NASDAQ: CDNS · Application Software
Cadence Design Systems
Cadence Design Systems sells electronic design automation (EDA) software, emulation hardware, semiconductor IP, and system simulation tools that engineers use to design and verify chips, circuit boards, and complete electronic systems. It reports one segment, with revenue in three product categories: Core EDA (70% of FY2025 revenue), Semiconductor IP (14%), and System Design and Analysis (16%). FY2025 revenue was $5.30 billion (+14%) and net income $1.11 billion. In February 2026 it closed the roughly €2.7 billion acquisition of Hexagon's Design & Engineering business, and backlog reached a record $8.2 billion in Q3 2026.
Last updated
Analysis last edited: October 31, 2026 · Financial data fetched: October 17, 2026 10:06 (SEC EDGAR) · Source 10-K filed: February 19, 2026
Built on10-K FY2025 · filed 2026-02-1910-Q (quarter ended 2026-09-30) · filed 2026-10-28
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
01
At a glanceFrom SEC data
Eight headline measures, each placed among the companies covered on this site.
- Revenue growthCAGRSmooths out year-to-year swings into "grew X% a year on average." Makes growth pace comparable across companies of very different sizes.
- 14.6%
- Operating marginOperating marginHow many cents of operating profit are left per dollar of revenue. Reflects pricing power and cost structure.
- 28.2%
- ROIC minus WACCROIC − WACC spreadThe difference between ROIC and WACC. Consistently positive implies value creation; consistently negative implies value destruction.
- +3.4 pts
- Net debt ÷ EBITDAEBITDAOperating income with D&A added back. A rough proxy for cash-generating power that’s less distorted by capital intensity, depreciation method, or financing/tax differences than net income.
- -0.4x
- Cash conversionOperating CF ÷ net income (cash conversion)How much of reported profit shows up as actual cash. 1x or higher means profit is backed by cash.
- 1.56x
- Dividend raisesDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year).
- —
- P/E todayP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing.
- 64.5x
- Betaβ (beta)How much a stock moves, on average, for a 1% move in the overall market. Above 1 means more volatile than the market, which raises the return shareholders require. This site computes it from about 2.5 years (roughly 130 weeks) of weekly returns, built from Yahoo Finance daily prices, regressed against an S&P 500 ETF (SPY) as the market proxy, then applies the well-known long-run mean-reversion adjustment (0.67 × β + 0.33) as the WACC default.
- 1.27
Higher than 80% of 372 non-financial companies
Average yearly growth over the years shown
Higher than 78% of 311 non-financial companies
Latest fiscal year (FY2025)
Higher than 51% of 311 non-financial companies
Return on capital above (or below) its estimated cost
Higher than 14% of 304 non-financial companies
Below 0 means more cash than debt
Higher than 52% of 349 non-financial companies
Operating cash flow ÷ net income
Years the dividend per share rose, of the last 5
Latest close 2026-11-04; trailing 12 months to 2026-09-30
Above 1 = moves more than the market
Each marker shows where this company sits among the non-financial companies covered on this site, not all listed companies (left = lowest, right = highest). A high position is not automatically good — for net debt ÷ EBITDA, higher means more debt. Details and formulas are in the sections below and in How to read this.
02
Valuation todayFrom SEC data
Price-based measures at the latest close, next to the same measures at the last fiscal year-end.
Share price$327.48close on 2026-11-04
Market cap$89.01B
- P/EP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing. today
- 64.5x
- P/BP/BShare price ÷ book value per share. Below 1x means the market values the company below its accounting net worth. This site uses the closing price nearest the fiscal year-end and highlights sub-1x readings. today
- 16.3x
- EV/EBITDAEV/EBITDAEnterprise value (≈ market cap + interest-bearing debt − cash) as a multiple of EBITDA — roughly, "how many years of EBITDA to buy the whole company." Lower is generally viewed as cheaper, and it’s more comparable than P/E across companies with different debt loads or depreciation policies. This site excludes noncontrolling interests from the EV calculation. today
- 51.4x
- FCF yieldFree cash flow (FCF)Operating CF minus capital expenditures — cash generated by the business after funding its own investment, available for dividends, buybacks, acquisitions, or debt paydown. Acquisitions and securities purchases (also in investing CF) are not subtracted, so FCF can be positive in a year when total investing CF exceeds operating CF. today
- 1.8%
- Dividend yieldDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year). today
- —
At FY2025 year-end: 77.0x
Earnings: trailing 12 months to 2026-09-30
At FY2025 year-end: 15.5x
Book value at FY2025 year-end
At FY2025 year-end: 49.1x
EBITDA for FY2025
At FY2025 year-end: 1.9%
Free cash flow for FY2025
Dividends per share for FY2025
“Today” uses the latest closing price (2026-11-04, Yahoo Finance daily closing prices) and shares outstanding at the last fiscal year-end. The rest of this page — including the financial table and ROIC vs. WACC — uses fiscal year-end prices. These are reference figures, not a judgment of whether the stock is cheap or expensive.
03
What changed since last earningsFrom SEC data
The latest reported quarter against the same quarter a year earlier, the balance sheet against the previous quarter-end, and what management said in its latest earnings release.
Quarter ended Sep 30, 2026.
- Revenue$1.34B → $1.63B (vs. a year earlier)↑ +22.0%$1.34B → $1.63B (vs. a year earlier)
- Operating margin31.8% → 26.2% (vs. a year earlier)↓ −5.5 pts31.8% → 26.2% (vs. a year earlier)
- Net income$287M → $290M (vs. a year earlier)↑ +0.9%$287M → $290M (vs. a year earlier)
- Diluted EPS$1.05 → $1.05 (vs. a year earlier)→ +0.0%$1.05 → $1.05 (vs. a year earlier)
- Cash$1.44B → $1.45B (vs. previous quarter-end)↑ +0.8%$1.44B → $1.45B (vs. previous quarter-end)
Source: Form 10-Q ↗ (SEC XBRL). Long-term debt is the tagged long-term debt figure and leaves out short-term borrowings.
From the earnings release of Oct 26, 2026.
Management outlook ↑ Raised
Raised 2026 revenue growth outlook to 21%. Source sentence
With broad-based business momentum, expanding technology leadership and a record backlog, we are raising our 2026 revenue outlook to 21% year-over-year growth,” said Anirudh Devgan, president and chief executive officer.
Key changes
Q3 revenue up 22%. Source sentence
“Q3 revenue grew 22% year-over-year, with strong double-digit growth across all product categories, driven by growing momentum from AI-driven designs,” said John Wall, senior vice president and chief financial officer.
Record backlog of $8.2B. Source sentence
Q3 Recurring Revenue Up 18% YoY, Record Backlog of $8.2 Billion
Repurchased $400M of shares. Source sentence
Cadence used $400 million to repurchase Cadence shares.
Written by AI. A line appears only if its figures and direction match the quoted sentence, which an automatic check confirms. Companies' outlooks are their own and may not be met. Read the release ↗
04
Company profileFrom SEC dataShow
- Legal name
- CADENCE DESIGN SYSTEMS INC
- Headquarters
- SAN JOSE, CA
- Incorporated in
- Delaware
- Fiscal year end
- 12/31
- Exchange & ticker
- NASDAQ: CDNS
- Industry
- Application Software
- CIK
- 813672
- Website
- https://www.cadence.com/ ↗
Workforce (as of FY2025 year-end)
Employees
13,800
Source: Form 10-K (FY2025) cover page and business description
05
Earnings calendarFrom SEC dataShow
When the company reports each quarter: the quarter-end date, the day results were released, and when the 10-Q or 10-K was filed.
Next report
Q4 FY2026
Quarter end: December 2026. In past years, Q4 results were released 43–49 days after quarter end (Feb 17, 2026; Feb 18, 2025; Feb 12, 2024). No date has been announced in the sources this site uses.
Reporting pattern
- Fiscal year ends around December 31.
- Reports four times a year: three quarterly reports (10-Q) and an annual report (10-K) for Q4.
- Earnings releases came 22–49 days after quarter end over the last 12 quarters.
| Quarter | Quarter ended | Earnings release (8-K) | Report filed (10-Q / 10-K) |
|---|---|---|---|
| Q3 FY2026 | Sep 30, 2026 | Oct 26, 2026 (+26 days) | Oct 28, 2026 10-Q (+28 days) |
| Q2 FY2026 | Jun 30, 2026 | Jul 27, 2026 (+27 days) | Jul 29, 2026 10-Q (+29 days) |
| Q1 FY2026 | Mar 31, 2026 | Apr 27, 2026 (+27 days) | May 1, 2026 10-Q (+31 days) |
| Q4 FY2025 | Dec 31, 2025 | Feb 17, 2026 (+48 days) | Feb 19, 2026 10-K (+50 days) |
| Q3 FY2025 | Sep 30, 2025 | Oct 27, 2025 (+27 days) | Oct 29, 2025 10-Q (+29 days) |
| Q2 FY2025 | Jun 30, 2025 | Jul 28, 2025 (+28 days) | Jul 30, 2025 10-Q (+30 days) |
| Q1 FY2025 | Mar 31, 2025 | Apr 28, 2025 (+28 days) | Apr 30, 2025 10-Q (+30 days) |
| Q4 FY2024 | Dec 31, 2024 | Feb 18, 2025 (+49 days) | Feb 21, 2025 10-K (+52 days) |
| Q3 FY2024 | Sep 30, 2024 | Oct 28, 2024 (+28 days) | Oct 30, 2024 10-Q (+30 days) |
| Q2 FY2024 | Jun 30, 2024 | Jul 22, 2024 (+22 days) | Jul 24, 2024 10-Q (+24 days) |
| Q1 FY2024 | Mar 31, 2024 | Apr 22, 2024 (+22 days) | Apr 24, 2024 10-Q (+24 days) |
| Q4 FY2023 | Dec 31, 2023 | Feb 12, 2024 (+43 days) | Feb 14, 2024 10-K (+45 days) |
Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. For a quarter whose 10-Q or 10-K isn’t filed yet, the date is the latest Item 2.02 8-K since the previous report, which may be a preliminary or other results-related update. Fiscal years are labeled by the calendar year in which they end.
06
Flagship products & servicesSite analysis
Core EDA
Digital and analog design
Examples: Virtuoso, digital implementation tools
Chip design and implementation.
Core EDA
Verification hardware and software
Examples: Palladium emulation, Xcelium simulator
Verifying chip designs before manufacturing.
Semiconductor IP
Design IP
Examples: Tensilica DSPs, SerDes, PCI, USB, Artisan foundation IP
Building blocks licensed for system-on-chip designs.
System Design and Analysis
PCB and packaging
Examples: Allegro
Board and advanced-package design.
System Design and Analysis
Simulation
Examples: BETA CAE, MSC Nastran, Adams
Structural, multibody, and multiphysics analysis.
Product descriptions are from the FY2025 Form 10-K's Item 1.
U.S. and worldwide share of flagship products/services
The filings reviewed give no market share figure for the company's products or services.
Reviewed: Form 10-K (FY2025) · Form 10-Q (quarter ended 2026-09-30)
07
Recent strategic focusSite analysis
Acquisitions and 2026 results, from the 10-K, the Q3 2026 earnings release and 8-Ks.
Hexagon D&E closed
Cadence completed the acquisition on February 23, 2026, issuing 3,224,473 shares as part of the roughly €2.70B consideration (about €1.89B in cash).
Source: 8-K filed 2026-02-23; Form 10-K (FY2025) Item 1
Raised 2026 outlook
After Q3 2026 revenue of $1.633B (+22%; GAAP EPS $1.05, non-GAAP $2.11), Cadence raised its 2026 revenue outlook to $6.387–6.417B (about 21% growth) and non-GAAP EPS to about $8.40. It spent $400M on buybacks in the quarter and the board authorized $2.5B more.
Source: 8-K filed 2026-10-26 (Exhibit 99.01)
Export-control settlement
Cadence settled with BIS and DOJ in July 2025 over sales of $45.3M of products and services between 2015 and 2021.
Source: Form 10-K (FY2025) Item 1A
Capex ÷ D&A (FY2025)
0.62x
Below depreciation — investment is being pared back
formulacapital expenditures ÷ depreciation & amortization
e.g.$142M ÷ $228M = 0.62x
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
R&D-to-revenue ratio (FY2025)
33.4%
formularesearch & development expense ÷ revenue × 100
e.g.$1,769M ÷ $5,297M × 100 = 33.4%
M&A spend (6-year total)
$2.4B
Latest year: $430M
Cash-flow-statement spending on acquisitions, net of cash acquired
Where the money goes, over time
Unit: $M. Capex went from $95M in FY2020 to $142M in FY2025
- Capex
- R&D
- M&A spend
formulacapital expenditures ÷ depreciation & amortization
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-19
08
Key figures at a glanceFrom SEC data
FY2020–FY2025, 6 years.
Revenue (FY2025)
$5.3B
As reported in the 10-K
Revenue CAGR (5 years)
+14.6%▲favorable
formula(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
e.g.($5,297M ÷ $2,683M) ^ (1÷5) − 1 = 14.6%
termsCAGR · ^ (exponent) · Revenue (net sales)
Operating margin (FY2025)
28.2%▲favorable
+4.1pt vs. 5 years ago
formulaoperating income ÷ revenue × 100
e.g.$1,492M ÷ $5,297M × 100 = 28.2%
ROE (FY2025)
21.9%▲favorable
6-year average: 27.2%
As reported in the 10-K
P/B (FY2025 end)
15.52x
formulafiscal year-end closing price ÷ book value per share
e.g.$312.58 ÷ $20.14 = 15.52x
Period-end (fiscal year-end) value, not today's P/B
EV/EBITDA (FY2025 end)
49.1x
formula(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
e.g.($84,959M + $2,480M − $3,001M) ÷ ($1,492M + $228M) = 49.1x
termsEV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)
Period-end (fiscal year-end) value, not today's multiple
- ▲
Revenue grew +14.6% a year over 5 years (strong growth)
From $2.68B in FY2020 to $5.3B in FY2025. The annualized rate (CAGR) makes it possible to compare growth pace across companies of different sizes.
- ▲
Operating margin improved: 24.1% → 28.2%
How much operating profit is left per $100 of revenue. It moved +4.1 points over 5 years — pricing power, cost control, and product mix all show up here.
- ▲
Equity ratio is 53.9% (a high level of financial stability)
The share of total assets funded by equity rather than debt. 50%+ is often read as low bankruptcy risk, though the right level varies by industry (real estate and leasing run lower, for instance).
- ▲
Free cash flow was positive in 6 of 6 years
Operating cash flow minus capital expenditures: the cash left over after funding the business’s own investment, available for dividends, buybacks, acquisitions, or debt paydown. A negative year can mean heavy investment, or weak core earnings — worth distinguishing.
- ▲
ROE averaged 27.2% over 6 years (latest: 21.9%)
How much profit was generated on shareholders’ equity. Roughly 10%+ is often cited as solid for a U.S. company, though this varies a lot by industry and capital intensity.
09
Business modelSite analysis
Business Model Canvas
The whole company in nine blocks. Left side: how it delivers (partners, activities, resources, costs). Right side: who it serves and how it earns. Every entry comes from the company’s filings shown on this page.
08 · who helps
Key partners
No partners or suppliers named in the filings.
07 · what it does
Key activities
Core EDA
Developing design and verification software- Building emulation and prototyping hardware
Semiconductor IP
Licensing silicon IP and subsystemsSystem Design and Analysis
System-level design and simulation
06 · what it draws on
Key resources
Core EDA
R&D engineers ($1.77B of R&D spending in FY2025)- Foundry partners' process design kits
Semiconductor IP
IP design teamsSystem Design and Analysis
Simulation and analysis software
02 · why customers buy
Value propositions
- Chip and system design software, semiconductor IP and simulation; its custom/analog IC tools are considered the industry standard.
04 · how it keeps them
Customer relationships
- Multi-year software licenses and close work with semiconductor and systems customers.
03 · how it reaches them
Channels
- Mostly direct sales; a third-party distributor in Japan and selective value-added resellers.
01 · who it serves
Customer segments
Core EDA
Semiconductor and systems companiesSemiconductor IP
Chip designersSystem Design and Analysis
Electronics, aerospace and defense, automotive, and pharmaceutical companies
09 · where money goes
Cost structure
FY2025, share of revenue ($5.3B)
- Research & development33.4%
- Selling, general & administrative5.9%
- Other operating costs (incl. cost of goods sold)32.5%
Operating profit left: 28.2% of revenue. Depreciation & amortization (inside the costs above): $228M. Capital spending: $142M.
Source: Form 10-K income statement and cash-flow statement (SEC XBRL).
05 · how money comes in
Revenue streams
Core EDA
Time-based software licenses (generally two to three years)- Hardware sales and leases
Semiconductor IP
IP licenses and royalties- Services
System Design and Analysis
Software licenses- Maintenance and services
Value propositions, channels and customer relationships: Form 10-K (FY2025)
Core EDA
Software, hardware, and services to design and verify semiconductor chips — analog, digital, mixed-signal, memory, RF, and silicon photonics — including Palladium emulation and Xcelium simulation.
01 what it draws on
Inputs & resources
- R&D engineers ($1.77B of R&D spending in FY2025)
- Foundry partners' process design kits
02 what it does
Activities
- Developing design and verification software
- Building emulation and prototyping hardware
03 who it serves
Customers
- Semiconductor and systems companies
04 how money comes in
How it earns
- Time-based software licenses (generally two to three years)
- Hardware sales and leases
- Maintenance and services
Core EDA: how it makes money
- 70% of FY2025 revenue (71% in FY2024).
Semiconductor IP
Pre-designed chip building blocks: interface and memory IP, SerDes, Tensilica DSPs, verification IP, and (from 2025) Arm's Artisan foundation IP.
01 what it draws on
Inputs & resources
- IP design teams
02 what it does
Activities
- Licensing silicon IP and subsystems
03 who it serves
Customers
- Chip designers
04 how money comes in
How it earns
- IP licenses and royalties
- Services
Semiconductor IP: how it makes money
- 14% of FY2025 revenue (13% in FY2024).
System Design and Analysis
PCB and advanced-packaging design (Allegro), multiphysics and structural simulation (including BETA CAE and, from 2026, Hexagon's MSC Nastran and Adams), and molecular modeling.
01 what it draws on
Inputs & resources
- Simulation and analysis software
02 what it does
Activities
- System-level design and simulation
03 who it serves
Customers
- Electronics, aerospace and defense, automotive, and pharmaceutical companies
04 how money comes in
How it earns
- Software licenses
- Maintenance and services
System Design and Analysis: how it makes money
- 16% of FY2025 revenue; revenue grew 37% in Q2 2026, helped by the Hexagon D&E business, and 30% in Q3 2026.
Government & regulation around the business
Non-market factors from the company’s filings: what governments and regulators fund, buy, set, approve or restrict, and which part of the flow above each one touches.
Cadence’s China sales are shaped by U.S. export restrictions on listed entities.
Trade & export rules
Export controls and sanctions
BIS issued an interim final rule effective September 29, 2025 extending export restrictions to more entities.
Constrains the businessTouches: CustomersSource: Form 10-K (FY2025)
Government as customer
Government contracts
Problems could lead to debarment from U.S. government contracts.
Supports and constrainsTouches: Customers · How it earnsSource: Form 10-K (FY2025)
10
Where it earnsSite analysis
Many U.S.-listed companies earn most of their revenue outside the U.S. — this breaks down revenue by country/region so it's clear where the business actually makes its money.
Largest market (FY2025)
United States — 44% of revenue
Revenue by country / region (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
United States
2,311 (44%)Other Asia
1,005.2 (19%)EMEA
790.6 (15%)China
680 (13%)Japan
341.7 (6%)Other Americas
168.3 (3%)
11
Contract structureSite analysisShow
Short-term or spot sales carry different earnings quality than long-term or auto-renewing contracts — this shows how the company actually contracts with its customers.
Cadence primarily licenses software under time-based licenses, generally two to three years long, while hardware, IP, and certain software revenue is recognized up front, so quarterly revenue can swing with timing. No customer was 10% or more of revenue in FY2025 or FY2024.
Backlog
$8.2B at the end of Q3 2026, a record
Typical term: $4.2B expected to be recognized in the next 12 months
Remaining performance obligations.
12
Customers & suppliersSite analysis
Who the company sells to and buys from. Companies rarely name either, so named counterparties come only from the company's own filings and press releases; otherwise this lists the concentration figures the 10-K discloses.
Customers
Semiconductor and electronics systems companies, plus aerospace, automotive, and life-sciences customers for simulation tools.
Named by the company
No customer is named; none accounted for 10% or more of revenue in FY2025.
What the filings disclose
- The United States was 44% of FY2025 revenue and China 13%. (Form 10-K (FY2025), MD&A)
- No single customer accounted for 10% or more of receivables at year-end 2025 (one customer was about 11% at year-end 2024). (Form 10-K (FY2025), Note 4)
Suppliers
Cadence works with foundry partners on process design kits and relies on its own engineers; about 13,800 employees, mostly in engineering roles.
Named by the company
None named in the 10-K or the company’s press releases.
13
Competitors & peersSite analysis
Competitors the 10-K names, and the peer group the company itself chose in its proxy statement. Nothing here is this site's own pick.
Cadence's 10-K names key competitors in EDA, IP, and simulation, from large EDA vendors to emerging Chinese firms, and says customers' in-house design teams also compete.
Competitors named in the 10-K
EDA and simulation
Ansys is now part of Synopsys.
International
Altium was acquired by Renesas; other Chinese entrants named include Xpeedic, X-EPIC, Primarius, Univista, and Giga Design Automation.
Peer group the company chose
Fiscal 2025 compensation peer group, from the proxy statement. Peers are companies the board considers comparable — for example when setting executive pay — not necessarily direct competitors.
U.S. software, semiconductor, and technology companies with roughly one-third to three times Cadence's revenue and market value; unchanged for fiscal 2026.
- Advanced Micro Devicessite ↗
- Fortinetsite ↗
- ServiceNowsite ↗
- ANSYSsite ↗
- Keysight Technologiessite ↗
- Skyworks Solutionssite ↗
- Arista Networkssite ↗
- Marvell Technologysite ↗
- Synopsyssite ↗
- Autodesksite ↗
- Microchip Technologysite ↗
- Veeva Systemssite ↗
- CrowdStrikesite ↗
- Palo Alto Networkssite ↗
- Workdaysite ↗
- Datadogsite ↗
- PTCsite ↗
Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.
14
M&A historySite analysisShow
Companies acquired over the last five years, plus older large acquisitions that still anchor a current business — what each was bought to do, and what happened afterward. From the 10-K, 8-Ks, and the company's press releases.
Cadence has expanded from chip design into system simulation through acquisitions.
Cash spent on acquisitions, FY2020–FY2025: $2.4B
2024
BETA CAE Systems
Not stated in the FY2025 Form 10-K
Structural analysis software.
- Stated purpose (company)
- Strengthen presence in structural analysis.
Source: Form 10-K (FY2025) — Item 1
2025
Arm Artisan foundation IP business
Not stated in the FY2025 Form 10-K
Standard cell libraries, memory compilers, and GPIOs for advanced nodes.
- Stated purpose (company)
- Complements Cadence's protocol, memory interface, and SerDes IP.
Source: Form 10-K (FY2025) — Item 1
Feb 2026
Hexagon Design & Engineering business (incl. MSC Software)
About €2.70B (about €1.89B cash plus Cadence shares)
MSC Nastran structural analysis and Adams multibody dynamics simulation, used in aerospace, automotive, and robotics.
- Stated purpose (company)
- Expected to accelerate Cadence's Intelligent System Design strategy and broaden its customer base.
15
Six years of financialsFrom SEC data
Each chart's axis holds a single unit (never mixing dollars, %, and $/share). The table's per-period header links to the filing the numbers came from.
Revenue over time
Unit: $M
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-19
Profit over time (operating → net)
Unit: $M
- Operating income
- Pretax income
- Net income
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-19
Margins over time
Unit: %
- Operating margin
- Net margin
formulaoperating income ÷ revenue × 100
formulanet income attributable to the company ÷ revenue × 100
Cash flow over time
Unit: $M (below zero = cash went out)
- Operating CF
- Investing CF
- Free CF
formulacash flow from operations − capital expenditures
termsFree cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-19
Financial stability & capital efficiency
Unit: %
- Equity ratio
- ROE
formulatotal equity ÷ total assets × 100 (as reported in the 10-K)
termsStockholders’ equity · Total assets
formulanet income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
termsNet income (attributable to the company) · Stockholders’ equity
Earnings per share (EPS) and dividend per share
Unit: $
- EPS
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-19
| Line item | FY202010-K on EDGAR ↗ | FY202110-K on EDGAR ↗ | FY202210-K on EDGAR ↗ | FY202310-K on EDGAR ↗ | FY202410-K on EDGAR ↗ | FY202510-K on EDGAR ↗ |
|---|---|---|---|---|---|---|
| Income statement ($M) | ||||||
| Revenue | 2,683 | 2,988 | 3,562 | 4,090 | 4,641 | 5,297 |
| Operating income | 646 | 779 | 1,074 | 1,251 | 1,351 | 1,492 |
| Pretax income | 633 | 768 | 1,045 | 1,282 | 1,396 | 1,522 |
| Net income (attributable) | 591 | 696 | 849 | 1,041 | 1,055 | 1,109 |
| Revenue growthcalc(this year’s revenue − last year’s revenue) ÷ last year’s revenue × 100 | — | 11.4% | 19.2% | 14.8% | 13.5% | 14.1% |
| Operating margincalcoperating income ÷ revenue × 100 | 24.1% | 26.1% | 30.1% | 30.6% | 29.1% | 28.2% |
| Net margincalcnet income attributable to the company ÷ revenue × 100 | 22.0% | 23.3% | 23.8% | 25.5% | 22.7% | 20.9% |
| Balance sheet ($M) | ||||||
| Total assets | 3,951 | 4,386 | 5,137 | 5,669 | 8,974 | 10,153 |
| Total equity | 2,493 | 2,741 | 2,745 | 3,404 | 4,674 | 5,474 |
| Interest-bearing debtSum of short- and long-term borrowings, notes/bonds payable | 347 | 348 | 648 | 649 | 2,476 | 2,480 |
| Equity ratio | 63.1% | 62.5% | 53.4% | 60.0% | 52.1% | 53.9% |
| ROE | 23.7% | 26.6% | 31.0% | 33.9% | 26.1% | 21.9% |
| Cash flow ($M) | ||||||
| Operating CF | 905 | 1,101 | 1,242 | 1,349 | 1,261 | 1,729 |
| Investing CF | -292 | -293 | -739 | -412 | -837 | -461 |
| Financing CF | -415 | -644 | -657 | -804 | 1,239 | -949 |
| Free cash flowcalccash flow from operations − capital expenditures | 810 | 1,036 | 1,119 | 1,247 | 1,118 | 1,587 |
| Cash and equivalents | 928 | 1,089 | 882 | 1,008 | 2,644 | 3,001 |
| Per share & other | ||||||
| EPS ($) | 2.11 | 2.50 | 3.09 | 3.82 | 3.85 | 4.06 |
| BVPS ($) | 8.94 | 9.90 | 10.07 | 12.53 | 17.07 | 20.14 |
| P/E (x) | 64.7 | 74.5 | 52.0 | 71.3 | 78.0 | 77.0 |
| EV/EBITDA (x)calc(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization) | 47.4 | 55.2 | 36.1 | 52.7 | 53.1 | 49.1 |
| P/B (x)calcfiscal year-end closing price ÷ book value per share | 15.27 | 18.82 | 15.96 | 21.74 | 17.61 | 15.52 |
P/B and EV/EBITDA use each period’s period-end (fiscal year-end) figures, not the current share price. Figures without a "calc" tag are as reported in the Form 10-K (the consolidated financial statements and, for older years, earlier 10-Ks), pulled automatically from SEC EDGAR. Where a later filing restated a prior period, the restated figure is used.
Last 8 quarters
Three-month figures from 10-Q filings. Change is versus the same quarter a year earlier. Newest quarter on top.
| Quarter ended | Revenue | Operating income | Net income | Diluted EPS |
|---|---|---|---|---|
| 2026-09-30 | $1.63B+22.0% | $429M+0.8% | $290M+0.9% | $1.05 |
| 2026-06-30 | $1.58B+24.2% | $450M+86.2% | $367M+129.3% | $1.33 |
| 2026-03-31 | $1.47B+18.7% | $431M+19.3% | $336M+22.7% | $1.23 |
| 2025-12-31 † | $1.44B+6.2% | $463M+1.4% | $388M+14.1% | — |
| 2025-09-30 | $1.34B | $425M | $287M | $1.05 |
| 2025-06-30 | $1.28B | $242M | $160M | $0.59 |
| 2025-03-31 | $1.24B | $362M | $274M | $1.00 |
| 2024-12-31 † | $1.36B | $457M | $340M | — |
† Fourth quarter = the 10-K’s annual figure minus the first three quarters; quarterly EPS isn’t derived this way because share counts change during the year.
16
Is ROIC above WACC?From SEC data
ROIC (the return on money invested in the business) above WACC (the cost of raising that money) means the company is creating value. WACC is an estimate, so its assumptions can be adjusted below.
ROIC (FY2025)
15.1%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
e.g.$1,492M × (1 − 23.5%) ÷ $7,552M × 100 = 15.1%
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
WACC (this site’s estimate)
11.70%
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
e.g.Equity weight: $84.96B ÷ ($84.96B + $2.48B) = 97.2%
e.g.Debt weight: $2.48B ÷ ($84.96B + $2.48B) = 2.8%
e.g.WACC: 11.9% × 97.2% + 4.7% × (1 − 23.5%) × 2.8% = 11.70%
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
How firm is this? With the equity risk premium ±1 point and beta ±0.2, WACC runs 9.6%–14.2% and ROIC − WACC runs +0.9 to +5.5 points. The sign holds across this range. This describes the latest year and does not predict future value creation.
WACC 11.70% is this site’s estimate under the assumptions below (not a figure the company has published)
- Risk-free rate
- 4.95% (10-year Treasury, 2026-11-03)
- β
- 1.27 (price-derived adjusted beta)
- Equity risk premium
- 5.5%
- Cost of equity
- 11.94%
- Cost of debt
- 4.70%
- Tax rate
- 23.5% (effective rate, FY2023–FY2025)
- Capital structure (equity : debt)
- 97% : 3%
ROIC over time, vs. WACC
Unit: % — bars = each period's ROIC, horizontal line = latest WACC. Bars above the line are green, below are red
- ROIC (above WACC)
- ROIC (below WACC)
- WACC 11.70%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
Try different WACC assumptions
β and the equity risk premium are estimates with a real range of plausible values — move the sliders to check whether ROIC > WACC still holds. The risk-free rate starts at the 10-year Treasury yield on 2026-11-03 (U.S. Treasury).
Initial β: 1.27 (price-derived adjusted beta. Raw β 1.41, R² 0.28, 130 weeks)
formula0.67 × β + 0.33 (β = the slope of weekly stock returns regressed on weekly market returns)
e.g.0.67 × 1.409 + 0.33 = 1.274
termsβ (beta)
Period 2024-05-10–2026-11-04, using S&P 500 ETF (SPY) as the market proxy. Source: Yahoo Finance price history.
formularisk-free rate + β × equity risk premium
e.g.5.0% + 1.27 × 5.5% = 11.9%
termsCAPM · Risk-free rate · β (beta) · Equity risk premium (market risk premium)
formulafiscal year-end closing price × shares outstanding (= market cap)
formulainterest expense ÷ interest-bearing debt × 100 (clamped to 0–10%; falls back to the risk-free rate if there’s no debt)
17
What the price implies (DCF)From SEC data
A company's value can be written as its free cash flow divided by (cost of capital − perpetual growth). Working that backwards from the market's valuation shows how much growth the share price assumed — compared here with the company's actual past growth.
Growth the price implies (price on 2026-11-04)
9.9%
Perpetual FCF growth: g = r − FCF ÷ EV = 11.7% − 1.8%
Past FCF growth (FY2020–FY2025)
+14.4%
Compound annual rate, 5 years
Past revenue growth (FY2020–FY2025)
+14.6%
Compound annual rate, 5 years
Inputs (FY2025): free cash flow $1.59B (operating CF − capex); enterprise value $88.33B = market cap $89.01B (latest close, 2026-11-04) + debt $2.48B − cash and short-term investments $3.16B; r = WACC of 11.7% using this page’s default assumptions (β 1.27, risk-free 5.0%, market premium 5.5%).
Three WACC scenarios
The same calculation under cautious, base and optimistic cost-of-capital assumptions (risk-free rate fixed at the 10-year Treasury yield). Pick one to load it into the sliders below.
Try your own assumptions
V = FCF ÷ (r − g). It starts at the implied growth rate, where the theoretical value equals today’s enterprise value.
Theoretical enterprise value
$88.16B
FCF $1.59B ÷ (11.7% − 9.9%)
Theoretical ÷ actual enterprise value
1.00x
Below 1x: these assumptions value the business below the market did
How sensitive the answer is
Theoretical ÷ actual enterprise value for each combination of r and g.
| g \ r | 9.7% | 10.7% | 11.7% | 12.7% | 13.7% |
|---|---|---|---|---|---|
| 0% | 0.19x | 0.17x | 0.15x | 0.14x | 0.13x |
| 2% | 0.23x | 0.21x | 0.19x | 0.17x | 0.15x |
| 4% | 0.32x | 0.27x | 0.23x | 0.21x | 0.19x |
| 6% | 0.49x | 0.38x | 0.32x | 0.27x | 0.23x |
| 8% | 1.06x | 0.67x | 0.49x | 0.38x | 0.32x |
A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap uses the latest close (2026-11-04) × shares at fiscal year-end; free cash flow and WACC inputs are from the latest fiscal year.
18
Earnings qualityFrom SEC dataShow
The same reported profit can mean different things depending on whether it's backed by cash, driven by the core business, or the result of a one-off item. Four checks below.
- ✓
Operating CF ÷ net income: averages 1.44x
Profit is backed by cash coming in.
- ✓
Accrual ratio (latest): -6.5%
A small share of profit rests on accounting estimates.
- ✓
Core-earnings share (operating income ÷ pretax income): 98%
Most profit comes from core operations.
- ✓
Days sales outstanding: 46 → 56 days
No major slowdown in collecting on sales.
Operating CF vs. net income
Unit: $M — operating CF above net income means profit is backed by cash
- Operating CF
- Net income
formulacash flow from operations ÷ net income attributable to the company
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formula(net income − operating CF) ÷ average total assets × 100
termsNet income (attributable to the company) · Cash flow from operations (operating CF) · Total assets
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-19
Profit bridge (FY2025)
Unit: $M — what moved profit from operating income to net income
- Profit (each stage)
- Pushed profit up
- Pushed profit down
formulaoperating income ÷ income before income taxes × 100
termsOperating income · Income before income taxes (pretax income)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-19
Receivables & inventory days
Unit: days — days grow when receivables or inventory build up faster than sales
- Days sales outstanding
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
Worked examples (latest period)
formulacash flow from operations ÷ net income attributable to the company
e.g.$1,729M ÷ $1,109M = 1.56x
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formulaoperating income ÷ income before income taxes × 100
e.g.$1,492M ÷ $1,522M × 100 = 98%
termsOperating income · Income before income taxes (pretax income)
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
e.g.($680M + $945M) ÷ 2 ÷ $5,297M × 365 = 56 days
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
19
Who holds the sharesFrom SEC dataShow
How much of the stock large institutional investors report owning on SEC Form 13F, how much the directors and executive officers hold (and how much of the vote they control), and roughly how much is left for individual investors. Shown next to beta so the holder mix can be read alongside how much the stock swings.
Institutions, insiders and everyone else, 13F holdings as of 2026-06-30
“Everyone else” is what remains after shares reported on Form 13F and shares held by directors and executive officers: mostly individual investors, plus non-insider families or foundations and smaller or foreign institutions. The figures have different dates and 13F reports count some shares twice — read it as an approximate split.
- Held by 13F filers
- 88.3%
- Directors & officers (shares)
- <1%
- Everyone else (est.)
- 11.7%
- Directors & officers (voting power)
- <1%
- Institutional-ownership rank
- 220 of 416
- Beta (adjusted)
- 1.27
individuals and other non-13F holders
no separate voting figure; shown as shares
1 = most institutional; 53% of covered companies have more
above 1 = swings more than the market
- 243.3M shares reported by 1,503 13F filers ÷ 275.4M shares outstanding on 2026-06-30. Option positions are excluded.
- Directors and executive officers as a group, from the proxy statement’s beneficial-ownership table; includes shares they can acquire within 60 days.
- A large “everyone else” share can still reflect a family, trust or foundation stake held outside the board; check the proxy statement’s 5% holders.
Sources: SEC Form 13F data set (holdings as of 2026-06-30) · Form DEF 14A filed 2026-03-25 (beneficial ownership table) · Form 10-Q cover page (shares outstanding as of 2026-06-30)
20
Strengths & weaknessesSite analysis
Strengths
1. Steady growth
Revenue rose from $2.99B (FY2021) to $5.30B (FY2025), and the 2026 outlook calls for about 19% growth.
Evidence: SEC EDGAR XBRL; 8-K filed 2026-07-27
2. Record backlog
Backlog was a record $8.2B at the end of Q3 2026, with $4.2B expected to be recognized within 12 months.
Evidence: 8-K filed 2026-10-26 (Exhibit 99.01)
3. Diversified customers
No customer accounted for 10% or more of revenue in FY2025 or FY2024.
Evidence: Form 10-K (FY2025) MD&A
4. High profitability
Operating margin was 28% in FY2025; Q3 2026 GAAP operating margin was 26.2% and non-GAAP 44.1% (vs 47.6%).
Evidence: SEC EDGAR XBRL; 8-K filed 2026-10-26 (Exhibit 99.01)
Weaknesses
1. Export control violations
In July 2025 Cadence pleaded guilty to one count of conspiracy to commit export control violations (2015–2021 sales to a customer in China) and recorded a $128.5M charge; the plea agreement has a three-year probation term.
Evidence: Form 10-K (FY2025) Item 1A and MD&A
2. Rising debt for acquisitions
Interest-bearing debt rose from $0.35B (FY2021) to $2.48B (FY2025), and the Hexagon deal's €1.89B cash portion was funded with cash and existing debt facilities.
Evidence: SEC EDGAR XBRL; Form 10-K (FY2025) Item 1
3. Slower GAAP earnings growth
Net income grew only from $1.06B (FY2024) to $1.11B (FY2025) while revenue grew 14%; FY2025 included a $128.5M export-control charge.
Evidence: SEC EDGAR XBRL; Form 10-K (FY2025) MD&A
21
What draws investors to itSite analysis
Why the stock can look attractive to investors — each point paired with what has to hold for it to stay true, and the opposing view. This is this site's analysis, not a recommendation to buy or sell.
P/E (FY2025)
77.0x
Price at fiscal year-end ÷ diluted EPS
Dividend yield (FY2025)
—
Dividends per share ÷ fiscal year-end price
Payout ratio (FY2025)
—
Dividends per share ÷ diluted EPS
FCF yield (FY2025)
1.9%
(Operating CF − capex) ÷ market cap
1. Compounding growth
Revenue grew about 15% a year from FY2021 to FY2025, and EPS rose from $2.50 to $4.06.
- What has to hold
- Chip design complexity and AI demand keep growing.
- The other side
- China export restrictions could return.
Evidence: SEC EDGAR XBRL
2. Buybacks
Cadence repurchased $925M of stock in FY2025 and had about $1.4B of authorization left; it pays no dividend.
- What has to hold
- Cash flow stays strong after the Hexagon deal.
- The other side
- Shares issued to Hexagon offset part of the buybacks.
Evidence: Form 10-K (FY2025) Note on stockholders' equity
P/E and FCF yield use the FY2025 year-end share price. Cadence pays no dividend.
22
ResilienceSite analysisShow
How well the company could absorb a bad year: its financial buffer, how its revenue and profit held up in the worst year on record, and what the 10-K says about the business's exposure to shocks. Figures and filing statements only — no overall rating.
1. Financial buffer (FY2025)
Cash & short-term investments ÷ debt due within a year
—
$3.16B vs. —
Interest coverage (operating income ÷ interest expense)
12.8x
$1.49B vs. $117M
Free cash flow ÷ dividends paid
—
2. Worst year in the record, and the recovery
| Figure | Worst year-over-year change | Back to the prior level? |
|---|---|---|
| Revenue | No decline in the record | — |
| Operating income | No decline in the record | — |
Covers only the 6 fiscal years on record (FY2020–FY2025), which may not include a full recession — the worst year here isn’t necessarily how the company would fare in a severe downturn.
3. Business resilience (from the 10-K)
Recurring revenue
A record $8.2B backlog at Q3 2026.
Source: 8-K filed 2026-10-26 (Exhibit 99.01)
Cash
$3.0B of cash at year-end 2025 against $2.48B of debt, before funding the Hexagon cash consideration.
Source: SEC EDGAR XBRL
Customer spread
No customer at 10% or more of revenue.
Source: Form 10-K (FY2025), MD&A
23
Legal & regulatory mattersSite analysisShow
Lawsuits, government investigations, enforcement actions and settlements the company discloses — where each stands, what is at stake, and what comes next. From the 10-K's Legal Proceedings and contingencies note, the latest 10-Q, and 8-Ks.
Cadence resolved its export-control violations with BIS and the DOJ in July 2025, including a guilty plea to one conspiracy count, and paid $140.6 million. Ongoing audit and compliance obligations remain.
0 open matters · 1 settled or closed
BIS/DOJ export-control settlement and plea
SettledEnforcement / sanctionU.S. Commerce Department (BIS); U.S. Department of Justice
Resolves export violations from 2015 to 2021. Cadence pleaded guilty to one count of conspiracy to commit export-control violations and signed an administrative settlement with BIS.
- Amounts
- $140.6 million of net penalties and forfeitures, paid in the quarter ended September 30, 2025.
- Next step
- Ongoing audit, compliance and other obligations under the agreements.
Source: Form 10-Q (quarter ended 2026-09-30) — Legal Proceedings
Based on Form 10-Q (quarter ended 2026-09-30) — Legal Proceedings, reviewed 2026-10-18. Routine ordinary-course claims are not listed. “Major” is this site’s judgment of which matters could materially affect results.
24
Risks (including geopolitical)Site analysis
Starting from the 10-K's Risk Factors section, organized by category — geopolitical, currency, raw materials, regulatory, disaster, and more — with impact and likelihood assessed by this site.
Risk map
Vertical = impact on results, horizontal = likelihood. Upper right = most severe. Numbers match the list below (placement is this site’s own assessment).
Likelihood →
"Company disclosure" vs. "this site’s assessment"
The description and mitigation for each risk are this site’s summary of the 10-K’s "Risk Factors" section. Impact and likelihood are this site’s own assessment, not the company’s — where the company discloses its own likelihood assessment, that is noted in the summary.
Impact is judged from how large the affected business is relative to total revenue/profit, and from the risk’s track record of moving results in the past. Likelihood is judged from the filing’s wording and the current business environment (already occurring, or recurring). See the rating criteria.
Geopolitical risk highlights
- [1]U.S.–China export controls
- 1Geopolitical
U.S.–China export controls
- Company disclosure (summarized from the 10-K)
- China was 13% of FY2025 revenue. BIS imposed license requirements on EDA software for China in May 2025, rescinded them in July 2025, and the 10-K says they hurt China revenue in that period and could be reimposed.
- Company’s stated mitigation
- Risk-based trade compliance policies, plus the additional export compliance programs required by the plea agreement.
- This site’s assessment
- Impact High / Likelihood Med
- 2Competition & technology shift
Competition
- Company disclosure (summarized from the 10-K)
- Competitors include Synopsys (which acquired Ansys), Siemens EDA, Keysight, and Chinese EDA firms such as Huada Empyrean; customers with in-house EDA tools also compete.
- Company’s stated mitigation
- We invest and expect to continue to invest in research and development for new and existing products, technologies and services in response to our customers’ increasing technological requirements and to maintain and improve our competitive position.
- This site’s assessment
- Impact Med / Likelihood Med
- 3Demand & macro
Semiconductor industry cycle
- Company disclosure (summarized from the 10-K)
- Customers are concentrated in the semiconductor and electronics systems industries, so their spending drives Cadence's revenue.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
- 4M&A & integration
Integrating Hexagon D&E
- Company disclosure (summarized from the 10-K)
- The roughly €2.7B acquisition closed in February 2026, and Cadence lists failure to successfully integrate acquired businesses among its risks.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
- 5Information security
Cybersecurity
- Company disclosure (summarized from the 10-K)
- Cyberattacks and other catastrophic events could interrupt systems, delay product development, and cause loss of critical data.
- Company’s stated mitigation
- Our cybersecurity risk management program is integrated into our overall risk oversight strategy and utilizes common reporting channels and governance processes that apply across other risk areas.
- This site’s assessment
- Impact Med / Likelihood Med
25
What changed in the risk factorsFrom SEC data
Paragraphs in the latest 10-K's Risk Factors that have little overlap with the year before, and paragraphs that were dropped.
New or substantially reworded (8)
• We rely on third-party data center providers and any disruption in the operations of these third-party providers, limitations on capacity or interference with our use could adversely affect our business, financial condition and results of operations.
The growth of our business depends primarily on the semiconductor and electronics systems industries.
The increasing complexity of designs of semiconductors and electronic systems and customers’ concerns about managing costs have previously led to, and in the future could lead to, a decrease in design starts and design activity in general. Read more
For example, in response to this increasing complexity, some customers have chosen to focus on one discrete phase of the design process or opt for less advanced, but less risky, manufacturing processes that may not require the most advanced EDA products. If growth in the semiconductor and electronics systems industries slows or stalls, then demand for our products and services could decrease and our business, financial condition and results of operations could be adversely affected. Additionally, as the EDA industry has matured, stronger competition has emerged from companies better able to compete as sole source vendors. This increased competition…
Furthermore, the semiconductor and electronics systems industries have become increasingly complex and interconnected ecosystems. Read more
Many of our customers outsource the manufacturing of their semiconductor designs to foundries. Our customers also frequently incorporate third-party IP, whether provided by us or other vendors, into their designs to improve the efficiency of their design process. We work closely with major foundries to help ensure that our products are compatible with their manufacturing processes. Similarly, we work closely with other major providers of semiconductor IP, particularly microprocessor IP, to optimize our EDA products for use with their IP designs and to help ensure that their IP and our own IP products work effectively together, as we may each provide for the design of separate components on the same chip. If we fail to optimize our products for use with major…
In addition, as previously disclosed, on May 23, 2025, BIS informed us that a license was required for the export, re-export or in-country transfer of EDA Software and Technology when a party to the transaction is located in China or is a Chinese "military end user" on the "Military End-User List," wherever located. On July 2, 2025, BIS informed us that the license requirements set forth in the May 23, 2025 letter from BIS were rescinded effective immediately. While we have since restored access to EDA Software and Technology for affected customers in accordance with these updated U.S. export regulations, the temporary license requirements negatively impacted our revenue in China during this period. However, in light of continued negotiations between the United States and China, the United States may consider reimposing these or additional restrictions on the export, re-export or…
Specifically, as previously disclosed, on July 27, 2025, we reached a settlement with each of BIS and the U.S. Read more
Department of Justice ("DOJ") that resolved matters relating to export control violations that occurred between 2015 and 2021 primarily involving sales initiated by a Cadence subsidiary of products and services valued at $45.3 million in total over that period to a customer in China, as well as the subsequent transfer of technology involved in those sales to a third party in China, without the requisite authorization from BIS. As part of the settlements, we entered into a plea agreement with the DOJ pursuant to which we agreed to plead guilty to one count of conspiracy to commit export controls violations. The plea agreement has a three-year probationary term and includes obligations to implement additional export compliance programs and policies, including ongoing reporting…
Failure to comply with the terms of the plea agreement, the administrative settlement agreement or our probation could result in further criminal, civil, or administrative proceedings or denial of export privileges. Read more
Such failure or any resulting further government action could materially and adversely affect our reputation, business, financial condition and results of operations. Further, our ongoing obligations under these agreements will generally apply to any new business entities we acquire, which could limit our ability to acquire new businesses that may be strategically important to us, and our continued acquisition and integration of other businesses could increase our risk of a violation. Our ongoing obligations under these agreements will also generally apply to any purchaser of our company or our material business operations, which could deter a potential acquisition of our…
In addition to risks related to license requirements, use of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or assurances of title or controls on origin of the software. Moreover, many of the risks associated with use of open source software, such as the lack of warranties or assurances of title, cannot be eliminated, and could, if not properly addressed, negatively affect our business. While we have established processes designed to help alleviate these risks, including a review process for screening requests from our development organizations for the use of open source software, we cannot guarantee that our processes for controlling our use of open source software in our products and services will be effective.
No longer in the text (1)
In August 2022, the United States enacted the Inflation Reduction Act of 2022, which included a new minimum tax on certain large corporations, an excise tax on stock buybacks and significant funding for IRS enforcement efforts. Read more
In October 2021, the Organisation for Economic Co-operation and Development (“OECD”) announced an agreement among more than 130 countries to adopt new rules including Pillar Two Model Rules which call for the taxation of large multinational corporations, such as Cadence, at a minimum rate of 15%. Subsequently multiple sets of administrative guidance have been issued. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years.…
14 more paragraphs differ; the filings below have the full text.
Matched automatically, quoted as filed, and may include rewording of an existing risk. Compares Item 1A of the 10-K filed Feb 19, 2026 ↗ with the 10-K filed Feb 21, 2025 ↗.
26
What to watch going forwardSite analysis
- Any reimposed U.S. export restrictions on EDA sales to China.
- Compliance under the three-year plea agreement probation.
- Integration of Hexagon D&E and growth of System Design and Analysis.
- AI-driven design demand and backlog conversion.
- Competition from Synopsys after its Ansys acquisition.
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Source documentsShow
This page's financial figures come from the Form 10-Ks listed below. Check the original filings for full detail.
Last updated
Analysis last edited: October 31, 2026 · Financial data fetched: October 17, 2026 10:06 (SEC EDGAR) · Source 10-K filed: February 19, 2026
Built on10-K FY2025 · filed 2026-02-19
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
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