SAN JOSE, Calif. — April 28, 2025 — Cadence (Nasdaq: CDNS) today announced results for the first quarter of 2025.

•Revenue of $1.242 billion, compared to revenue of $1.009 billion in Q1 2024

•GAAP operating margin of 29.1%, compared to 24.8% in Q1 2024

•Non-GAAP operating margin of 41.7%, compared to 37.8% in Q1 2024

•GAAP diluted net income per share of $1.00, compared to $0.91 in Q1 2024

•Non-GAAP diluted net income per share of $1.57, compared to $1.17 in Q1 2024

•Quarter-end backlog was $6.4 billion and current remaining performance obligations ("cRPO"), contract revenue expected to be recognized as revenue in the next 12 months, was $3.2 billion

“Cadence delivered excellent results for the first quarter of 2025 with robust ongoing customer demand for our innovative technologies driving 23% revenue growth and 34% non-GAAP EPS growth year-over-year,” said Anirudh Devgan, president and chief executive officer. “We haven't seen any change in customers' behavior at this time, as they continue investing in R&D for their next-gen designs. Our resilient software business model, strong backlog, and AI-driven product innovations, position us well in navigating today's dynamic macro environment.”

“Q1 was a strong quarter for Cadence, driven by broad-based strength across all our businesses,” said John Wall, senior vice president and chief financial officer. “I am pleased that we exceeded all key financial metrics for the quarter, and we are tracking ahead of our original forecast for 2025, allowing us to raise our full year outlook.”

Commentary on the first quarter of 2025 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

For fiscal year 2025, the company expects:

•Revenue in the range of $5.15 billion to $5.23 billion

•GAAP operating margin in the range of 30.25% to 31.25%

•Non-GAAP operating margin in the range of 43.25% to 44.25%

•GAAP diluted net income per share in the range of $4.21 to $4.31

•Non-GAAP diluted net income per share in the range of $6.73 to $6.83

The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.

Reconciliations of the financial results and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release.

•Semiconductor IP revenue grew 40% year-over-year in Q1 as it continued to benefit from market opportunities offered by AI, chiplet-based architectures, and foundry ecosystem buildout.

•Core EDA revenue grew 16% year-over-year in Q1. AI-driven Cadence Cerebrus continued its strong momentum with nearly 50 new logos in Q1 and more than 1,000 tapeouts to date. Cadence hardware products expanded their footprint with existing customers, especially top hyperscalers, while gaining notable competitive wins.

•At the GPU Technology Conference (GTC), Cadence announced an expanded partnership with NVIDIA on its latest Grace Blackwell architecture and a collaboration on developing full-stack agentic AI solutions using the new Llama Nemotron Reasoning Model.

•System Design and Analysis delivered over 50% year-over-year revenue growth in Q1, as Cadence’s AI-driven design optimization platforms integrated with its physics-based simulation solutions continued delivering superior results across multiple end-markets.

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the first quarter 2025 financial results audio webcast today, April 28, 2025, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting April 28, 2025 at 5 p.m. (Pacific) and ending June 16, 2025 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence’s Intelligent System Design™ strategy, are essential for the world’s leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2024, Cadence was recognized by the Wall Street Journal as one of the world’s top 100 best-managed companies. Cadence solutions offer limitless opportunities—learn more at www.cadence.com.

This press release contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, backlog, industry trends, market growth, pending transactions and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions and armed conflicts around the world; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s pending acquisitions of Secure-IC and Arm's Artisan foundation IP business, each of which remains subject to certain closing conditions including receipt of regulatory approvals, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

All forward-looking statements in this press release are based on management's expectations as of the date of this press release and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance.

To supplement Cadence’s financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence’s performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, income or expenses related to investments, divestitures and Cadence’s non-qualified deferred compensation plan, restructuring and other significant items not directly related to Cadence’s core business operations, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence’s core business operations and therefore provides supplemental information to Cadence management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence management, including forecasting and budgeting.

The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:

 

Operating Margin Reconciliation						Three Months Ended
						March 31, 2025						March 31, 2024
						(unaudited)
GAAP operating margin as a percent of total revenue						29.1%						24.8%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense						8.7%						8.7%
Amortization of acquired intangibles						2.0%						1.7%
Acquisition and integration-related costs						1.8%						2.2%
Restructuring						0.0%						0.0%
Non-qualified deferred compensation expenses (credits)						(0.1)%						0.4%
Special charges						0.2%						0.0%
Non-GAAP operating margin as a percent of total revenue						41.7%						37.8%

For more information, please contact:

Cadence Investor Relations

408-944-7100

investor_relations@cadence.com

Cadence Newsroom

408-944-7039

newsroom@cadence.com

 

						March 31, 2025						December 31, 2024
Current assets:
Cash and cash equivalents						$	2,777,674					$	2,644,030
Receivables, net						580,887						680,460
Inventories						225,621						257,711
Prepaid expenses and other						413,905						433,878
Total current assets						3,998,087						4,016,079
Property, plant and equipment, net						466,322						458,200
Goodwill						2,419,717						2,378,671
Acquired intangibles, net						584,228						594,734
Deferred taxes						986,191						982,057
Other assets						558,941						544,741
Total assets						$	9,013,486					$	8,974,482
Current liabilities:
Accounts payable and accrued liabilities						$	570,197					$	632,692
Current portion of deferred revenue						730,570						737,413
Total current liabilities						1,300,767						1,370,105
Long-term liabilities:
Long-term portion of deferred revenue						110,702						115,168
Long-term debt						2,477,159						2,476,183
Other long-term liabilities						348,601						339,448
Total long-term liabilities						2,936,462						2,930,799
Stockholders’ equity						4,776,257						4,673,578
Total liabilities and stockholders’ equity						$	9,013,486					$	8,974,482

 

						Three Months Ended
						March 31, 2025						March 31, 2024
Revenue:
Product and maintenance						$	1,110,850					$	913,385
Services						131,516						95,718
Total revenue						1,242,366						1,009,103
Costs and expenses:
Cost of product and maintenance						116,672						75,395
Cost of services						50,461						49,802
Marketing and sales						202,700						180,589
Research and development						439,102						378,958
General and administrative						63,098						68,716
Amortization of acquired intangibles						8,922						5,407
Restructuring						(109)						280
Total costs and expenses						880,846						759,147
Income from operations						361,520						249,956
Interest expense						(29,118)						(8,692)
Other income, net						23,290						68,779
Income before provision for income taxes						355,692						310,043
Provision for income taxes						82,113						62,400
Net income						$	273,579					$	247,643
Net income per share - basic						$	1.01					$	0.92
Net income per share - diluted						$	1.00					$	0.91
Weighted average common shares outstanding - basic						271,973						269,606
Weighted average common shares outstanding - diluted						273,631						273,544

 

			2024																														2025
GEOGRAPHY			Q1						Q2						Q3						Q4						Year						Q1
Americas			46		%				49		%				50		%				49		%				49		%				48		%
China			12		%				12		%				13		%				13		%				12		%				11		%
Other Asia			20		%				19		%				17		%				17		%				18		%				19		%
Europe, Middle East and Africa			17		%				14		%				14		%				15		%				15		%				16		%
Japan			5		%				6		%				6		%				6		%				6		%				6		%
Total			100		%				100		%				100		%				100		%				100		%				100		%

 

			2024																														2025
PRODUCT CATEGORY			Q1						Q2						Q3						Q4						Year						Q1
Core EDA			76		%				73		%				70		%				68		%				71		%				71		%
Semiconductor IP			12		%				13		%				14		%				13		%				13		%				14		%
System Design and Analysis			12		%				14		%				16		%				19		%				16		%				15		%
Total			100		%				100		%				100		%				100		%				100		%				100		%

 

						Three Months Ending June 30, 2025						Year Ending December 31, 2025
						Forecast						Forecast
GAAP operating margin as a percent of total revenue						27.5% - 28.5%						30.25% - 31.25%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense						10%						9%
Amortization of acquired intangibles						2%						2%
Acquisition and integration-related costs						2%						2%
Non-GAAP operating margin as a percent of total revenue†						41.5% - 42.5%						43.25% - 44.25%

 

						Three Months Ending June 30, 2025						Year Ending December 31, 2025
						Forecast						Forecast
Diluted net income per share on a GAAP basis						$0.89 to $0.95						$4.21 to $4.31
Stock-based compensation expense						0.45						1.70
Amortization of acquired intangibles						0.09						0.36
Acquisition and integration-related costs						0.09						0.31
Non-qualified deferred compensation credits						—						(0.01)
Special charges						—						0.01
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets						—						0.01
Income tax effect of non-GAAP adjustments						0.03						0.14
Diluted net income per share on a non-GAAP basis†						$1.55 to $1.61						$6.73 to $6.83

 

						Three Months Ending June 30, 2025						Year Ending December 31, 2025
($ in millions)						Forecast						Forecast
Net income on a GAAP basis						$242 to $259						$1,154 to $1,181
Stock-based compensation expense						123						466
Amortization of acquired intangibles						25						98
Acquisition and integration-related costs						25						86
Non-qualified deferred compensation credits						—						(2)
Special charges						—						2
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets						—						3
Income tax effect of non-GAAP adjustments						7						37
Net income on a non-GAAP basis†						$422 to $439						$1,844 to $1,871

* Fiscal 2020 was a 53-week year, compared to all other years which were 52 week years. 2020 (which impacts the 3 year CAGR in 2023) included approximately $45 million revenue impact for the extra week.

** At midpoint of outlook.

Profitability Trends

(In Millions)			2019						2020						2021						2022						2023						2024									2025E
Revenue*			$	2,336					$	2,683					$	2,988					$	3,562					$	4,090					$	4,641								$	5,190
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								$	1,621
Non-GAAP operating income*			$	749					$	944					$	1,111					$	1,436					$	1,717					$	1,974								$	2,271
Non-GAAP operating income adjusted for stock-based compensation*			$	567					$	747					$	901					$	1,166					$	1,391					$	1,583								$	1,805

* At midpoint of outlook.

Backlog

(In Billions)			2021						2022						2023						2024									Q1 2025
Backlog			$	4.4					$	5.8					$	6.0					$	6.8								$	6.4

Revenue

(In Millions)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Product and Maintenance			$	913					$	961					$	1,100					$	1,239								$	1,111
Services			96						100						115						117									131
Total Revenue			$	1,009					$	1,061					$	1,215					$	1,356								$	1,242

Recurring and Up-Front Revenue

			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Revenue recognized over time			87		%				85		%				80		%				72		%							77		%
Revenue from arrangements with non-cancelable commitments			3		%				3		%				2		%				2		%							3		%
Recurring Revenue			90		%				88		%				82		%				74		%							80		%
Up-Front Revenue			10		%				12		%				18		%				26		%							20		%
Total			100		%				100		%				100		%				100		%							100		%

Trailing Twelve Months Recurring and Up-Front Revenue

			Trailing Twelve Months Ended
			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Recurring Revenue			87		%				87		%				86		%				83		%							80		%
Up-Front Revenue			13		%				13		%				14		%				17		%							20		%
Total			100		%				100		%				100		%				100		%							100		%

Revenue Mix by Geography

(% of Total Revenue)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Americas			46		%				49		%				50		%				49		%							48		%
China			12		%				12		%				13		%				13		%							11		%
Other Asia			20		%				19		%				17		%				17		%							19		%
Europe, Middle East and Africa			17		%				14		%				14		%				15		%							16		%
Japan			5		%				6		%				6		%				6		%							6		%
Total			100		%				100		%				100		%				100		%							100		%

Revenue Mix by Product Category

(% of Total Revenue)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Core EDA			76		%				73		%				70		%				68		%							71		%
Semiconductor IP			12		%				13		%				14		%				13		%							14		%
System Design and Analysis			12		%				14		%				16		%				19		%							15		%
Total			100		%				100		%				100		%				100		%							100		%

Gross Margin

			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
GAAP Gross Margin			87.6		%				86.9		%				86.6		%				83.8		%							86.5		%
Non-GAAP Gross Margin			89.1		%				88.5		%				88.6		%				85.5		%							88.4		%

Total Costs and Expenses

(In Millions)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Total GAAP Costs and Expenses			$	759					$	767					$	865					$	899								$	881
Total Non-GAAP Costs and Expenses			$	627					$	635					$	671					$	733								$	724

Operating Margin

			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
GAAP Operating Margin			24.8		%				27.7		%				28.8		%				33.7		%							29.1		%
Non-GAAP Operating Margin			37.8		%				40.1		%				44.8		%				46.0		%							41.7		%

Net Income Per Share

			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
GAAP Net Income Per Share			$	0.91					$	0.84					$	0.87					$	1.24								$	1.00
Non-GAAP Net Income Per Share			$	1.17					$	1.28					$	1.64					$	1.88								$	1.57

Total DSO

			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
DSO			36						49						44						48									44

Free Cash Flow

(In Millions)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Net Cash from Operating Activities			$	253					$	156					$	410					$	441								$	487
Capital Expenditures			49						29						27						37									23
Free Cash Flow			$	204					$	127					$	383					$	404								$	464

Cash and Cash Equivalents

(In Millions)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Cash and Cash Equivalents			$	1,012					$	1,059					$	2,786					$	2,644								$	2,778

•Approximately 67 percent of our cash and cash equivalents were in the U.S. at quarter-end.

Debt

(In Millions)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Debt (principal value)			$	650					$	1,350					$	2,850					$	2,500								$	2,500

•In September 2024, Cadence issued $2.5 billion of Senior Notes at a weighted average interest rate of 4.44%.

Share Repurchase

(In Millions)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Share Repurchase			$	125					$	125					$	150					$	150								$	350
Number of Shares			0.425						0.423						0.563						0.519									1.361

Employees

			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
Headcount			11,753						12,665						12,703						12,705									12,837

This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, backlog, industry trends, market growth, pending transactions and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions and armed conflicts around the world; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s pending acquisitions of Secure-IC and Arm's Artisan foundation IP business, each of which remains subject to certain closing conditions including receipt of regulatory approvals, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this CFO Commentary with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. See our earnings press release issued today for further discussion of our non-GAAP financial measures, as well as the reconciliation provided in the Appendix to this CFO Commentary.

Cadence’s management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company’s core business operations and therefore provides supplemental information to Cadence’s management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence’s business from the same perspective as Cadence’s management, including forecasting and budgeting.

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Millions)			Q1 2024						Q2 2024						Q3 2024						Q4 2024									Q1 2025
GAAP total costs and expenses			$	759					$	767					$	865					$	899								$	881
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense			(88)						(88)						(109)						(107)									(108)
Amortization of acquired intangibles			(17)						(20)						(27)						(27)									(25)
Acquisition and integration-related costs			(22)						(21)						(29)						(23)									(23)
Restructuring			—						—						(25)						1									—
Non-qualified deferred compensation (expenses) credits			(5)						(2)						(4)						—									2
Special charges*			—						(1)						—						(10)									(2)
Non-GAAP total costs and expenses**			$	627					$	635					$	671					$	733								$	724

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(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								$	3,569
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)									(86)
Restructuring			(9)						(9)						1						—						(11)						(24)									—
Non-qualified deferred compensation (expenses) credits			(5)						(5)						(6)						8						(11)						(11)									2
Special charges**			(1)						—						(27)						—						—						(11)									(2)
Non-GAAP total costs and expenses***			$	1,587					$	1,739					$	1,877					$	2,125					$	2,373					$	2,667								$	2,919