10-QPeriod: Q2 FY2026

CADENCE DESIGN SYSTEMS INC Quarterly Report for Q2 Ended Jun 30, 2026

Filed July 29, 2026For Securities:CDNS

Summary

Cadence Design Systems, Inc. (CDNS) reported strong financial performance for the six months ended June 30, 2026. Total revenue reached $3.06 billion, a 21% increase year-over-year, driven by robust growth across its product categories, particularly in Core EDA and System Design and Analysis (SD&A). Net income for the period was $702.7 million, a significant increase from $433.6 million in the prior year. The company completed a major acquisition of Hexagon's design and engineering business for $2.9 billion, which significantly boosted goodwill and acquired intangibles, while also contributing to revenue growth. Despite increased operating expenses related to investments in R&D and sales, as well as costs associated with acquisitions, Cadence maintained healthy operating margins, which improved to 29% for the six-month period. The company's cash position remains strong, although it decreased due to significant investment activities, including the aforementioned acquisition. Cadence continues to emphasize its Intelligent System Design (ISD) strategy and its AI-driven solutions, positioning itself for continued innovation and market leadership in the semiconductor and electronic systems design space.

Key Highlights

  • 1Total revenue for the six months ended June 30, 2026, increased by 21% to $3.06 billion compared to $2.52 billion in the same period of 2025.
  • 2Net income for the six months ended June 30, 2026, surged to $702.7 million, up from $433.6 million in the prior year's comparable period.
  • 3The company completed a significant acquisition of Hexagon's design and engineering business for $2.9 billion, impacting its asset structure with substantial increases in goodwill and acquired intangibles.
  • 4Operating expenses, including R&D and Sales & Marketing, increased due to continued investment and acquisitions, but operating margin improved to 29% for the six-month period.
  • 5Cash and cash equivalents decreased from $3.0 billion at the end of 2025 to $1.44 billion at June 30, 2026, largely due to cash used in business combinations.
  • 6The company's core product categories, Core EDA, Semiconductor IP, and System Design and Analysis (SD&A), continue to show consistent revenue contributions.
  • 7Revenue from Asia, particularly China, showed substantial growth of 64% for the six-month period, indicating strong market traction in that region.

Frequently Asked Questions

Cadence's revenue growth in the first half of 2026 was primarily driven by an increase in product and maintenance revenue, up 22% year-over-year, reflecting continued customer investment in complex designs. Services revenue also saw a significant increase of 18%.

The acquisition significantly increased Cadence's assets, particularly Goodwill (up to $4.91 billion) and Acquired Intangibles (up to $1.87 billion). It also contributed to the reported revenue and costs. Pro forma revenue for the six months ended June 30, 2026, reflecting the combined entities, was $3.12 billion, higher than the reported $3.06 billion.

Operating expenses have increased due to investments in R&D and sales, as well as costs associated with recent acquisitions. However, the company has seen an improvement in its operating margin, rising to 29% for the six months ended June 30, 2026, compared to 24% in the prior year, indicating efficient cost management relative to revenue growth.

Cash and cash equivalents stood at $1.44 billion as of June 30, 2026, a decrease from $3.0 billion at the end of 2025. The primary use of cash during the first six months of 2026 was investing activities, notably $2.1 billion in business combinations, including the Hexagon acquisition.