cdns-20250428

Exhibit 99.01

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.

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.

© 2025 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

This press release contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, backlog, industry trends, market growth, pending transactions and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions and armed conflicts around the world; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s pending acquisitions of Secure-IC and Arm's Artisan foundation IP business, each of which remains subject to certain closing conditions including receipt of regulatory approvals, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

For a detailed discussion of these and other cautionary statements related to Cadence’s business, please refer to Cadence’s filings with the U.S. Securities and Exchange Commission, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.

All forward-looking statements in this press release are based on management's expectations as of the date of this press release and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

GAAP to Non-GAAP Reconciliation

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance.

To supplement Cadence’s financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence’s performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, income or expenses related to investments, divestitures and Cadence’s non-qualified deferred compensation plan, restructuring and other significant items not directly related to Cadence’s core business operations, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence’s core business operations and therefore provides supplemental information to Cadence management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence management, including forecasting and budgeting.

The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:


Operating Margin Reconciliation	Three Months Ended
	March 31, 2025	March 31, 2024
	(unaudited)
GAAP operating margin as a percent of total revenue	29.1%	24.8%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	8.7%	8.7%
Amortization of acquired intangibles	2.0%	1.7%
Acquisition and integration-related costs	1.8%	2.2%
Restructuring	0.0%	0.0%
Non-qualified deferred compensation expenses (credits)	(0.1)%	0.4%
Special charges	0.2%	0.0%
Non-GAAP operating margin as a percent of total revenue	41.7%	37.8%


Net Income Reconciliation	Three Months Ended
	March 31, 2025		March 31, 2024
(in thousands)	(unaudited)
Net income on a GAAP basis	$	273,579	$	247,643
Stock-based compensation expense	107,613		88,129
Amortization of acquired intangibles	25,416		16,755
Acquisition and integration-related costs	23,105		22,086
Restructuring	(109)		280
Non-qualified deferred compensation expenses (credits)	(1,573)		4,588
Special charges	1,988		—
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	3,332		(59,986)
Income tax effect of non-GAAP adjustments	(2,939)		(613)
Net income on a non-GAAP basis	$	430,412	$	318,882


Diluted Net Income Per Share Reconciliation	Three Months Ended
	March 31, 2025		March 31, 2024
(in thousands, except per share data)	(unaudited)
Diluted net income per share on a GAAP basis	$	1.00	$	0.91
Stock-based compensation expense	0.39		0.32
Amortization of acquired intangibles	0.09		0.06
Acquisition and integration-related costs	0.09		0.08
Restructuring	—		—
Non-qualified deferred compensation expenses (credits)	(0.01)		0.02
Special charges	0.01		—
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	0.01		(0.22)
Income tax effect of non-GAAP adjustments	(0.01)		—
Diluted net income per share on a non-GAAP basis	$	1.57	$	1.17
Shares used in calculation of diluted net income per share	273,631		273,544

For more information, please contact:

Cadence Investor Relations

408-944-7100

[email protected]

Cadence Newsroom

408-944-7039

[email protected]

Cadence Design Systems, Inc.

Condensed Consolidated Balance Sheets

March 31, 2025 and December 31, 2024

(In thousands)

(Unaudited)


	March 31, 2025		December 31, 2024
Current assets:
Cash and cash equivalents	$	2,777,674	$	2,644,030
Receivables, net	580,887		680,460
Inventories	225,621		257,711
Prepaid expenses and other	413,905		433,878
Total current assets	3,998,087		4,016,079
Property, plant and equipment, net	466,322		458,200
Goodwill	2,419,717		2,378,671
Acquired intangibles, net	584,228		594,734
Deferred taxes	986,191		982,057
Other assets	558,941		544,741
Total assets	$	9,013,486	$	8,974,482
Current liabilities:


Accounts payable and accrued liabilities	$	570,197	$	632,692
Current portion of deferred revenue	730,570		737,413
Total current liabilities	1,300,767		1,370,105
Long-term liabilities:
Long-term portion of deferred revenue	110,702		115,168
Long-term debt	2,477,159		2,476,183
Other long-term liabilities	348,601		339,448
Total long-term liabilities	2,936,462		2,930,799
Stockholders’ equity	4,776,257		4,673,578
Total liabilities and stockholders’ equity	$	9,013,486	$	8,974,482

Cadence Design Systems, Inc.

Condensed Consolidated Income Statements

For the Three Months Ended March 31, 2025 and March 31, 2024

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended
	March 31, 2025		March 31, 2024
Revenue:
Product and maintenance	$	1,110,850	$	913,385
Services	131,516		95,718
Total revenue	1,242,366		1,009,103
Costs and expenses:
Cost of product and maintenance	116,672		75,395
Cost of services	50,461		49,802
Marketing and sales	202,700		180,589
Research and development	439,102		378,958
General and administrative	63,098		68,716
Amortization of acquired intangibles	8,922		5,407
Restructuring	(109)		280
Total costs and expenses	880,846		759,147
Income from operations	361,520		249,956
Interest expense	(29,118)		(8,692)
Other income, net	23,290		68,779
Income before provision for income taxes	355,692		310,043
Provision for income taxes	82,113		62,400
Net income	$	273,579	$	247,643
Net income per share - basic	$	1.01	$	0.92
Net income per share - diluted	$	1.00	$	0.91
Weighted average common shares outstanding - basic	271,973		269,606
Weighted average common shares outstanding - diluted	273,631		273,544

Cadence Design Systems, Inc.

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2025 and March 31, 2024

(In thousands)

(Unaudited)


	Three Months Ended
	March 31, 2025		March 31, 2024
Cash and cash equivalents at beginning of period	$	2,644,030	$	1,008,152
Cash flows from operating activities:
Net income	273,579		247,643
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	52,916		39,556

Stock-based compensation	107,613		88,129
(Gain) loss on divestitures and investments, net	1,791		(55,394)
Deferred income taxes	(1,861)		(1,523)

ROU asset amortization and change in operating lease liabilities	(1,446)		(917)
Other non-cash items	862		556
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables	102,136		102,991
Inventories	15,018		(10,689)
Prepaid expenses and other	10,316		(15,073)
Other assets	12,237		(7,535)
Accounts payable and accrued liabilities	(69,621)		(117,291)
Deferred revenue	(14,377)		(23,941)
Other long-term liabilities	(2,142)		6,720
Net cash provided by operating activities	487,021		253,232
Cash flows from investing activities:


Purchases of investments	(11,469)		(2,095)
Proceeds from the sale and maturity of investments	1,246		43,377
Proceeds from the sale of IP and other assets	11,500		—
Purchases of property, plant and equipment	(23,061)		(49,601)

Cash paid in business combinations, net of cash acquired	—		(71,450)
Net cash used for investing activities	(21,784)		(79,769)
Cash flows from financing activities:






Proceeds from issuance of common stock	76,789		116,725
Stock received for payment of employee taxes on vesting of restricted stock	(72,566)		(151,123)
Payments for repurchases of common stock	(350,007)		(125,006)
Net cash used for financing activities	(345,784)		(159,404)
Effect of exchange rate changes on cash and cash equivalents	14,191		(9,793)
Increase in cash and cash equivalents	133,644		4,266
Cash and cash equivalents at end of period	$	2,777,674	$	1,012,418

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)


	2024										2025
GEOGRAPHY	Q1		Q2		Q3		Q4		Year		Q1
Americas	46	%	49	%	50	%	49	%	49	%	48	%
China	12	%	12	%	13	%	13	%	12	%	11	%
Other Asia	20	%	19	%	17	%	17	%	18	%	19	%
Europe, Middle East and Africa	17	%	14	%	14	%	15	%	15	%	16	%
Japan	5	%	6	%	6	%	6	%	6	%	6	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Category (% of Total Revenue)


	2024										2025
PRODUCT CATEGORY	Q1		Q2		Q3		Q4		Year		Q1
Core EDA	76	%	73	%	70	%	68	%	71	%	71	%
Semiconductor IP	12	%	13	%	14	%	13	%	13	%	14	%
System Design and Analysis	12	%	14	%	16	%	19	%	16	%	15	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Operating Margin

As of April 28, 2025

(Unaudited)


	Three Months Ending June 30, 2025	Year Ending December 31, 2025
	Forecast	Forecast
GAAP operating margin as a percent of total revenue	27.5% - 28.5%	30.25% - 31.25%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	10%	9%
Amortization of acquired intangibles	2%	2%
Acquisition and integration-related costs	2%	2%



Non-GAAP operating margin as a percent of total revenue†	41.5% - 42.5%	43.25% - 44.25%


†			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share

As of April 28, 2025

(Unaudited)


	Three Months Ending June 30, 2025	Year Ending December 31, 2025
	Forecast	Forecast
Diluted net income per share on a GAAP basis	$0.89 to $0.95	$4.21 to $4.31
Stock-based compensation expense	0.45	1.70
Amortization of acquired intangibles	0.09	0.36
Acquisition and integration-related costs	0.09	0.31

Non-qualified deferred compensation credits	—	(0.01)
Special charges	—	0.01
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	—	0.01
Income tax effect of non-GAAP adjustments	0.03	0.14
Diluted net income per share on a non-GAAP basis†	$1.55 to $1.61	$6.73 to $6.83


†			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Net Income

As of April 28, 2025

(Unaudited)


	Three Months Ending June 30, 2025	Year Ending December 31, 2025
($ in millions)	Forecast	Forecast
Net income on a GAAP basis	$242 to $259	$1,154 to $1,181
Stock-based compensation expense	123	466
Amortization of acquired intangibles	25	98
Acquisition and integration-related costs	25	86

Non-qualified deferred compensation credits	—	(2)
Special charges	—	2
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	—	3
Income tax effect of non-GAAP adjustments	7	37
Net income on a non-GAAP basis†	$422 to $439	$1,844 to $1,871


†			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Exhibit 99.02

CADENCE REPORTS FIRST QUARTER

2025

CADENCE DESIGN SYSTEMS, INC.

CFO COMMENTARY

Key Takeaways

• Exceeded all key financial metrics for Q1

• Raising 2025 outlook for revenue and EPS

• Repurchased $350 million of Cadence stock in Q1

Q2 2025 Outlook

• Revenue: $1.25 billion - $1.27 billion

• GAAP operating margin: 27.5% - 28.5%

• Non-GAAP operating margin: 41.5% - 42.5%

• GAAP EPS: $0.89 - $0.95

• Non-GAAP EPS: $1.55 - $1.61

• Expect to use approximately $175 million to repurchase Cadence shares in Q2

Q1 2025 KEY METRICS

• Revenue: $1.242 billion

• GAAP operating margin: 29.1%

• Non-GAAP operating margin: 41.7%

• GAAP EPS: $1.00

• Non-GAAP EPS: $1.57

• Operating cash flow: $487 million

FY 2025 Outlook

• Revenue: $5.15 billion - $5.23 billion

• GAAP operating margin: 30.25% - 31.25%

• Non-GAAP operating margin: 43.25% - 44.25%

• GAAP EPS: $4.21 - $4.31

• Non-GAAP EPS: $6.73 - $6.83

• Operating cash flow: $1.6 billion - $1.7 billion

• Expect to use at least 50% of free cash flow to repurchase Cadence shares for the year

Financial Results Webcast

Our Q1 2025 financial results webcast will begin April 28, 2025 at 2:00 p.m. (Pacific). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on April 28, 2025 until 5:00 p.m. (Pacific) on June 16, 2025.



April 28, 2025	Cadence Q1 2025 Financial Results	1


Cadence Design Systems, Inc.

Financial Metrics


(In Millions, except per share data)	2019		2020*		2021		2022		2023*		2024		2025E

Revenue	$	2,336	$	2,683	$	2,988	$	3,562	$	4,090	$	4,641	$5,150- $5,230
Revenue growth*	9%		15%		11%		19%		15%		13%		11% - 13%
3-year CAGR	9%		11%		12%		15%		15%		16%		~13%
3-year CAGR without 53rd week impact			11%						16%

GAAP operating expenses	$	1,845	$	2,037	$	2,209	$	2,488	$	2,839	$	3,291	~$3,569
GAAP operating expense growth	6%		10%		8%		13%		14%		16%		~8%

Non-GAAP operating expenses	$	1,587	$	1,739	$	1,877	$	2,125	$	2,373	$	2,667	~$2,919
Non-GAAP operating expense growth	6%		10%		8%		13%		12%		12%		~9%

GAAP operating margin**	21.1%		24.1%		26.1%		30.1%		30.6%		29.1%		30.75	%



Non-GAAP operating margin**	32.1%		35.2%		37.2%		40.3%		42.0%		42.5%		43.75	%



GAAP earnings per share	$	3.53	$	2.11	$	2.50	$	3.09	$	3.82	$	3.85	$4.21 - $4.31

Non-GAAP earning per share	$	2.20	$	2.80	$	3.29	$	4.27	$	5.15	$	5.97	$6.73 - $6.83
Non-GAAP EPS growth**	18%		27%		18%		30%		21%		16%		14	%
3-year Non-GAAP EPS CAGR**	22%		26%		21%		25%		23%		22%		17	%

Weighted average shares diluted outstanding	280.5		279.6		278.9		275.0		272.7		273.8		273 - 275

Cash flow from operations	730		905		1,101		1,242		1,349		1,261		$1,600 - $1,700

Capital expenditures	75		95		65		123		102		143		~$150

* Fiscal 2020 was a 53-week year, compared to all other years which were 52 week years. 2020 (which impacts the 3 year CAGR in 2023) included approximately $45 million revenue impact for the extra week.

** At midpoint of outlook.

Profitability Trends


(In Millions)	2019		2020		2021		2022		2023		2024		2025E

Revenue*	$	2,336	$	2,683	$	2,988	$	3,562	$	4,090	$	4,641	$	5,190
Revenue Growth*	9%		15%		11%		19%		15%		13%		12%
3-Year Revenue Growth CAGR*	9%		11%		12%		15%		15%		16%		13%
GAAP operating margin*	21.1%		24.1%		26.1%		30.1%		30.6%		29.1%		30.75%

Non-GAAP operating margin*	32.1%		35.2%		37.2%		40.3%		42.0%		42.5%		43.75%
Stock-based compensation	(7.8)%		(7.4)%		(7.0)%		(7.6)%		(8.0)%		(8.4)%		(9.0)%
Non-GAAP operating margin adjusted for stock-based compensation*	24.3%		27.8%		30.2%		32.7%		34.0%		34.1%		34.75%

GAAP operating income	$	492	$	646	$	779	$	1,074	$	1,251	$	1,351	$	1,621

Non-GAAP operating income*	$	749	$	944	$	1,111	$	1,436	$	1,717	$	1,974	$	2,271

Non-GAAP operating income adjusted for stock-based compensation*	$	567	$	747	$	901	$	1,166	$	1,391	$	1,583	$	1,805

* At midpoint of outlook.


April 28, 2025			Cadence Q1 2025 Financial Results			2


Cadence Design Systems, Inc.

Second Quarter 2025 Financial Outlook


	Q2 2024		Q1 2025		Q2 2025E

Total Revenue ($ Millions)	$	1,061	$	1,242	$1,250 - $1,270
Q/Q Growth			(8)%		1% - 2%
Y/Y Growth			23%		18% - 20%

GAAP Operating Margin	27.7%		29.1%		27.5% - 28.5%

Non-GAAP Operating Margin	40.1%		41.7%		41.5% - 42.5%

GAAP EPS	$	0.84	$	1.00	$0.89 - $0.95



Non-GAAP EPS	$	1.28	$	1.57	$1.55 - $1.61

Fiscal Year 2025 Financial Outlook


			Previous	Current
	FY 2024		FY 2025E	FY 2025E






Recurring Revenue	82.6%		~80%	~80%

Total Revenue ($ Millions)	$	4,641	$5,140 - $5,220	$5,150 - $5,230
Y/Y Growth	13%		11% - 12%	11% - 13%

Revenue from Beginning Backlog	~70%		~70%	~70%

GAAP Operating Margin	29.1%		30.25% - 31.25%	30.25% - 31.25%

Non-GAAP Operating Margin	42.5%		43.25% - 44.25%	43.25% - 44.25%

GAAP Other Income & Expense ($ Millions)	$	45	$(53) - $(67)	$(43) - $(57)

Non-GAAP Other Income & Expense ($ Millions)	$	(16)	$(53) - $(67)	$(40) - $(54)

GAAP Tax Rate	24.4%		~25%	~26%

Non-GAAP Tax Rate	16.5%		16.5%	16.5%

Weighted Average Diluted Shares Outstanding (Millions)	273.8		274 - 276	273 - 275

GAAP EPS	$	3.85	$4.19 - $4.29	$4.21 - $4.31
Y/Y Growth	1%		9% - 11%	9% - 12%

Non-GAAP EPS	$	5.97	$6.65 - $6.75	$6.73 - $6.83
Y/Y Growth	16%		11% - 13%	13% - 14%

Cash Flow from Operations ($ Millions)	$	1,261	$1,600 - $1,700	$1,600 - $1,700

DSO	48		~50	~50

Capital Expenditures ($ Millions)	$	143	~$150	~$150


April 28, 2025			Cadence Q1 2025 Financial Results			3


Cadence Design Systems, Inc.

First Quarter Financial Results

Backlog


(In Billions)	2021		2022		2023		2024		Q1 2025


Backlog	$	4.4	$	5.8	$	6.0	$	6.8	$	6.4

Revenue


(In Millions)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025

Product and Maintenance	$	913	$	961	$	1,100	$	1,239	$	1,111
Services	96		100		115		117		131
Total Revenue	$	1,009	$	1,061	$	1,215	$	1,356	$	1,242

Recurring and Up-Front Revenue


	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025

Revenue recognized over time	87	%	85	%	80	%	72	%	77	%
Revenue from arrangements with non-cancelable commitments	3	%	3	%	2	%	2	%	3	%
Recurring Revenue	90	%	88	%	82	%	74	%	80	%
Up-Front Revenue	10	%	12	%	18	%	26	%	20	%
Total	100	%	100	%	100	%	100	%	100	%

Trailing Twelve Months Recurring and Up-Front Revenue


	Trailing Twelve Months Ended
	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025

Recurring Revenue	87	%	87	%	86	%	83	%	80	%
Up-Front Revenue	13	%	13	%	14	%	17	%	20	%
Total	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Geography


(% of Total Revenue)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


Americas	46	%	49	%	50	%	49	%	48	%
China	12	%	12	%	13	%	13	%	11	%
Other Asia	20	%	19	%	17	%	17	%	19	%
Europe, Middle East and Africa	17	%	14	%	14	%	15	%	16	%
Japan	5	%	6	%	6	%	6	%	6	%
Total	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Category


(% of Total Revenue)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025





Core EDA	76	%	73	%	70	%	68	%	71	%
Semiconductor IP	12	%	13	%	14	%	13	%	14	%
System Design and Analysis	12	%	14	%	16	%	19	%	15	%
Total	100	%	100	%	100	%	100	%	100	%


April 28, 2025			Cadence Q1 2025 Financial Results			4


Cadence Design Systems, Inc.

Gross Margin


	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


GAAP Gross Margin	87.6	%	86.9	%	86.6	%	83.8	%	86.5	%
Non-GAAP Gross Margin	89.1	%	88.5	%	88.6	%	85.5	%	88.4	%

Total Costs and Expenses


(In Millions)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


Total GAAP Costs and Expenses	$	759	$	767	$	865	$	899	$	881

Total Non-GAAP Costs and Expenses	$	627	$	635	$	671	$	733	$	724

Operating Margin


	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


GAAP Operating Margin	24.8	%	27.7	%	28.8	%	33.7	%	29.1	%
Non-GAAP Operating Margin	37.8	%	40.1	%	44.8	%	46.0	%	41.7	%

Net Income Per Share


	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


GAAP Net Income Per Share	$	0.91	$	0.84	$	0.87	$	1.24	$	1.00

Non-GAAP Net Income Per Share	$	1.17	$	1.28	$	1.64	$	1.88	$	1.57

Total DSO


	Q1 2024	Q2 2024	Q3 2024	Q4 2024	Q1 2025


DSO	36	49	44	48	44

Balance Sheet and Cash Review

Free Cash Flow


(In Millions)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


Net Cash from Operating Activities	$	253	$	156	$	410	$	441	$	487
Capital Expenditures	49		29		27		37		23
Free Cash Flow	$	204	$	127	$	383	$	404	$	464

Cash and Cash Equivalents


(In Millions)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


Cash and Cash Equivalents	$	1,012	$	1,059	$	2,786	$	2,644	$	2,778

•Approximately 67 percent of our cash and cash equivalents were in the U.S. at quarter-end.

Debt


(In Millions)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


Debt (principal value)	$	650	$	1,350	$	2,850	$	2,500	$	2,500

•In September 2024, Cadence issued $2.5 billion of Senior Notes at a weighted average interest rate of 4.44%.

Share Repurchase


(In Millions)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


Share Repurchase	$	125	$	125	$	150	$	150	$	350
Number of Shares	0.425		0.423		0.563		0.519		1.361

Employees


	Q1 2024	Q2 2024	Q3 2024	Q4 2024	Q1 2025


Headcount	11,753	12,665	12,703	12,705	12,837


April 28, 2025			Cadence Q1 2025 Financial Results			5


Cadence Design Systems, Inc.

Forward Looking Statements

This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, backlog, industry trends, market growth, pending transactions and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions and armed conflicts around the world; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s pending acquisitions of Secure-IC and Arm's Artisan foundation IP business, each of which remains subject to certain closing conditions including receipt of regulatory approvals, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

GAAP to Non-GAAP Reconciliation

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this CFO Commentary with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. See our earnings press release issued today for further discussion of our non-GAAP financial measures, as well as the reconciliation provided in the Appendix to this CFO Commentary.

Cadence’s management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company’s core business operations and therefore provides supplemental information to Cadence’s management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence’s business from the same perspective as Cadence’s management, including forecasting and budgeting.


April 28, 2025			Cadence Q1 2025 Financial Results			6


Cadence Design Systems, Inc.

APPENDIX I

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses


(In Millions)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025


GAAP total costs and expenses	$	759	$	767	$	865	$	899	$	881

Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense	(88)		(88)		(109)		(107)		(108)
Amortization of acquired intangibles	(17)		(20)		(27)		(27)		(25)
Acquisition and integration-related costs	(22)		(21)		(29)		(23)		(23)
Restructuring	—		—		(25)		1		—
Non-qualified deferred compensation (expenses) credits	(5)		(2)		(4)		—		2
Special charges*	—		(1)		—		(10)		(2)
Non-GAAP total costs and expenses**	$	627	$	635	$	671	$	733	$	724

Table may not foot due to rounding


*			Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses


(In Millions)	2019		2020*		2021		2022		2023		2024		2025E


GAAP total costs and expenses	$	1,845	$	2,037	$	2,209	$	2,488	$	2,839	$	3,291	$	3,569

Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense	(182)		(197)		(210)		(270)		(326)		(391)		(466)
Amortization of acquired intangibles	(53)		(64)		(67)		(60)		(62)		(90)		(98)
Acquisition and integration-related costs	(8)		(23)		(23)		(41)		(56)		(96)		(86)
Restructuring	(9)		(9)		1		—		(11)		(24)		—
Non-qualified deferred compensation (expenses) credits	(5)		(5)		(6)		8		(11)		(11)		2
Special charges**	(1)		—		(27)		—		—		(11)		(2)
Non-GAAP total costs and expenses***	$	1,587	$	1,739	$	1,877	$	2,125	$	2,373	$	2,667	$	2,919

Table may not foot due to rounding


*			Fiscal 2020 was a 53-week year.
**			2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
***			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


April 28, 2025			Cadence Q1 2025 Financial Results			7


Cadence Design Systems, Inc.

Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP Operating Income Adjusted for Stock-based Compensation


(In Millions)	2019		2020*		2021		2022		2023		2024		2025E


GAAP operating income	$	492	$	646	$	779	$	1,074	$	1,251	$	1,351	$	1,621

Reconciling items to non-GAAP operating income
Stock-based compensation expense	182		197		210		270		326		391		466
Amortization of acquired intangibles	53		64		67		60		62		90		98
Acquisition and integration-related costs	8		23		23		41		56		96		86
Restructuring	9		9		(1)		—		11		24		—
Non-qualified deferred compensation expenses (credits)	5		5		6		(8)		11		11		(2)
Special charges**	1		—		27		—		—		11		2
Non-GAAP operating income***	$	749	$	944	$	1,111	$	1,436	$	1,717	$	1,974	$	2,271
Stock-based compensation expense	(182)		(197)		(210)		(270)		(326)		(391)		$	(466)
Non-GAAP operating income adjusted for stock-based compensation***	$	567	$	747	$	901	$	1,166	$	1,391	$	1,583	$	1,805

Table may not foot due to rounding


*			Fiscal 2020 was a 53-week year.
**			2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
***			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


April 28, 2025			Cadence Q1 2025 Financial Results			8


Cadence Design Systems, Inc.

Reconciliation of GAAP Gross Margin as a Percent of Total Revenue to Non-GAAP Gross Margin as a Percent of Total Revenue


	Q1 2024	Q2 2024	Q3 2024	Q4 2024	Q1 2025


GAAP gross margin as a percent of total revenue	87.6%	86.9%	86.6%	83.8%	86.5%

Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense	0.3%	0.3%	0.3%	0.3%	0.4%
Amortization of acquired intangibles	1.1%	1.2%	1.5%	1.3%	1.4%
Non-qualified deferred compensation expenses (credits)	0.0%	0.0%	0.0%	0.0%	0.0%
Acquisition and integration-related costs	0.1%	0.1%	0.2%	0.1%	0.1%
Non-GAAP gross margin as a percent of total revenue*	89.1%	88.5%	88.6%	85.5%	88.4%


*			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


April 28, 2025			Cadence Q1 2025 Financial Results			9


Cadence Design Systems, Inc.

Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue


	Q1 2024	Q2 2024	Q3 2024	Q4 2024	Q1 2025	Q2 2025E


GAAP operating margin as a percent of total revenue	24.8%	27.7%	28.8%	33.7%	29.1%	27.5% - 28.5%

Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense	8.7%	8.3%	9.0%	7.9%	8.7%	10%
Amortization of acquired intangibles	1.7%	1.9%	2.2%	2.0%	2.0%	2%
Acquisition and integration-related costs	2.2%	1.9%	2.4%	1.7%	1.8%	2%
Restructuring	0.0%	0.0%	2.0%	(0.1)%	0.0%	0%
Non-qualified deferred compensation expenses (credits)	0.4%	0.2%	0.4%	0.0%	(0.1)%	0%
Special charges*	0.0%	0.1%	0.0%	0.8%	0.2%	0%
Non-GAAP operating margin as a percent of total revenue**	37.8%	40.1%	44.8%	46.0%	41.7%	41.5% - 42.5%


*			Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue


	2019	2020	2021	2022	2023	2024	2025E


GAAP operating margin as a percent of total revenue	21.1%	24.1%	26.1%	30.1%	30.6%	29.1%	30.25% - 31.25%

Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense	7.8%	7.4%	7.0%	7.6%	8.0%	8.4%	9%
Amortization of acquired intangibles	2.3%	2.4%	2.2%	1.7%	1.5%	2.0%	2%
Acquisition and integration-related costs	0.3%	0.8%	0.8%	1.1%	1.4%	2.1%	2%
Restructuring	0.4%	0.3%	0.0%	0.0%	0.3%	0.5%	0%
Non-qualified deferred compensation expenses (credits)	0.2%	0.2%	0.2%	(0.2)%	0.2%	0.2%	0%
Special charges*	0.0%	0.0%	0.9%	0.0%	0.0%	0.2%	0%
Non-GAAP operating margin as a percent of total revenue**	32.1%	35.2%	37.2%	40.3%	42.0%	42.5%	43.25% - 44.25%


*			2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


April 28, 2025			Cadence Q1 2025 Financial Results			10


Cadence Design Systems, Inc.

Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share


(In Thousands, Except Per Share Data)	Q1 2024		Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025E


Diluted net income per share on a GAAP basis	$	0.91	$	0.84	$	0.87	$	1.24	$	1.00	$0.89 - $0.95
Stock-based compensation expense	0.32		0.32		0.40		0.39		0.39		0.45
Amortization of acquired intangibles	0.06		0.07		0.10		0.10		0.09		0.09
Acquisition and integration-related costs	0.08		0.08		0.11		0.08		0.09		0.09
Restructuring	—		—		0.09		—		—		—
Non-qualified deferred compensation expenses (credits)	0.02		0.01		0.01		—		(0.01)		—
Special charges*	—		—		—		0.04		0.01		—
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(0.22)		(0.10)		0.04		0.05		0.01		—

Income tax effect of non-GAAP adjustments	—		0.06		0.02		(0.02)		(0.01)		0.03
Diluted net income per share on a non-GAAP basis**	$	1.17	$	1.28	$	1.64	$	1.88	$	1.57	$1.55 - $1.61

Shares used in calculation of diluted net income per share	273,544		273,520		273,958		274,292		273,631


*			Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


April 28, 2025			Cadence Q1 2025 Financial Results			11


Cadence Design Systems, Inc.

Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share


(In Thousands, Except Per Share Data)	2019		2020		2021		2022		2023		2024		2025E


Diluted net income per share on a GAAP basis	$	3.53	$	2.11	$	2.50	$	3.09	$	3.82	$	3.85	$4.21 - $4.31
Stock-based compensation expense	0.65		0.71		0.75		0.98		1.19		1.43		1.70
Amortization of acquired intangibles	0.19		0.23		0.24		0.22		0.23		0.33		0.36
Acquisition and integration-related costs	0.03		0.08		0.08		0.15		0.21		0.35		0.31
Restructuring	0.03		0.03		—		—		0.04		0.09		—
Non-qualified deferred compensation expenses (credits)	0.02		0.02		0.02		(0.03)		0.04		0.04		(0.01)
Special charges*	—		—		0.10		—		—		0.04		0.01
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(0.01)		—		(0.03)		0.05		(0.17)		(0.22)		0.01
Income tax benefit related to intercompany transfers of certain intellectual property rights	(2.05)		—		—		—		—		—		—
Income tax effect of non-GAAP adjustments	(0.19)		(0.38)		(0.37)		(0.19)		(0.21)		0.06		0.14
Diluted net income per share on a non-GAAP basis**	$	2.20	$	2.80	$	3.29	$	4.27	$	5.15	$	5.97	$6.73 - $6.83

Shares used in calculation of diluted net income per share	280,515		279,641		278,858		275,011		272,748		273,833		273 - 275M


*			2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


April 28, 2025			Cadence Q1 2025 Financial Results			12


Cadence Design Systems, Inc.

Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense



(In Millions)	FY 2023		FY 2024		FY 2025E


GAAP total other income and expense	$	31	$	45	$(43) - $(57)

Reconciling items to non-GAAP total income and expense
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(46)		(61)		3
Non-GAAP total other income and expense*	$	(15)	$	(16)	$(40) - $(54)


*			The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


April 28, 2025			Cadence Q1 2025 Financial Results			13


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Exhibit No.						Description

99.01						Press Release issued by Cadence Design Systems, Inc. on April 28, 2025.

99.02						CFO Commentary on Results of Quarter Ended March 31, 202 5 .

104						Cover Page Interactive Data File (embedded within the Inline XBRL document).


CADENCE DESIGN SYSTEMS, INC.

By:						/s/ John M. Wall
						John M. Wall
						Senior Vice President and Chief Financial Officer