Cadence Design Systems (CDNS) Q1 2026 Financial Results Summary

Cadence Design Systems (Nasdaq: CDNS) released its first quarter 2026 financial results on April 27, 2026. Below is a summary of the key financial and operational metrics from the report.

Key Financial Metrics

• Revenue:
  • $1.474 billion for Q1 2026
  • Increased by 19% from $1.242 billion in Q1 2025
• GAAP Operating Margin:
  • 29.3% for Q1 2026
  • Up from 29.1% in Q1 2025
• Non-GAAP Operating Margin:
  • 44.7% for Q1 2026
  • Increased from 41.7% in Q1 2025
• GAAP Diluted Net Income per Share:
  • $1.23 for Q1 2026
  • Increased from $1.00 in Q1 2025 (an increase of 23%)
• Non-GAAP Diluted Net Income per Share:
  • $1.96 for Q1 2026
  • Up from $1.57 in Q1 2025 (an increase of 25%)
• Quarter-end Backlog:
  • $8.0 billion
  • $4.0 billion expected to be recognized in the next 12 months from remaining performance obligations

2026 Business Outlook

For fiscal year 2026, Cadence expects the following:

• Revenue: Projected in the range of $6.125 billion to $6.225 billion
  • Estimated year-over-year growth of 17%
• GAAP Operating Margin:
  • Expected in the range of 27.5% to 28.5%
• Non-GAAP Operating Margin:
  • Expected in the range of 43.5% to 44.5%
• GAAP Diluted Net Income per Share:
  • Forecasted in the range of $4.39 to $4.49
• Non-GAAP Diluted Net Income per Share:
  • Forecasted in the range of $7.85 to $7.95

Business Highlights

• Launch of AgentStack: An orchestration framework enabling knowledge sharing and extensibility across chip designs.
• Introduction of ViraStack and InnoStack AI Super Agents, expanding Cadence's capabilities in the AI domain for analog, custom design, and digital implementation.
• Core EDA Revenue Growth:
  • Grew by 18% year over year, driven by the adoption of AI-driven solutions in various sectors including advanced digital implementation, custom design, and verification.
• Hardware Sector: Achieved a record quarter bolstered by strong demand in AI and high-performance computing markets.
• IP Business Growth:
  • 22% year-over-year growth fueled by demand in AI infrastructure and automotive workloads.
• System Design and Analysis Revenue:
  • Increased by 18% year-over-year, reflecting the addition of technologies from the Hexagon D&E acquisition.

Share Repurchase and Dividend Declaration

Cadence did engage in share repurchase activity during Q1 2026:

• Payments for Repurchases of Common Stock amounted to $200 million compared to $350 million in Q1 2025.

As per the provided data, there is no mention of a quarterly dividend declaration in this report.

Conclusion

Cadence Design Systems demonstrated robust performance in Q1 2026, highlighting growth in both revenue and margins amid a strong demand for AI solutions and expanded product offerings. The company’s outlook suggests continued growth through the remainder of the fiscal year.

Note: The following tables contain amounts in thousands.

Condensed Consolidated Income Statements

For the Three Months Ended March 31, 2026 and March 31, 2025

(In thousands, except per share amounts)

	March 31, 2026	March 31, 2025
Revenue:
Product and maintenance	$1,348,922	$1,110,850
Services	$125,298	$131,516
Total revenue	$1,474,220	$1,242,366
Costs and expenses:
Cost of product and maintenance	$153,312	$116,672
Cost of services	$61,235	$50,461
Marketing and sales	$211,485	$202,700
Research and development	$508,437	$439,102
General and administrative	$88,217	$63,098
Amortization of acquired intangibles	$20,210	$8,922
Restructuring	-5	-109
Total costs and expenses	$1,042,891	$880,846
Income from operations	$431,329	$361,520
Interest expense	-31,613	-29,118
Other income, net	$28,387	$23,290
Income before provision for income taxes	$428,103	$355,692
Provision for income taxes	$92,443	$82,113
Net income	$335,660	$273,579
Net income per share - basic	$1.23	$1.01
Net income per share - diluted	$1.23	$1.00
Weighted average common shares outstanding - basic	272,061	271,973
Weighted average common shares outstanding - diluted	273,725	273,631

Condensed Consolidated Balance Sheets

March 31, 2026 and December 31, 2025

(In thousands)

	March 31, 2026	December 31, 2025
Current assets:
Cash and cash equivalents	$1,406,668	$3,001,317
Receivables, net	$1,033,814	$944,939
Inventories	$317,951	$303,545
Prepaid expenses and other	$421,967	$419,872
Total current assets	$3,180,400	$4,669,673
Property, plant and equipment, net	$536,903	$517,004
Goodwill	$4,929,581	$2,749,143
Acquired intangibles, net	$1,933,262	$718,223
Deferred taxes	$843,209	$917,733
Other assets	$674,999	$581,372
Total assets	$12,098,354	$10,153,148
Current liabilities:
Revolving credit facility	$425,000	—
Accounts payable and accrued liabilities	$863,910	$856,856
Current portion of deferred revenue	$873,598	$778,435
Total current liabilities	$2,162,508	$1,635,291
Long-term liabilities:
Long-term portion of deferred revenue	$146,574	$155,997
Long-term debt	$2,481,170	$2,480,150
Other long-term liabilities	$746,639	$407,529
Total long-term liabilities	$3,374,383	$3,043,676
Stockholders’ equity	$6,561,463	$5,474,181
Total liabilities and stockholders’ equity	$12,098,354	$10,153,148

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