Companies /Technology

Cadence Design Systems Inc

NASDAQ: CDNS Software - Application
$303.70
▼ $2.97 (−0.97%) today
Markets open · 3:22pm ET

Q2 2026 Earnings

Reported Jul 27, 2026, 4:03pm ET · SEC source
$2.11
Beat +2.66%
EPS · est. $2.06
$1.6B
Beat +0.53%
Revenue · est. $1.6B
−3.3%
Trailing market
CDNS vs S&P since report
5 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−2%0+2%Jul 27Jul 28report 4:03pm ETearnings+0.5%+1.3%
−2%0+2%Jul 27Jul 28earnings+0.5%+1.3%
CDNS +1.3%S&P 500 +0.5%
−2%0+2%+4%Jul 27Jul 28report 4:03pm ETearnings−0.6%+1.3%
−2%0+2%+4%Jul 27Jul 28earnings−0.6%+1.3%
CDNS +1.3%NASDAQ −0.6%
−4%0+4%Jul 27Aug 4report 4:03pm ETearnings+4.4%−3.6%
−4%0+4%Jul 27Aug 4earnings+4.4%−3.6%
CDNS −3.6%S&P 500 +4.4%
−4%0+4%Jul 27Aug 4report 4:03pm ETearnings+5.7%−3.6%
−4%0+4%Jul 27Aug 4earnings+5.7%−3.6%
CDNS −3.6%NASDAQ +5.7%
+1.80%
Day of report
−3.47%
Next session
−1.19%
One week
+0.82%
30 days

S&P 500 over the same 30 days: +4.08%.

Did CDNS Beat Earnings? Q2 2026 Results

Cadence Design Systems posted a clean beat across both top and bottom lines in the second quarter of 2026, extending its streak of beating consensus EPS estimates to four consecutive quarters as robust demand for its AI-driven design tools powered results well ahead of expectations. The company reported non-GAAP EPS of $2.11, ahead of the $2.06 consensus by 2.66%, while revenue reached $1.58 billion, up 24.2% year-over-year and just ahead of the $1.58 billion estimate. The single biggest driver of the quarter's strength was a surge in Semiconductor IP revenue, which climbed more than 40% year-over-year on the back of strong Star IP demand and a significant Intel agreement, complemented by record hardware shipments and 37% growth in System Design and Analysis. Non-GAAP operating margin expanded to 45.5% from 42.8% a year ago, while backlog reached a record $8.10 billion. Cadence raised its full-year 2026 revenue outlook to $6.26 billion to $6.34 billion, reflecting roughly 19% growth at the midpoint, with non-GAAP EPS now guided at $8.05 to $8.15.

Key Takeaways
  • Broad-based strength driving double-digit growth across all businesses
  • Accelerating demand for AI-driven solutions across Design for AI and AI for Design
  • IP revenue grew more than 40% YoY driven by Star IP portfolio and significant Intel agreement
  • Core EDA revenue grew 18% YoY driven by AI portfolio and expanded adoption across hyperscalers, semiconductor companies and startups
  • Hardware delivered another record quarter adding 12 new customers
  • System Design and Analysis revenue grew 37% YoY driven by PCB, advanced packaging solutions and Hexagon D&E integration

“Cadence delivered an outstanding Q2 driven by broad-based strength and the accelerating demand for our AI-driven solutions across both Design for AI and AI for Design fronts.”

Cadence Design Systems CEO, on the earnings call

Forward Guidance & Outlook

Cadence raised its fiscal year 2026 outlook: revenue of $6.26 billion to $6.34 billion (approximately 19% YoY growth at midpoint, up from prior 16%-18%), GAAP operating margin of 27.75% to 28.75%, non-GAAP operating margin of 43.75% to 44.75%, GAAP EPS of $4.76 to $4.86, non-GAAP EPS of $8.05 to $8.15, and operating cash flow of approximately $2.0 billion. For Q3 2026, revenue is guided at $1.595 billion to $1.625 billion (19%-21% YoY growth), non-GAAP operating margin of 43.5% to 44.5%, GAAP EPS of $1.11 to $1.17, and non-GAAP EPS of $2.01 to $2.07. The company expects to use approximately $200 million to repurchase shares in Q3 and approximately 50% of free cash flow for share repurchases for the full year.

CDNS YoY Financials

Q2 2026 vs Q2 2025 · SEC filings Q2 2025 Q2 2026
$0$500.0M$1.0B$1.5B$1.3B$1.6BRevenue$1.1B$1.3BGross Profit$241.8M$450.3MOperating Income$160.1M$367.1MNet Income
$0$500.0M$1.0B$1.5BRevenueGross ProfitOperating IncomeNet Income

CDNS Revenue by Segment

Product and Maintenance
Core EDA$1.1B+18.0%
System Design and Analysis$269.4M+37.0%
Semiconductor IP$237.7M+40.0%
Services

CDNS Revenue by Geography

Americas$681.3M+9.0%
Asia Pacific$316.9M+30.8%
China$237.7M+107.0%
EMEA$237.7M+16.5%
Japan$110.9M+24.2%

Figures from SEC filings and company reports. Not investment advice.