Cadence Design Systems Inc 8-K, filed Oct 26, 2026

Cadence Design Systems Inc (CDNS)

8-K 2026-10-26 For: 2026-10-23

Added on October 26, 2026

About this 8-K

Cadence Design Systems Inc filed this 8-K on October 26, 2026, reporting on events of October 23, 2026.

Cadence reported Q3 revenue of $1.633 billion, non-GAAP diluted EPS of $2.11 and record backlog of $8.2 billion. It raised 2026 revenue growth outlook to 21% and non-GAAP EPS to $8.40, and authorized an additional $2.5 billion for share repurchases. AI summary

Items reported

Item 2.02: Financial results
Item 8.01: Other events
Item 9.01: Financial statements and exhibits

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☐			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 October 26, 2026.

99.02						CFO Commentary on Results of Quarter Ended September 30, 2026.

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


Operating Margin Reconciliation	Three Months Ended
	September 30, 2026	September 30, 2025
	(unaudited)
GAAP operating margin as a percent of total revenue	26.2%	31.8%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	8.9%	8.7%
Amortization of acquired intangibles	4.9%	1.9%
Acquisition and integration-related costs	1.5%	2.8%
Restructuring	2.6%	2.0%
Non-qualified deferred compensation expenses (credits)	0.0%	0.4%


Non-GAAP operating margin as a percent of total revenue	44.1%	47.6%


Net Income Reconciliation	Three Months Ended
	September 30, 2026		September 30, 2025
(in thousands)	(unaudited)
Net income on a GAAP basis	$	289,747	$	287,122
Stock-based compensation expense	144,763		116,073
Amortization of acquired intangibles	79,870		25,984
Acquisition and integration-related costs	25,031		37,295
Restructuring	42,159		27,394
Non-qualified deferred compensation expenses (credits)	(42)		5,760


Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition	—		18,561
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(2,886)		8,741
Income tax effect of non-GAAP adjustments	3,545		1,283
Net income on a non-GAAP basis	$	582,187	$	528,213


Diluted Net Income Per Share Reconciliation	Three Months Ended
	September 30, 2026		September 30, 2025
(in thousands, except per share data)	(unaudited)
Diluted net income per share on a GAAP basis	$	1.05	$	1.05
Stock-based compensation expense	0.53		0.42
Amortization of acquired intangibles	0.29		0.10
Acquisition and integration-related costs	0.09		0.14
Restructuring	0.15		0.10
Non-qualified deferred compensation expenses (credits)	—		0.02


Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition	—		0.07
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	(0.01)		0.03
Income tax effect of non-GAAP adjustments	0.01		—
Diluted net income per share on a non-GAAP basis	$	2.11	$	1.93
Shares used in calculation of diluted net income per share	275,278		273,798


	September 30, 2026		December 31, 2025
Current assets:
Cash and cash equivalents	$	1,452,020	$	3,001,317
Receivables, net	1,110,591		944,939
Inventories	448,824		303,545
Prepaid expenses and other	342,452		419,872
Total current assets	3,353,887		4,669,673
Property, plant and equipment, net	603,189		517,004
Goodwill	4,926,955		2,749,143
Acquired intangibles, net	1,792,006		718,223
Deferred taxes	789,077		917,733
Other assets	759,660		581,372
Total assets	$	12,224,774	$	10,153,148
Current liabilities:
Revolving credit facility	$	150,000	$	—
Current portion of long-term debt	498,809		—
Accounts payable and accrued liabilities	805,365		856,856
Current portion of deferred revenue	1,012,305		778,435
Total current liabilities	2,466,479		1,635,291
Long-term liabilities:
Long-term portion of deferred revenue	138,228		155,997
Long-term debt	1,984,433		2,480,150
Other long-term liabilities	760,383		407,529
Total long-term liabilities	2,883,044		3,043,676
Stockholders’ equity	6,875,251		5,474,181
Total liabilities and stockholders’ equity	$	12,224,774	$	10,153,148


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Revenue:
Product and maintenance	$	1,487,311	$	1,207,703	$	4,266,901	$	3,489,063
Services	146,000		131,135		425,081		367,582
Total revenue	1,633,311		1,338,838		4,691,982		3,856,645
Costs and expenses:
Cost of product and maintenance	173,867		118,702		502,362		374,672
Cost of services	61,753		63,493		187,123		158,823
Marketing and sales	242,476		192,560		694,995		595,855
Research and development	537,541		423,031		1,577,251		1,304,190
General and administrative	113,020		78,035		289,785		210,162
Amortization of acquired intangibles	33,779		10,233		88,304		28,359
Loss related to contingent liability	—		—		—		128,545
Restructuring	42,159		27,394		41,802		27,332
Total costs and expenses	1,204,595		913,448		3,381,622		2,827,938
Income from operations	428,716		425,390		1,310,360		1,028,707
Interest expense	(30,375)		(29,035)		(97,124)		(87,101)
Other income (expense), net	9,994		(3,572)		133,436		87,476
Income before provision for income taxes	408,335		392,783		1,346,672		1,029,082
Provision for income taxes	118,588		105,661		354,189		308,330
Net income	$	289,747	$	287,122	$	992,483	$	720,752
Net income per share - basic	$	1.06	$	1.06	$	3.63	$	2.65
Net income per share - diluted	$	1.05	$	1.05	$	3.61	$	2.64
Weighted average common shares outstanding - basic	273,748		271,152		273,260		271,471
Weighted average common shares outstanding - diluted	275,278		273,798		275,061		273,440


	2025										2026
GEOGRAPHY	Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3
Americas	48	%	49	%	43	%	47	%	47	%	45	%	43	%	43	%
China	11	%	9	%	18	%	12	%	13	%	13	%	15	%	16	%
Other Asia	19	%	19	%	18	%	20	%	19	%	20	%	20	%	19	%
Europe, Middle East and Africa	16	%	16	%	14	%	14	%	15	%	16	%	15	%	15	%
Japan	6	%	7	%	7	%	7	%	6	%	6	%	7	%	7	%
Total	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%


	2025										2026
PRODUCT CATEGORY	Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3
Core EDA	71	%	71	%	71	%	69	%	70	%	71	%	68	%	69	%
Semiconductor IP	14	%	13	%	14	%	15	%	14	%	14	%	15	%	15	%
System Design and Analysis	15	%	16	%	15	%	16	%	16	%	15	%	17	%	16	%
Total	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%


	Three Months Ending December 31, 2026	Year Ending December 31, 2026
	Forecast	Forecast
GAAP operating margin as a percent of total revenue	30% - 31%	28.2% - 29.2%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	8%	9%
Amortization of acquired intangibles	5%	4%
Acquisition and integration-related costs	1%	2%
Restructuring	0%	1%



Non-GAAP operating margin as a percent of total revenue†	44% - 45%	44.2% - 45.2%



†			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.


	Three Months Ending December 31, 2026	Year Ending December 31, 2026
($ in millions)	Forecast	Forecast
Net income on a GAAP basis	$339 to $355	$1,331 to $1,347
Stock-based compensation expense	139	569
Amortization of acquired intangibles	78	289
Acquisition and integration-related costs	23	122
Restructuring	—	42
Non-qualified deferred compensation expenses	—	9


Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition	—	(3)
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets	—	(98)
Income tax effect of non-GAAP adjustments	22	40
Net income on a non-GAAP basis†	$601 to $617	$2,301 to $2,317


(In Millions, except per share data)	2021		2022		2023		2024		2025		2026E

Revenue	$	2,988	$	3,562	$	4,090	$	4,641	$	5,297	$6,387- $6,417
Revenue growth	11%		19%		15%		13%		14%		21% - 21%
3-year CAGR*	12%		15%		15%		16%		14%		~16%


GAAP operating expenses	$	2,209	$	2,488	$	2,839	$	3,291	$	3,805	$4,571
GAAP operating expense growth	8%		13%		14%		16%		16%		~20%

Non-GAAP operating expenses	$	1,877	$	2,125	$	2,373	$	2,667	$	2,935	$3,540
Non-GAAP operating expense growth	8%		13%		12%		12%		10%		~21%

GAAP operating margin	26.1%		30.1%		30.6%		29.1%		28.2%		28.2% - 29.2%



Non-GAAP operating margin	37.2%		40.3%		42.0%		42.5%		44.6%		44.2% - 45.2%

Rule of 40 Metric**	48.6%		59.5%		56.8%		56.0%		58.7%		~66%

GAAP earnings per share	$	2.50	$	3.09	$	3.82	$	3.85	$	4.06	$4.84 - $4.90

Non-GAAP earning per share	$	3.29	$	4.27	$	5.15	$	5.97	$	7.14	$8.37 - $8.43
Non-GAAP EPS growth*	18%		30%		21%		16%		20%		18	%
3-year Non-GAAP EPS CAGR*	21%		25%		23%		22%		19%		18	%

Weighted average diluted shares outstanding	278.9		275.0		272.7		273.8		273.3		274 - 276

Cash flow from operations	1,101		1,242		1,349		1,261		1,729		~$2,000

Capital expenditures	65		123		102		143		142		~$240


(In Millions)	2021		2022		2023		2024		2025		2026E*




GAAP operating margin	26.1%		30.1%		30.6%		29.1%		28.2%		28.7%

Non-GAAP operating margin	37.2%		40.3%		42.0%		42.5%		44.6%		44.7%
Stock-based compensation	(7.0)%		(7.6)%		(8.0)%		(8.4)%		(8.6)%		(8.9)%
Non-GAAP operating margin adjusted for stock-based compensation	30.2%		32.7%		34.0%		34.1%		36.0%		35.8%

GAAP operating income	$	779	$	1,074	$	1,251	$	1,351	$	1,492	$	1,831

Non-GAAP operating income	$	1,111	$	1,436	$	1,717	$	1,974	$	2,361	$	2,862

Non-GAAP operating income adjusted for stock-based compensation	$	901	$	1,166	$	1,391	$	1,583	$	1,906	$	2,293


	Nine Months Ended
	September 30, 2026		September 30, 2025
Cash and cash equivalents at beginning of period	$	3,001,317	$	2,644,030
Cash flows from operating activities:
Net income	992,483		720,752
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	320,159		163,269

Stock-based compensation	429,836		342,011
Gain on divestitures and investments, net	(88,611)		(22,135)
Deferred income taxes	118,684		89,756

ROU asset amortization and change in operating lease liabilities	(2,105)		1,702
Other non-cash items	7,266		4,713
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables	(84,285)		(90,666)
Inventories	(172,927)		(60,858)
Prepaid expenses and other	39,812		(14,834)
Other assets	(38,982)		5,811
Accounts payable and accrued liabilities	(263,024)		(23,237)
Deferred revenue	148,835		44,456
Other long-term liabilities	7,295		14,546
Net cash provided by operating activities	1,414,436		1,175,286
Cash flows from investing activities:


Purchases of investments	(98,481)		(35,182)
Proceeds from the sale and maturity of investments	166,529		3,493
Proceeds from the sale of IP and other assets	—		11,500
Purchases of property, plant and equipment	(163,254)		(100,830)
Purchases of intangible assets	(6,975)		—
Cash paid in business combinations, net of cash acquired	(2,143,429)		(250,695)
Net cash used for investing activities	(2,245,610)		(371,714)
Cash flows from financing activities:
Proceeds from revolving credit facility	875,000		—
Payments on revolving credit facility	(725,000)		—


	Q4 2025		Q3 2026		Q4 2026E

Total Revenue ($ Millions)	$	1,440	$	1,633	$1,695 - $1,725
Q/Q Growth			3%		4% - 6%
Y/Y Growth			22%		18% - 20%

GAAP Operating Margin	32.2%		26.2%		30% - 31%

Non-GAAP Operating Margin	45.8%		44.1%		44% - 45%

GAAP EPS	$	1.42	$	1.05	$1.23 - $1.29



Non-GAAP EPS	$	1.99	$	2.11	$2.19 - $2.25


			Previous	Current
	FY 2025		FY 2026E	FY 2026E






Recurring Revenue	80%		~80%	~80%

Total Revenue ($ Millions)	$	5,297	$6,260 - $6,340	$6,387 - $6,417
Y/Y Growth	14%		18% - 20%	21% - 21%

Revenue from Beginning Backlog	~69%		~65%	~64%

GAAP Operating Margin	28.2%		27.75% - 28.75%	28.2% - 29.2%

Non-GAAP Operating Margin	44.6%		43.75% - 44.75%	44.2% - 45.2%

GAAP Other Income & Expense ($ Millions)	$	30	$(17) - $3	$0 - $10

Non-GAAP Other Income & Expense ($ Millions)	$	(24)	$(115) - $(95)	$(101) - $(91)

GAAP Tax Rate	27.1%		~26%	~27%

Non-GAAP Tax Rate	16.5%		16.5%	16.5%

Weighted Average Diluted Shares Outstanding (Millions)	273.3		275.5 - 277.5	274 - 276

GAAP EPS	$	4.06	$4.76 - $4.86	$4.84 - $4.90
Y/Y Growth	5%		17% - 20%	19% - 21%

Non-GAAP EPS	$	7.14	$8.05 - $8.15	$8.37 - $8.43
Y/Y Growth	20%		13% - 14%	17% - 18%

Cash Flow from Operations ($ Millions)	$	1,729	~$2,000	~$2,000

DSO	64		~65	~65

Capital Expenditures ($ Millions)	$	142	~$240	~$240


(In Billions)	2022		2023		2024		2025		Q3 2026


Backlog	$	5.8	$	6.0	$	6.8	$	7.8	$	8.2


(In Millions)	Q3 2025		Q4 2025		Q1 2026		Q2 2026		Q3 2026

Product and Maintenance	$	1,208	$	1,332	$	1,349	$	1,431	$	1,487
Services	131		108		125		154		146
Total Revenue	$	1,339	$	1,440	$	1,474	$	1,584	$	1,633


	Trailing Twelve Months Ended
	Q3 2025		Q4 2025		Q1 2026		Q2 2026		Q3 2026

Recurring Revenue	80	%	80	%	79	%	79	%	78	%
Up-Front Revenue	20	%	20	%	21	%	21	%	22	%
Total	100	%	100	%	100	%	100	%	100	%


(% of Total Revenue)	Q3 2025		Q4 2025		Q1 2026		Q2 2026		Q3 2026


Americas	43	%	47	%	45	%	43	%	43	%
China	18	%	12	%	13	%	15	%	16	%
Other Asia	18	%	20	%	20	%	20	%	19	%
Europe, Middle East and Africa	14	%	14	%	16	%	15	%	15	%
Japan	7	%	7	%	6	%	7	%	7	%
Total	100	%	100	%	100	%	100	%	100	%



*			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.