Cadence Design beats Q1 estimates on AI demand, raises outlook
Investing.com -- Cadence Design Systems reported first-quarter results that exceeded analyst expectations, driven by expanding customer adoption of the company’s AI-driven solutions and record hardware sales.
The company reported first-quarter revenue of $1.474 billion, compared to revenue of $1.242 billion in Q1 2025. It was also above Wall Street estimates of $1.45 billion.
The first-quarter results were helped by strong performance in Core EDA revenue that grew 18% year-over-year, with strength in advanced digital implementation, custom, and verification at leading AI infrastructure and semiconductor customers. The hardware segment also delivered a record quarter, led by strong demand from AI and high-performance computing customers, along with growing adoption in automotive and robotics markets.
“Cadence had a strong start to 2026, delivering a solid Q1 with accelerating AI demand and record backlog, reflecting strong customer commitment to our AI-driven portfolio,” said Anirudh Devgan, president and chief executive officer.
The company’s adjusted profit for the quarter came at $1.96 per share, edging above analyst estimates of $1.92 per share.
The IP business achieved 22% year-over-year growth, fueled by robust demand from AI infrastructure, HPC, and automotive workloads. System Design and Analysis revenue increased 18%, with the company completing its acquisition of Hexagon’s Design and Engineering division during the quarter.
“Cadence delivered excellent results for the first quarter of 2026, with broad-based strength across all our businesses,” said John Wall, senior vice president and chief financial officer. “With robust design activity and solid execution, we are raising our 2026 revenue outlook to 17% year-over-year growth.”
The company raised its fiscal 2026 revenue outlook to a range of $6.125 billion to $6.225 billion, representing approximately 17% YoY growth. Cadence said that it expects adjusted diluted earnings per share between $7.85 and $7.95 for the full year.
For fiscal 2026, Cadence expects GAAP operating margin in the range of 27.5% to 28.5% and adjusted operating margin between 43.5% and 44.5%.