Cadence Design Systems

Cadence sells software, hardware and intellectual property (IP) that engineers use to design chips and electronic systems. Core electronic design automation (EDA) software and hardware for chip emulation gave 69% of revenue in Q3 2026, semiconductor IP 15% and System Design and Analysis 16%. System Design and Analysis includes software for circuit boards, chip packages and simulation of physical systems. Most revenue comes from multi-year software licenses, so revenue is mostly recurring.

In Q3 2026, revenue was $1.633 billion and the backlog was $8.2 billion. In February 2026, Cadence bought the design and engineering business of Hexagon. Its head office is in San Jose, California, and Anirudh Devgan is its president and chief executive officer.

The market doubts that Cadence can keep its growth and high margins for many years. Investors fear two things. First, AI design tools from new companies, or from chip makers themselves, can lower the value of EDA software. Second, spending on chip design can slow after the AI build-out.

The stock moved little in the year to November 2026, while non-GAAP EPS guidance for 2026 rose to $8.40 from $7.14 in 2025. The Hexagon purchase also lowered the non-GAAP operating margin to 44.1% in Q3 2026 from 47.6%. For the gap to close, three things must be true. Revenue must keep growing in the mid-teens or more, with a backlog that stays above $8 billion.

The non-GAAP operating margin must rise again as the Hexagon business is integrated. Cadence must sell its own AI products, such as its AI Super Agents and Maestro models, as paid add-ons, so that AI adds revenue. The Q4 2026 report, expected in mid-February 2027, with the 2027 guidance, is the next test. If growth and margins hold, the gap can close over the next four to six quarters.

1. Oct 26, 2026Passed

   Q3 2026 results: growth and backlogRevenue growth near 20% with a backlog that stays above $8 billion passes; slower growth or a smaller backlog fails.Outcome: Revenue rose 22%, the backlog reached a record $8.2 billion and Cadence raised its 2026 guidance.
2. Feb 16, 2027 · est.Pending

   Q4 2026 results and 2027 guidance2027 guidance for revenue growth in the mid-teens or more with a higher non-GAAP operating margin passes; guidance for slower growth or a lower margin fails.

Every passed and failed checkpoint across all picks

• October 26, 2026Cadence reported Q3 2026 results. Revenue rose 22% to $1.633 billion, and the backlog was a record $8.2 billion. The non-GAAP operating margin was 44.1%, down from 47.6% a year earlier. Non-GAAP EPS rose to $2.11 from $1.93, and GAAP EPS was $1.05, the same as a year earlier. Cadence raised its 2026 guidance to revenue of $6.387 billion to $6.417 billion and non-GAAP EPS of $8.37 to $8.43. The Board added $2.5 billion to the buyback program. Cadence also launched Maestro, a set of AI models for chip and system design.
• July 27, 2026Cadence reported Q2 2026 results. Revenue rose 24% to $1.584 billion, and non-GAAP EPS rose to $2.11 from $1.65. The backlog was a record $8.1 billion. Cadence raised its 2026 revenue guidance to $6.26 billion to $6.34 billion.
• May 7, 2026Cadence shareholders approved an amendment of the equity incentive plan that adds 5,000,000 shares for awards.

Last earnings

October 26, 2026 (8-K on sec.gov)

Next earnings

Expected about February 16, 2027. The company has not confirmed the date.

• 10-QQuarterly report for the period ended Sep 30, 2026Filed October 28, 2026 · cdns-20260930
• 8-KEarnings release and Other company newsFiled October 26, 2026 · cdns-20261023
• 10-QQuarterly report for the period ended Jun 30, 2026Filed July 29, 2026 · cdns-20260630
• 8-KEarnings releaseFiled July 27, 2026 · cdns-20260727
• 8-KChange of directors or officers and Shareholder vote resultsFiled May 12, 2026 · cdns-20260507
• 10-QQuarterly report for the period ended Mar 31, 2026Filed May 1, 2026 · cdns-20260331
• 8-KEarnings releaseFiled April 27, 2026 · cdns-20260427
• 8-KCurrent reportFiled February 23, 2026 · cdns-20260223
• 10-KAnnual report for the period ended Dec 31, 2025Filed February 19, 2026 · cdns-20251231
• 8-KEarnings releaseFiled February 17, 2026 · cdns-20260217

Every filing on SEC EDGAR (CIK 813672)

• AI tools can change chip design. If new companies or customers build AI design tools that need fewer EDA licenses, Cadence can lose pricing power or market share.
• China gave 16% of revenue in Q3 2026. U.S. export controls can limit sales to Chinese customers. In July 2025, Cadence settled export control charges with the U.S. Department of Justice and the Bureau of Industry and Security, and it must meet obligations under these settlements.
• Chip design spending depends on the AI and semiconductor cycle. If AI spending slows, customers can delay new designs, hardware purchases and IP licenses.
• The Hexagon purchase lowered margins and raised amortization costs. If the integration is slow, the non-GAAP operating margin may not return to its 2025 level of 44.6%.
• Stock-based compensation is large: Cadence expects $2.07 per share in 2026. Non-GAAP EPS leaves this cost out, so GAAP EPS is much lower.

Cadence has $2.5 billion of senior notes: $500 million of 4.200% notes due September 2027, $1.0 billion of 4.300% notes due 2029 and $1.0 billion of 4.700% notes due 2034. The 2027 notes are now shown as due within one year. Read more

Cadence Design Systems does not pay a dividend.

Source: company filings and market data, read on November 9, 2026. The ex-dividend date is the first day a buyer no longer gets the next payment.