Cadence Design Systems (CDNS) Q3 2026 Earnings
How Did CDNS Stock React to Q3 2026 Earnings?
Did CDNS Beat Earnings? Q3 2026 Results
Yes. Cadence Design Systems reported Q3 2026 earnings of $2.11 a share on Oct 26, 2026, beating the $2.05 consensus estimate by 3.1%. Revenue was $1.6B against a $1.6B estimate.
Cadence Design Systems posted a strong third quarter for fiscal 2026, with adjusted non-GAAP EPS of $2.11 beating the $2.05 consensus estimate by 3.13%, extending the company's streak of consensus EPS beats to five consecutive quarters. Revenue climbed 22.0% year-over-year to $1.63 billion, edging past the $1.61 billion consensus, as broad-based momentum across all three product segments drove results. The standout driver was System Design and Analysis, which grew 30% year-over-year, while Core EDA and Semiconductor IP expanded 20% and 24%, respectively, reflecting deepening adoption among hyperscaler and memory customers. <a href="https://247wallst.com/investing/2026/10/22/wall-street-says-cadence-is-successfully-monetizing-ai-chip-complexity-but-will-valuation-still-sink-the-stock/">Cadence's ability to monetize AI chip complexity</a> was further underscored by the launch of Maestro, a suite of domain-specialized AI models claiming up to 30x higher quality versus general-purpose alternatives. Confidence in the trajectory prompted management to raise its full-year 2026 revenue outlook for the third time, now targeting approximately 21% growth, with full-year non-GAAP EPS guided to a range of $8.37 to $8.43.
- Strong double-digit growth across all product categories driven by AI-driven designs
- Core EDA drove 16 new digital and signoff full-flow wins with growing adoption among memory and hyperscaler customers
- Hardware delivered another record quarter fueled by meaningful expansions with marquee customers and growth in hardware cloud offering
- IP revenue driven by strong demand for Star IP portfolio across interface, memory and foundation IP
- System Design and Analysis driven by PCB and advanced packaging solutions and strong adoption of Millennium platform
- Q3 recurring revenue grew 18% year-over-year
“Cadence delivered an outstanding third quarter. 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.”
Cadence Design Systems CEO, on the earnings call
What Is Cadence Design Systems's Outlook?
For fiscal year 2026, Cadence raised its revenue outlook for the third time, now expecting revenue of $6.387 billion to $6.417 billion (approximately 21% YoY growth), GAAP operating margin of 28.2% to 29.2%, non-GAAP operating margin of 44.2% to 45.2%, GAAP EPS of $4.84 to $4.90, non-GAAP EPS of $8.37 to $8.43, and operating cash flow of approximately $2.0 billion. For Q4 2026, the company expects revenue of $1.695 billion to $1.725 billion, GAAP operating margin of 30% to 31%, non-GAAP operating margin of 44% to 45%, GAAP EPS of $1.23 to $1.29, non-GAAP EPS of $2.19 to $2.25, and expects to use approximately $400 million to repurchase shares. The company plans to use more than 50% of free cash flow for share repurchases for the full year.
CDNS YoY Financials
| Metric | Q3 2026 | Q3 2025 | Year over year |
|---|---|---|---|
| Revenue | $1.6B | $1.3B | +22.0% |
| Gross Profit | $1.4B | $1.3B | +9.6% |
| Operating Income | $428.7M | $425.4M | +0.8% |
| Net Income | $289.7M | $287.1M | +0.9% |
CDNS Revenue by Segment
CDNS Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.