Delaware | 000-15867 | 00-0000000 | ||||||||||||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock, $0.01 par value per share | CDNS | Nasdaq Global Select Market |
Exhibit No. | Description | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
CADENCE DESIGN SYSTEMS, INC. | ||||||||
By: | /s/ John M. Wall |
|||||||
John M. Wall |
||||||||
Senior Vice President and Chief Financial Officer
|
Operating Margin Reconciliation | Three Months Ended | |||||||||||||
December 31, 2024 | December 31, 2023 | |||||||||||||
(unaudited) | ||||||||||||||
GAAP operating margin as a percent of total revenue | 33.7% |
31.5% |
||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue: | ||||||||||||||
Stock-based compensation expense | 7.9% |
8.1% |
||||||||||||
Amortization of acquired intangibles | 2.0% |
1.6% |
||||||||||||
Acquisition and integration-related costs | 1.7% |
1.2% |
||||||||||||
Restructuring | (0.1)% |
(0.1)% |
||||||||||||
Non-qualified deferred compensation expenses |
0.0% |
0.6% |
||||||||||||
Special charges* |
0.8% |
0.0% |
||||||||||||
Non-GAAP operating margin as a percent of total revenue | 46.0% |
42.9% |
* | Includes costs related to adjustments to estimated legal liabilities and executive severance. |
Operating Margin Reconciliation | Years Ended |
|||||||||||||
December 31, 2024 | December 31, 2023 | |||||||||||||
(unaudited) | ||||||||||||||
GAAP operating margin as a percent of total revenue | 29.1% |
30.6% |
||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue: | ||||||||||||||
Stock-based compensation expense | 8.4% |
8.0% |
||||||||||||
Amortization of acquired intangibles | 2.0% |
1.5% |
||||||||||||
Acquisition and integration-related costs | 2.1% |
1.4% |
||||||||||||
Restructuring | 0.5% |
0.3% |
||||||||||||
Non-qualified deferred compensation expenses |
0.2% |
0.2% |
||||||||||||
Special charges* |
0.2% |
0.0% |
||||||||||||
Non-GAAP operating margin as a percent of total revenue | 42.5% |
42.0% |
* | Includes costs related to adjustments to estimated legal liabilities and executive severance. |
Net Income Reconciliation | Three Months Ended | |||||||||||||
December 31, 2024 | December 31, 2023 | |||||||||||||
(in thousands) | (unaudited) | |||||||||||||
Net income on a GAAP basis | $ | 340,210 | $ | 323,899 | ||||||||||
Stock-based compensation expense | 106,508 | 86,683 | ||||||||||||
Amortization of acquired intangibles | 26,776 | 16,920 | ||||||||||||
Acquisition and integration-related costs | 23,477 | 12,583 | ||||||||||||
Restructuring | (1,020) | (569) | ||||||||||||
Non-qualified deferred compensation expenses |
293 | 6,295 | ||||||||||||
Special charges* |
10,224 | — | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** |
14,654 | (27,966) | ||||||||||||
Income tax effect of non-GAAP adjustments | (5,456) | (41,638) | ||||||||||||
Net income on a non-GAAP basis | $ | 515,666 | $ | 376,207 |
* | Includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
** |
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. |
Net Income Reconciliation | Years Ended |
|||||||||||||
December 31, 2024 | December 31, 2023 | |||||||||||||
(in thousands) | (unaudited) | |||||||||||||
Net income on a GAAP basis | $ | 1,055,484 | $ | 1,041,144 | ||||||||||
Stock-based compensation expense | 391,219 | 325,611 | ||||||||||||
Amortization of acquired intangibles | 90,449 | 61,970 | ||||||||||||
Acquisition and integration-related costs | 95,562 | 56,542 | ||||||||||||
Restructuring | 23,765 | 11,013 | ||||||||||||
Non-qualified deferred compensation expenses |
11,145 | 10,851 | ||||||||||||
Special charges* |
11,457 | — | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** |
(60,798) | (45,502) | ||||||||||||
Income tax effect of non-GAAP adjustments | 17,162 | (57,139) | ||||||||||||
Net income on a non-GAAP basis | $ | 1,635,445 | $ | 1,404,490 |
* | Includes costs related to adjustments to estimated legal liabilities and executive severance. | ||||
** |
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. |
Diluted Net Income Per Share Reconciliation | Three Months Ended | |||||||||||||
December 31, 2024 | December 31, 2023 | |||||||||||||
(in thousands, except per share data) | (unaudited) | |||||||||||||
Diluted net income per share on a GAAP basis | $ | 1.24 | $ | 1.19 | ||||||||||
Stock-based compensation expense | 0.39 | 0.32 | ||||||||||||
Amortization of acquired intangibles | 0.10 | 0.06 | ||||||||||||
Acquisition and integration-related costs | 0.08 | 0.04 | ||||||||||||
Restructuring | — | — | ||||||||||||
Non-qualified deferred compensation expenses |
— | 0.02 | ||||||||||||
Special charges* |
0.04 | — | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** |
0.05 | (0.10) | ||||||||||||
Income tax effect of non-GAAP adjustments | (0.02) | (0.15) | ||||||||||||
Diluted net income per share on a non-GAAP basis | $ | 1.88 | $ | 1.38 | ||||||||||
Shares used in calculation of diluted net income per share | 274,292 | 272,419 | ||||||||||||
* | Includes costs related to adjustments to estimated legal liabilities and executive severance. | ||||
** |
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. |
Diluted Net Income Per Share Reconciliation | Years Ended |
|||||||||||||
December 31, 2024 | December 31, 2023 | |||||||||||||
(in thousands, except per share data) | (unaudited) | |||||||||||||
Diluted net income per share on a GAAP basis | $ | 3.85 | $ | 3.82 | ||||||||||
Stock-based compensation expense | 1.43 | 1.19 | ||||||||||||
Amortization of acquired intangibles | 0.33 | 0.23 | ||||||||||||
Acquisition and integration-related costs | 0.35 | 0.21 | ||||||||||||
Restructuring | 0.09 | 0.04 | ||||||||||||
Non-qualified deferred compensation expenses |
0.04 | 0.04 | ||||||||||||
Special charges* |
0.04 | — | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** |
(0.22) | (0.17) | ||||||||||||
Income tax effect of non-GAAP adjustments | 0.06 | (0.21) | ||||||||||||
Diluted net income per share on a non-GAAP basis | $ | 5.97 | $ | 5.15 | ||||||||||
Shares used in calculation of diluted net income per share | 273,833 | 272,748 | ||||||||||||
* | Includes costs related to adjustments to estimated legal liabilities and executive severance. | ||||
** |
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. |
December 31, 2024 | December 31, 2023 | |||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 2,644,030 | $ | 1,008,152 | ||||||||||
Receivables, net | 680,460 | 489,224 | ||||||||||||
Inventories | 257,711 | 181,661 | ||||||||||||
Prepaid expenses and other | 433,878 | 297,180 | ||||||||||||
Total current assets | 4,016,079 | 1,976,217 | ||||||||||||
Property, plant and equipment, net | 458,200 | 403,213 | ||||||||||||
Goodwill | 2,378,671 | 1,535,845 | ||||||||||||
Acquired intangibles, net | 594,734 | 336,843 | ||||||||||||
Deferred taxes | 982,057 | 880,001 | ||||||||||||
Other assets | 544,741 | 537,372 | ||||||||||||
Total assets | $ | 8,974,482 | $ | 5,669,491 | ||||||||||
Current liabilities: | ||||||||||||||
Current portion of long-term debt |
$ | — | $ | 349,285 | ||||||||||
Accounts payable and accrued liabilities | 632,692 | 576,558 | ||||||||||||
Current portion of deferred revenue | 737,413 | 665,024 | ||||||||||||
Total current liabilities | 1,370,105 | 1,590,867 | ||||||||||||
Long-term liabilities: | ||||||||||||||
Long-term portion of deferred revenue | 115,168 | 98,931 | ||||||||||||
Long-term debt | 2,476,183 | 299,771 | ||||||||||||
Other long-term liabilities | 339,448 | 275,651 | ||||||||||||
Total long-term liabilities | 2,930,799 | 674,353 | ||||||||||||
Stockholders’ equity | 4,673,578 | 3,404,271 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 8,974,482 | $ | 5,669,491 |
Three Months Ended | Years Ended |
|||||||||||||||||||||||||
December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||
Product and maintenance | $ | 1,239,287 | $ | 981,987 | $ | 4,213,509 | $ | 3,834,359 | ||||||||||||||||||
Services | 116,694 | 86,636 | 427,755 | 255,627 | ||||||||||||||||||||||
Total revenue | 1,355,981 | 1,068,623 | 4,641,264 | 4,089,986 | ||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||
Cost of product and maintenance | 157,249 | 71,491 | 436,600 | 331,760 | ||||||||||||||||||||||
Cost of services | 62,742 | 32,639 | 210,902 | 103,281 | ||||||||||||||||||||||
Marketing and sales | 200,406 | 180,368 | 757,483 | 690,319 | ||||||||||||||||||||||
Research and development | 392,026 | 367,443 | 1,549,093 | 1,441,796 | ||||||||||||||||||||||
General and administrative | 78,550 | 75,742 | 282,283 | 242,430 | ||||||||||||||||||||||
Amortization of acquired intangibles | 9,153 | 4,981 | 30,375 | 18,162 | ||||||||||||||||||||||
Restructuring | (1,020) | (569) | 23,765 | 11,013 | ||||||||||||||||||||||
Total costs and expenses | 899,106 | 732,095 | 3,290,501 | 2,838,761 | ||||||||||||||||||||||
Income from operations | 456,875 | 336,528 | 1,350,763 | 1,251,225 | ||||||||||||||||||||||
Interest expense | (29,907) | (8,989) | (75,999) | (36,185) | ||||||||||||||||||||||
Other income, net |
9,684 | 34,523 | 121,055 | 66,886 | ||||||||||||||||||||||
Income before provision for income taxes |
436,652 | 362,062 | 1,395,819 | 1,281,926 | ||||||||||||||||||||||
Provision for income taxes |
96,442 | 38,163 | 340,335 | 240,782 | ||||||||||||||||||||||
Net income | $ | 340,210 | $ | 323,899 | $ | 1,055,484 | $ | 1,041,144 | ||||||||||||||||||
Net income per share - basic | $ | 1.25 | $ | 1.20 | $ | 3.89 | $ | 3.86 | ||||||||||||||||||
Net income per share - diluted | $ | 1.24 | $ | 1.19 | $ | 3.85 | $ | 3.82 | ||||||||||||||||||
Weighted average common shares outstanding - basic | 272,069 | 269,088 | 271,212 | 269,381 | ||||||||||||||||||||||
Weighted average common shares outstanding - diluted | 274,292 | 272,419 | 273,833 | 272,748 |
Years Ended |
|||||||||||
December 31, 2024 | December 31, 2023 | ||||||||||
Cash and cash equivalents at beginning of year |
$ | 1,008,152 | $ | 882,325 | |||||||
Cash flows from operating activities: | |||||||||||
Net income | 1,055,484 | 1,041,144 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 196,935 | 145,292 | |||||||||
Amortization of debt discount and fees | 3,473 | 1,262 | |||||||||
Stock-based compensation | 391,219 | 325,611 | |||||||||
Gain on investments, net |
(49,593) | (34,602) | |||||||||
Deferred income taxes | (128,737) | (36,512) | |||||||||
Provisions for losses on receivables | 2,078 | 3,325 | |||||||||
ROU asset amortization and change in operating lease liabilities | (1,920) | 451 | |||||||||
Other non-cash items | 587 | 1,983 | |||||||||
Changes in operating assets and liabilities, net of effect of acquired businesses: | |||||||||||
Receivables | (180,287) | (11,748) | |||||||||
Inventories | (82,771) | (65,895) | |||||||||
Prepaid expenses and other | (81,529) | 39,015 | |||||||||
Other assets | 11,866 | (45,784) | |||||||||
Accounts payable and accrued liabilities | 33,676 | 5,415 | |||||||||
Deferred revenue | 66,478 | (21,583) | |||||||||
Other long-term liabilities | 23,592 | 1,802 | |||||||||
Net cash provided by operating activities | 1,260,551 | 1,349,176 | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of investments | (4,982) | (176,170) | |||||||||
Proceeds from the sale and maturity of investments | 47,980 | 64,775 | |||||||||
Purchases of property, plant and equipment | (142,542) | (102,337) | |||||||||
Purchases of intangible assets | — | (166) | |||||||||
Cash paid in business combinations, net of cash acquired | (737,574) | (198,351) | |||||||||
Net cash used for investing activities | (837,118) | (412,249) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving credit facility |
— | 50,000 | |||||||||
Payments on revolving credit facility |
— | (150,000) | |||||||||
Proceeds from issuance of debt |
3,196,595 | — | |||||||||
Payments of debt |
(1,350,000) | — | |||||||||
Payments of debt issuance costs |
(23,828) | — | |||||||||
Proceeds from issuance of common stock | 204,237 | 132,957 | |||||||||
Stock received for payment of employee taxes on vesting of restricted stock | (237,737) | (136,396) | |||||||||
Payments for repurchases of common stock | (550,026) | (700,134) | |||||||||
Net cash provided by (used for) financing activities |
1,239,241 | (803,573) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (26,796) | (7,527) | |||||||||
Increase in cash and cash equivalents |
1,635,878 | 125,827 | |||||||||
Cash and cash equivalents at end of year |
$ | 2,644,030 | $ | 1,008,152 |
2023 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GEOGRAPHY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||||||||||||||||||||||||||||||||||||
Americas | 44 | % | 41 | % | 43 | % | 44 | % | 43 | % | 46 | % | 49 | % | 50 | % | 49 | % | 49 | % | |||||||||||||||||||||||||||||||||||||||
China | 17 | % | 18 | % | 17 | % | 15 | % | 17 | % | 12 | % | 12 | % | 13 | % | 13 | % | 12 | % | |||||||||||||||||||||||||||||||||||||||
Other Asia | 18 | % | 18 | % | 19 | % | 19 | % | 19 | % | 20 | % | 19 | % | 17 | % | 17 | % | 18 | % | |||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa | 15 | % | 17 | % | 15 | % | 16 | % | 16 | % | 17 | % | 14 | % | 14 | % | 15 | % | 15 | % | |||||||||||||||||||||||||||||||||||||||
Japan | 6 | % | 6 | % | 6 | % | 6 | % | 5 | % | 5 | % | 6 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
2023 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRODUCT CATEGORY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||||||||||||||||||||||||||||||||||||
Core EDA |
77 | % | 76 | % | 76 | % | 75 | % | 76 | % | 76 | % | 73 | % | 70 | % | 68 | % | 71 | % | |||||||||||||||||||||||||||||||||||||||
IP | 11 | % | 11 | % | 11 | % | 13 | % | 12 | % | 12 | % | 13 | % | 14 | % | 13 | % | 13 | % | |||||||||||||||||||||||||||||||||||||||
System Design and Analysis | 12 | % | 13 | % | 13 | % | 12 | % | 12 | % | 12 | % | 14 | % | 16 | % | 19 | % | 16 | % | |||||||||||||||||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ending
March 31, 2025
|
Year Ending
December 31, 2025
|
|||||||||||||
Forecast | Forecast | |||||||||||||
GAAP operating margin as a percent of total revenue | 27% - 28% |
30.25% - 31.25% |
||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue: | ||||||||||||||
Stock-based compensation expense | 9% |
9% |
||||||||||||
Amortization of acquired intangibles | 2% | 2% |
||||||||||||
Acquisition and integration-related costs | 2% |
2% |
||||||||||||
Non-GAAP operating margin as a percent of total revenue† | 40% - 41% |
43.25% - 44.25% |
† | The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
Three Months Ending
March 31, 2025
|
Year Ending
December 31, 2025
|
|||||||||||||
Forecast | Forecast | |||||||||||||
Diluted net income per share on a GAAP basis | $0.93 to $0.99 |
$4.19 to $4.29 |
||||||||||||
Stock-based compensation expense | 0.40 | 1.69 | ||||||||||||
Amortization of acquired intangibles | 0.09 | 0.36 | ||||||||||||
Acquisition and integration-related costs | 0.08 | 0.31 | ||||||||||||
Income tax effect of non-GAAP adjustments | (0.04) | 0.10 | ||||||||||||
Diluted net income per share on a non-GAAP basis† | $1.46 to $1.52 |
$6.65 to $6.75 |
† |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
Three Months Ending
March 31, 2025
|
Year Ending
December 31, 2025
|
|||||||||||||
($ in millions) | Forecast | Forecast | ||||||||||||
Net income on a GAAP basis | $256 to $273 |
$1,151 to $1,179 |
||||||||||||
Stock-based compensation expense | 109 | 466 | ||||||||||||
Amortization of acquired intangibles | 25 | 98 | ||||||||||||
Acquisition and integration-related costs | 23 | 85 | ||||||||||||
Income tax effect of non-GAAP adjustments | (11) | 28 | ||||||||||||
Net income on a non-GAAP basis† | $402 to $419 |
$1,828 to $1,856 |
† |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
CADENCE REPORTS FOURTH QUARTER
AND FISCAL YEAR 2024
| ||||||||
CADENCE DESIGN SYSTEMS, INC. | ||||||||
CFO COMMENTARY |
||||||||
Key Takeaways for 2024
• Record year-end backlog of $6.8B and current RPO of $3.4B
• Revenue growth of 13.5%
• Non-GAAP operating margin of 42.5%
|
Q1 2025 Outlook
• Revenue: $1.23 billion - $1.25 billion
• GAAP operating margin: 27% - 28%
• Non-GAAP operating margin: 40% - 41%
• GAAP EPS: $0.93 - $0.99
• Non-GAAP EPS: $1.46 - $1.52
• Expect to use approximately $175 million to repurchase Cadence shares in Q1
|
Q4 2024 KEY METRICS |
||||||
• Revenue: $1.356 billion
• GAAP operating margin: 33.7%
• Non-GAAP operating margin: 46.0%
• GAAP EPS: $1.24
• Non-GAAP EPS: $1.88
• Operating cash flow: $441 million
| ||||||||
FY 2025 Outlook
• Revenue: $5.14 billion - $5.22 billion
• GAAP operating margin: 30.25% - 31.25%
• Non-GAAP operating margin: 43.25% - 44.25%
• GAAP EPS: $4.19 - $4.29
• Non-GAAP EPS: $6.65 - $6.75
• Operating cash flow: $1.6 billion - $1.7 billion
• Expect to use approximately 50% of free cash flow to repurchase Cadence shares for the year
|
Financial Results Webcast |
FY 2024 KEY METRICS |
||||||
Our Q4 2024 financial results webcast will begin February 18, 2025 at 2:00 p.m. (Pacific). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on February 18, 2025 until 5:00 p.m. (Pacific) on March 17, 2025. |
• Revenue: $4.641 billion
• GAAP operating margin: 29.1%
• Non-GAAP operating margin: 42.5%
• GAAP EPS: $3.85
• Non-GAAP EPS: $5.97
• Operating cash flow: $1.261 billion
|
|||||||
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 1 |
Cadence Design Systems, Inc. | ||||||||
(In Millions, except per share data) | 2019 | 2020* | 2021 | 2022 | 2023* |
2024 |
2025E |
||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,336 | $ | 2,683 | $ | 2,988 | $ | 3,562 | $ | 4,090 | $ | 4,641 | $5,140- $5,220 |
||||||||||||||||||||||||||||||||||
Revenue growth* | 9% | 15% | 11% | 19% | 15% |
13% |
11% - 12% |
||||||||||||||||||||||||||||||||||||||||
3-year CAGR | 9% | 11% | 12% | 15% | 15% | 16% |
~13% |
||||||||||||||||||||||||||||||||||||||||
3-year CAGR without 53rd week impact | 11% | 16% |
|||||||||||||||||||||||||||||||||||||||||||||
GAAP operating expenses | $ | 1,845 | $ | 2,037 | $ | 2,209 | $ | 2,488 | $ | 2,839 | $ | 3,291 | ~$3,563 |
||||||||||||||||||||||||||||||||||
GAAP operating expense growth | 6% | 10% | 8% | 13% | 14% |
16% |
~8% |
||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating expenses | $ | 1,587 | $ | 1,739 | $ | 1,877 | $ | 2,125 | $ | 2,373 | $ | 2,667 | ~$2,914 |
||||||||||||||||||||||||||||||||||
Non-GAAP operating expense growth | 6% | 10% | 8% | 13% | 12% |
12% |
~9% |
||||||||||||||||||||||||||||||||||||||||
GAAP operating margin** | 21.1% |
24.1% |
26.1% |
30.1% |
30.6% |
29.1% |
30.75 | % | |||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin** | 32.1% |
35.2% |
37.2% |
40.3% |
42.0% |
42.5% |
43.75 | % | |||||||||||||||||||||||||||||||||||||||
GAAP earnings per share | $ | 3.53 | $ | 2.11 | $ | 2.50 | $ | 3.09 | $ | 3.82 | $ | 3.85 | $4.19 - $4.29 |
||||||||||||||||||||||||||||||||||
Non-GAAP earning per share | $ | 2.20 | $ | 2.80 | $ | 3.29 | $ | 4.27 | $ | 5.15 | $ | 5.97 | $6.65 - $6.75 |
||||||||||||||||||||||||||||||||||
Non-GAAP EPS growth** | 18% | 27% | 18% | 30% | 21% |
16% |
12 | % | |||||||||||||||||||||||||||||||||||||||
3-year Non-GAAP EPS CAGR** | 22% | 26% | 21% | 25% | 23% |
22% |
16 | % | |||||||||||||||||||||||||||||||||||||||
Weighted average shares diluted outstanding | 280.5 | 279.6 | 278.9 | 275.0 | 272.7 |
273.8 |
274 - 276 |
||||||||||||||||||||||||||||||||||||||||
Cash flow from operations | 730 | 905 | 1,101 | 1,242 | 1,349 |
1261 |
$1,600 - $1,700 |
||||||||||||||||||||||||||||||||||||||||
Capital expenditures | 75 | 95 | 65 | 123 | 102 |
143 |
~$150 |
||||||||||||||||||||||||||||||||||||||||
(In Millions) | 2019 | 2020 | 2021 | 2022 | 2023 |
2024 |
2025E* |
||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,336 | $ | 2,683 | $ | 2,988 | $ | 3,562 | $ | 4,090 | $ | 4,641 | $ | 5,180 | |||||||||||||||||||||||||||||||||
Revenue Growth | 9% | 15% | 11% | 19% | 15% |
13% |
12% |
||||||||||||||||||||||||||||||||||||||||
3-Year Revenue Growth CAGR | 9% | 11% | 12% | 15% | 15% | 16% |
13% |
||||||||||||||||||||||||||||||||||||||||
GAAP operating margin | 21.1% |
24.1% |
26.1% |
30.1% |
30.6% |
29.1% |
30.75% |
||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin | 32.1% |
35.2% |
37.2% |
40.3% |
42.0% |
42.5% |
43.75% |
||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | (7.8)% |
(7.4)% |
(7.0)% |
(7.6)% |
(8.0)% |
(8.4)% |
(9.0)% |
||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin adjusted for stock-based compensation | 24.3% |
27.8% |
30.2% |
32.7% |
34.0% |
34.1% |
34.75% |
||||||||||||||||||||||||||||||||||||||||
GAAP operating income | $ | 492 | $ | 646 | $ | 779 | $ | 1,074 | $ | 1,251 | $ | 1,351 | $ | 1,617 | |||||||||||||||||||||||||||||||||
Non-GAAP operating income | $ | 749 | $ | 944 | $ | 1,111 | $ | 1,436 | $ | 1,717 | $ | 1,974 | $ | 2,266 | |||||||||||||||||||||||||||||||||
Non-GAAP operating income adjusted for stock-based compensation | $ | 567 | $ | 747 | $ | 901 | $ | 1,166 | $ | 1,391 | $ | 1,583 | $ | 1,800 | |||||||||||||||||||||||||||||||||
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 2 |
Cadence Design Systems, Inc. | ||||||||
Q1 2024 |
Q4 2024 |
Q1 2025E |
|||||||||||||||||||||
Total Revenue ($ Millions) | $ | 1,009 | $ | 1,356 | $1,230 - $1,250 |
||||||||||||||||||
Q/Q Growth | 12% |
(8)% - (9)% |
|||||||||||||||||||||
Y/Y Growth | 27% |
22% - 24% |
|||||||||||||||||||||
GAAP Operating Margin | 24.8% |
33.7% |
30.25% - 31.25% |
||||||||||||||||||||
Non-GAAP Operating Margin | 37.8% |
46.0% |
43.25% - 44.25% |
||||||||||||||||||||
GAAP EPS | $ | 0.91 | $ | 1.24 | $0.93 - $0.99 |
||||||||||||||||||
Non-GAAP EPS | $ | 1.17 | $ | 1.88 | $1.46 - $1.52 |
||||||||||||||||||
FY 2024 |
FY 2025E |
||||||||||||||||
Recurring Revenue | 82.6% |
~80% |
|||||||||||||||
Total Revenue ($ Millions) | $ | 4,641 | $5,140 - $5,220 |
||||||||||||||
Y/Y Growth | 13% |
11% - 12% |
|||||||||||||||
Revenue from Beginning Backlog | ~70% |
~70% |
|||||||||||||||
GAAP Operating Margin | 29.1% |
30.25% - 31.25% |
|||||||||||||||
Non-GAAP Operating Margin | 42.5% |
43.25% - 44.25% |
|||||||||||||||
GAAP Other Income & Expense ($ Millions) | $ | 45 | $(53) - $(67) |
||||||||||||||
Non-GAAP Other Income & Expense ($ Millions) | $ | (16) | $(53) - $(67) |
||||||||||||||
GAAP Tax Rate | 24.4% |
~25% |
|||||||||||||||
Non-GAAP Tax Rate | 16.5% |
16.5% |
|||||||||||||||
Weighted Average Diluted Shares Outstanding (Millions) | 273.8 |
274 - 276 |
|||||||||||||||
GAAP EPS | $ | 3.85 | $4.19 - $4.29 |
||||||||||||||
Y/Y Growth | 1% |
9% - 11% |
|||||||||||||||
Non-GAAP EPS | $ | 5.97 | $6.65 - $6.75 |
||||||||||||||
Y/Y Growth | 16% |
11% - 13% |
|||||||||||||||
Cash Flow from Operations ($ Millions) | $ | 1,261 | $1,600 - $1,700 |
||||||||||||||
DSO | 48 |
~50 |
|||||||||||||||
Capital Expenditures ($ Millions) | $ | 143 | ~$150 |
||||||||||||||
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 3 |
Cadence Design Systems, Inc. | ||||||||
(In Billions) | 2020 | 2021 | 2022 | 2023 |
2024 |
||||||||||||||||||||||||||||||
Backlog | $ | 3.9 | $ | 4.4 | $ | 5.8 | $ | 6.0 | $ | 6.8 | |||||||||||||||||||||||||
(In Millions) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Product and Maintenance | $ | 982 | $ | 913 | $ | 961 | $ | 1,100 | $ | 1,239 | |||||||||||||||||||||||||
Services | 87 | 96 | 100 | 115 | 117 | ||||||||||||||||||||||||||||||
Total Revenue | $ | 1,069 | $ | 1,009 | $ | 1,061 | $ | 1,215 | $ | 1,356 | |||||||||||||||||||||||||
(In Millions) | 2020* |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Product and Maintenance | $ | 2,537 | $ | 2,813 | $ | 3,340 | $ | 3,834 | $ | 4,213 | |||||||||||||||||||||||||
Services | 146 | 175 | 222 | 256 | 428 | ||||||||||||||||||||||||||||||
Total Revenue | $ | 2,683 | $ | 2,988 | $ | 3,562 | $ | 4,090 | $ | 4,641 | |||||||||||||||||||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
Revenue recognized over time | 85 | % | 87 | % | 85 | % | 80 | % | 72 | % | |||||||||||||||||||||||||
Revenue from arrangements with non-cancelable commitments | 2 | % | 3 | % | 3 | % | 2 | % | 2 | % | |||||||||||||||||||||||||
Recurring Revenue | 87 | % | 90 | % | 88 | % | 82 | % | 74 | % | |||||||||||||||||||||||||
Up-Front Revenue |
13 | % | 10 | % | 12 | % | 18 | % | 26 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
Revenue recognized over time | 85 | % | 85 | % | 83 | % | 81 | % | 80 | % | |||||||||||||||||||||||||
Revenue from arrangements with non-cancelable commitments | 3 | % | 3 | % | 2 | % | 3 | % | 3 | % | |||||||||||||||||||||||||
Recurring Revenue | 88 | % | 88 | % | 85 | % | 84 | % | 83 | % | |||||||||||||||||||||||||
Up-Front Revenue |
12 | % | 12 | % | 15 | % | 16 | % | 17 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||
Trailing Twelve Months Ended | |||||||||||||||||||||||||||||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
Recurring Revenue | 84 | % | 87 | % | 87 | % | 86 | % | 83 | % | |||||||||||||||||||||||||
Up-Front Revenue | 16 | % | 13 | % | 13 | % | 14 | % | 17 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 4 |
Cadence Design Systems, Inc. | ||||||||
(% of Total Revenue) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Americas | 44 | % | 46 | % | 49 | % | 50 | % | 49 | % | |||||||||||||||||||||||||
China | 15 | % | 12 | % | 12 | % | 13 | % | 13 | % | |||||||||||||||||||||||||
Other Asia | 19 | % | 20 | % | 19 | % | 17 | % | 17 | % | |||||||||||||||||||||||||
Europe, Middle East and Africa | 16 | % | 17 | % | 14 | % | 14 | % | 15 | % | |||||||||||||||||||||||||
Japan | 6 | % | 5 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(% of Total Revenue) | 2020 |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Americas | 42 | % | 45 | % | 46 | % | 43 | % | 49 | % | |||||||||||||||||||||||||
China | 15 | % | 13 | % | 15 | % | 17 | % | 12 | % | |||||||||||||||||||||||||
Other Asia | 18 | % | 19 | % | 18 | % | 19 | % | 18 | % | |||||||||||||||||||||||||
Europe, Middle East and Africa | 18 | % | 17 | % | 16 | % | 16 | % | 15 | % | |||||||||||||||||||||||||
Japan | 7 | % | 6 | % | 5 | % | 5 | % | 6 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(% of Total Revenue) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Core EDA |
75 | % | 76 | % | 73 | % | 70 | % | 68 | % | |||||||||||||||||||||||||
IP | 13 | % | 12 | % | 13 | % | 14 | % | 13 | % | |||||||||||||||||||||||||
System Design and Analysis | 12 | % | 12 | % | 14 | % | 16 | % | 19 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(% of Total Revenue) | 2020 |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Core EDA |
76 | % | 76 | % | 76 | % | 76 | % | 71 | % | |||||||||||||||||||||||||
IP | 14 | % | 13 | % | 12 | % | 12 | % | 13 | % | |||||||||||||||||||||||||
System Design and Analysis | 10 | % | 11 | % | 12 | % | 12 | % | 16 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
Core EDA |
10 | % | 10 | % | 14 | % | 15 | % | 13 | % | |||||||||||||||||||||||||
IP | 18 | % | 16 | % | 15 | % | 8 | % | 15 | % | |||||||||||||||||||||||||
System Design and Analysis | 13 | % | 19 | % | 24 | % | 22 | % | 30 | % | |||||||||||||||||||||||||
Total 3 Year CAGR |
11 | % | 12 | % | 15 | % | 15 | % | 16 | % |
2020* |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
Core EDA |
9 | % | 10 | % | 14 | % | 16 | % | 13 | % | |||||||||||||||||||||||||
IP | 18 | % | 16 | % | 15 | % | 9 | % | 15 | % | |||||||||||||||||||||||||
System Design and Analysis | 12 | % | 19 | % | 24 | % | 23 | % | 30 | % | |||||||||||||||||||||||||
Total 3 Year CAGR |
11 | % | 12 | % | 15 | % | 16 | % | 16 | % |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 5 |
Cadence Design Systems, Inc. | ||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
GAAP Gross Margin | 90.3 | % | 87.6 | % | 86.9 | % | 86.6 | % | 83.8 | % | |||||||||||||||||||||||||
Non-GAAP Gross Margin | 91.7 | % | 89.1 | % | 88.5 | % | 88.6 | % | 85.5 | % | |||||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
GAAP Gross Margin | 88.6 | % | 89.7 | % | 89.6 | % | 89.4 | % | 86.0 | % | |||||||||||||||||||||||||
Non-GAAP Gross Margin | 90.6 | % | 91.7 | % | 91.0 | % | 90.7 | % | 87.8 | % | |||||||||||||||||||||||||
(In Millions) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Total GAAP Costs and Expenses | $ | 732 | $ | 759 | $ | 767 | $ | 865 | $ | 899 | |||||||||||||||||||||||||
Total Non-GAAP Costs and Expenses | $ | 610 | $ | 627 | $ | 635 | $ | 671 | $ | 733 | |||||||||||||||||||||||||
(In Millions) | 2020* |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Total GAAP Costs and Expenses | $ | 2,037 | $ | 2,209 | $ | 2,488 | $ | 2,839 | $ | 3,291 | |||||||||||||||||||||||||
Total Non-GAAP Costs and Expenses | $ | 1,739 | $ | 1,877 | $ | 2,125 | $ | 2,373 | $ | 2,667 | |||||||||||||||||||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
GAAP Operating Margin | 31.5 | % | 24.8 | % | 27.7 | % | 28.8 | % | 33.7 | % | |||||||||||||||||||||||||
Non-GAAP Operating Margin | 42.9 | % | 37.8 | % | 40.1 | % | 44.8 | % | 46.0 | % | |||||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
GAAP Operating Margin | 24.1 | % | 26.1 | % | 30.1 | % | 30.6 | % | 29.1 | % | |||||||||||||||||||||||||
Non-GAAP Operating Margin | 35.2 | % | 37.2 | % | 40.3 | % | 42.0 | % | 42.5 | % | |||||||||||||||||||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
GAAP Net Income Per Share | $ | 1.19 | $ | 0.91 | $ | 0.84 | $ | 0.87 | $ | 1.24 | |||||||||||||||||||||||||
Non-GAAP Net Income Per Share | $ | 1.38 | $ | 1.17 | $ | 1.28 | $ | 1.64 | $ | 1.88 | |||||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
GAAP Net Income Per Share | $ | 2.11 | $ | 2.50 | $ | 3.09 | $ | 3.82 | $ | 3.85 | |||||||||||||||||||||||||
Non-GAAP Net Income Per Share | $ | 2.80 | $ | 3.29 | $ | 4.27 | $ | 5.15 | $ | 5.97 | |||||||||||||||||||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
DSO | 43 |
36 |
49 |
44 |
48 |
||||||||||||||||||||||||||||||
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 6 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Net Cash from Operating Activities | $ | 272 | $ | 253 | $ | 156 | $ | 410 | $ | 441 | |||||||||||||||||||||||||
Capital Expenditures | 34 | 49 | 29 | 27 | 37 | ||||||||||||||||||||||||||||||
Free Cash Flow | $ | 238 | $ | 204 | $ | 127 | $ | 383 | $ | 404 | |||||||||||||||||||||||||
(In Millions) | 2020 |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Net Cash from Operating Activities | $ | 905 | $ | 1,101 | $ | 1,242 | $ | 1,349 | $ | 1,261 | |||||||||||||||||||||||||
Capital Expenditures | 95 | 65 | 123 | 102 | 143 | ||||||||||||||||||||||||||||||
Free Cash Flow | $ | 810 | $ | 1,036 | $ | 1,119 | $ | 1,247 | $ | 1,118 | |||||||||||||||||||||||||
(In Millions) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Cash and Cash Equivalents | $ | 1,008 | $ | 1,012 | $ | 1,059 | $ | 2,786 | $ | 2,644 | |||||||||||||||||||||||||
(In Millions) | 2020 |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Cash and Cash Equivalents | $ | 928 | $ | 1,089 | $ | 882 | $ | 1,008 | $ | 2,644 | |||||||||||||||||||||||||
(In Millions) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Debt (principal value) |
$ | 650 | $ | 650 | $ | 1,350 | $ | 2,850 | $ | 2,500 | |||||||||||||||||||||||||
(In Millions) | 2020 |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Debt (principal value) |
$ | 350 | $ | 350 | $ | 750 | $ | 650 | $ | 2,500 | |||||||||||||||||||||||||
(In Millions) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
Share Repurchase | $ | 125 | $ | 125 | $ | 125 | $ | 150 | $ | 150 | |||||||||||||||||||||||||
Number of Shares | 0.488 | 0.425 | 0.423 | 0.563 | 0.519 | ||||||||||||||||||||||||||||||
(In Millions) | 2020 |
2021 |
2022 |
2023 |
2024 |
||||||||||||||||||||||||||||||
Share Repurchase | $ | 380 | $ | 612 | $ | 1,050 | $ | 700 | $ | 550 | |||||||||||||||||||||||||
Number of Shares | 4.247 | 4.401 | 6.602 | 3.145 | 1.930 | ||||||||||||||||||||||||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
Headcount | 11,226 | 11,753 | 12,665 | 12,703 | 12,705 | ||||||||||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
Headcount | 8,746 | 9,298 | 10,228 | 11,226 | 12,705 | ||||||||||||||||||||||||||||||
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 7 |
Cadence Design Systems, Inc. | ||||||||
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 8 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
||||||||||||||||||||||||||||||
GAAP total costs and expenses | $ | 732 | $ | 759 | $ | 767 | $ | 865 | $ | 899 | |||||||||||||||||||||||||
Reconciling items to non-GAAP total costs and expenses | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | (87) | (88) | (88) | (109) | (107) | ||||||||||||||||||||||||||||||
Amortization of acquired intangibles | (17) | (17) | (20) | (27) | (27) | ||||||||||||||||||||||||||||||
Acquisition and integration-related costs | (13) | (22) | (21) | (29) | (23) | ||||||||||||||||||||||||||||||
Restructuring | 1 | — | — | (25) | 1 | ||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses |
(6) | (5) | (2) | (4) | — | ||||||||||||||||||||||||||||||
Special charges* |
— | — | (1) | — | (10) | ||||||||||||||||||||||||||||||
Non-GAAP total costs and expenses** |
$ | 610 | $ | 627 | $ | 635 | $ | 671 | $ | 733 | |||||||||||||||||||||||||
* | Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
** |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
(In Millions) | 2019 | 2020* | 2021 | 2022 | 2023 |
2024 |
2025E |
||||||||||||||||||||||||||||||||||||||||
GAAP total costs and expenses | $ | 1,845 | $ | 2,037 | $ | 2,209 | $ | 2,488 | $ | 2,839 | $ | 3,291 | $ | 3,563 | |||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP total costs and expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | (182) | (197) | (210) | (270) | (326) | (391) | (466) | ||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | (53) | (64) | (67) | (60) | (62) | (90) | (98) | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | (8) | (23) | (23) | (41) | (56) | (96) | (85) | ||||||||||||||||||||||||||||||||||||||||
Restructuring | (9) | (9) | 1 | — | (11) | (24) | — | ||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation (expenses) credits | (5) | (5) | (6) | 8 | (11) | (11) | — | ||||||||||||||||||||||||||||||||||||||||
Special charges** | (1) | — | (27) | — | — | (11) | — | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP total costs and expenses*** | $ | 1,587 | $ | 1,739 | $ | 1,877 | $ | 2,125 | $ | 2,373 | $ | 2,667 | $ | 2,914 | |||||||||||||||||||||||||||||||||
* | Fiscal 2020 was a 53-week year. | ||||
** | 2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
*** | The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 9 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | 2019 | 2020* | 2021 | 2022 | 2023 |
2024 |
2025E |
||||||||||||||||||||||||||||||||||||||||
GAAP operating income |
$ | 492 | $ | 646 | $ | 779 | $ | 1,074 | $ | 1,251 | $ | 1,351 | $ | 1,617 | |||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP operating income |
|||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 182 | 197 | 210 | 270 | 326 | 391 | 466 | ||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 53 | 64 | 67 | 60 | 62 | 90 | 98 | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 8 | 23 | 23 | 41 | 56 | 96 | 85 | ||||||||||||||||||||||||||||||||||||||||
Restructuring | 9 | 9 | (1) | — | 11 | 24 | — | ||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) |
5 | 5 | 6 | (8) | 11 | 11 | — | ||||||||||||||||||||||||||||||||||||||||
Special charges** | 1 | — | 27 | — | — | 11 | — | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating income*** |
$ | 749 | $ | 944 | $ | 1,111 | $ | 1,436 | $ | 1,717 | $ | 1,974 | $ | 2,266 | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | (182) | (197) | (210) | (270) | (326) | (391) | $ | (466) | |||||||||||||||||||||||||||||||||||||||
Non-GAAP operating income adjusted for stock-based compensation*** |
$ | 567 | $ | 747 | $ | 901 | $ | 1,166 | $ | 1,391 | $ | 1,583 | $ | 1,800 | |||||||||||||||||||||||||||||||||
* | Fiscal 2020 was a 53-week year. | ||||
** | 2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
*** | The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 10 |
Cadence Design Systems, Inc. | ||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
|||||||||||||||||||||||||||||||
GAAP gross margin as a percent of total revenue | 90.3% |
87.6% |
86.9% |
86.6% |
83.8% |
||||||||||||||||||||||||||||||
Reconciling items to non-GAAP gross margin as a percent of total revenue | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 0.3% |
0.3% |
0.3% |
0.3% |
0.3% |
||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 1.1% | 1.1% | 1.2% |
1.5% |
1.3% |
||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses |
0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.0% | 0.1% |
0.1% |
0.2% |
0.1% |
||||||||||||||||||||||||||||||
Non-GAAP gross margin as a percent of total revenue* | 91.7% |
89.1% |
88.5% |
88.6% |
85.5% |
||||||||||||||||||||||||||||||
* | The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
2020 |
2021 |
2022 |
2023 |
2024 |
|||||||||||||||||||||||||||||||
GAAP gross margin as a percent of total revenue | 88.6% |
89.7% |
89.6% |
89.4% |
86.0% |
||||||||||||||||||||||||||||||
Reconciling items to non-GAAP gross margin as a percent of total revenue | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 0.3% |
0.3% |
0.2% |
0.2% |
0.3% |
||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 1.7% |
1.6% |
1.2% |
1.1% |
1.3% |
||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.0% | 0.0% | 0.0% | 0.0% |
0.2% |
||||||||||||||||||||||||||||||
Special charges* |
0.0% | 0.1% |
0.0% | 0.0% |
0.0% |
||||||||||||||||||||||||||||||
Non-GAAP gross margin as a percent of total revenue** |
90.6% |
91.7% |
91.0% |
90.7% |
87.8% |
||||||||||||||||||||||||||||||
* | 2021 includes costs related to a voluntary retirement program. |
** |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 11 |
Cadence Design Systems, Inc. | ||||||||
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
Q1 2025E |
|||||||||||||||||||||||||||||||||||||||
GAAP operating margin as a percent of total revenue | 31.5% |
24.8% |
27.7% |
28.8% |
33.7% |
27% - 28% |
||||||||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 8.1% |
8.7% |
8.3% |
9.0% |
7.9% |
9% |
||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 1.6% |
1.7% |
1.9% |
2.2% |
2.0% |
2% |
||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 1.2% |
2.2% |
1.9% |
2.4% |
1.7% |
2% |
||||||||||||||||||||||||||||||||||||||
Restructuring | (0.1)% |
0.0% |
0.0% |
2.0% |
(0.1)% |
0% |
||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses |
0.6% |
0.4% |
0.2% |
0.4% |
0.0% |
0% | ||||||||||||||||||||||||||||||||||||||
Special charges* |
0.0% |
0.0% |
0.1% |
0.0% |
0.8% |
0% | ||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin as a percent of total revenue** |
42.9% |
37.8% |
40.1% |
44.8% |
46.0% |
40% - 41% |
||||||||||||||||||||||||||||||||||||||
* | Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
** |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
2019 | 2020 | 2021 | 2022 | 2023 |
2024 |
2025E |
||||||||||||||||||||||||||||||||||||||||||||
GAAP operating margin as a percent of total revenue | 21.1% |
24.1% |
26.1% |
30.1% |
30.6% |
29.1% |
30.25% - 31.25% |
|||||||||||||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 7.8% |
7.4% |
7.0% |
7.6% |
8.0% |
8.4% |
9% |
|||||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 2.3% |
2.4% |
2.2% |
1.7% |
1.5% |
2.0% |
2% |
|||||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.3% |
0.8% |
0.8% |
1.1% |
1.4% |
2.1% |
2% |
|||||||||||||||||||||||||||||||||||||||||||
Restructuring | 0.4% |
0.3% |
0.0% |
0.0% |
0.3% |
0.5% |
0% |
|||||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 0.2% |
0.2% |
0.2% |
(0.2)% |
0.2% |
0.2% |
0% | |||||||||||||||||||||||||||||||||||||||||||
Special charges* |
0.0% |
0.0% |
0.9% |
0.0% |
0.0% |
0.2% |
0% | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin as a percent of total revenue** | 32.1% |
35.2% |
37.2% |
40.3% |
42.0% |
42.5% |
43.25% - 44.25% |
|||||||||||||||||||||||||||||||||||||||||||
* | 2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
** | The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 12 |
Cadence Design Systems, Inc. | ||||||||
(In Thousands, Except Per Share Data) | Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Q4 2024 |
Q1 2025E |
||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a GAAP basis | $ | 1.19 | $ | 0.91 | $ | 0.84 | $ | 0.87 | $ | 1.24 | $0.93 - $0.99 |
|||||||||||||||||||||||||||||||||
Stock-based compensation expense | 0.32 | 0.32 | 0.32 | 0.40 | 0.39 | 0.40 | ||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 0.06 | 0.06 | 0.07 | 0.10 | 0.10 | 0.09 | ||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.04 | 0.08 | 0.08 | 0.11 | 0.08 | 0.08 | ||||||||||||||||||||||||||||||||||||||
Restructuring | — | — | — | 0.09 | — | — | ||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses |
0.02 | 0.02 | 0.01 | 0.01 | — | — | ||||||||||||||||||||||||||||||||||||||
Special charges* |
— | — | — | — | 0.04 | — | ||||||||||||||||||||||||||||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** | (0.10) | (0.22) | (0.10) | 0.04 | 0.05 | — | ||||||||||||||||||||||||||||||||||||||
Income tax effect of non-GAAP adjustments | (0.15) | — | 0.06 | 0.02 | (0.02) | (0.04) | ||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a non-GAAP basis*** |
$ | 1.38 | $ | 1.17 | $ | 1.28 | $ | 1.64 | $ | 1.88 | $1.46 - $1.52 |
|||||||||||||||||||||||||||||||||
Shares used in calculation of diluted net income per share | 272,419 | 273,544 | 273,520 | 273,958 | 274,292 | |||||||||||||||||||||||||||||||||||||||
* | Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
** | Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. | ||||
*** |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 13 |
Cadence Design Systems, Inc. | ||||||||
(In Thousands, Except Per Share Data) | 2019 | 2020 | 2021 | 2022 | 2023 |
2024 |
2025E |
||||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a GAAP basis | $ | 3.53 | $ | 2.11 | $ | 2.50 | $ | 3.09 | $ | 3.82 | $ | 3.85 | $4.19 - $4.29 |
||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 0.65 | 0.71 | 0.75 | 0.98 | 1.19 | 1.43 | 1.69 | ||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 0.19 | 0.23 | 0.24 | 0.22 | 0.23 | 0.33 | 0.36 | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.03 | 0.08 | 0.08 | 0.15 | 0.21 | 0.35 | 0.31 | ||||||||||||||||||||||||||||||||||||||||
Restructuring | 0.03 | 0.03 | — | — | 0.04 | 0.09 | — | ||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 0.02 | 0.02 | 0.02 | (0.03) | 0.04 | 0.04 | — | ||||||||||||||||||||||||||||||||||||||||
Special charges* |
— | — | 0.10 | — | — | 0.04 | — | ||||||||||||||||||||||||||||||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** |
(0.01) | — | (0.03) | 0.05 | (0.17) | (0.22) | — | ||||||||||||||||||||||||||||||||||||||||
Income tax benefit related to intercompany transfers of certain intellectual property rights | (2.05) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Income tax effect of non-GAAP adjustments | (0.19) | (0.38) | (0.37) | (0.19) | (0.21) | 0.06 | 0.10 | ||||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a non-GAAP basis*** |
$ | 2.20 | $ | 2.80 | $ | 3.29 | $ | 4.27 | $ | 5.15 | $ | 5.97 | $6.65 - $6.75 |
||||||||||||||||||||||||||||||||||
Shares used in calculation of diluted net income per share | 280,515 | 279,641 | 278,858 | 275,011 | 272,748 | 273,833 | 274 - 276M |
||||||||||||||||||||||||||||||||||||||||
* | 2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance. |
||||
** | Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. | ||||
*** | The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 14 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | FY 2023 |
FY 2024 |
FY 2025E |
|||||||||||||||||||||||
GAAP total other income and expense | $ | 31 | $ | 45 | $(53) - $(67) |
|||||||||||||||||||||
Reconciling items to non-GAAP total income and expense | ||||||||||||||||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets* |
(46) | (61) | — | |||||||||||||||||||||||
Non-GAAP total other income and expense** |
$ | (15) | $ | (16) | $(53) - $(67) |
|||||||||||||||||||||
* | Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. | ||||
** | The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
February 18, 2025 | Cadence Q4 and Fiscal Year 2024 Financial Results | 15 |