Cadence (CDNS) Reports Strong Q2 Earnings, Raises Full-Year Outlook

by MarketNewsData

Cadence Design Systems reported second-quarter 2025 results that significantly outpaced estimates, with strong growth across all business segments driven by AI-related demand.

Key Financials (Q2 FY2025)

  • Revenue: $1.275 billion
    YoY growth: +20%
    vs. estimate: ~$1.25 billion
  • Non-GAAP EPS: $1.65
    YoY growth: +29%
    vs. estimate: ~$1.56
  • GAAP EPS: $0.59
    Down from $0.84 YoY due to a one-time $140.6 million charge related to regulatory settlements
  • Non-GAAP Operating Margin: 42.8%
    Up from 40.1% last year
  • Backlog: $6.4 billion
  • cRPO (12-month expected revenue): $3.1 billion

Full-Year 2025 Guidance (Updated)

  • Revenue: $5.21–$5.27 billion (up from $5.15–$5.23B)
  • Non-GAAP EPS: $6.85–$6.95 (up from $6.73–$6.83)
  • GAAP EPS: $3.97–$4.07 (revised slightly down due to one-time charge)
  • Non-GAAP Operating Margin: 43.5%–44.5%
  • Operating Cash Flow: $1.65–$1.75 billion

Highlights

  • All major business units grew YoY, led by strong demand in IP and system design, with EDA also seeing robust expansion.
  • Management acknowledged May 23 export restrictions but noted that demand for AI-centric products more than offset the impact.
  • The company’s raised guidance and large backlog reinforce visibility and momentum heading into the second half.

Stock Reaction

  • After-hours move: CDNS rose 7.18% to $357.73 following the release.

Cadence continues to benefit from structural demand tied to AI workloads, with clear execution and visibility through its growing backlog. Despite regulatory overhangs, fundamentals remain strong.

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