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CADENCE REPORTS SECOND QUARTER
2025
CADENCE DESIGN SYSTEMS, INC.
CFO COMMENTARY
Key Takeaways
• Exceeded Q2 guidance for revenue and non-GAAP EPS
• Raising 2025 revenue outlook by $50 million at midpoint driven by broad-based strength
• Raising 2025 operating cash flow outlook by $50 million at midpoint

Q3 2025 Outlook
• Revenue: 1.305 billion - $1.335 billion
• GAAP operating margin: 32% - 33%
• Non-GAAP operating margin: 45% - 46%
• GAAP EPS: $1.14 - $1.20
• Non-GAAP EPS: $1.75 - $1.81
• Expect to use approximately $200 million to repurchase Cadence shares in Q3
Q2 2025 KEY METRICS
• Revenue: $1.275 billion
• GAAP operating margin: 19.0%
• Non-GAAP operating margin: 42.8%
• GAAP EPS: $0.59
• Non-GAAP EPS: $1.65
• Operating cash flow: $378 million

FY 2025 Outlook
• Revenue: $5.21 billion - $5.27 billion
• GAAP operating margin: 28.5% - 29.5%
• Non-GAAP operating margin: 43.5% - 44.5%
• GAAP EPS: $3.97 - $4.07
• Non-GAAP EPS: $6.85 - $6.95
• Operating cash flow: $1.65 billion - $1.75 billion
• Expect to use at least 50% of free cash flow to repurchase Cadence shares for the year
Financial Results Webcast
Our Q2 2025 financial results webcast will begin July 28, 2025 at 2:00 p.m. (Pacific). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on July 28, 2025 until 5:00 p.m. (Pacific) on September 16, 2025.
July 28, 2025Cadence Q2 2025 Financial Results
1

Cadence Design Systems, Inc.
Financial Metrics
(In Millions, except per share data)20192020*20212022
2023*
2024
2025E
Revenue$2,336 $2,683 $2,988 $3,562 $4,090 $4,641 
$5,210- $5,270
Revenue growth*9%15%11%19%
15%
13%
12% - 14%
3-year CAGR9%11%12%15%15%
16%
~14%
3-year CAGR without 53rd week impact11%
16%
GAAP operating expenses$1,845 $2,037 $2,209 $2,488 $2,839 $3,291 
~$3,720
GAAP operating expense growth6%10%8%13%
14%
16%
~13%
Non-GAAP operating expenses$1,587 $1,739 $1,877 $2,125 $2,373 $2,667 
~$2,934
Non-GAAP operating expense growth6%10%8%13%
12%
12%
~10%
GAAP operating margin**
21.1%
24.1%
26.1%
30.1%
30.6%
29.1%
29.0 %
Non-GAAP operating margin**
32.1%
35.2%
37.2%
40.3%
42.0%
42.5%
44.0 %
GAAP earnings per share$3.53 $2.11 $2.50 $3.09 $3.82 $3.85 
$3.97 - $4.07
Non-GAAP earning per share$2.20 $2.80 $3.29 $4.27 $5.15 $5.97 
$6.85 - $6.95
Non-GAAP EPS growth**18%27%18%30%
21%
16%
16 %
3-year Non-GAAP EPS CAGR**22%26%21%25%
23%
22%
17 %
Weighted average diluted shares outstanding
280.5279.6278.9275.0
272.7
273.8
273 - 275
Cash flow from operations7309051,1011,242
1,349
1,261
$1,650 - $1,750
Capital expenditures759565123
102
143
~$160
* Fiscal 2020 was a 53-week year, compared to all other years which were 52 week years. 2020 (which impacts the 3 year CAGR in 2023) included approximately $45 million revenue impact for the extra week.
** At midpoint of outlook.
Profitability Trends
(In Millions)2019202020212022
2023
2024
2025E
Revenue*
$2,336 $2,683 $2,988 $3,562 $4,090 $4,641 $5,240 
Revenue Growth*
9%15%11%19%
15%
13%
13%
3-Year Revenue Growth CAGR*
9%11%12%15%15%
16%
14%
GAAP operating margin*
21.1%
24.1%
26.1%
30.1%
30.6%
29.1%
29.0%
Non-GAAP operating margin*
32.1%
35.2%
37.2%
40.3%
42.0%
42.5%
44.0%
Stock-based compensation
(7.8)%
(7.4)%
(7.0)%
(7.6)%
(8.0)%
(8.4)%
(8.8)%
Non-GAAP operating margin adjusted for stock-based compensation*
24.3%
27.8%
30.2%
32.7%
34.0%
34.1%
35.2%
GAAP operating income$492 $646 $779 $1,074 $1,251 $1,351 $1,520 
Non-GAAP operating income*
$749 $944 $1,111 $1,436 $1,717 $1,974 $2,306 
Non-GAAP operating income adjusted for stock-based compensation*
$567 $747 $901 $1,166 $1,391 $1,583 $1,844 
* At midpoint of outlook.
July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Third Quarter 2025 Financial Outlook
Q3 2024
Q2 2025*
Q3 2025E
Total Revenue ($ Millions)$1,215 $1,275 
$1,305 - 1,335
   Q/Q Growth
3%
2% - 5%
   Y/Y Growth
20%
7% - 10%
GAAP Operating Margin
28.8%
19.0%
32% - 33%
Non-GAAP Operating Margin
44.8%
42.8%
45% - 46%
GAAP EPS$0.87 $0.59 
$1.14 - $1.20
Non-GAAP EPS$1.64 $1.65 
$1.75 - $1.81
*Q2 2025 GAAP results include a one-time charge relating to the $140.6 million settlements of our previously disclosed legal proceedings with the U.S. Department of Justice (“DOJ”) and the Bureau of Industry and Security (“BIS”) of the U.S. Department of Commerce

Fiscal Year 2025 Financial Outlook
PreviousCurrent
FY 2024
FY 2025E
FY 2025E
Recurring Revenue
83%
~80%
~80%
Total Revenue ($ Millions)$4,641 
$5,150 - $5,230
$5,210 - $5,270
   Y/Y Growth
13%
11% - 13%
12% - 14%
Revenue from Beginning Backlog
~70%
~70%
~70%
GAAP Operating Margin
29.1%
30.25% - 31.25%
28.5% - 29.5%
Non-GAAP Operating Margin
42.5%
43.25% - 44.25%
43.5% - 44.5%
GAAP Other Income & Expense ($ Millions)$45 
$(57) - $(43)
$(9) - $11
Non-GAAP Other Income & Expense ($ Millions)$(16)
$(54) - $(40)
$(52) - $(32)
GAAP Tax Rate
24.4%
~26%
~28%
Non-GAAP Tax Rate
16.5%
16.5%
16.5%
Weighted Average Diluted Shares Outstanding (Millions)
273.8
273 - 275
273 - 275
GAAP EPS$3.85 
$4.21 - $4.31
$3.97 - $4.07
   Y/Y Growth
1%
9% - 12%
3% - 6%
Non-GAAP EPS$5.97 
$6.73 - $6.83
$6.85 - $6.95
   Y/Y Growth
16%
13% - 14%
15% - 16%
Cash Flow from Operations ($ Millions)$1,261 
$1,600 - $1,700
$1,650 - $1,750
DSO
48
~50
~50
Capital Expenditures ($ Millions)$143 
~$150
~$160


July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Second Quarter Financial Results
Backlog
(In Billions)20212022
2023
2024
Q2 2025
Backlog$4.4 $5.8 $6.0 $6.8 $6.4 
Revenue
(In Millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Product and Maintenance$961 $1,100 $1,239 $1,111 $1,170 
Services100 115 117 131 105 
   Total Revenue$1,061 $1,215 $1,356 $1,242 $1,275 
Recurring and Up-Front Revenue*
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Revenue Recognized Over Time
85 %79 %72 %77 %73 %
Other Recurring Revenue
3 %4 %4 %5 %5 %
Recurring Revenue
88 %83 %76 %82 %78 %
Up-Front Revenue
12 %17 %24 %18 %22 %
Total Revenue
100 %100 %100 %100 %100 %
*The definition of recurring revenue was updated in Q2 2025. Prior period numbers reflect the updated definition. Other recurring revenue includes revenue recognized at a point in time for short-term software arrangements that are typically renewed at least annually and revenue recognized at varying points in time over the term of other arrangements with non-cancelable commitments, whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of products.
Trailing Twelve Months Recurring and Up-Front Revenue
Trailing Twelve Months Ended
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Recurring Revenue88 %87 %84 %82 %80 %
Up-Front Revenue12 %13 %16 %18 %20 %
   Total 100 %100 %100 %100 %100 %
Revenue Mix by Geography
(% of Total Revenue)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Americas49 %50 %49 %48 %49 %
China12 %13 %13 %11 %9 %
Other Asia19 %17 %17 %19 %19 %
Europe, Middle East and Africa14 %14 %15 %16 %16 %
Japan6 %6 %6 %6 %7 %
   Total100 %100 %100 %100 %100 %
Revenue Mix by Product Category
(% of Total Revenue)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Core EDA
73 %70 %68 %71 %71 %
Semiconductor IP
13 %14 %13 %14 %13 %
System Design and Analysis14 %16 %19 %15 %16 %
   Total100 %100 %100 %100 %100 %


July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Gross Margin
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
GAAP Gross Margin86.9 %86.6 %83.8 %86.5 %85.6 %
Non-GAAP Gross Margin88.5 %88.6 %85.5 %88.4 %87.2 %
Total Costs and Expenses
(In Millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Total GAAP Costs and Expenses$767 $865 $899 $881 $1,034 
Total Non-GAAP Costs and Expenses$635 $671 $733 $724 $729 
Operating Margin
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
GAAP Operating Margin27.7 %28.8 %33.7 %29.1 %19.0 %
Non-GAAP Operating Margin40.1 %44.8 %46.0 %41.7 %42.8 %
Net Income Per Share
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
GAAP Net Income Per Share$0.84 $0.87 $1.24 $1.00 $0.59 
Non-GAAP Net Income Per Share$1.28 $1.64 $1.88 $1.57 $1.65 
Total DSO
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
DSO
49
44
48
44
51
Balance Sheet and Cash Review
Free Cash Flow
(In Millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Net Cash from Operating Activities$156 $410 $441 $487 $378 
Capital Expenditures29 27 37 23 44 
Free Cash Flow$127 $383 $404 $464 $334 
Cash and Cash Equivalents
(In Millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Cash and Cash Equivalents$1,059 $2,786 $2,644 $2,778 $2,823 
•Approximately 63 percent of our cash and cash equivalents were in the U.S. at quarter-end.
Debt
(In Millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Debt (principal value)
$1,350 $2,850 $2,500 $2,500 $2,500 
•In September 2024, Cadence issued $2.5 billion of Senior Notes at a weighted average interest rate of 4.44%.
Share Repurchase
(In Millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Share Repurchase$125 $150 $150 $350 $175 
Number of Shares0.423 0.563 0.519 1.361 0.607 
Employees
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Headcount12,665 12,703 12,705 12,837 13,152 
July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Forward Looking Statements
This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, backlog, industry trends, market growth, settlements of legal proceedings, tax payments and 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 and armed conflicts around the world; (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 access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s pending acquisitions which remain subject to certain closing conditions, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential 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 the settlements with the DOJ (which is subject to court approval) and BIS, Cadence’s ongoing compliance, cooperation, audit and other obligations under the settlement agreements, any further inquiries or adverse actions by the court, the DOJ, BIS or other U.S. or foreign governmental authorities and any impact of the settlements on Cadence’s operations and business dealings in China, U.S. government contracting business and other customer relationships; 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. Cadence plans to file a current report on Form 8-K with more information about the DOJ and BIS settlements and will include further information in its Form 10-Q for the fiscal quarter ended June 30, 2025.

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.

© 2025 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.
July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
APPENDIX I
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses
(In Millions)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
GAAP total costs and expenses$767 $865 $899 $881 $1,034 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(88)(109)(107)(108)(118)
Amortization of acquired intangibles(20)(27)(27)(25)(24)
Acquisition and integration-related costs(21)(29)(23)(23)(26)
Restructuring— (25)1 — — 
Non-qualified deferred compensation (expenses) credits
(2)(4)— 2 (8)
Special charges
(1)— (2)(2)— 
Loss related to contingent liability*
— — (8)— (129)
Non-GAAP total costs and expenses**
$635 $671 $733 $724 $729 
Table may not foot due to rounding
*
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 Expenses to Non-GAAP Total Expenses
(In Millions)20192020*20212022
2023
2024
2025E
GAAP total costs and expenses$1,845 $2,037 $2,209 $2,488 $2,839 $3,291 $3,720 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(182)(197)(210)(270)(326)(391)(462)
Amortization of acquired intangibles(53)(64)(67)(60)(62)(90)(101)
Acquisition and integration-related costs(8)(23)(23)(41)(56)(96)(86)
Restructuring (9)(9)1 — (11)(24)— 
Non-qualified deferred compensation (expenses) credits(5)(5)(6)8 (11)(11)(6)
Special charges**(1)— (27)— — (3)(2)
Loss related to contingent liability***
— — — — — (8)(129)
Non-GAAP total costs and expenses****
$1,587 $1,739 $1,877 $2,125 $2,373 $2,667 $2,934 
Table may not foot due to rounding
*Fiscal 2020 was a 53-week year.
**
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.
July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP Operating Income Adjusted for Stock-based Compensation
(In Millions)20192020*20212022
2023
2024
2025E
GAAP operating income
$492 $646 $779 $1,074 $1,251 $1,351 $1,520 
Reconciling items to non-GAAP operating income
Stock-based compensation expense182 197 210 270 326 391 462 
Amortization of acquired intangibles53 64 67 60 62 90 101 
Acquisition and integration-related costs8 23 23 41 56 96 86 
Restructuring 9 9 (1)— 11 24 — 
Non-qualified deferred compensation expenses (credits)
5 5 6 (8)11 11 6 
Special charges**1 — 27 — — 3 2 
Loss related to contingent liability***
— — — — — 8 129 
Non-GAAP operating income****
$749 $944 $1,111 $1,436 $1,717 $1,974 $2,306 
Stock-based compensation expense(182)(197)(210)(270)(326)(391)$(462)
Non-GAAP operating income adjusted for stock-based compensation****
$567 $747 $901 $1,166 $1,391 $1,583 $1,844 
Table may not foot due to rounding
*Fiscal 2020 was a 53-week year.
**
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.
July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Reconciliation of GAAP Gross Margin as a Percent of Total Revenue to Non-GAAP Gross Margin as a Percent of Total Revenue
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
GAAP gross margin as a percent of total revenue
86.9%
86.6%
83.8%
86.5%
85.6%
Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense
0.3%
0.3%
0.3%
0.4%
0.4%
Amortization of acquired intangibles
1.2%
1.5%
1.3%
1.4%
1.1%
Non-qualified deferred compensation expenses (credits)
0.0%0.0%0.0%0.0%0.0%
Acquisition and integration-related costs
0.1%
0.2%
0.1%
0.1%
0.1%
Non-GAAP gross margin as a percent of total revenue*
88.5%
88.6%
85.5%
88.4%
87.2%
*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.


July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Q3 2025E
GAAP operating margin as a percent of total revenue
27.7%
28.8%
33.7%
29.1%
19.0%
32% - 33%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense
8.3%
9.0%
7.9%
8.7%
9.3%
9%
Amortization of acquired intangibles
1.9%
2.2%
2.0%
2.0%
1.8%
2%
Acquisition and integration-related costs
1.9%
2.4%
1.7%
1.8%
2.0%
2%
Restructuring
0.0%
2.0%
(0.1)%
0.0%
0.0%
0%
Non-qualified deferred compensation expenses (credits)
0.2%
0.4%
0.0%
(0.1)%
0.6%
0%
Special charges
0.1%
0.0%
0.2%
0.2%
0.0%
0%
Loss related to contingent liability*
0.0%
0.0%
0.6%
0.0%
10.1%
0%
Non-GAAP operating margin as a percent of total revenue**
40.1%
44.8%
46.0%
41.7%
42.8%
45% - 46%
*
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.


























July 28, 2025Cadence Q2 2025 Financial Results
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Cadence Design Systems, Inc.
Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
2019202020212022
2023
2024
2025E
GAAP operating margin as a percent of total revenue
21.1%
24.1%
26.1%
30.1%
30.6%
29.1%
28.5% - 29.5%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense
7.8%
7.4%
7.0%
7.6%
8.0%
8.4%
9%
Amortization of acquired intangibles
2.3%
2.4%
2.2%
1.7%
1.5%
2.0%
2%
Acquisition and integration-related costs
0.3%
0.8%
0.8%
1.1%
1.4%
2.1%
2%
Restructuring
0.4%
0.3%
0.0%
0.0%
0.3%
0.5%
0%
Non-qualified deferred compensation expenses (credits)
0.2%
0.2%
0.2%
(0.2)%
0.2%
0.2%
0%
Special charges*
0.0%
0.0%
0.9%
0.0%
0.0%
0.0%
0%
Loss related to contingent liability**
0.0%
0.0%
0.0%
0.0%
0.0%
0.2%
2%
Non-GAAP operating margin as a percent of total revenue***
32.1%
35.2%
37.2%
40.3%
42.0%
42.5%
43.5% - 44.5%
*
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.
July 28, 2025Cadence Q2 2025 Financial Results
11
Cadence Design Systems, Inc.
Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data)
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Q3 2025E
Diluted net income per share on a GAAP basis$0.84 $0.87 $1.24 $1.00 $0.59 
$1.14 - $1.20
Stock-based compensation expense0.32 0.40 0.39 0.39 0.43 0.44 
Amortization of acquired intangibles0.07 0.10 0.10 0.09 0.09 0.10 
Acquisition and integration-related costs0.08 0.11 0.08 0.09 0.09 0.07 
Restructuring — 0.09 — — — — 
Non-qualified deferred compensation expenses (credits)
0.01 0.01 — (0.01)0.03 — 
Special charges
— — 0.01 0.01 — — 
Loss related to contingent liability*
— — 0.03 — 0.47 — 
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets
(0.10)0.04 0.05 0.01 (0.17)— 
Income tax effect of non-GAAP adjustments0.06 0.02 (0.02)(0.01)0.12 — 
Diluted net income per share on a non-GAAP basis**
$1.28 $1.64 $1.88 $1.57 $1.65 
$1.75 - $1.81
Shares used in calculation of diluted net income per share273,520 273,958 274,292 273,631 272,899 
*
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.





July 28, 2025Cadence Q2 2025 Financial Results
12
Cadence Design Systems, Inc.
Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data)2019202020212022
2023
2024
2025E
Diluted net income per share on a GAAP basis$3.53 $2.11 $2.50 $3.09 $3.82 $3.85 
$3.97 - $4.07
Stock-based compensation expense0.65 0.71 0.75 0.98 1.19 1.43 1.69 
Amortization of acquired intangibles0.19 0.23 0.24 0.22 0.23 0.33 0.37 
Acquisition and integration-related costs0.03 0.08 0.08 0.15 0.21 0.35 0.31 
Restructuring 0.03 0.03 — — 0.04 0.09 — 
Non-qualified deferred compensation expenses (credits)0.02 0.02 0.02 (0.03)0.04 0.04 0.02 
Special charges*
— — 0.10 — — 0.01 0.01 
Loss related to contingent liability**
— — — — — 0.03 0.47 
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets
(0.01)— (0.03)0.05 (0.17)(0.22)(0.16)
Income tax benefit related to intercompany transfers of certain intellectual property rights(2.05)— — — — — — 
Income tax effect of non-GAAP adjustments(0.19)(0.38)(0.37)(0.19)(0.21)0.06 0.17 
Diluted net income per share on a non-GAAP basis***
$2.20 $2.80 $3.29 $4.27 $5.15 $5.97 
$6.85 - $6.95
Shares used in calculation of diluted net income per share 280,515 279,641 278,858 275,011 272,748 273,833 
273 - 275M
*
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.








July 28, 2025Cadence Q2 2025 Financial Results
13
Cadence Design Systems, Inc.
Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense
(In Millions)
FY 2023
FY 2024
FY 2025E
GAAP total other income and expense$31 $45 
$(9) - $11
Reconciling items to non-GAAP total income and expense
Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets
(46)(61)(43)
Non-GAAP total other income and expense*
$(15)$(16)
$(52) - $(32)
*
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.


July 28, 2025Cadence Q2 2025 Financial Results
14