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 and robust customer demand.

• Q4 2024 revenue was $1.356B, up from $1.069B in Q4 2023, exceeding guidance for both revenue and EPS.

• Expanded partnerships with industry leaders (NVIDIA, Qualcomm, Marvell, TSMC, Intel, Arm, Rapidus) and deepened AI integration across product lines, fueling growth in EDA, IP, and system design segments.

• Positioned to benefit from AI trends, with significant expansion in AI-driven products and new market opportunities.

• System design and analysis business grew over 40% in 2024; IP business up 28% YoY in Q4; core EDA business up 15% YoY in Q4.

Financial highlights

• Q4 revenue: $1.356B; full-year revenue: $4.641B.

• Q4 GAAP operating margin: 33.7%; full-year: 29.1%. Q4 non-GAAP operating margin: 46%; full-year: 42.5%.

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

• Operating cash flow: $441M in Q4; $1.261B for the year. Year-end cash: $2.644B; debt: $2.5B.

• $550M used for share repurchases in 2024; capital expenditures: $143M; free cash flow: $1.118B.

Outlook and guidance

• 2025 revenue guidance: $5.14–$5.22B; GAAP operating margin: 30.3–31.3%; non-GAAP: 43.25–44.25%.

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

• Q1 2025 revenue: $1.23–$1.25B; GAAP EPS: $0.93–$0.99; non-GAAP EPS: $1.46–$1.52.

• 50% of free cash flow to be used for share repurchases in 2025.

• China revenue assumed flat for 2025 due to unpredictability; ex-China growth expected in low teens.