Cadence Design Systems, Inc.
- Open
- 307.64
- Day high
- 309.77
- Day low
- 302.36
- Prev close
- 306.67
- Volume
- 1.3M
- Mkt cap
- $84.4B
- P/E (TTM)
- 60.6
- EPS (TTM)
- $5.02
- P/B
- 12.3
- P/S
- 14.5
- Yield
- —
- Per share
- —
- ▼Insiders net selling -$8.0M over the last 3 months (0 open-market buys, 41 sales)
- 🏛Institutions accumulating (13F)
Cadence Design Systems, Inc. (CDNS) is a Technology company listed on NASDAQ. The stock is down 12% over the past year. Over the trailing 3 months, insiders filed 0 open-market buys and 41 sales (SEC Form 4). Drillr has 1 published research article covering CDNS.
Cadence Design Systems, Inc. (CDNS) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 8 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
CDNS earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Jul 27, 2026 | $2.05 | $2.11 | +2.9% | $1.6B | +0.5% |
| Apr 27, 2026 | $1.91 | $1.96 | +2.6% | $1.5B | +1.2% |
| Feb 17, 2026 | $1.91 | $1.99 | +4.2% | $1.4B | +1.1% |
| Feb 18, 2025 | $1.82 | $1.88 | +3.3% | $1.4B | +0.7% |
| Jul 22, 2024 | $1.23 | $1.28 | +4.1% | $1.1B | +1.7% |
| Feb 12, 2024 | $1.33 | $1.38 | +3.8% | $1.1B | +0.7% |
| Jul 24, 2023 | $1.18 | $1.22 | +3.4% | $977M | +0.2% |
| Feb 13, 2023 | $0.92 | $0.96 | +4.3% | $900M | +1.7% |
| Jul 25, 2022 | $0.97 | $1.08 | +11.3% | $858M | +2.7% |
| Feb 22, 2022 | $0.76 | $0.82 | +7.9% | $773M | +2.1% |
| Feb 22, 2021 | $0.75 | $0.83 | +11.1% | $760M | — |
| Oct 19, 2020 | $0.61 | $0.70 | +14.8% | $667M | +20.5% |
CDNS insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Aug 27, 2026 | SANGIOVANNI VINCENTELLI ALBERTOdirector | Sell | 309 | $323.54 |
| Aug 27, 2026 | SANGIOVANNI VINCENTELLI ALBERTOdirector | Sell | 280 | $318.33 |
| Aug 27, 2026 | SANGIOVANNI VINCENTELLI ALBERTOdirector | Sell | 240 | $319.31 |
| Aug 27, 2026 | SANGIOVANNI VINCENTELLI ALBERTOdirector | Sell | 380 | $321.16 |
| Aug 27, 2026 | SANGIOVANNI VINCENTELLI ALBERTOdirector | Sell | 41 | $324.66 |
| Aug 27, 2026 | Scannell Paulofficer: Sr. Vice President | Sell | 280 | $339.00 |
| Aug 25, 2026 | TENG CHIN-CHIofficer: Sr. Vice President | Option | 1,000 | $202.94 |
| Aug 25, 2026 | TENG CHIN-CHIofficer: Sr. Vice President | Sell | 4,732 | $314.49 |
| Aug 19, 2026 | Cunningham Paulofficer: Sr. Vice President | Option | 1,000 | $138.02 |
| Aug 19, 2026 | Scannell Paulofficer: Sr. Vice President | Tax | 181 | $323.47 |
| Aug 19, 2026 | Cunningham Paulofficer: Sr. Vice President | Sell | 2,000 | $323.32 |
| Jul 23, 2026 | TENG CHIN-CHIofficer: Sr. Vice President | Sell | 1,968 | $339.05 |
| Jul 23, 2026 | TENG CHIN-CHIofficer: Sr. Vice President | Sell | 252 | $336.71 |
| Jul 23, 2026 | TENG CHIN-CHIofficer: Sr. Vice President | Sell | 440 | $342.15 |
| Jul 23, 2026 | TENG CHIN-CHIofficer: Sr. Vice President | Sell | 200 | $337.78 |
Source: CDNS SEC Form 4 filings, latest Aug 27, 2026. For informational purposes only — not investment advice.
See the full CDNS insider & 13F page →Cadence Design Systems, Inc. company profile
Overview
Cadence Design Systems, Inc. (NASDAQ:CDNS) is a leading provider of electronic design automation (EDA) software, hardware, and services for the semiconductor and electronics industries. Founded in 1987 through the merger of SDA Systems and ECAD, the company has evolved from a traditional EDA vendor into a comprehensive intelligent system design platform provider. Headquartered in San Jose, California, Cadence serves customers across multiple industries including 5G communications, automotive, aerospace and defense, consumer electronics, and hyperscale computing markets. The company has been at the forefront of incorporating artificial intelligence into chip design processes and has established itself as a critical enabler of semiconductor innovation.
Business
Cadence operates in the Electronic Design Automation (EDA) industry, which provides the essential software tools and hardware platforms that enable the design and verification of semiconductor chips and electronic systems. EDA tools are indispensable in modern chip design as semiconductors have become too complex to design manually - modern chips contain billions of transistors that must be precisely placed and interconnected. The company's business is organized around several key segments: 1. Core EDA Business (~60-65% of revenue): This includes digital IC design tools like Genus logic synthesis, Joules RTL power solutions, and Modus design-for-test software. It also encompasses functional verification platforms including JasperGold formal verification, Xcelium parallel logic simulation, and custom IC design tools for analog and mixed-signal circuits. These tools help engineers create, simulate, and verify chip designs before manufacturing. 2. Hardware Systems (~15-20% of revenue): Cadence provides specialized hardware platforms including Palladium enterprise emulation systems and Protium prototyping platforms. These systems allow chip designers to test their designs at much higher speeds than software simulation alone, which is critical for complex modern processors and system-on-chip designs. 3. Intellectual Property (IP) Business (~15-20% of revenue): The company offers pre-verified, reusable circuit blocks that customers can integrate into their chip designs. This includes interface IP for standard protocols, memory compilers, and processor IP. The IP business has been growing rapidly as customers seek to reduce design time and risk by using proven components. 4. System Design and Analysis (~5-10% of revenue): This segment provides tools for designing printed circuit boards (PCBs), IC packaging, and analyzing electromagnetic and thermal effects. This represents Cadence's expansion beyond chip-level design into system-level design optimization. The EDA industry is essential because it enables the $500+ billion global semiconductor industry. Without EDA tools, it would be impossible to design the complex chips that power everything from smartphones to data centers to automotive systems.
Revenue model
Cadence generates revenue primarily through software licensing and maintenance contracts, following a predominantly recurring revenue model. Approximately 80% of the company's revenue is recurring, providing significant business stability and predictability. The company's revenue streams include: 1. Software Licenses and Maintenance (majority of revenue): Cadence licenses its EDA software tools to semiconductor companies, system companies, and foundries through multi-year contracts. These customers pay annual license fees plus maintenance fees for ongoing support and updates. The software is typically licensed on a per-seat or per-project basis. 2. Hardware Systems Sales: The company sells high-performance emulation and prototyping hardware platforms, which command premium prices due to their specialized nature and limited competition. These systems often cost hundreds of thousands to millions of dollars per unit. 3. IP Licensing: Cadence licenses its intellectual property portfolio to customers who integrate these pre-designed components into their chips. Revenue is generated through upfront license fees plus royalties based on chip production volumes. 4. Services Revenue: The company provides consulting, training, and design services to help customers optimize their design processes and implement new technologies. The primary customers are semiconductor companies (like NVIDIA, Qualcomm, Marvell), foundries (TSMC, Samsung, Intel Foundry), and increasingly system companies (hyperscalers, automotive OEMs) that are designing custom silicon. Factors that positively impact margins include the increasing complexity of chip designs (driving demand for more sophisticated tools), the shift toward AI-driven design automation (enabling premium pricing), and the expansion into new markets like automotive and life sciences. Negative factors include competitive pricing pressure, the cyclical nature of semiconductor spending, and the significant R&D investments required to stay technologically competitive. Geopolitical tensions, particularly affecting China business, also create margin pressure through reduced demand and pricing constraints.
Competitive moat
Cadence possesses a strong competitive moat built on several key factors, though it faces meaningful competitive threats. The company's primary moat stems from high switching costs - once semiconductor companies integrate Cadence tools into their design flows, changing vendors requires significant retraining, workflow disruption, and validation of new tools, which can take months or years. This creates substantial customer stickiness. The company also benefits from network effects within the ecosystem - as more foundries optimize their processes for Cadence tools, and more IP providers ensure compatibility with Cadence platforms, the tools become more valuable to end customers. Additionally, Cadence has built deep technical expertise accumulated over decades, particularly in advanced node design and AI-driven automation, which is difficult for competitors to replicate quickly. However, the moat faces several challenges. The EDA industry is an oligopoly with two other major players - Synopsys and Siemens EDA (formerly Mentor Graphics) - creating intense competition. These competitors have comparable technical capabilities and established customer relationships. The industry also faces potential disruption from emerging technologies, particularly as AI and machine learning could potentially automate design processes in ways that reduce dependence on traditional EDA tools. The company's expansion into new markets like system design and IP also faces competition from specialized vendors who may have stronger domain expertise. Additionally, large customers like major semiconductor companies have significant bargaining power and could potentially develop in-house capabilities or support alternative vendors to reduce dependence on any single EDA provider. Overall, while Cadence has a solid competitive position, the moat is moderate rather than insurmountable, requiring continuous innovation and strategic execution to maintain market leadership.
Risks & safety
Cadence demonstrates a strong financial position with solid margin of safety characteristics, though valuation metrics suggest limited downside protection at current levels. • Cash and Liquidity: $2.78 billion in cash and short-term investments with strong free cash flow generation of $464 million in Q1 2025. Current ratio of 3.07 indicates excellent short-term liquidity. • Debt Position: Debt-to-equity ratio of 0.52 is manageable, though higher than historical levels. The company maintains investment-grade credit quality with stable cash flows supporting debt service. • Profitability: Strong recurring revenue model with 80% recurring revenue provides earnings stability. EBITDA margins consistently above 35% demonstrate operational efficiency. • Valuation Concerns: P/E ratio of 63.2x and EV/EBITDA of 39.5x suggest expensive valuation with limited margin of safety. Price-to-book ratio of 14.5x indicates significant premium to tangible assets. • Other Considerations: Graham number of $19.94 compared to current price near $298 suggests significant overvaluation by traditional value metrics. However, the company's strong market position and growth prospects may justify premium valuation for growth-oriented investors.
Recent development
Over the past few years, Cadence has undergone significant strategic transformation centered around AI-driven design automation and expansion beyond traditional EDA markets. The company launched its Cadence.ai portfolio in 2023, which has seen remarkable adoption with AI product orders tripling year-over-year and the Cerebrus AI solution achieving over 1,000 tapeouts by Q1 2025. The company has significantly strengthened its foundry partnerships, particularly with TSMC, Samsung, GlobalFoundries, Intel Foundry, and emerging players like Rapidus for 2-nanometer enablement. These collaborations are crucial as they ensure Cadence tools are optimized for the latest manufacturing processes, creating competitive advantages and customer lock-in. Strategic acquisitions have expanded Cadence's capabilities beyond traditional chip design. The acquisition of BETA CAE strengthened its multiphysics simulation capabilities for automotive applications, while the purchase of Secure-IC augmented its embedded security IP portfolio. The pending acquisition of Arm's Artisan foundation IP business represents a significant expansion of the IP portfolio. The company has also made substantial investments in hardware platforms, launching the Palladium Z3 and Protium X3 systems that have seen strong customer demand. These platforms are critical for verifying increasingly complex AI chips and system-on-chip designs. Market expansion efforts have focused on system design and analysis, which achieved over 50% revenue growth in recent quarters. The company has also expanded into new verticals including automotive, aerospace and defense, and life sciences, reducing dependence on traditional semiconductor customers. The launch of Cadence OnCloud Marketplace represents a strategic shift toward cloud-based and e-commerce delivery models, enabling broader market reach and new customer acquisition channels.
CDNS company profile · for informational purposes only — not investment advice.
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