Cadence Design Systems (NASDAQ:CDNS) Issues Earnings Results, Beats Estimates By $0.06 EPS

Cadence Design Systems (NASDAQ:CDNS) posted its quarterly earnings results 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. The firm had revenue of $1.58 billion for the quarter, compared to analyst estimates of $1.58 billion. Cadence Design Systems had a net margin of 21.18% and a return on equity of 28.44%. The company’s quarterly revenue was up 24.2% compared to the same quarter last year. During the same period in the prior year, the firm posted $1.65 earnings per share. 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

Cadence Design Systems stock opened at $338.61 on Tuesday. The stock’s fifty day moving average price is $373.77 and its two-hundred day moving average price is $329.63. The firm has a market cap of $93.40 billion, a PE ratio of 78.93, a price-to-earnings-growth ratio of 3.86 and a beta of 1.15. The company has a debt-to-equity ratio of 0.38, a current ratio of 1.47 and a quick ratio of 1.32. Cadence Design Systems has a one year low of $262.75 and a one year high of $416.69.

Insider Activity at Cadence Design Systems

In related news, VP Paul Cunningham sold 2,000 shares of the firm’s stock in a transaction on Monday, June 15th. The stock was sold at an average price of $391.00, for a total value of $782,000.00. Following the transaction, the vice president owned 126,586 shares in the company, valued at approximately $49,495,126. This trade represents a 1.56% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, VP Paul Scannell sold 7,081 shares of the business’s stock in a transaction dated Monday, June 1st. The shares were sold at an average price of $393.91, for a total value of $2,789,276.71. Following the completion of the transaction, the vice president directly owned 32,181 shares of the company’s stock, valued at approximately $12,676,417.71. This trade represents a 18.04% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 157,057 shares of company stock worth $60,272,277 in the last quarter. 0.49% of the stock is currently owned by corporate insiders.

Institutional Trading of Cadence Design Systems

Institutional investors and hedge funds have recently made changes to their positions in the company. State Street Corp raised its position in Cadence Design Systems by 1.2% during the third quarter. State Street Corp now owns 12,468,162 shares of the software maker’s stock valued at $4,379,567,000 after purchasing an additional 149,577 shares in the last quarter. Wellington Management Group LLP boosted its holdings in shares of Cadence Design Systems by 218.6% in the 4th quarter. Wellington Management Group LLP now owns 2,553,225 shares of the software maker’s stock valued at $798,087,000 after purchasing an additional 1,751,927 shares in the last quarter. Schroder Investment Management Group boosted its holdings in shares of Cadence Design Systems by 2.5% in the 4th quarter. Schroder Investment Management Group now owns 2,126,393 shares of the software maker’s stock valued at $671,090,000 after purchasing an additional 52,458 shares in the last quarter. Amundi increased its stake in shares of Cadence Design Systems by 32.8% in the 4th quarter. Amundi now owns 1,984,842 shares of the software maker’s stock valued at $620,430,000 after purchasing an additional 489,930 shares during the last quarter. Finally, Charles Schwab Investment Management Inc. increased its stake in shares of Cadence Design Systems by 2.5% in 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 purchasing an additional 47,382 shares during the last quarter. Institutional investors own 84.85% of the company’s stock.

Wall Street Analysts Forecast Growth

CDNS has been the subject of several research analyst reports. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Cadence Design Systems in a report on Thursday, July 2nd. Rosenblatt Securities increased their price target on shares of Cadence Design Systems from $375.00 to $410.00 and gave the company a “buy” rating in a report on Tuesday, July 14th. Needham & Company LLC restated a “buy” rating and set a $400.00 price objective on shares of Cadence Design Systems in a research report on Tuesday, April 28th. Piper Sandler boosted their price objective on Cadence Design Systems from $319.00 to $325.00 and gave the stock a “neutral” rating in a report on Tuesday, April 28th. Finally, Berenberg Bank set a $440.00 price objective on Cadence Design Systems in a report on Wednesday, May 27th. One research analyst has rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and three have assigned a Hold rating to the company. According to data from MarketBeat.com, Cadence Design Systems presently has a consensus rating of “Moderate Buy” and a consensus target price of $393.65.

Cadence Design Systems News Summary

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

• Positive Sentiment: Q2 earnings beat expectations: Cadence reported adjusted earnings of $2.11 per share, above the $2.05 consensus estimate. Revenue reached $1.58 billion, in line with expectations but up 24.2% year over year. Cadence Design Systems Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: Raised full-year guidance: Management projected 2026 earnings of $8.05-$8.15 per share and revenue of approximately $6.3 billion, modestly above prior expectations. Third-quarter EPS guidance of $2.01-$2.07 also exceeded the $1.84 analyst consensus. Cadence raises annual forecasts as demand booms for AI chip design
• Positive Sentiment: AI-driven demand remains strong: Cadence cited robust customer spending on AI-powered chip and system design software. Reports highlighted a record $8.1 billion backlog and expanding partnerships around agentic AI, supporting expectations for roughly 19% revenue growth in 2026. Cadence signals 19 percent 2026 revenue growth
• Neutral Sentiment: Valuation remains demanding: With CDNS trading at a high earnings multiple and above its 200-day moving average, continued share-price gains may depend on the company sustaining elevated growth and converting its backlog into revenue.

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.