10-QPeriod: Q1 FY2019

CADENCE DESIGN SYSTEMS INC Quarterly Report for Q1 Ended Mar 30, 2019

Filed April 22, 2019For Securities:CDNS

Summary

Cadence Design Systems, Inc. (CDNS) reported solid financial results for the first quarter of 2019, demonstrating strong revenue growth and improved profitability. Total revenue increased by 11% year-over-year to $576.7 million, driven primarily by an 13% increase in product and maintenance revenue, reflecting robust customer demand for new, complex electronic designs. The company continued to invest in research and development, a key driver of its long-term growth strategy. The company's financial position remains strong, with cash and cash equivalents increasing to $538.9 million. Cadence also demonstrated a commitment to shareholder returns through its active stock repurchase program. Despite some minor fluctuations in services revenue and increased operating expenses related to R&D and sales, the overall performance indicates continued momentum in its core business and strategic initiatives.

Financial Highlights

47 data points
Beta

Revenue

$576.74M

Net Income

$120.56M

20.9% Net Margin

EPS (Diluted)

$0.43

Total Assets

$2.55B

Cash & Equivalents

$538.90M

Free Cash Flow

$170.14M

Financial Statements
Beta
Revenue$576.74M
Operating Expenses$448.35M
Operating Income$128.40M
Interest Expense$5.39M
Net Income$120.56M
EPS (Basic)$0.44
EPS (Diluted)$0.43
Shares Outstanding (Basic)273.07M
Shares Outstanding (Diluted)280.62M

Key Highlights

  • 1Total revenue increased by 11% to $576.7 million for the three months ended March 30, 2019, compared to $517.3 million for the same period in 2018.
  • 2Product and maintenance revenue grew by 13% to $543.5 million, indicating strong demand for Cadence's core offerings.
  • 3Net income significantly increased by 65% to $120.6 million for the quarter, leading to a diluted EPS of $0.43, up from $0.26 in the prior year.
  • 4Cash and cash equivalents increased to $538.9 million as of March 30, 2019, indicating a healthy liquidity position.
  • 5Operating expenses increased by 2% to $375.1 million, primarily driven by increased investments in marketing and sales, and research and development.
  • 6The company repurchased $81.1 million of its common stock during the quarter, demonstrating a commitment to returning value to shareholders.
  • 7Long-term liabilities increased to $549.0 million, mainly due to an increase in other long-term liabilities.

Frequently Asked Questions

Cadence reported a total revenue of $576.7 million for the three months ended March 30, 2019, an increase of 11% compared to $517.3 million in the same period of 2018. This growth was largely driven by a 13% increase in product and maintenance revenue.

Net income for the first quarter of 2019 saw a substantial increase of 65% to $120.6 million, up from $72.9 million in the prior year. This translated to a diluted earnings per share of $0.43, compared to $0.26 in the first quarter of 2018.

As of March 30, 2019, Cadence maintained a strong liquidity position with $538.9 million in cash and cash equivalents, an increase from $533.3 million at the end of 2018. The company also had access to a revolving credit facility and generated positive cash flow from operations.

Cadence had total outstanding debt of $395.5 million as of March 30, 2019, primarily consisting of its 2024 Notes and a revolving credit facility. The company continued its stock repurchase program, buying back $81.1 million in shares during the quarter, and had approximately $594 million available for future repurchases.