CADENCE DESIGN SYSTEMS, INC.
CADENCE REPORTS THIRD QUARTER 2026
Exceeded Q3 guidance for revenue, non-GAAP operating margin, and non-GAAP EPS
Raising 2026 revenue growth outlook for the third time this year to ~21%
Achieved new record backlog of
$8.2 billion
Q4 2026 OutlookQ3 2026 KEY METRICS
Revenue: $1.633 billion
GAAP operating margin: 26.2%
Non-GAAP operating margin: 44.1%
GAAP EPS: $1.05
Non-GAAP EPS: $2.11
Operating cash flow: $424 million
Revenue: $1.695 billion - $1.725 billion
GAAP operating margin: 30% -31%
Non-GAAP operating margin: 44%
- 45%
GAAP EPS: $1.23 - $1.29
Non-GAAP EPS: $2.19 - $2.25
Expect to use approximately $400 million to repurchase Cadence shares in Q4
FY 2026 OutlookRevenue: $6.387 billion - $6.417 billion
GAAP operating margin: 28.2% -29.2%
Non-GAAP operating margin: 44.2% - 45.2%
GAAP EPS: $4.84 - $4.90
Non-GAAP EPS: $8.37 - $8.43
Operating cash flow: ~$2.0 billion
Expect to use more than 50% of free cash flow to repurchase Cadence shares for the year
Financial Results Webcast Our Q3 2026 financial results webcast will begin October 26, 2026 at 2:00 p.m. (Pacific). The webcast may be accessed at https://www.cadence.com/cadence/ investor_relations. An archive of the webcast will be available on October 26, 2026 until 5:00 p.m.
(Pacific) on December 17, 2026.
Financial Metrics
(In Millions, except per share data) | 2021 | 2022 | 2023 | 2024 | 2025 | 2026E |
Revenue | $ 2,988 | $ 3,562 | $ 4,090 | $ 4,641 | $ 5,297 | $6,387- $6,417 |
Revenue growth | 11% | 19% | 15% | 13% | 14% | 21% - 21% |
3-year CAGR* | 12% | 15% | 15% | 16% | 14% | ~16% |
GAAP operating expenses | $ 2,209 | $ 2,488 | $ 2,839 | $ 3,291 | $ 3,805 | $4,571 |
GAAP operating expense growth | 8% | 13% | 14% | 16% | 16% | ~20% |
Non-GAAP operating expenses | $ 1,877 | $ 2,125 | $ 2,373 | $ 2,667 | $ 2,935 | $3,540 |
Non-GAAP operating expense growth | 8% | 13% | 12% | 12% | 10% | ~21% |
GAAP operating margin | 26.1% | 30.1% | 30.6% | 29.1% | 28.2% | 28.2% - 29.2% |
Non-GAAP operating margin | 37.2% | 40.3% | 42.0% | 42.5% | 44.6% | 44.2% - 45.2% |
Rule of 40 Metric** | 48.6% | 59.5% | 56.8% | 56.0% | 58.7% | ~66% |
GAAP earnings per share | $ 2.50 | $ 3.09 | $ 3.82 | $ 3.85 | $ 4.06 | $4.84 - $4.90 |
Non-GAAP earning per share | $ 3.29 | $ 4.27 | $ 5.15 | $ 5.97 | $ 7.14 | $8.37 - $8.43 |
Non-GAAP EPS growth* | 18% | 30% | 21% | 16% | 20% | 18 % |
3-year Non-GAAP EPS CAGR* | 21% | 25% | 23% | 22% | 19% | 18 % |
Weighted average diluted shares outstanding | 278.9 | 275.0 | 272.7 | 273.8 | 273.3 | 274 - 276 |
Cash flow from operations | 1,101 | 1,242 | 1,349 | 1,261 | 1,729 | ~$2,000 |
Capital expenditures | 65 | 123 | 102 | 143 | 142 | ~$240 |
* At midpoint of outlook.
** Rule of 40 Metric = Revenue growth % + Non-GAAP operating margin %.
Profitability Trends
(In Millions) | 2021 2022 2023 2024 2025 | 2026E* |
GAAP operating margin | 26.1% 30.1% 30.6% 29.1% 28.2% | 28.7% |
Non-GAAP operating margin | 37.2% 40.3% 42.0% 42.5% 44.6% | 44.7% |
Stock-based compensation | (7.0)% (7.6)% (8.0)% (8.4)% (8.6)% | (8.9)% |
Non-GAAP operating margin adjusted for stock-based compensation | 30.2% 32.7% 34.0% 34.1% 36.0% | 35.8% |
GAAP operating income | $ 779 $ 1,074 $ 1,251 $ 1,351 $ 1,492 | $ 1,831 |
Non-GAAP operating income | $ 1,111 $ 1,436 $ 1,717 $ 1,974 $ 2,361 | $ 2,862 |
Non-GAAP operating income adjusted for stock-based compensation | $ 901 $ 1,166 $ 1,391 $ 1,583 $ 1,906 | $ 2,293 |
* At midpoint of outlook.
Fourth Quarter 2026 Financial Outlook
Q4 2025 | Q3 2026 | Q4 2026E | |
Total Revenue ($ Millions) | $ 1,440 | $ 1,633 | $1,695 - $1,725 |
Q/Q Growth | 3% | 4% - 6% | |
Y/Y Growth | 22% | 18% - 20% | |
GAAP Operating Margin | 32.2% | 26.2% | 30% - 31% |
Non-GAAP Operating Margin | 45.8% | 44.1% | 44% - 45% |
GAAP EPS | $ 1.42 | $ 1.05 | $1.23 - $1.29 |
Non-GAAP EPS | $ 1.99 | $ 2.11 | $2.19 - $2.25 |
Fiscal Year 2026 Financial Outlook
FY 2025 | Previous FY 2026E | Current FY 2026E | |
Recurring Revenue | 80% | ~80% | ~80% |
Total Revenue ($ Millions) | $ 5,297 | $6,260 - $6,340 | $6,387 - $6,417 |
Y/Y Growth | 14% | 18% - 20% | 21% - 21% |
Revenue from Beginning Backlog | ~69% | ~65% | ~64% |
GAAP Operating Margin | 28.2% | 27.75% - 28.75% | 28.2% - 29.2% |
Non-GAAP Operating Margin | 44.6% | 43.75% - 44.75% | 44.2% - 45.2% |
GAAP Other Income & Expense ($ Millions) | $ 30 | $(17) - $3 | $0 - $10 |
Non-GAAP Other Income & Expense ($ Millions) | $ (24) | $(115) - $(95) | $(101) - $(91) |
GAAP Tax Rate | 27.1% | ~26% | ~27% |
Non-GAAP Tax Rate | 16.5% | 16.5% | 16.5% |
Weighted Average Diluted Shares Outstanding (Millions) | 273.3 | 275.5 - 277.5 | 274 - 276 |
GAAP EPS | $ 4.06 | $4.76 - $4.86 | $4.84 - $4.90 |
Y/Y Growth | 5% | 17% - 20% | 19% - 21% |
Non-GAAP EPS | $ 7.14 | $8.05 - $8.15 | $8.37 - $8.43 |
Y/Y Growth | 20% | 13% - 14% | 17% - 18% |
Cash Flow from Operations ($ Millions) | $ 1,729 | ~$2,000 | ~$2,000 |
DSO | 64 | ~65 | ~65 |
Capital Expenditures ($ Millions) | $ 142 | ~$240 | ~$240 |
Third Quarter Financial Results
Backlog
(In Billions) | 2022 | 2023 | 2024 | 2025 | Q3 2026 |
Backlog | $ 5.8 | $ 6.0 | $ 6.8 | $ 7.8 | $ 8.2 |
Revenue
(In Millions) | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
Product and Maintenance | $ 1,208 | $ 1,332 | $ 1,349 | $ 1,431 | $ 1,487 |
Services | 131 | 108 | 125 | 154 | 146 |
Total Revenue | $ 1,339 | $ 1,440 | $ 1,474 | $ 1,584 | $ 1,633 |
Q3 2025 Q4 2025 Q1 2026 Q2 2026 | Q3 2026 | |||||||||
Revenue Recognized Over Time | 78 | % | 77 | % | 73 | % | 72 | % | 74 | % |
Other Recurring Revenue | 4 | % | 2 | % | 4 | % | 6 | % | 5 | % |
Recurring Revenue | 82 | % | 79 | % | 77 | % | 78 | % | 79 | % |
Up-Front Revenue | 18 | % | 21 | % | 23 | % | 22 | % | 21 | % |
Total Revenue | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Table may not foot due to rounding Recurring and Up-Front Revenue
Trailing Twelve Months Recurring and Up-Front Revenue
Trailing Twelve Months Ended | ||||||
Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | ||
Recurring Revenue | 80 % | 80 % | 79 % | 79 % | 78 | % |
Up-Front Revenue | 20 % | 20 % | 21 % | 21 % | 22 | % |
Total | 100 % | 100 % | 100 % | 100 % | 100 | % |
Revenue Mix by Geography
(% of Total Revenue) Q3 2025 Q4 2025 Q1 2026 Q2 2026 | Q3 2026 | |||||||||
Americas | 43 | % | 47 | % | 45 | % | 43 | % | 43 | % |
China | 18 | % | 12 | % | 13 | % | 15 | % | 16 | % |
Other Asia | 18 | % | 20 | % | 20 | % | 20 | % | 19 | % |
Europe, Middle East and Africa | 14 | % | 14 | % | 16 | % | 15 | % | 15 | % |
Japan | 7 | % | 7 | % | 6 | % | 7 | % | 7 | % |
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Revenue Mix by Product Category
(% of Total Revenue) Q3 2025 Q4 2025 Q1 2026 Q2 2026 | Q3 2026 | |||||||||
Core EDA | 71 | % | 69 | % | 71 | % | 68 | % | 69 | % |
Semiconductor IP | 14 | % | 15 | % | 14 | % | 15 | % | 15 | % |
System Design and Analysis | 15 | % | 16 | % | 15 | % | 17 | % | 16 | % |
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Gross Margin
Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | |
GAAP Gross Margin | 86.4 % | 86.9 % | 85.4 % | 84.9 % | 85.6 % |
Non-GAAP Gross Margin | 88.0 % | 88.5 % | 88.0 % | 88.2 % | 88.8 % |
Total Costs and Expenses
(In Millions) | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
Total GAAP Costs and Expenses | $ 913 | $ 977 | $ 1,043 | $ 1,134 | $ 1,205 |
Total Non-GAAP Costs and Expenses | $ 701 | $ 781 | $ 815 | $ 863 | $ 913 |
Operating Margin
Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | |
GAAP Operating Margin | 31.8 % | 32.2 % | 29.3 % | 28.4 % | 26.2 % |
Non-GAAP Operating Margin | 47.6 % | 45.8 % | 44.7 % | 45.5 % | 44.1 % |
Net Income Per Share
Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | |
GAAP Net Income Per Share | $ 1.05 | $ 1.42 | $ 1.23 | $ 1.33 | $ 1.05 |
Non-GAAP Net Income Per Share | $ 1.93 | $ 1.99 | $ 1.96 | $ 2.11 | $ 2.11 |
Total DSO
Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | |
DSO | 55 | 64 | 67 | 65 | 66 |
Balance Sheet and Cash Review
Free Cash Flow
(In Millions) | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
Net Cash from Operating Activities | $ 311 | $ 553 | $ 356 | $ 635 | $ 424 |
Capital Expenditures | 34 | 41 | 49 | 53 | 62 |
Free Cash Flow | $ 277 | $ 512 | $ 307 | $ 582 | $ 362 |
Cash and Cash Equivalents
(In Millions) | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
Cash and Cash Equivalents | $ 2,753 | $ 3,001 | $ 1,407 | $ 1,440 | $ 1,452 |
Approximately 15 percent of our cash and cash equivalents were in the U.S. at quarter-end. Debt
(In Millions) | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
Debt (principal value) | $ 2,500 | $ 2,500 | $ 2,925 | $ 2,500 | $ 2,650 |
Share Repurchase
(In Millions) | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 |
Share Repurchase | $ 200 | $ 200 | $ 200 | $ 200 | $ 400 |
Number of Shares | 0.584 | 0.613 | 0.671 | 0.580 | 1.305 |
Employees
Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | |
Headcount | 13,693 | 13,800 | 15,110 | 15,445 | 15,753 |
Forward Looking Statements
This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, capital allocation and share repurchase program, business model and prospects, technology and product developments and performance, customer adoption and demand, strategic relationships, backlog, industry trends and Cadence's ability to capitalize on them, market dynamics and market growth, tax rates, legislative and regulatory developments and other statements using words such as "anticipates," "believes," "expects," "intends," "plans," "will," and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence's ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence's efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence's products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence's products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence's customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions, armed conflicts around the world, increased energy costs and supply chain constraints; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence's increased debt levels and obligations and Cadence's ability to repay debt or access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence's acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject, including Cadence's ongoing obligations under its July 2025 settlement agreements with the U.S. Department of Justice ("DOJ") and Bureau of Industry and Security ("BIS"), any further inquiries or adverse actions by the DOJ, BIS or other governmental authorities and any impact of the settlements on Cadence's operations and business dealings; and (xii) Cadence's ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence's repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. Cadence's share repurchase program may be modified, suspended or terminated without prior notice.
For a detailed discussion of these and other cautionary statements related to Cadence and its business, please refer to Cadence's filings with the U.S. Securities and Exchange Commission, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.
All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
GAAP to Non-GAAP Reconciliation
Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this CFO Commentary with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. See our earnings press release issued today for further discussion of our non-GAAP financial measures, as well as the reconciliation provided in the Appendix to this CFO Commentary.
Cadence's management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company's core business operations and therefore provides supplemental information to Cadence's management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence's management, including forecasting and budgeting.
© 2026 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.APPENDIX I
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses
(In Millions) | Q3 2025 Q4 2025 Q1 2026 Q2 2026 | Q3 2026 |
GAAP total costs and expenses | $ 913 $ 977 $ 1,043 $ 1,134 | $ 1,205 |
Reconciling items to non-GAAP total costs and expenses | ||
Stock-based compensation expense | (116) (113) (138) (147) | (145) |
Amortization of acquired intangibles | (26) (30) (51) (80) | (80) |
Acquisition and integration-related costs | (37) (49) (41) (33) | (25) |
Restructuring | (27) (2) - - | (42) |
Non-qualified deferred compensation (expenses) credits | (6) (2) 3 (11) | - |
Non-GAAP total costs and expenses* | $ 701 $ 781 $ 815 $ 863 | $ 913 |
Table may not foot due to rounding
* The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses
(In Millions) | 2021 2022 2023 2024 2025 | 2026E |
GAAP total costs and expenses | $ 2,209 $ 2,488 $ 2,839 $ 3,291 $ 3,805 | $ 4,571 |
Reconciling items to non-GAAP total costs and expenses | ||
Stock-based compensation expense | (210) (270) (326) (391) (455) | (569) |
Amortization of acquired intangibles | (67) (60) (62) (90) (105) | (289) |
Acquisition and integration-related costs | (23) (41) (56) (96) (135) | (122) |
Restructuring | 1 - (11) (24) (29) | (42) |
Non-qualified deferred compensation (expenses) credits | (6) 8 (11) (11) (14) | (9) |
Special charges* | (27) - - (3) (2) | - |
Loss related to contingent liability** | - - - (8) (129) | - |
Non-GAAP total costs and expenses*** | $ 1,877 $ 2,125 $ 2,373 $ 2,667 $ 2,935 | $ 3,540 |
Table may not foot due to rounding
* 2021 includes costs related to a voluntary retirement program.
** Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
*** The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP Operating Income Adjusted for Stock-based Compensation
(In Millions) | 2021 2022 2023 2024 2025 | 2026E |
GAAP operating income | $ 779 $ 1,074 $ 1,251 $ 1,351 $ 1,492 | $ 1,831 |
Reconciling items to non-GAAP operating income | ||
Stock-based compensation expense | 210 270 326 391 455 | 569 |
Amortization of acquired intangibles | 67 60 62 90 105 | 289 |
Acquisition and integration-related costs | 23 41 56 96 135 | 122 |
Restructuring | (1) - 11 24 29 | 42 |
Non-qualified deferred compensation expenses (credits) | 6 (8) 11 11 14 | 9 |
Special charges* | 27 - - 3 2 | - |
Loss related to contingent liability** | - - - 8 129 | - |
Non-GAAP operating income*** | $ 1,111 $ 1,436 $ 1,717 $ 1,974 $ 2,361 | $ 2,862 |
Stock-based compensation expense | (210) (270) (326) (391) (455) | (569) |
Non-GAAP operating income adjusted for stock-based compensation*** | $ 901 $ 1,166 $ 1,391 $ 1,583 $ 1,906 | $ 2,293 |
Table may not foot due to rounding
* 2021 includes costs related to a voluntary retirement program.
** Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
*** The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.Reconciliation of GAAP Gross Margin as a Percent of Total Revenue to Non-GAAP Gross Margin as a Percent of Total Revenue
Q3 2025 Q4 2025 Q1 2026 Q2 2026 | Q3 2026 | |
GAAP gross margin as a percent of total revenue Reconciling items to non-GAAP gross margin as a percent of total revenue Stock-based compensation expense Amortization of acquired intangibles Non-qualified deferred compensation expenses (credits) Acquisition and integration-related costs Non-GAAP gross margin as a percent of total revenue* | 86.4% 86.9% 85.4% 84.9% 0.3% 0.3% 0.4% 0.4% 1.2% 1.3% 2.1% 2.9% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0% 0.1% 0.0% 88.0% 88.5% 88.0% 88.2% | 85.6% |
0.4% | ||
2.8% | ||
0.0% | ||
0.0% | ||
88.8% | ||
Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
Q3 2025 Q4 2025 Q1 2026 Q2 2026 | Q3 2026 | Q4 2026E |
GAAP operating margin as a | 26.2% 8.9% 4.9% 1.5% 2.6% 0.0% 44.1% | 30% - 31% 8% 5% 1% 0% 0% 44% - 45% |
percent of total revenue 31.8% 32.2% 29.3% 28.4% | ||
Reconciling items to non-GAAP | ||
operating margin as a percent of | ||
total revenue | ||
Stock-based compensation | ||
expense 8.7% 7.9% 9.4% 9.3% | ||
Amortization of acquired | ||
intangibles 1.9% 2.1% 3.4% 5.0% | ||
Acquisition and integration- | ||
related costs 2.8% 3.4% 2.8% 2.1% | ||
Restructuring 2.0% 0.1% 0.0% 0.0% | ||
Non-qualified deferred | ||
compensation expenses | ||
(credits) 0.4% 0.1% (0.2)% 0.7% | ||
Non-GAAP operating margin as a | ||
percent of total revenue* 47.6% 45.8% 44.7% 45.5% |
Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
2021 2022 2023 2024 2025 | 2026E | |
GAAP operating margin as a percent of total revenue | 26.1% 30.1% 30.6% 29.1% 28.2% | 28.2% - 29.2% |
Reconciling items to non-GAAP operating margin as a percent of total revenue | ||
Stock-based compensation expense | 7.0% 7.6% 8.0% 8.4% 8.6% | 9% |
Amortization of acquired intangibles | 2.2% 1.7% 1.5% 2.0% 2.0% | 4% |
Acquisition and integration-related costs | 0.8% 1.1% 1.4% 2.1% 2.5% | 2% |
Restructuring | 0.0% 0.0% 0.3% 0.5% 0.6% | 1% |
Non-qualified deferred compensation expenses (credits) | 0.2% (0.2)% 0.2% 0.2% 0.3% | 0% |
Special charges* | 0.9% 0.0% 0.0% 0.0% 0.0% | 0% |
Loss related to contingent liability** | 0.0% 0.0% 0.0% 0.2% 2.4% | 0% |
Non-GAAP operating margin as a percent of total revenue*** | 37.2% 40.3% 42.0% 42.5% 44.6% | 44.2% - 45.2% |
* 2021 includes costs related to a voluntary retirement program.
** Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
*** The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data) | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | Q4 2026E |
Diluted net income per share on a | $ 1.05 0.53 0.29 0.09 0.15 - - (0.01) 0.01 $ 2.11 275,278 | $1.23 - $1.29 0.51 0.29 0.08 - - - - 0.08 $2.19 - $2.25 | ||||
GAAP basis | $ 1.05 | $ 1.42 | $ 1.23 | $ 1.33 | ||
Stock-based compensation | ||||||
expense | 0.42 | 0.41 | 0.50 | 0.53 | ||
Amortization of acquired | ||||||
intangibles | 0.10 | 0.11 | 0.19 | 0.29 | ||
Acquisition and integration- | ||||||
related costs | 0.14 | 0.18 | 0.15 | 0.12 | ||
Restructuring | 0.10 | 0.01 | - | - | ||
Non-qualified deferred | ||||||
compensation expenses | ||||||
(credits) | 0.02 | 0.01 | (0.01) | 0.04 | ||
Other income or expense related | ||||||
to foreign currency forward | ||||||
exchange contract and | ||||||
settlement associated with an | ||||||
acquisition | 0.07 | 0.04 | (0.01) | - | ||
Other income or expense related | ||||||
to investments, divestitures and | ||||||
non-qualified deferred | ||||||
compensation plan assets | 0.03 | (0.18) | (0.04) | (0.30) | ||
Income tax effect of non-GAAP | ||||||
adjustments | - | (0.01) | (0.05) | 0.10 | ||
Diluted net income per share on a | ||||||
non-GAAP basis* | $ 1.93 $ 1.99 $ 1.96 $ 2.11 | |||||
Shares used in calculation of | ||||||
diluted net income per share | 273,798 | 272,932 | 273,725 | 276,163 | ||
Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data) | 2021 2022 2023 2024 2025 | 2026E |
Diluted net income per share on a GAAP basis Stock-based compensation expense Amortization of acquired intangibles Acquisition and integration-related costs Restructuring Non-qualified deferred compensation expenses (credits) Special charges* Loss related to contingent liability** Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets Income tax effect of non-GAAP adjustments Diluted net income per share on a non-GAAP basis*** Shares used in calculation of diluted net income per share | $ 2.50 $ 3.09 $ 3.82 $ 3.85 $ 4.06 0.75 0.98 1.19 1.43 1.67 0.24 0.22 0.23 0.33 0.38 0.08 0.15 0.21 0.35 0.49 - - 0.04 0.09 0.11 0.02 (0.03) 0.04 0.04 0.05 0.10 - - 0.01 0.01 - - - 0.03 0.47 - - - - 0.11 (0.03) 0.05 (0.17) (0.22) (0.31) (0.37) (0.19) (0.21) 0.06 0.10 $ 3.29 $ 4.27 $ 5.15 $ 5.97 $ 7.14 278,858 275,011 272,748 273,833 273,312 | $4.84 - $4.90 |
2.07 | ||
1.05 | ||
0.45 | ||
0.15 | ||
0.03 | ||
- | ||
- | ||
(0.01) | ||
(0.35) | ||
0.14 | ||
$8.37 - $8.43 | ||
274 - 276M |
* 2021 includes costs related to a voluntary retirement program.
** Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.
*** The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense
(In Millions) | 2024 | 2025 | 2026E |
GAAP total other income and expense Reconciling items to non-GAAP total income and expense Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets Non-GAAP total other income and expense* | $ 45 - (61) $ (16) | $ 30 | $0 - $10 |
29 | (3) | ||
(83) | (98) | ||
$ (24) | $(101) - $(91) |
* The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.