Cadence Design Systems (NASDAQ:CDNS) Issues Earnings Results, Beats Estimates By $0.09 EPS

Cadence Design Systems (NASDAQ:CDNS) issued its earnings results on Tuesday. The software maker reported $1.99 EPS for the quarter, beating analysts’ consensus estimates of $1.90 by $0.09, FiscalAI reports. Cadence Design Systems had a return on equity of 30.13% and a net margin of 20.35%.During the same period in the prior year, the company earned $1.88 EPS. The firm’s quarterly revenue 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 Down 5.3%

Shares of Cadence Design Systems stock traded down $16.00 during trading on Tuesday, hitting $283.46. 5,539,689 shares of the company were exchanged, compared to its average volume of 2,542,919. The company has a debt-to-equity ratio of 0.48, a current ratio of 3.05 and a quick ratio of 2.84. The firm has a market capitalization of $77.16 billion, a P/E ratio of 73.06, a price-to-earnings-growth ratio of 3.33 and a beta of 1.01. The firm’s fifty day moving average price is $309.88 and its 200 day moving average price is $328.89. Cadence Design Systems has a 1-year low of $221.56 and a 1-year high of $376.45.

Trending Headlines about Cadence Design Systems

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

• Positive Sentiment: Reported Q4 results above expectations (EPS beat and revenue/gross profit growth); quarter showed improving margins and stronger cash flow, which supports longer‑term earnings momentum. Cadence Beats Q4 Estimates
• Positive Sentiment: Management issued very strong FY‑2026 and Q1 guidance well above Street estimates (FY EPS guide ~8.05–8.15 vs. consensus ~5.45; Q1 EPS guide ~1.89–1.95 vs. consensus ~1.74), a major positive catalyst for future revenue and profit expectations. (Guidance and results in company release.) Cadence Q4 & FY2025 Results
• Positive Sentiment: Launched a new ChipStack AI super agent for chip design, reinforcing Cadence’s exposure to AI-driven design demand and providing a product catalyst for adoption and revenue growth. ChipStack AI Launch
• Neutral Sentiment: Analyst coverage is mixed — some firms reaffirm/raise price targets (median targets remain well above the current price) while at least one firm remains cautious; this produces varying short‑term reactions from funds and traders. Analyst PTs
• Neutral Sentiment: Some data feeds show confusing/zeroed short‑interest figures this cycle; unreliable short‑interest reporting means this metric is not clearly driving today’s move. (Market data items in reports.)
• Negative Sentiment: Significant insider selling activity reported in recent months (multiple senior executives have sold shares), which can raise governance/near‑term sentiment concerns for some investors. QuiverQuant Insider Activity
• Negative Sentiment: Large institutional trimming reported in Q4 for some big holders (per third‑party data), plus the stock currently trades below its 50‑ and 200‑day moving averages and at a rich P/E; that combination can prompt profit‑taking even after upbeat results. Institutional Moves / Technicals

Insider Buying and Selling at Cadence Design Systems

In related news, VP Paul Scannell sold 5,490 shares of the business’s stock in a transaction that occurred on Wednesday, December 10th. The shares were sold at an average price of $339.43, for a total transaction of $1,863,470.70. Following the completion of the transaction, the vice president owned 20,321 shares in the company, valued at approximately $6,897,557.03. The trade was a 21.27% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, VP Paul Cunningham sold 1,000 shares of the stock in a transaction on Monday, February 2nd. The stock was sold at an average price of $295.09, for a total transaction of $295,090.00. Following the completion of the sale, the vice president owned 95,137 shares in the company, valued at approximately $28,073,977.33. This trade represents a 1.04% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 56,475 shares of company stock worth $18,505,486 over the last ninety days. 1.99% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in CDNS. AQR Capital Management LLC raised its position in shares of Cadence Design Systems by 5.0% during the fourth quarter. AQR Capital Management LLC now owns 92,015 shares of the software maker’s stock worth $28,762,000 after purchasing an additional 4,409 shares during the period. Abel Hall LLC acquired a new position in shares of Cadence Design Systems in the 4th quarter valued at approximately $436,000. EFG International AG bought a new stake in Cadence Design Systems during the 4th quarter worth approximately $8,990,000. Defiance ETFs LLC acquired a new stake in Cadence Design Systems during the 4th quarter worth approximately $37,286,000. Finally, Prosperity Bancshares Inc bought a new position in Cadence Design Systems in the fourth quarter valued at approximately $38,000. 84.85% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

Several analysts recently weighed in on the company. Oppenheimer upgraded Cadence Design Systems from an “underperform” rating to a “market perform” rating and set a $275.00 target price for the company in a research note on Monday, December 1st. KeyCorp reaffirmed an “overweight” rating and issued a $405.00 price target on shares of Cadence Design Systems in a research note on Tuesday, October 28th. Citigroup assumed coverage on shares of Cadence Design Systems in a research note on Monday, November 24th. They set a “buy” rating and a $385.00 price objective on the stock. Wells Fargo & Company increased their price objective on shares of Cadence Design Systems from $405.00 to $410.00 and gave the stock an “overweight” rating in a report on Tuesday, October 28th. Finally, Rosenblatt Securities restated a “neutral” rating and issued a $335.00 price objective on shares of Cadence Design Systems in a research report on Tuesday. Thirteen analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $379.59.

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.