10-QPeriod: Q2 FY2022

CADENCE DESIGN SYSTEMS INC Quarterly Report for Q2 Ended Apr 2, 2022

Filed April 25, 2022For Securities:CDNS

Summary

Cadence Design Systems Inc. reported strong financial performance for the first quarter of fiscal year 2022, demonstrating robust revenue growth and increased profitability. Total revenue for the period ending April 2, 2022, surged by 23% to $901.8 million compared to the prior year, driven by broad-based strength across its product categories, particularly in functional verification, custom IC design, and digital IC design. The company also saw a significant increase in its services revenue, up 50% year-over-year. This top-line growth translated into improved operating margins, which rose to 35% from 28% in the same period last year. The company maintained a healthy balance sheet with $1.13 billion in cash and cash equivalents. Cadence also continues to return value to shareholders, repurchasing $250 million in common stock during the quarter. Despite ongoing global economic uncertainties and increased R&D investment, Cadence's strategic focus on Intelligent System Design appears to be driving solid execution and positive financial outcomes, positioning it well for continued growth.

Financial Highlights

47 data points
Beta

Revenue

$901.77M

Net Income

$235.34M

26.1% Net Margin

EPS (Diluted)

$0.85

Total Assets

$4.40B

Cash & Equivalents

$1.13B

Free Cash Flow

$318.48M

Financial Statements
Beta
Revenue$901.77M
R&D Expenses$290.89M
Operating Expenses$582.84M
Operating Income$318.93M
Interest Expense$4.11M
Net Income$235.34M
EPS (Basic)$0.86
EPS (Diluted)$0.85
Shares Outstanding (Basic)272.43M
Shares Outstanding (Diluted)276.92M

Key Highlights

  • 1Total revenue increased by 23% year-over-year to $901.8 million.
  • 2Operating income grew significantly, leading to an expanded operating margin of 35% from 28% in the prior year.
  • 3Net income rose to $235.3 million, or $0.85 per diluted share, up from $187.2 million, or $0.67 per diluted share, in the same period last year.
  • 4Cash and cash equivalents stood at a healthy $1.13 billion as of April 2, 2022.
  • 5The company repurchased $250 million of its common stock during the quarter under its existing authorization.
  • 6Research and Development expenses increased by 7% to $290.9 million, reflecting continued investment in innovation.
  • 7Revenue from services saw substantial growth of 50% year-over-year, indicating strong customer engagement for integrated solutions.

Frequently Asked Questions

Cadence Design Systems Inc. reported a 23% increase in total revenue for the three months ended April 2, 2022, reaching $901.8 million, compared to $736.0 million in the same period of the prior year. This growth was driven by a 21% increase in product and maintenance revenue and a substantial 50% increase in services revenue.

The company demonstrated improved profitability, with income from operations increasing to $318.9 million from $203.9 million in the prior year's comparable period. This resulted in a significant expansion of the operating margin to 35% from 28%. Diluted earnings per share also increased to $0.85 from $0.67 year-over-year.

As of April 2, 2022, Cadence held $1.13 billion in cash and cash equivalents, a slight increase from $1.09 billion at the beginning of the fiscal year. The company also has access to a $700 million revolving credit facility, under which no borrowings were outstanding at the end of the quarter, indicating a strong liquidity position.

Cadence actively returned capital to shareholders by repurchasing $250 million of its common stock during the quarter, with approximately $877 million remaining under its authorized repurchase program as of April 2, 2022. The company's long-term debt consists primarily of $350 million in Senior Notes due 2024, and it remains in compliance with all associated covenants. No amounts were outstanding on its revolving credit facility.