Cadence Design Systems (NASDAQ:CDNS) Posts Quarterly Earnings Results, Beats Expectations By $0.07 EPS

Cadence Design Systems (NASDAQ:CDNS) posted its quarterly earnings data on Monday. The software maker reported $1.96 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.89 by $0.07, FiscalAI reports. The business had revenue of $1.47 billion for the quarter, compared to analysts’ expectations of $1.45 billion. Cadence Design Systems had a return on equity of 29.34% and a net margin of 20.93%.The business’s revenue was up 18.6% on a year-over-year basis. During the same quarter last year, the firm earned $1.57 earnings per share. Cadence Design Systems updated its FY 2026 guidance to 7.850-7.950 EPS and its Q2 2026 guidance to 2.020-2.080 EPS.

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

• Cadence raised its 2026 revenue outlook to ~17% growth (now targeting $6.125B–$6.225B) and expects to achieve the Rule of 60 for the first time, signaling stronger-than-expected profitability and topline momentum.
• The company introduced an agentic AI full‑flow platform—AgentStack and AI super agents (ChipStack, ViraStack, InnoStack)—and announced collaborations with Google (Gemini) and Nvidia, which management says could materially expand EDA consumption and create new subscription + consumption revenue streams.
• Q1 results beat expectations with revenue of $1.474B (+19% YoY), strong non‑GAAP operating margin (44.7%), and a record backlog of $8 billion, driven by broad strength across EDA, hardware, system analysis and IP bookings.
• The Hexagon Design & Engineering acquisition adds ~ $160M of revenue in 2026 but is expected to be dilutive (~$0.28) this year due to integration costs and the financing structure (70% cash), creating near‑term margin and EPS headwinds before anticipated accretion in 2027.
• Cadence’s IP business remains a tailwind, growing ~22% YoY with a record, large IP deal at a leading foundry and continued strength in hardware/emulation demand, reinforcing multiple growth drivers across product lines.

Cadence Design Systems Trading Up 1.2%

NASDAQ:CDNS opened at $336.74 on Tuesday. The business’s 50-day moving average is $294.47 and its two-hundred day moving average is $309.05. The company has a debt-to-equity ratio of 0.45, a current ratio of 2.86 and a quick ratio of 2.67. Cadence Design Systems has a 12 month low of $262.75 and a 12 month high of $376.45. The firm has a market capitalization of $92.97 billion, a PE ratio of 82.94, a price-to-earnings-growth ratio of 4.00 and a beta of 1.04.

Analysts Set New Price Targets

Several research analysts recently weighed in on the company. Rosenblatt Securities reaffirmed a “buy” rating and issued a $360.00 target price on shares of Cadence Design Systems in a research report on Friday. Wells Fargo & Company cut their target price on Cadence Design Systems from $410.00 to $375.00 and set an “overweight” rating on the stock in a research report on Wednesday, February 18th. Piper Sandler cut their target price on Cadence Design Systems from $355.00 to $319.00 and set a “neutral” rating on the stock in a research report on Wednesday, February 18th. Morgan Stanley cut their target price on Cadence Design Systems from $385.00 to $370.00 and set an “overweight” rating on the stock in a research report on Wednesday, February 18th. Finally, Weiss Ratings reaffirmed a “hold (c)” rating on shares of Cadence Design Systems in a research report on Monday, December 29th. Fifteen investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to MarketBeat.com, the company has an average rating of “Moderate Buy” and an average target price of $377.06.

Insider Buying and Selling at Cadence Design Systems

In other Cadence Design Systems news, Director Ita M. Brennan sold 180 shares of the firm’s stock in a transaction dated Tuesday, March 17th. The stock was sold at an average price of $295.03, for a total value of $53,105.40. Following the transaction, the director directly owned 7,470 shares of the company’s stock, valued at $2,203,874.10. This trade represents a 2.35% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, VP Paul Cunningham sold 1,000 shares of the firm’s stock in a transaction dated Monday, March 2nd. The shares were sold at an average price of $297.78, for a total value of $297,780.00. Following the completion of the transaction, the vice president directly owned 94,137 shares in the company, valued at $28,032,115.86. This trade represents a 1.05% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 24,680 shares of company stock valued at $7,579,340 over the last three months. 0.49% of the stock is owned by company insiders.

Institutional Trading of Cadence Design Systems

Hedge funds and other institutional investors have recently modified their holdings of the business. Swiss RE Ltd. purchased a new stake in shares of Cadence Design Systems during the fourth quarter worth about $29,000. Imprint Wealth LLC purchased a new stake in shares of Cadence Design Systems during the third quarter worth about $31,000. Strategic Wealth Investment Group LLC purchased a new stake in shares of Cadence Design Systems during the second quarter worth about $32,000. Kemnay Advisory Services Inc. purchased a new stake in shares of Cadence Design Systems during the fourth quarter worth about $34,000. Finally, Greenline Wealth Management LLC purchased a new stake in shares of Cadence Design Systems during the fourth quarter worth about $34,000. 84.85% of the stock is owned by hedge funds and other institutional investors.

Key Headlines Impacting Cadence Design Systems

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

• Positive Sentiment: Q1 results beat consensus: EPS $1.96 vs. ~$1.89 and revenue $1.47B (up ~18.6% YoY), showing continued top‑line growth. Cadence Design Systems Tops Q1 Targets, Guides Above Views
• Positive Sentiment: Management raised FY‑2026 and Q2 guidance well above Street expectations (FY EPS guide 7.85–7.95 and revenue guide mid‑$6B; Q2 EPS 2.02–2.08 and revenue ~ $1.6B), driven by sustained demand for AI‑focused chip design tools. This is the primary catalyst for upside. Cadence lifts annual revenue forecast on sustained AI chip-design boom
• Neutral Sentiment: Management commentary and the full Q1 call transcript provide color on AI-related demand, product cadence and customer timing — useful for judging sustainability but not immediately price‑moving relative to the guide. Q1 2026 Earnings Call Transcript
• Negative Sentiment: Cash flow and liquidity mixed: operating cash flow declined (~27% YoY) and cash & equivalents fell markedly (~49% YoY) while total liabilities rose — investors may discount valuation because of weaker cash conversion. Quiver Quantitative: Stock Falls on Q1 2026 Earnings
• Negative Sentiment: Pre‑earnings options and insider activity signalled hedging/selling: unusually large put buying ahead of results and recent insider sell transactions may pressure sentiment despite the strong guide. (Options and insider details reported in market coverage and data feeds.)

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.