Cadence Design Systems (CDNS) Q4 2024 earnings summary

Executive summary

• Achieved 13.5% revenue growth and 42.5% non-GAAP operating margin for 2024, with a record $6.8B backlog entering 2025, driven by strong AI-driven product adoption, robust customer demand, and broad-based segment momentum.

• Expanded strategic partnerships with NVIDIA, Qualcomm, Marvell, TSMC, GlobalFoundries, Samsung, Intel Foundry, Arm, and Rapidus, enhancing AI, EDA, hardware, and IP portfolios.

• AI-powered platforms (Cerebrus, SimAI, Allegro X AI, Verisium) saw significant adoption, with over 750 Cerebrus tapeouts and strong momentum in verification, multiphysics analysis, and new verticals like life sciences.

• System design and analysis business grew over 40% in 2024, IP business up 28% year-over-year in Q4, and core EDA business up 15% year-over-year in Q4, with hardware business delivering a record year.

• Entered definitive agreement to acquire Secure-IC, expanding embedded security IP portfolio, and named one of the world's best workplaces in 2024.

Financial highlights

• Q4 2024 revenue: $1.356B; FY 2024 revenue: $4.641B.

• Q4 GAAP operating margin: 33.7%; FY GAAP operating margin: 29.1%.

• Q4 non-GAAP operating margin: 46%; FY non-GAAP operating margin: 42.5%.

• Q4 GAAP EPS: $1.24; FY GAAP EPS: $3.85. Q4 non-GAAP EPS: $1.88; FY non-GAAP EPS: $5.97.

• Operating cash flow: $441M in Q4; $1.261B for FY 2024; year-end cash: $2.644B; debt: $2.5B; $550M in share repurchases.

Outlook and guidance

• FY 2025 revenue guidance: $5.14B–$5.22B; Q1 2025: $1.23B–$1.25B.

• FY 2025 GAAP operating margin: 30.3%–31.3%; non-GAAP: 43.25%–44.25%.

• FY 2025 GAAP EPS: $4.19–$4.29; non-GAAP EPS: $6.65–$6.75; operating cash flow: $1.6B–$1.7B.

• Q1 2025 GAAP EPS: $0.93–$0.99; non-GAAP EPS: $1.46–$1.52.

• Assumes China revenue flat year-over-year due to unpredictability; expects to use ~50% of free cash flow for share repurchases.