Cadence Design Systems (CDNS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $1.061 billion, up 9% year-over-year, driven by strong demand in AI, hyperscale, and automotive sectors.

• Net income for Q2 2024 was $229.5 million, with GAAP EPS of $0.84 and non-GAAP EPS of $1.28, both up from the prior year.

• Completed the acquisition of BETA CAE for $1.14B, expanding the multiphysics platform and strengthening the automotive and system analysis portfolio; Invecas was also acquired for $71.5M.

• Bookings were stronger than expected, resulting in a $6 billion backlog and robust demand across product lines.

• Major hardware launches and expanded partnerships with NVIDIA, Samsung, TSMC, and Intel supported growth.

Financial highlights

• Q2 2024 product and maintenance revenue was $961 million; services revenue was $100 million.

• GAAP operating margin was 28%; non-GAAP operating margin was 40%.

• Operating cash flow for Q2 was $156 million; cash and cash equivalents at quarter end were $1.059 billion.

• Free cash flow for Q2 was $127 million.

• Recurring revenue represented 85–88% of Q2 revenue.

Outlook and guidance

• Full-year 2024 revenue expected between $4.6 billion and $4.66 billion, representing 13% year-over-year growth.

• GAAP operating margin projected at 29.7%–31.3%; non-GAAP at 41.7%–43.3%.

• GAAP EPS guidance $3.82–$4.02; non-GAAP EPS $5.77–$5.97; operating cash flow $1.0–$1.2 billion.

• Q3 2024 revenue expected at $1.165–$1.195 billion; GAAP EPS $0.83–$0.93; non-GAAP EPS $1.39–$1.49.

• Approximately 50% of annual free cash flow to be used for share repurchases.