Cadence Design Systems (NASDAQ:CDNS) Issues Earnings Results

Cadence Design Systems (NASDAQ:CDNS) issued its quarterly earnings data on Tuesday. The software maker reported $1.99 EPS for the quarter, topping analysts’ consensus estimates of $1.91 by $0.08, FiscalAI reports. Cadence Design Systems had a return on equity of 30.04% and a net margin of 20.93%.The firm had revenue of $1.44 billion during the quarter, compared to analyst estimates of $1.42 billion. During the same period in the previous year, the company posted $1.88 EPS. The company’s revenue for the quarter 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 Trading Up 7.6%

NASDAQ:CDNS opened at $305.01 on Thursday. Cadence Design Systems has a 12 month low of $221.56 and a 12 month high of $376.45. The company has a current ratio of 3.05, a quick ratio of 2.84 and a debt-to-equity ratio of 0.48. The firm’s 50 day moving average is $309.22 and its 200 day moving average is $328.72. The stock has a market capitalization of $83.02 billion, a PE ratio of 75.13, a price-to-earnings-growth ratio of 3.15 and a beta of 1.01.

More Cadence Design Systems News

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

• Positive Sentiment: Q4 results and guidance: Cadence reported Q4 revenue and EPS above expectations and issued stronger-than-expected Q1 and FY26 guidance, underpinning the rally. Cadence Reports Fourth Quarter and Fiscal Year 2025 Financial Results
• Positive Sentiment: AI/custom-chip tailwinds: Management emphasized accelerating custom-chip design and AI-related demand during the earnings call — a structural growth argument investors favor. Cadence Design Systems Earnings Call Highlights AI Surge
• Positive Sentiment: Wall Street reaction: Several outlets and analysts praised the quarter and outlook (coverage noting the beat and bullish takes), adding buying interest after-hours and into today’s session. Cadence Design Systems shares pop on earnings beat, custom chip optimism
• Positive Sentiment: Bank of America remains bullish: BofA reaffirmed a Buy and a $400 price target, supplying additional upside thesis for investors focused on long-term AI exposure. Bank of America Securities Remains Bullish on Cadence Design Systems, Inc. (CDNS)
• Neutral Sentiment: Analyst mix: Some shops raised targets or reiterated buy calls while others trimmed price targets — the result is mixed analyst messaging that supports both cautious and constructive views. These Analysts Revise Their Forecasts On Cadence Design Systems Following Q4 Results
• Neutral Sentiment: Rosenblatt stance changed: Recent items show Rosenblatt both upgrading and later reiterating a neutral rating — an example of short-term analyst repositioning after the print. Rosenblatt Securities Reiterates “Neutral” Rating for Cadence Design Systems (NASDAQ:CDNS)
• Negative Sentiment: Unusual put buying: Large volume of put options was traded, signaling traders buying downside protection or taking bearish bets — this increases short-term volatility risk. Stock Traders Buy Large Volume of Cadence Design Systems Put Options (NASDAQ:CDNS)
• Negative Sentiment: Insider/hedge activity and positioning: Reports show notable insider selling and sizable institutional portfolio adjustments; while not uncommon, these can weigh on near-term sentiment. Cadence Design Systems (CDNS) stock rises on Q4 2025 Earnings

Wall Street Analyst Weigh In

CDNS has been the topic of several recent analyst reports. Weiss Ratings restated a “hold (c)” rating on shares of Cadence Design Systems in a research note on Monday, December 29th. Oppenheimer raised shares of Cadence Design Systems from an “underperform” rating to a “market perform” rating and set a $275.00 price target on the stock in a research report on Monday, December 1st. Morgan Stanley reduced their price objective on shares of Cadence Design Systems from $385.00 to $370.00 and set an “overweight” rating for the company in a research report on Wednesday. Wells Fargo & Company decreased their price objective on shares of Cadence Design Systems from $410.00 to $375.00 and set an “overweight” rating for the company in a research note on Wednesday. Finally, JPMorgan Chase & Co. boosted their target price on Cadence Design Systems from $390.00 to $405.00 and gave the stock an “overweight” rating in a research note on Tuesday, October 28th. Fifteen investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat.com, Cadence Design Systems presently has an average rating of “Moderate Buy” and a consensus price target of $376.50.

Insiders Place Their Bets

In other news, CFO John M. Wall sold 27,805 shares of the company’s stock in a transaction on Tuesday, December 16th. The stock was sold at an average price of $318.57, for a total transaction of $8,857,838.85. Following the transaction, the chief financial officer owned 69,957 shares of the company’s stock, valued at $22,286,201.49. This represents a 28.44% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, VP Paul Scannell sold 5,490 shares of Cadence Design Systems stock in a transaction dated Wednesday, December 10th. The stock was sold at an average price of $339.43, for a total value of $1,863,470.70. Following the completion of the sale, the vice president directly owned 20,321 shares of the company’s stock, valued at approximately $6,897,557.03. This trade represents a 21.27% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders sold 56,475 shares of company stock valued at $18,505,486. Company insiders own 1.99% of the company’s stock.

Institutional Trading of Cadence Design Systems

A number of institutional investors have recently modified their holdings of CDNS. Corient Private Wealth LLC lifted its stake in Cadence Design Systems by 22.1% in the 4th quarter. Corient Private Wealth LLC now owns 293,243 shares of the software maker’s stock worth $91,662,000 after purchasing an additional 53,168 shares in the last quarter. Mercer Global Advisors Inc. ADV increased its holdings in shares of Cadence Design Systems by 19.1% in the fourth quarter. Mercer Global Advisors Inc. ADV now owns 43,300 shares of the software maker’s stock worth $13,535,000 after purchasing an additional 6,931 shares during the period. Raymond James Financial Inc. increased its holdings in shares of Cadence Design Systems by 3.0% in the fourth quarter. Raymond James Financial Inc. now owns 711,292 shares of the software maker’s stock worth $222,350,000 after purchasing an additional 20,475 shares during the period. Vident Advisory LLC raised its position in shares of Cadence Design Systems by 3.0% in the fourth quarter. Vident Advisory LLC now owns 57,531 shares of the software maker’s stock worth $17,983,000 after buying an additional 1,670 shares in the last quarter. Finally, Beacon Pointe Advisors LLC boosted its stake in Cadence Design Systems by 60.6% during the fourth quarter. Beacon Pointe Advisors LLC now owns 2,178 shares of the software maker’s stock valued at $681,000 after buying an additional 822 shares during the period. 84.85% of the stock is currently owned by hedge funds and other institutional investors.

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.