Cadence Design Systems (CDNS) investor relations material

Executive summary

• Q2 2026 revenue reached $1.584 billion, up 24% year-over-year, surpassing guidance, with all key metrics exceeding expectations and record backlog of $8.1 billion.

• Net income for Q2 2026 was $367.1 million, up 129% year-over-year, and diluted EPS was $1.33, with non-GAAP EPS at $2.11.

• AI-driven solutions and strategic partnerships with Intel, Samsung, and Rapidus are fueling broad-based performance and accelerating demand across customer segments.

• The acquisition of Hexagon's design and engineering business expanded the System Design and Analysis portfolio and contributed to revenue growth.

• Recurring revenue accounted for 78% of Q2 2026 total revenue, with strong geographic and product diversification.

Financial highlights

• Q2 2026 GAAP operating margin was 28.4%; non-GAAP operating margin was 45.5%.

• Q2 2026 GAAP EPS was $1.33; non-GAAP EPS was $2.11.

• Operating cash flow for Q2 2026 was $635 million; cash and cash equivalents at quarter-end were $1.44 billion.

• Product and maintenance revenue grew 22% year-over-year for Q2 2026; services revenue increased 47%.

• Record backlog of $8.1 billion at quarter-end.

Outlook and guidance

• Full-year 2026 revenue expected between $6.26 and $6.34 billion, up 18–20% year-over-year.

• GAAP operating margin projected at 27.75%–28.75%; non-GAAP at 43.75%–44.75%.

• GAAP EPS guidance: $4.76–$4.86; non-GAAP EPS: $8.05–$8.15.

• Operating cash flow for the year expected at $2 billion; 50% of free cash flow to be used for share repurchases.

• Q3 2026 revenue guidance: $1.595–$1.625 billion; non-GAAP EPS $2.01–$2.07.