Cadence Design Systems beats Q4 earnings and revenue estimates, expects growth in 2025

From Nasdaq: 2025-02-19 15:00:00

Cadence Design Systems reported fourth-quarter 2024 non-GAAP EPS of $1.88, beating estimates by 3.3%. Revenues of $1.356 billion also exceeded expectations, driven by robust demand for solutions. The company highlighted the AI super cycle’s new phase and collaborations with tech giants like Qualcomm and NVIDIA. Revenues for 2025 are estimated to be $5.14-$5.22 billion, with an expected increase in non-GAAP EPS.
Amid AI proliferation, Cadence.ai products like Cerebrus, SimAI, and JedAI are gaining momentum. Management initiated 2025 outlook with revenues expected to be in the range of $5.14-$5.22 billion and non-GAAP EPS between $6.65 and $6.75. CDNS stock is down 4% in pre-market trading. The company is expanding partnerships and eyeing new AI markets like Life Sciences.
Cadence Design Systems’ product & maintenance revenues rose 26.2% year over year to $1.239 billion, while services revenues increased 34.5% to $117 million. Geographically, the Americas accounted for 49% of total revenues. Core EDA, Intellectual Property, and Systems Design & Analysis segments contributed to revenue growth, driven by strong demand and strategic acquisitions.
In Q4, CDNS reported a non-GAAP gross margin of 85.5% and an operating margin of 46%. The company’s total non-GAAP costs and expenses increased 20.2% year over year. CDNS had cash and cash equivalents of $2.644 billion as of Dec. 31, 2024. Operating cash flow was $441 million, with free cash flow of $404 million.
For 2025, CDNS expects non-GAAP operating margin to be between 43.25% and 44.25% and operating cash flow between $1.6 billion and $1.7 billion. Revenues for Q1 2025 are estimated to be $1.23-$1.25 billion, with non-GAAP EPS between $1.46 and $1.52. CDNS currently carries a Zacks Rank #4 (Sell).
In comparison to other software companies, Microsoft reported second-quarter fiscal 2025 earnings of $3.23 per share, while PTC reported first-quarter fiscal 2025 non-GAAP EPS of $1.10. Commvault Systems reported third-quarter fiscal 2025 results with adjusted earnings of 94 cents per share. Subscription revenues for Commvault were up 39% year over year.



Read more at Nasdaq: Cadence’s Q4 Earnings & Revenues Surpass Estimates, Surge Y/Y