Cadence Design Systems (CDNS) Q4 2025 earnings summary

Executive summary

• Achieved 14% revenue growth in FY 2025, reaching $5.297B, with a record $7.8B backlog entering 2026, driven by strong demand across AI, EDA, IP, hardware, and SDA portfolios.

• Non-GAAP EPS grew 20% to $7.14, and operating margin reached 45% for 2025.

• AI-driven solutions, including the launch of ChipStack AI Super Agent, significantly expanded design productivity and customer engagement, with endorsements from major industry players.

• Strategic collaborations deepened with leading foundries (TSMC, Intel, Rapidus, Samsung) and hyperscalers, supporting next-gen AI and multi-chip architectures.

• Strong demand for AI-driven products and broad-based business strength contributed to results.

Financial highlights

• FY 2025 revenue was $5.297B, with Q4 revenue at $1.44B; non-GAAP operating margin was 44.6% for the year and 45.8% for Q4.

• FY 2025 GAAP EPS was $4.06; non-GAAP EPS was $7.14.

• Operating cash flow was $1.729B for the year and $553M in Q4.

• Cash balance at year-end was $3.0B; debt outstanding at $2.5B.

• $925M used for share repurchases in 2025.

Outlook and guidance

• FY 2026 revenue expected between $5.9B-$6.0B, with non-GAAP operating margin of 44.75%-45.75% and non-GAAP EPS of $8.05-$8.15.

• Q1 2026 revenue guidance is $1.42B-$1.46B; recurring revenue projected to remain around 80% of total.

• Approximately 50% of free cash flow to be used for share repurchases in 2026.

• FY 2026 GAAP operating margin projected at 31.75%-32.75%; GAAP EPS guidance: $4.95-$5.05.

• Pending acquisition of Hexagon's D&E business not included in 2026 outlook.