Cadence Reports First Quarter 2024 Financial Results

Record First Quarter Backlog of $6.0 Billion and cRPO of $3.1 Billion
Raising 2024 Revenue Outlook

SAN JOSE, Calif.— April 22, 2024 -- Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the first quarter of 2024.

First Quarter 2024 Financial Results

• Revenue of $1.009 billion, compared to revenue of $1.022 billion in Q1 2023
• GAAP operating margin of 25%, compared to 32% in Q1 2023
• Non-GAAP operating margin of 38%, compared to 42% in Q1 2023
• GAAP diluted net income per share of $0.91, compared to $0.89 in Q1 2023
• Non-GAAP diluted net income per share of $1.17, compared to $1.29 in Q1 2023
• Quarter-end backlog was $6.0 billion and current remaining performance obligations ("cRPO"), contract revenue expected to be recognized as revenue in the next 12 months, was $3.1 billion.

“Q1 was a strong start to the year for Cadence as we delivered solid Q1 results,” said Anirudh Devgan, president and chief executive officer. “I’m pleased with our record Q1 backlog that reflects our broad-based strength and product leadership. We’re thrilled with the momentum of our Cadence.AI portfolio which is providing customers with the most comprehensive and impactful chip-to-systems design capabilities and are excited about the launch of our innovative third generation Dynamic Duo hardware platforms that further expands our leadership.”

“Our strong Q1 results reflect our continued technology leadership supporting our customers and partners, and solid execution from the Cadence team,” said John Wall, senior vice president and chief financial officer. “I am pleased that we delivered record Q1 bookings and achieved record Q1 backlog of approximately $6.0 billion.”

CFO Commentary

Commentary on the first quarter of 2024 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For fiscal year 2024, the company expects:

• Revenue in the range of $4.56 billion to $4.62 billion
• GAAP operating margin in the range of 31% to 32%
• Non-GAAP operating margin in the range of 42% to 43%
• GAAP diluted net income per share in the range of $4.04 to $4.14
• Non-GAAP diluted net income per share in the range of $5.88 to $5.98

For the second quarter of 2024, the company expects:

• Revenue in the range of $1.03 billion to $1.05 billion
• GAAP operating margin in the range of 26.5% to 27.5%
• Non-GAAP operating margin in the range of 38.5% to 39.5%
• GAAP diluted net income per share in the range of $0.73 to $0.77
• Non-GAAP diluted net income per share in the range of $1.20 to $1.24

Cadence’s outlook does not include the impact of its pending acquisition of BETA CAE, the company’s expectations for which are largely unchanged from announcement.

The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.

Reconciliations of the financial highlights and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release.

Business Highlights

• Built upon AI-enhanced core design engines, the company's generative AI solutions boosted by foundational LLM co-pilots, are delivering unparalleled productivity, quality of results and time to market benefits for customers. Last week, at CadenceLIVE Silicon Valley, several top tier customers shared their remarkable successes with Cadence.AI products
• Launched the company's third generation hardware accelerated verification platforms - the Palladium Z3 emulation and Protium X3 prototyping platforms delivering more than 2x the capacity and 1.5x higher performance than the previous generation
• Introduced the Cadence Reality Digital Twin Platform that virtualizes the entire data center and uses AI, high-performance computing and physics-based simulation to significantly improve data center energy efficiency by up to 30%
• Announced a collaboration with Arm to develop a chiplet-based reference design and software development platform to accelerate software-defined vehicle innovation

Click here for the Q1 2024 Financial Schedules(opens in a new tab).

Audio Webcast Scheduled

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the first quarter 2024 financial results audio webcast today, April 22, 2024, 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 April 22, 2024 at 5 p.m. (Pacific) and ending June 14, 2024 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

About Cadence

Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence customers are the world’s most innovative companies, delivering extraordinary products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For 10 years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.