Cadence Design Systems (NASDAQ: CDNS) reported Q2 EPS of $0.45, $0.05 better than the analyst estimate of $0.40. Revenue for the quarter came in at $518 million versus the consensus estimate of $514.95 million.

“Multiple technology waves, especially machine learning, are driving increased design activity and our System Design Enablement strategy is perfectly positioned to benefit from these across multiple verticals,” said Lip-Bu Tan, chief executive officer. “We had notable wins in Aerospace & Defense and introduced Cadence Cloud, the industry’s first broad cloud portfolio for the development of electronic systems and semiconductors.”

“Consistent execution delivered good results for Cadence again this quarter. We continue to lead with innovation, making Cadence products increasingly mission critical to our customers, while our efforts to continually improve operational efficiency results in increased profitability flowing through to free cash flow,” said John Wall, senior vice president and chief financial officer.

CFO Commentary

Commentary on the second quarter 2018 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

The outlook provided below is on an ASC Topic 606 basis, which Cadence has adopted for its fiscal year 2018 using the modified retrospective transition method. As required by the new standard, the company will report revenue under both methods for the 2018 transition year.

For the third quarter of 2018, the company expects total revenue in the range of $510 million to $520 million. Third quarter GAAP net income per diluted share is expected to be in the range of $0.22 to $0.24. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.40 to $0.42.

For 2018, the company expects total revenue in the range of $2.070 billion to $2.090 billion. On a GAAP basis, net income per diluted share for 2018 is expected to be in the range of $0.95 to $1.01. Using the non-GAAP measure defined below, net income per diluted share for 2018 is expected to be in the range of $1.64 to $1.70.

GUIDANCE:

Cadence Design Systems sees FY2018 EPS of $1.64-$1.70, versus the consensus of $1.62. Cadence Design Systems sees FY2018 revenue of $2.07-2.09 million, versus the consensus of $2.07 million.

For earnings history and earnings-related data on Cadence Design Systems (CDNS) click here.