Cadence Design Systems beats Q3 estimates, raises full-year outlook

Investing.com -- Cadence Design Systems Inc (NASDAQ: CDNS) reported third-quarter financial results that exceeded analyst expectations, with the design automation software provider raising its full-year revenue guidance amid strong demand across its business segments.

The company posted adjusted earnings per share of $1.93 for the third quarter, surpassing the analyst consensus of $1.79. Revenue reached $1.34 billion, beating estimates of $1.32 billion and representing a 10.1% increase from $1.22 billion in the same quarter last year.

Cadence shares dipped 0.5% in after-hours trading Monday despite the earnings beat and raised outlook.

"Cadence delivered excellent results for the third quarter of 2025," said Anirudh Devgan, president and chief executive officer. "With a record backlog and ongoing broad-based strength of our business, we are raising our full year revenue outlook to ~14% growth year-over-year."

The company reported a quarter-end backlog of $7.0 billion, with $3.5 billion expected to be recognized as revenue in the next 12 months. Cadence’s non-GAAP operating margin improved to 47.6% from 44.8% in the year-ago quarter.

For fiscal year 2025, Cadence raised its outlook, now projecting revenue between $5.26 billion and $5.29 billion, above the analyst consensus of $5.25 billion. The company also increased its full-year adjusted EPS guidance to $7.02-$7.08, exceeding the consensus estimate of $6.93.

"I am pleased to report that Cadence delivered strong results for the third quarter of 2025, with broad-based momentum across all our businesses," said John Wall, senior vice president and chief financial officer. "Strong financial and operational performance resulted in Q3 backlog of $7.0 billion, putting us on track to deliver a strong 2025."

During the quarter, Cadence completed its acquisition of Arm Artisan foundation IP and signed a definitive agreement to acquire Hexagon’s D&E business, expanding its portfolio with structural analysis and multi-body dynamics technologies.

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