Cadence Reports Second Quarter 2026 Financial Results

About this update from Cadence Design Systems, Inc.

Record Backlog of $8.1 Billion Raising 2026 Revenue Outlook to 19% YoY Growth Raising 2026 Non-GAAP EPS to $8.10 and Operating Cash Flow to $2 Billion SAN JOSE, Calif., July 27, 2026 --( BUSINESS WIRE )--Cadence (Nasdaq: CDNS) today announced results for the second quarter of 2026. Second Quarter 2026 Financial Results "Cadence delivered an outstanding Q2 driven by broad-based strength and the accelerating demand for our AI-driven solutions across both Design for AI and AI for Design fronts," said Anirudh Devgan, president and chief executive officer. "Cadence is leading the agentic AI transformation in semiconductor design with a healthy environment. We are uniquely positioned to capitalize on this massive TAM expansion opportunity as the only provider with agentic solutions spanning the full electronic system design flow." "Cadence delivered excellent results for the second quarter of 2026, with broad-based strength driving double-digit growth across all our businesses," said John Wall, senior vice president and chief financial officer. "With a record backlog and continued business momentum, we are now raising our 2026 outlook to 19% revenue growth, non-GAAP operating margin to 44.25%, non-GAAP EPS to $8.10, and operating cash flow to $2 billion at the midpoint." CFO Commentary Commentary on the second quarter of 2026 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations . Business Outlook For fiscal year 2026, the company expects: The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company's geographic earnings mix, or other changes to the company's strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2026 but will re-evaluate this rate periodically for significant items that may materially affect its projections. Reconciliations of the financial results and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release. Revenue growth outlook is based on the midpoint of the range. Business Highlights Audio Webcast Scheduled Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the second quarter 2026 financial results audio webcast today, July 27, 2026, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting July 27, 2026 at 5 p.m. (Pacific) and ending September 16, 2026 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations . About Cadence Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence's Intelligent System Design™ strategy, are essential for the world's leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2025, Cadence was recognized by Fortune as one of the world's top 100 best companies to work for. Cadence solutions offer limitless opportunities—learn more at www.cadence.com . © 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. This press release and related webcast contain forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, customer adoption and demand, strategic relationships, backlog, industry trends, market growth, tax rates 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 pending acquisitions, acquisition of the Hexagon D&E business and 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 foreign 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. 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 press release are based on management's expectations as of the date of this press release 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 generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. To supplement Cadence's financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence's performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, income or expenses related to foreign currency forward exchange contract and settlement associated with an acquisition, investments, divestitures and Cadence's non-qualified deferred compensation plan, restructuring, loss related to contingent liability and other significant items not directly related to Cadence's core business operations, and the income tax effect of non-GAAP pre-tax adjustments. Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence's core business operations and therefore provides supplemental information to Cadence 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 management, including forecasting and budgeting. The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below: CDNS-IR Category: Financial, Featured View source version on businesswire.com: https://www.businesswire.com/news/home/20260726697902/en/ Contacts For more information, please contact: Cadence Investor Relations 408-944-7100 [email protected] Cadence Newsroom 408-944-7039 [email protected]

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