cdns-20250728

Exhibit 99.01

Cadence Reports Second Quarter 2025 Financial Results

Exceeded Q2 Guidance for Revenue & Non-GAAP EPS

Raising 2025 Revenue, Non-GAAP EPS & Cash Flow Outlook

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

Second Quarter 2025 Financial Results

•Revenue of $1.275 billion, compared to revenue of $1.061 billion in Q2 2024

•GAAP operating margin of 19.0%, compared to 27.7% in Q2 2024

•GAAP diluted net income per share of $0.59, compared to $0.84 in Q2 2024

•Non-GAAP operating margin of 42.8%, compared to 40.1% in Q2 2024

•Non-GAAP diluted net income per share of $1.65, compared to $1.28 in Q2 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 $3.1 billion

•GAAP results include a one-time charge relating to the $140.6 million settlements of our previously disclosed legal proceedings with the U.S. Department of Justice (“DOJ”) and the Bureau of Industry and Security (“BIS”) of the U.S. Department of Commerce

“Cadence delivered an exceptional Q2, with 20% year-over-year revenue growth and stronger than expected bookings. This highlighted the strategic relevance of our AI-driven portfolio and the depth of our customer relationships,” said Anirudh Devgan, president and chief executive officer. “The strength and breadth of our products are enabling us to lead through the accelerating waves of the AI Supercycle, from AI infrastructure build-out, to physical AI in autonomous systems, to the emerging frontier of science AI.”

“I am pleased to report that Cadence delivered excellent results for Q2, with broad-based strength across all businesses, more than offsetting the impact of the temporary restrictions on exports to China imposed on May 23rd,” said John Wall, senior vice president and chief financial officer. “We are raising our 2025 revenue outlook to 13% growth year-over-year, and non-GAAP operating margin to 44%.”

CFO Commentary

Commentary on the second 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 $5.21 billion to $5.27 billion

•GAAP operating margin in the range of 28.5% to 29.5%

•Non-GAAP operating margin in the range of 43.5% to 44.5%

•GAAP diluted net income per share in the range of $3.97 to $4.07

•Non-GAAP diluted net income per share in the range of $6.85 to $6.95

•Operating cash flow in the range of $1.65 billion to $1.75 billion

At the midpoint, the $50 million increase in operating cash flow outlook is primarily driven by the $50 million increase in revenue outlook. Cadence anticipates a $140.6 million cash outflow relating to the DOJ and BIS settlements. In addition, Cadence expects to benefit from approximately $140 million in reduced cash tax payments due to the immediate expensing of U.S. R&D expenditures under the One Big Beautiful Bill Act.

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

•Launched Cadence Cerebrus AI Studio, an agentic AI implementation platform delivering up to 20% PPA improvement and 5x to 10x faster chip delivery time.

•Launched Millennium M2000 AI Supercomputer featuring Nvidia Blackwell, delivering AI-accelerated simulation at unprecedented speed and scale across engineering and science workloads.

•Core EDA, comprised of Cadence’s digital, custom / analog and verification businesses, delivered 16% year-over-year revenue growth, driven by further proliferation of Cadence's AI portfolio.

•IP business delivered more than 25% year-over-year revenue growth, driven by product strength and a broadening silicon solutions portfolio.

•System Design & Analysis business achieved 35% year-over-year revenue growth driven by Cadence’s multi-physics analysis platform and AI-driven optimization, which delivered superior results.

Audio Webcast Scheduled

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the second quarter 2025 financial results audio webcast today, July 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 July 28, 2025 at 5 p.m. (Pacific) and ending September 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, settlements of legal proceedings, tax payments and rates 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 which remain subject to certain closing conditions, 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, including the settlements with the DOJ (which is subject to court approval) and BIS, Cadence’s ongoing compliance, cooperation, audit and other obligations under the settlement agreements, any further inquiries or adverse actions by the court, the DOJ, BIS or other U.S. or foreign governmental authorities and any impact of the settlements on Cadence’s operations and business dealings in China, U.S. government contracting business and other customer relationships; 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 and its 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. Cadence plans to file a current report on Form 8-K with more information about the DOJ and BIS settlements and will include further information in its Form 10-Q for the fiscal quarter ended June 30, 2025.

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, loss related to contingent liability 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
	June 30, 2025	June 30, 2024
	(unaudited)
GAAP operating margin as a percent of total revenue	19.0%	27.7%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	9.3%	8.3%
Amortization of acquired intangibles	1.8%	1.9%
Acquisition and integration-related costs	2.0%	1.9%
Restructuring	0.0%	0.0%
Non-qualified deferred compensation expenses	0.6%	0.2%
Special charges	0.0%	0.1%
Loss related to contingent liability*	10.1%	0.0%
Non-GAAP operating margin as a percent of total revenue	42.8%	40.1%


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.


Net Income Reconciliation	Three Months Ended
	June 30, 2025		June 30, 2024
(in thousands)	(unaudited)
Net income on a GAAP basis	$	160,051	$	229,520
Stock-based compensation expense	118,325		87,569
Amortization of acquired intangibles	23,703		20,155
Acquisition and integration-related costs	26,021		20,715
Restructuring	47		(33)
Non-qualified deferred compensation expenses	7,778		1,697
Special charges	—		1,233
Loss related to contingent liability*	128,545		—
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(46,248)		(27,048)
Income tax effect of non-GAAP adjustments	31,658		16,890
Net income on a non-GAAP basis	$	449,880	$	350,698


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.


Diluted Net Income Per Share Reconciliation	Three Months Ended
	June 30, 2025		June 30, 2024
(in thousands, except per share data)	(unaudited)
Diluted net income per share on a GAAP basis	$	0.59	$	0.84
Stock-based compensation expense	0.43		0.32
Amortization of acquired intangibles	0.09		0.07
Acquisition and integration-related costs	0.09		0.08
Restructuring	—		—
Non-qualified deferred compensation expenses	0.03		0.01
Special charges	—		—
Loss related to contingent liability*	0.47		—
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(0.17)		(0.10)
Income tax effect of non-GAAP adjustments	0.12		0.06
Diluted net income per share on a non-GAAP basis	$	1.65	$	1.28
Shares used in calculation of diluted net income per share	272,899		273,520


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

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

June 30, 2025 and December 31, 2024

(In thousands)

(Unaudited)


	June 30, 2025		December 31, 2024
Current assets:
Cash and cash equivalents	$	2,822,762	$	2,644,030
Receivables, net	670,166		680,460
Inventories	226,162		257,711
Prepaid expenses and other	503,453		433,878
Total current assets	4,222,543		4,016,079
Property, plant and equipment, net	482,131		458,200
Goodwill	2,599,798		2,378,671
Acquired intangibles, net	618,952		594,734
Deferred taxes	980,223		982,057
Other assets	605,051		544,741
Total assets	$	9,508,698	$	8,974,482
Current liabilities:


Accounts payable and accrued liabilities	$	766,636	$	632,692
Current portion of deferred revenue	729,929		737,413
Total current liabilities	1,496,565		1,370,105
Long-term liabilities:
Long-term portion of deferred revenue	154,448		115,168
Long-term debt	2,478,145		2,476,183
Other long-term liabilities	373,002		339,448
Total long-term liabilities	3,005,595		2,930,799
Stockholders’ equity	5,006,538		4,673,578
Total liabilities and stockholders’ equity	$	9,508,698	$	8,974,482

Cadence Design Systems, Inc.

Condensed Consolidated Income Statements

For the Three and Six Months Ended June 30, 2025 and June 30, 2024

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30, 2025		June 30, 2024		June 30, 2025		June 30, 2024
Revenue:
Product and maintenance	$	1,170,510	$	960,457	$	2,281,360	$	1,873,842
Services	104,931		100,224		236,447		195,942
Total revenue	1,275,441		1,060,681		2,517,807		2,069,784
Costs and expenses:
Cost of product and maintenance	139,298		94,363		255,970		169,758
Cost of services	44,869		44,907		95,330		94,709
Marketing and sales	200,595		186,725		403,295		367,314
Research and development	442,057		370,740		881,159		749,698
General and administrative	69,029		63,436		132,127		132,152
Amortization of acquired intangibles	9,204		6,667		18,126		12,074
Loss related to contingent liability	128,545		—		128,545		—
Restructuring	47		(33)		(62)		247
Total costs and expenses	1,033,644		766,805		1,914,490		1,525,952
Income from operations	241,797		293,876		603,317		543,832
Interest expense	(28,948)		(12,905)		(58,066)		(21,597)
Other income, net	67,758		34,739		91,048		103,518
Income before provision for income taxes	280,607		315,710		636,299		625,753
Provision for income taxes	120,556		86,190		202,669		148,590
Net income	$	160,051	$	229,520	$	433,630	$	477,163
Net income per share - basic	$	0.59	$	0.85	$	1.60	$	1.77
Net income per share - diluted	$	0.59	$	0.84	$	1.59	$	1.74
Weighted average common shares outstanding - basic	271,294		270,912		271,633		270,259
Weighted average common shares outstanding - diluted	272,899		273,520		273,264		273,532

Cadence Design Systems, Inc.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2025 and June 30, 2024

(In thousands)

(Unaudited)


	Six Months Ended
	June 30, 2025		June 30, 2024
Cash and cash equivalents at beginning of period	$	2,644,030	$	1,008,152
Cash flows from operating activities:
Net income	433,630		477,163
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	106,592		87,202

Stock-based compensation	225,938		175,698
Gain on divestitures and investments, net	(36,654)		(80,599)
Deferred income taxes	3,241		(9,506)

ROU asset amortization and change in operating lease liabilities	2,629		(1,410)
Other non-cash items	3,502		1,510
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables	(11,211)		(49,384)
Inventories	7,528		(15,978)
Prepaid expenses and other	(24,201)		(39,868)
Other assets	12,239		(38,967)
Accounts payable and accrued liabilities	115,603		(93,078)
Deferred revenue	21,824		(18,599)
Other long-term liabilities	3,964		15,013
Net cash provided by operating activities	864,624		409,197
Cash flows from investing activities:


Purchases of investments	(21,596)		(2,095)
Proceeds from the sale and maturity of investments	1,989		43,864
Proceeds from the sale of IP and other assets	11,500		—
Purchases of property, plant and equipment	(67,146)		(78,800)

Cash paid in business combinations, net of cash acquired	(122,146)		(720,821)
Net cash used for investing activities	(197,399)		(757,852)
Cash flows from financing activities:


Proceeds from issuance of debt	—		700,000


Payments of debt issuance costs	—		(944)
Proceeds from issuance of common stock	78,322		133,272
Stock received for payment of employee taxes on vesting of restricted stock	(94,334)		(166,903)
Payments for repurchases of common stock	(525,016)		(250,010)
Net cash provided by (used for) financing activities	(541,028)		415,415
Effect of exchange rate changes on cash and cash equivalents	52,535		(15,957)
Increase in cash and cash equivalents	178,732		50,803
Cash and cash equivalents at end of period	$	2,822,762	$	1,058,955

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)


	2024										2025
GEOGRAPHY	Q1		Q2		Q3		Q4		Year		Q1		Q2
Americas	46	%	49	%	50	%	49	%	49	%	48	%	49	%
China	12	%	12	%	13	%	13	%	12	%	11	%	9	%
Other Asia	20	%	19	%	17	%	17	%	18	%	19	%	19	%
Europe, Middle East and Africa	17	%	14	%	14	%	15	%	15	%	16	%	16	%
Japan	5	%	6	%	6	%	6	%	6	%	6	%	7	%
Total	100	%	100	%	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Category (% of Total Revenue)


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

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Operating Margin

As of July 28, 2025

(Unaudited)


	Three Months Ending September 30, 2025	Year Ending December 31, 2025
	Forecast	Forecast
GAAP operating margin as a percent of total revenue	32% - 33%	28.5% - 29.5%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	9%	9%
Amortization of acquired intangibles	2%	2%
Acquisition and integration-related costs	2%	2%



Loss related to contingent liability*	0%	2%
Non-GAAP operating margin as a percent of total revenue†	45% - 46%	43.5% - 44.5%


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
†			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 July 28, 2025

(Unaudited)


	Three Months Ending September 30, 2025	Year Ending December 31, 2025
	Forecast	Forecast
Diluted net income per share on a GAAP basis	$1.14 to $1.20	$3.97 to $4.07
Stock-based compensation expense	0.44	1.69
Amortization of acquired intangibles	0.10	0.37
Acquisition and integration-related costs	0.07	0.31

Non-qualified deferred compensation expenses	—	0.02
Special charges	—	0.01
Loss related to contingent liability*	—	0.47
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	—	(0.16)
Income tax effect of non-GAAP adjustments	—	0.17
Diluted net income per share on a non-GAAP basis†	$1.75 to $1.81	$6.85 to $6.95


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
†			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 July 28, 2025

(Unaudited)


	Three Months Ending September 30, 2025	Year Ending December 31, 2025
($ in millions)	Forecast	Forecast
Net income on a GAAP basis	$314 to $330	$1,087 to $1,114
Stock-based compensation expense	120	462
Amortization of acquired intangibles	26	101
Acquisition and integration-related costs	20	86

Non-qualified deferred compensation expenses	—	6
Special charges	—	2
Loss related to contingent liability*	—	129
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	—	(43)
Income tax effect of non-GAAP adjustments	—	47
Net income on a non-GAAP basis†	$480 to $496	$1,877 to $1,904


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
†			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 SECOND QUARTER
2025

CADENCE DESIGN SYSTEMS, INC.

CFO COMMENTARY

Key Takeaways

• Exceeded Q2 guidance for revenue and non-GAAP EPS

• Raising 2025 revenue outlook by $50 million at midpoint driven by broad-based strength

• Raising 2025 operating cash flow outlook by $50 million at midpoint

Q3 2025 Outlook

• Revenue: 1.305 billion - $1.335 billion

• GAAP operating margin: 32% - 33%

• Non-GAAP operating margin: 45% - 46%

• GAAP EPS: $1.14 - $1.20

• Non-GAAP EPS: $1.75 - $1.81

• Expect to use approximately $200 million to repurchase Cadence shares in Q3

Q2 2025 KEY METRICS

• Revenue: $1.275 billion

• GAAP operating margin: 19.0%

• Non-GAAP operating margin: 42.8%

• GAAP EPS: $0.59

• Non-GAAP EPS: $1.65

• Operating cash flow: $378 million

FY 2025 Outlook

• Revenue: $5.21 billion - $5.27 billion

• GAAP operating margin: 28.5% - 29.5%

• Non-GAAP operating margin: 43.5% - 44.5%

• GAAP EPS: $3.97 - $4.07

• Non-GAAP EPS: $6.85 - $6.95

• Operating cash flow: $1.65 billion - $1.75 billion

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

Financial Results Webcast

Our Q2 2025 financial results webcast will begin July 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 July 28, 2025 until 5:00 p.m. (Pacific) on September 16, 2025.



July 28, 2025	Cadence Q2 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	$5,210- $5,270
Revenue growth*	9%		15%		11%		19%		15%		13%		12% - 14%
3-year CAGR	9%		11%		12%		15%		15%		16%		~14%
3-year CAGR without 53rd week impact			11%						16%

GAAP operating expenses	$	1,845	$	2,037	$	2,209	$	2,488	$	2,839	$	3,291	~$3,720
GAAP operating expense growth	6%		10%		8%		13%		14%		16%		~13%

Non-GAAP operating expenses	$	1,587	$	1,739	$	1,877	$	2,125	$	2,373	$	2,667	~$2,934
Non-GAAP operating expense growth	6%		10%		8%		13%		12%		12%		~10%

GAAP operating margin**	21.1%		24.1%		26.1%		30.1%		30.6%		29.1%		29.0	%



Non-GAAP operating margin**	32.1%		35.2%		37.2%		40.3%		42.0%		42.5%		44.0	%



GAAP earnings per share	$	3.53	$	2.11	$	2.50	$	3.09	$	3.82	$	3.85	$3.97 - $4.07

Non-GAAP earning per share	$	2.20	$	2.80	$	3.29	$	4.27	$	5.15	$	5.97	$6.85 - $6.95
Non-GAAP EPS growth**	18%		27%		18%		30%		21%		16%		16	%
3-year Non-GAAP EPS CAGR**	22%		26%		21%		25%		23%		22%		17	%

Weighted average diluted shares 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		$1,650 - $1,750

Capital expenditures	75		95		65		123		102		143		~$160

* 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	$	5,240
Revenue Growth*	9%		15%		11%		19%		15%		13%		13%
3-Year Revenue Growth CAGR*	9%		11%		12%		15%		15%		16%		14%
GAAP operating margin*	21.1%		24.1%		26.1%		30.1%		30.6%		29.1%		29.0%

Non-GAAP operating margin*	32.1%		35.2%		37.2%		40.3%		42.0%		42.5%		44.0%
Stock-based compensation	(7.8)%		(7.4)%		(7.0)%		(7.6)%		(8.0)%		(8.4)%		(8.8)%
Non-GAAP operating margin adjusted for stock-based compensation*	24.3%		27.8%		30.2%		32.7%		34.0%		34.1%		35.2%

GAAP operating income	$	492	$	646	$	779	$	1,074	$	1,251	$	1,351	$	1,520

Non-GAAP operating income*	$	749	$	944	$	1,111	$	1,436	$	1,717	$	1,974	$	2,306

Non-GAAP operating income adjusted for stock-based compensation*	$	567	$	747	$	901	$	1,166	$	1,391	$	1,583	$	1,844

* At midpoint of outlook.


July 28, 2025			Cadence Q2 2025 Financial Results			2


Cadence Design Systems, Inc.

Third Quarter 2025 Financial Outlook


	Q3 2024		Q2 2025*		Q3 2025E

Total Revenue ($ Millions)	$	1,215	$	1,275	$1,305 - 1,335
Q/Q Growth			3%		2% - 5%
Y/Y Growth			20%		7% - 10%

GAAP Operating Margin	28.8%		19.0%		32% - 33%

Non-GAAP Operating Margin	44.8%		42.8%		45% - 46%

GAAP EPS	$	0.87	$	0.59	$1.14 - $1.20



Non-GAAP EPS	$	1.64	$	1.65	$1.75 - $1.81

*Q2 2025 GAAP results include a one-time charge relating to the $140.6 million settlements of our previously disclosed legal proceedings with the U.S. Department of Justice (“DOJ”) and the Bureau of Industry and Security (“BIS”) of the U.S. Department of Commerce

Fiscal Year 2025 Financial Outlook


			Previous	Current
	FY 2024		FY 2025E	FY 2025E






Recurring Revenue	83%		~80%	~80%

Total Revenue ($ Millions)	$	4,641	$5,150 - $5,230	$5,210 - $5,270
Y/Y Growth	13%		11% - 13%	12% - 14%

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

GAAP Operating Margin	29.1%		30.25% - 31.25%	28.5% - 29.5%

Non-GAAP Operating Margin	42.5%		43.25% - 44.25%	43.5% - 44.5%

GAAP Other Income & Expense ($ Millions)	$	45	$(57) - $(43)	$(9) - $11

Non-GAAP Other Income & Expense ($ Millions)	$	(16)	$(54) - $(40)	$(52) - $(32)

GAAP Tax Rate	24.4%		~26%	~28%

Non-GAAP Tax Rate	16.5%		16.5%	16.5%

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

GAAP EPS	$	3.85	$4.21 - $4.31	$3.97 - $4.07
Y/Y Growth	1%		9% - 12%	3% - 6%

Non-GAAP EPS	$	5.97	$6.73 - $6.83	$6.85 - $6.95
Y/Y Growth	16%		13% - 14%	15% - 16%

Cash Flow from Operations ($ Millions)	$	1,261	$1,600 - $1,700	$1,650 - $1,750

DSO	48		~50	~50

Capital Expenditures ($ Millions)	$	143	~$150	~$160


July 28, 2025			Cadence Q2 2025 Financial Results			3


Cadence Design Systems, Inc.

Second Quarter Financial Results

Backlog


(In Billions)	2021		2022		2023		2024		Q2 2025


Backlog	$	4.4	$	5.8	$	6.0	$	6.8	$	6.4

Revenue


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

Product and Maintenance	$	961	$	1,100	$	1,239	$	1,111	$	1,170
Services	100		115		117		131		105
Total Revenue	$	1,061	$	1,215	$	1,356	$	1,242	$	1,275

Recurring and Up-Front Revenue*


	Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025

Revenue Recognized Over Time	85	%	79	%	72	%	77	%	73	%
Other Recurring Revenue	3	%	4	%	4	%	5	%	5	%
Recurring Revenue	88	%	83	%	76	%	82	%	78	%
Up-Front Revenue	12	%	17	%	24	%	18	%	22	%
Total Revenue	100	%	100	%	100	%	100	%	100	%

*The definition of recurring revenue was updated in Q2 2025. Prior period numbers reflect the updated definition. Other recurring revenue includes revenue recognized at a point in time for short-term software arrangements that are typically renewed at least annually and revenue recognized at varying points in time over the term of other arrangements with non-cancelable commitments, whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of products.

Trailing Twelve Months Recurring and Up-Front Revenue


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

Recurring Revenue	88	%	87	%	84	%	82	%	80	%
Up-Front Revenue	12	%	13	%	16	%	18	%	20	%
Total	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Geography


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


Americas	49	%	50	%	49	%	48	%	49	%
China	12	%	13	%	13	%	11	%	9	%
Other Asia	19	%	17	%	17	%	19	%	19	%
Europe, Middle East and Africa	14	%	14	%	15	%	16	%	16	%
Japan	6	%	6	%	6	%	6	%	7	%
Total	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Category


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





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


July 28, 2025			Cadence Q2 2025 Financial Results			4


Cadence Design Systems, Inc.

Gross Margin


	Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025


GAAP Gross Margin	86.9	%	86.6	%	83.8	%	86.5	%	85.6	%
Non-GAAP Gross Margin	88.5	%	88.6	%	85.5	%	88.4	%	87.2	%

Total Costs and Expenses


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


Total GAAP Costs and Expenses	$	767	$	865	$	899	$	881	$	1,034

Total Non-GAAP Costs and Expenses	$	635	$	671	$	733	$	724	$	729

Operating Margin


	Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025


GAAP Operating Margin	27.7	%	28.8	%	33.7	%	29.1	%	19.0	%
Non-GAAP Operating Margin	40.1	%	44.8	%	46.0	%	41.7	%	42.8	%

Net Income Per Share


	Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025


GAAP Net Income Per Share	$	0.84	$	0.87	$	1.24	$	1.00	$	0.59

Non-GAAP Net Income Per Share	$	1.28	$	1.64	$	1.88	$	1.57	$	1.65

Total DSO


	Q2 2024	Q3 2024	Q4 2024	Q1 2025	Q2 2025


DSO	49	44	48	44	51

Balance Sheet and Cash Review

Free Cash Flow


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


Net Cash from Operating Activities	$	156	$	410	$	441	$	487	$	378
Capital Expenditures	29		27		37		23		44
Free Cash Flow	$	127	$	383	$	404	$	464	$	334

Cash and Cash Equivalents


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


Cash and Cash Equivalents	$	1,059	$	2,786	$	2,644	$	2,778	$	2,823

•Approximately 63 percent of our cash and cash equivalents were in the U.S. at quarter-end.

Debt


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


Debt (principal value)	$	1,350	$	2,850	$	2,500	$	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)	Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025


Share Repurchase	$	125	$	150	$	150	$	350	$	175
Number of Shares	0.423		0.563		0.519		1.361		0.607

Employees


	Q2 2024	Q3 2024	Q4 2024	Q1 2025	Q2 2025


Headcount	12,665	12,703	12,705	12,837	13,152


July 28, 2025			Cadence Q2 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, settlements of legal proceedings, tax payments and rates 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 which remain subject to certain closing conditions, 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, including the settlements with the DOJ (which is subject to court approval) and BIS, Cadence’s ongoing compliance, cooperation, audit and other obligations under the settlement agreements, any further inquiries or adverse actions by the court, the DOJ, BIS or other U.S. or foreign governmental authorities and any impact of the settlements on Cadence’s operations and business dealings in China, U.S. government contracting business and other customer relationships; 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.


July 28, 2025			Cadence Q2 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)	Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025


GAAP total costs and expenses	$	767	$	865	$	899	$	881	$	1,034

Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense	(88)		(109)		(107)		(108)		(118)
Amortization of acquired intangibles	(20)		(27)		(27)		(25)		(24)
Acquisition and integration-related costs	(21)		(29)		(23)		(23)		(26)
Restructuring	—		(25)		1		—		—
Non-qualified deferred compensation (expenses) credits	(2)		(4)		—		2		(8)
Special charges	(1)		—		(2)		(2)		—
Loss related to contingent liability*	—		—		(8)		—		(129)
Non-GAAP total costs and expenses**	$	635	$	671	$	733	$	724	$	729

Table may not foot due to rounding


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
**			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	$	3,720

Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense	(182)		(197)		(210)		(270)		(326)		(391)		(462)
Amortization of acquired intangibles	(53)		(64)		(67)		(60)		(62)		(90)		(101)
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)		(6)
Special charges**	(1)		—		(27)		—		—		(3)		(2)
Loss related to contingent liability***	—		—		—		—		—		(8)		(129)
Non-GAAP total costs and expenses****	$	1,587	$	1,739	$	1,877	$	2,125	$	2,373	$	2,667	$	2,934

Table may not foot due to rounding


*			Fiscal 2020 was a 53-week year.
**			2021 includes costs related to a voluntary retirement program.
***			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
****			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.


July 28, 2025			Cadence Q2 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	$	1,520

Reconciling items to non-GAAP operating income
Stock-based compensation expense	182		197		210		270		326		391		462
Amortization of acquired intangibles	53		64		67		60		62		90		101
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		6
Special charges**	1		—		27		—		—		3		2
Loss related to contingent liability***	—		—		—		—		—		8		129
Non-GAAP operating income****	$	749	$	944	$	1,111	$	1,436	$	1,717	$	1,974	$	2,306
Stock-based compensation expense	(182)		(197)		(210)		(270)		(326)		(391)		$	(462)
Non-GAAP operating income adjusted for stock-based compensation****	$	567	$	747	$	901	$	1,166	$	1,391	$	1,583	$	1,844

Table may not foot due to rounding


*			Fiscal 2020 was a 53-week year.
**			2021 includes costs related to a voluntary retirement program.
***			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
****			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.


July 28, 2025			Cadence Q2 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


	Q2 2024	Q3 2024	Q4 2024	Q1 2025	Q2 2025


GAAP gross margin as a percent of total revenue	86.9%	86.6%	83.8%	86.5%	85.6%

Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense	0.3%	0.3%	0.3%	0.4%	0.4%
Amortization of acquired intangibles	1.2%	1.5%	1.3%	1.4%	1.1%
Non-qualified deferred compensation expenses (credits)	0.0%	0.0%	0.0%	0.0%	0.0%
Acquisition and integration-related costs	0.1%	0.2%	0.1%	0.1%	0.1%
Non-GAAP gross margin as a percent of total revenue*	88.5%	88.6%	85.5%	88.4%	87.2%


*			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.


July 28, 2025			Cadence Q2 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


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


GAAP operating margin as a percent of total revenue	27.7%	28.8%	33.7%	29.1%	19.0%	32% - 33%

Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense	8.3%	9.0%	7.9%	8.7%	9.3%	9%
Amortization of acquired intangibles	1.9%	2.2%	2.0%	2.0%	1.8%	2%
Acquisition and integration-related costs	1.9%	2.4%	1.7%	1.8%	2.0%	2%
Restructuring	0.0%	2.0%	(0.1)%	0.0%	0.0%	0%
Non-qualified deferred compensation expenses (credits)	0.2%	0.4%	0.0%	(0.1)%	0.6%	0%
Special charges	0.1%	0.0%	0.2%	0.2%	0.0%	0%
Loss related to contingent liability*	0.0%	0.0%	0.6%	0.0%	10.1%	0%
Non-GAAP operating margin as a percent of total revenue**	40.1%	44.8%	46.0%	41.7%	42.8%	45% - 46%


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
**			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.


July 28, 2025			Cadence Q2 2025 Financial Results			10


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


	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%	28.5% - 29.5%

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%	0.0%	0%
Loss related to contingent liability**	0.0%	0.0%	0.0%	0.0%	0.0%	0.2%	2%
Non-GAAP operating margin as a percent of total revenue***	32.1%	35.2%	37.2%	40.3%	42.0%	42.5%	43.5% - 44.5%


*			2021 includes costs related to a voluntary retirement program.
**			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
***			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.


July 28, 2025			Cadence Q2 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)	Q2 2024		Q3 2024		Q4 2024		Q1 2025		Q2 2025		Q3 2025E


Diluted net income per share on a GAAP basis	$	0.84	$	0.87	$	1.24	$	1.00	$	0.59	$1.14 - $1.20
Stock-based compensation expense	0.32		0.40		0.39		0.39		0.43		0.44
Amortization of acquired intangibles	0.07		0.10		0.10		0.09		0.09		0.10
Acquisition and integration-related costs	0.08		0.11		0.08		0.09		0.09		0.07
Restructuring	—		0.09		—		—		—		—
Non-qualified deferred compensation expenses (credits)	0.01		0.01		—		(0.01)		0.03		—
Special charges	—		—		0.01		0.01		—		—
Loss related to contingent liability*	—		—		0.03		—		0.47		—
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(0.10)		0.04		0.05		0.01		(0.17)		—

Income tax effect of non-GAAP adjustments	0.06		0.02		(0.02)		(0.01)		0.12		—
Diluted net income per share on a non-GAAP basis**	$	1.28	$	1.64	$	1.88	$	1.57	$	1.65	$1.75 - $1.81

Shares used in calculation of diluted net income per share	273,520		273,958		274,292		273,631		272,899


*			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
**			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.


July 28, 2025			Cadence Q2 2025 Financial Results			12


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	$3.97 - $4.07
Stock-based compensation expense	0.65		0.71		0.75		0.98		1.19		1.43		1.69
Amortization of acquired intangibles	0.19		0.23		0.24		0.22		0.23		0.33		0.37
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		0.02
Special charges*	—		—		0.10		—		—		0.01		0.01
Loss related to contingent liability**	—		—		—		—		—		0.03		0.47
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)		(0.16)
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		0.17
Diluted net income per share on a non-GAAP basis***	$	2.20	$	2.80	$	3.29	$	4.27	$	5.15	$	5.97	$6.85 - $6.95

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.
**			Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
***			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.


July 28, 2025			Cadence Q2 2025 Financial Results			13


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	$(9) - $11

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)		(43)
Non-GAAP total other income and expense*	$	(15)	$	(16)	$(52) - $(32)


*			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.


July 28, 2025			Cadence Q2 2025 Financial Results			14


☐			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 July 28, 2025.

99.02						CFO Commentary on Results of Quarter Ended June 30 , 2025.

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