Cadence Design Systems (CDNS) Reports Record Backlog
Earnings Release Date: October 27, 2025
Key Points
- Revenue: $1.339 billion (vs $1.215 billion in Q3 2024).
- GAAP Operating Margin: 31.8% (vs 28.8% a year ago).
- Non-GAAP Operating Margin: 47.6% (vs 44.8%).
- GAAP Diluted EPS: $1.05 (vs $0.87).
- Non-GAAP Diluted EPS: $1.93 (vs $1.64).
- Backlog: Record $7.0 billion; Remaining Performance Obligations (RPO) for next 12 months $3.5 billion.
Against Street Expectations:
- EPS $1.93 vs $1.88 est → beat by $0.05.
- Revenue $1.34B vs $1.33B est → in line to slightly above.
Quarter Highlights
- Record backlog and strong demand across all product categories and regions.
- Hardware segment: Record quarter, driven by AI/HPC customer demand.
- IP business: Momentum continued with expansion of the portfolio following completion of the Arm Artisan foundation IP acquisition.
- Signed agreement to acquire Hexagon’s D&E business, adding advanced structural and multiphysics analysis technologies.
- Management highlighted broad-based strength and a robust pipeline supporting 2026 growth.
CEO Statement
“Cadence delivered another excellent quarter with record backlog and strong execution across all segments,” said Anirudh Devgan, President and CEO.
“Our Intelligent System Design strategy continues to resonate as AI and system complexity accelerate demand for our hardware, IP, and software platforms. The acquisitions of Arm’s Artisan IP and Hexagon’s D&E businesses further strengthen our long-term competitive position.”
Guidance & Outlook (FY 2025)
Cadence raised its full-year 2025 outlook:
- Revenue: $5.262B – $5.292B (previous midpoint $5.25B).
- GAAP Operating Margin: 27.9% – 28.9%.
- Non-GAAP Operating Margin: 43.9% – 44.9%.
- GAAP Diluted EPS: $3.80 – $3.86.
- Non-GAAP Diluted EPS: $7.02 – $7.08.
The company reiterated its focus on operational discipline and consistent margin expansion.
Financial Summary
| Metric | Q3 2025 | Q3 2024 |
|---|---|---|
| Revenue | $1.339 B | $1.215 B |
| GAAP Operating Margin | 31.8% | 28.8% |
| Non-GAAP Operating Margin | 47.6% | 44.8% |
| GAAP Diluted EPS | $1.05 | $0.87 |
| Non-GAAP Diluted EPS | $1.93 | $1.64 |
| Backlog | $7.0 B | — |
| RPO (Next 12 Months) | $3.5 B | — |
About Cadence
Cadence Design Systems (NASDAQ: CDNS) is a leader in computational software that enables electronic systems and semiconductor design from chips to systems. The company serves hyperscale computing, mobile, automotive, aerospace, industrial, life sciences, and robotics markets worldwide. Headquartered in San Jose, California.
Key Takeaways
- Strong quarter: EPS and revenue modestly beat expectations; margins expanded.
- Record backlog: $7.0B underscores long-term visibility and demand resilience.
- AI/HPC tailwind: Record hardware quarter supported by AI and high-performance computing demand.
- Strategic expansion: Completed Arm IP acquisition; announced Hexagon D&E deal.
- Guidance raised: FY25 revenue and EPS outlook increased across all metrics.
- Overall: Cadence continues to execute on its system design strategy, leveraging AI-driven complexity and acquisitions to sustain double-digit growth momentum.