23,264 shares in the company, valued at approximately $8,871,493.76. This represents a 6.10% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders have sold 157,057 shares of company stock valued at $60,272,277. Corporate insiders own 0.49% of the company’s stock.

Institutional Trading of Cadence Design Systems

Several institutional investors have recently bought and sold shares of CDNS. Swiss RE Ltd. acquired a new position in Cadence Design Systems during the fourth quarter worth $29,000. Imprint Wealth LLC acquired a new stake in shares of Cadence Design Systems in the 3rd quarter valued at $31,000. Strategic Wealth Investment Group LLC acquired a new stake in shares of Cadence Design Systems in the 2nd quarter valued at $32,000. Kemnay Advisory Services Inc. bought a new stake in shares of Cadence Design Systems in the 4th quarter worth about $34,000. Finally, Greenline Wealth Management LLC bought a new stake in shares of Cadence Design Systems in the 4th quarter worth about $34,000. Institutional investors and hedge funds own 84.85% of the company’s stock.

About Cadence Design Systems

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.