Companies /Technology

Cadence Design Systems Inc

NASDAQ: CDNS Software - Application
$304.88
▼ $1.80 (−0.59%) today
Markets closed · 2:43am ET

Q3 2025 Earnings

Reported Oct 27, 2025, 4:03pm ET · SEC source
$1.93
Beat +7.82%
EPS · est. $1.79
$1.3B
Beat +1.16%
Revenue · est. $1.3B
−8.1%
Trailing market
CDNS vs S&P since report
5 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
0+2%+4%Oct 27Oct 28report 4:03pm ETearnings+0.2%+0.5%
0+2%+4%Oct 27Oct 28earnings+0.2%+0.5%
CDNS +0.5%S&P 500 +0.2%
0+2%+4%Oct 27Oct 28report 4:03pm ETearnings+0.7%+0.5%
0+2%+4%Oct 27Oct 28earnings+0.7%+0.5%
CDNS +0.5%NASDAQ +0.7%
−3%0+3%Oct 27Nov 4report 4:03pm ETearnings−1.5%−2.9%
−3%0+3%Oct 27Nov 4earnings−1.5%−2.9%
CDNS −2.9%S&P 500 −1.5%
−3%0+3%Oct 27Nov 4report 4:03pm ETearnings−1.6%−2.9%
−3%0+3%Oct 27Nov 4earnings−1.6%−2.9%
CDNS −2.9%NASDAQ −1.6%
−2.87%
Day of report
+0.04%
Next session
−2.37%
One week
−8.63%
30 days

S&P 500 over the same 30 days: −0.53%.

Did CDNS Beat Earnings? Q3 2025 Results

Cadence Design Systems delivered a strong third quarter, with results clearing Wall Street's bar on both top and bottom lines as demand for its electronic design automation tools held firm. Revenue of $1.34 billion grew 10.2% year over year, edging past the $1.32 billion consensus estimate by 1.16%, while non-GAAP diluted EPS of $1.93 beat the $1.79 consensus by 7.85%, up from $1.64 in the year-ago period. A key driver behind the performance was record hardware demand, with significant expansions at AI and hyperscale computing customers lifting the company's backlog to a record $7.00 billion, with $3.50 billion expected to convert to revenue over the next 12 months. Non-GAAP operating margin widened to 47.6% from 44.8% a year ago, reflecting improved operational leverage across the business. Cadence raised its full-year 2025 revenue outlook to a range of $5.26 billion to $5.29 billion, implying roughly 14% growth at the midpoint, and lifted its non-GAAP EPS guidance to $7.02 to $7.08, signaling continued confidence in the demand environment despite ongoing insider selling noted among several executives.

Key Takeaways
  • Record Q3 hardware performance with significant expansions at AI and HPC customers
  • IP business momentum driven by accelerating global IP demand and customer proliferation
  • Broad-based strength across all businesses
  • Non-GAAP operating margin expansion to 47.6% from 44.8% year-over-year
  • Core EDA representing 71% of revenue with consistent demand

“Cadence delivered excellent results for the third quarter of 2025. With a record backlog and ongoing broad-based strength of our business, we are raising our full year revenue outlook to ~14% growth year-over-year.”

Cadence Design Systems CEO, on the earnings call

Forward Guidance & Outlook

Cadence raised its full-year 2025 revenue outlook to $5.262 billion - $5.292 billion, representing approximately 14% year-over-year growth at midpoint. Full-year GAAP EPS is expected at $3.80 - $3.86 and non-GAAP EPS at $7.02 - $7.08. For Q4 2025, revenue is guided at $1.405 billion - $1.435 billion, GAAP EPS of $1.17 - $1.23, and non-GAAP EPS of $1.88 - $1.94. Full-year operating cash flow is expected at $1.65 billion - $1.75 billion. The company expects to use approximately $200 million for share repurchases in Q4, with at least 50% of free cash flow allocated to repurchases for the full year. Approximately 70% of revenue is expected from beginning backlog.

CDNS YoY Financials

Q3 2025 vs Q3 2024 · SEC filings Q3 2024 Q3 2025
$0$400.0M$800.0M$1.2B$1.2B$1.3BRevenue$1.1B$1.2BGross Profit$350.1M$425.4MOperating Income$238.1M$287.1MNet Income
$0$400.0M$800.0M$1.2BRevenueGross ProfitOperating IncomeNet Income

CDNS Revenue by Segment

Product and Maintenance$1.2B
Core EDA
System Design and Analysis
Semiconductor IP
Services$131.1M

CDNS Revenue by Geography

Americas
Asia Pacific
China
EMEA
Japan

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