Cadence Reports Second Quarter 2019 Financial Results

SAN JOSE, Calif. -- July 22, 2019 --Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the second quarter of 2019.

Cadence reported second quarter 2019 revenue of $580 million, compared to revenue of $518 million reported for the same period in 2018. On a GAAP basis, Cadence achieved operating margin of 23 percent and recognized net income of $107 million, or $0.38 per share on a diluted basis, in the second quarter of 2019, compared to operating margin of 18 percent and net income of $75 million, or $0.27 per share on a diluted basis, for the same period in 2018.

Using the non-GAAP measure defined below, operating margin for the second quarter of 2019 was 34 percent and net income was $161 million, or $0.57 per share on a diluted basis, compared to operating margin of 30 percent and net income of $126 million, or $0.45 per share on a diluted basis, for the same period in 2018.

“Cadence achieved strong operating results for the second quarter of 2019, delivering 12 percent year-over-year revenue growth on broad-based strength across our product lines,” said Lip-Bu Tan, chief executive officer. “We continue to lead with innovation, introducing important new products, including the Protium^™ X1 Enterprise Prototyping Platform for early software development and Spectre^® X, a massively parallel circuit simulator with increased speed and capacity, for analog design.”

“I am pleased with our Q2 results and outlook,” said John Wall, senior vice president and chief financial officer. “We are raising our outlook for revenue, operating margin, earnings and cash from operations for the year while we continue to invest in TAM expansion opportunities that result from our Intelligent System Design strategy.”

CFO Commentary

Commentary on the second quarter 2019 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For the third quarter of 2019, the company expects total revenue in the range of $570 million to $580 million. Third quarter GAAP operating margin is expected to be approximately 19 percent and GAAP net income per diluted share is expected to be in the range of $0.32 to $0.34. Using the non-GAAP measure defined below, operating margin is expected to be approximately 30 percent and net income per diluted share is expected to be in the range of $0.50 to $0.52.

For 2019, the company expects total revenue in the range of $2.315 billion to $2.335 billion. On a GAAP basis, operating margin is expected to be in the range of 21 percent to 22 percent and net income per diluted share for 2019 is expected to be in the range of $1.44 to $1.50. Using the non-GAAP measure defined below, operating margin for 2019 is expected to be in the range of 31 percent to 32 percent and net income per diluted share for 2019 is expected to be in the range of $2.11 to $2.17.

A schedule showing a reconciliation of the business outlook from GAAP operating margin, GAAP net income and diluted net income per share to non-GAAP operating margin and non-GAAP net income and diluted net income per share is included in this release.

Financial tables

Click here for the Q2 2019 Financial Schedules.

Audio Webcast Scheduled

Lip-Bu Tan, chief executive officer, and John Wall, senior vice president and chief financial officer, will host the second quarter 2019 financial results audio webcast today, July 22, 2019, 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 July 22, 2019 at 5 p.m. (Pacific) and ending September 13, 2019 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

About Cadence

Cadence enables electronic systems and semiconductor companies to create the innovative end products that are transforming the way people live, work and play. Cadence^® software, hardware and semiconductor IP are used by customers to deliver products to market faster. The company’s Intelligent System Design strategy helps customers develop differentiated products—from chips to boards to systems—in mobile, consumer, cloud datacenter, automotive, aerospace, IoT, industrial and other market segments. Cadence is listed as one of Fortune Magazine's 100 Best Companies to Work For. Learn more at www.cadence.com.

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