Cadence Reports First Quarter 2025 Financial Results

• Exceeded Q1 Guidance for All Key Metrics
• Q1 Revenue Up 23% & Non-GAAP EPS Up 34% YoY
• Raising 2025 Revenue and EPS Outlook

SAN JOSE, Calif.— April 28, 2025 — Cadence (Nasdaq: CDNS) today announced results for the first quarter of 2025.

First Quarter 2025 Financial Results

• Revenue of $1.242 billion, compared to revenue of $1.009 billion in Q1 2024
• GAAP operating margin of 29.1%, compared to 24.8% in Q1 2024
• Non-GAAP operating margin of 41.7%, compared to 37.8% in Q1 2024
• GAAP diluted net income per share of $1.00, compared to $0.91 in Q1 2024
• Non-GAAP diluted net income per share of $1.57, compared to $1.17 in Q1 2024
• Quarter-end backlog was $6.4 billion and current remaining performance obligations ("cRPO"), contract revenue expected to be recognized as revenue in the next 12 months, was $3.2 billion

“Cadence delivered excellent results for the first quarter of 2025 with robust ongoing customer demand for our innovative technologies driving 23% revenue growth and 34% non-GAAP EPS growth year-over-year,” said Anirudh Devgan, president and chief executive officer. “We haven't seen any change in customers' behavior at this time, as they continue investing in R&D for their next-gen designs. Our resilient software business model, strong backlog, and AI-driven product innovations, position us well in navigating today's dynamic macro environment.”

“Q1 was a strong quarter for Cadence, driven by broad-based strength across all our businesses,” said John Wall, senior vice president and chief financial officer. “I am pleased that we exceeded all key financial metrics for the quarter, and we are tracking ahead of our original forecast for 2025, allowing us to raise our full year outlook.”

CFO Commentary

Commentary on the first quarter of 2025 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For fiscal year 2025, the company expects:

• Revenue in the range of $5.15 billion to $5.23 billion
• GAAP operating margin in the range of 30.25% to 31.25%
• Non-GAAP operating margin in the range of 43.25% to 44.25%
• GAAP diluted net income per share in the range of $4.21 to $4.31
• Non-GAAP diluted net income per share in the range of $6.73 to $6.83

The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.

Reconciliations of the financial results and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release.

Business Highlights

• Semiconductor IP revenue grew 40% year-over-year in Q1 as it continued to benefit from market opportunities offered by AI, chiplet-based architectures, and foundry ecosystem buildout.
• Core EDA revenue grew 16% year-over-year in Q1. AI-driven Cadence Cerebrus continued its strong momentum with nearly 50 new logos in Q1 and more than 1,000 tapeouts to date. Cadence hardware products expanded their footprint with existing customers, especially top hyperscalers, while gaining notable competitive wins.
• At the GPU Technology Conference (GTC), Cadence announced an expanded partnership with NVIDIA on its latest Grace Blackwell architecture and a collaboration on developing full-stack agentic AI solutions using the new Llama Nemotron Reasoning Model.
• System Design and Analysis delivered over 50% year-over-year revenue growth in Q1, as Cadence’s AI-driven design optimization platforms integrated with its physics-based simulation solutions continued delivering superior results across multiple end-markets.

Audio Webcast Scheduled

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the first quarter 2025 financial results audio webcast today, April 28, 2025, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting April 28, 2025 at 5 p.m. (Pacific) and ending June 16, 2025 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

Q1 2025 Financial Schedules

Click here for the Q1 2025 Financial Schedules.

About Cadence

Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence’s Intelligent System Design™ strategy, are essential for the world’s leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2024, Cadence was recognized by the Wall Street Journal as one of the world’s top 100 best-managed companies. Cadence solutions offer limitless opportunities—learn more at www.cadence.com.