Cadence Reports Q1 2026 Financial Results

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Cadence announced results for the first quarter of 2026.

First Quarter 2026 Financial Results

• Revenue of $1.474 billion, compared to revenue of $1.242 billion in Q1 2025
• GAAP operating margin of 29.3%, compared to 29.1% in Q1 2025
• Non-GAAP operating margin of 44.7%, compared to 41.7% in Q1 2025
• GAAP diluted net income per share of $1.23, compared to $1.00 in Q1 2025
• Non-GAAP diluted net income per share of $1.96, compared to $1.57 in Q1 2025
• Quarter-end backlog was $8.0 billion and revenue expected to be recognized in the next 12 months from remaining performance obligations was $4.0 billion

“Cadence had a strong start to 2026, delivering a solid Q1 with accelerating AI demand and record backlog, reflecting strong customer commitment to our AI-driven portfolio,” said Anirudh Devgan, president and chief executive officer. “Cadence is leading the agentic AI transformation in semiconductor and system design, pioneering the industry's most advanced and comprehensive agentic AI full-flow platform, AgentStack, integrated with ChipStack, ViraStack, and InnoStack Super Agents.”

“Cadence delivered excellent results for the first quarter of 2026, with broad-based strength across all our businesses,” said John Wall, senior vice president and chief financial officer. “With robust design activity and solid execution, we are raising our 2026 revenue outlook to 17% year-over-year growth.”

CFO Commentary

Commentary on the first 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:

• Revenue in the range of $6.125 billion to $6.225 billion
• GAAP operating margin in the range of 27.5% to 28.5%
• Non-GAAP operating margin in the range of 43.5% to 44.5%
• GAAP diluted net income per share in the range of $4.39 to $4.49
• Non-GAAP diluted net income per share in the range of $7.85 to $7.95

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

Launched AgentStack, an orchestration framework for Cadence's AI Super Agents that enables knowledge sharing and extensibility from chips to 3D-IC and systems

Launched ViraStack AI Super Agent for analog and custom design and the InnoStack AI Super Agent for digital implementation and signoff. Along with the ChipStack AI Super Agent for RTL and verification, Cadence now provides agentic AI solutions spanning the entire chip design spectrum

Core EDA revenue grew 18% year‑over‑year, driven by expanding customer adoption of Cadence’s AI‑driven solutions, with continued strength in advanced digital implementation, custom, and verification at leading AI infrastructure and semiconductor customers

Hardware delivered a record quarter, led by strong demand from AI and high‑performance computing customers, along with growing adoption in automotive and robotics markets

IP business achieved 22% year‑over‑year growth, fueled by robust demand from AI infrastructure, HPC, and automotive workloads and continued adoption of Cadence’s Star IP portfolio, including HBM, LPDDR, PCIe, SerDes, and foundation IP

System Design and Analysis revenue increased 18% year-over-year. With the close of the Hexagon D&E acquisition, Cadence added leading structural and multibody dynamics technologies and is well positioned to capitalize on the emerging Physical AI opportunity