CADENCE DESIGN SYSTEMS INC SEC 10-Q Report

Cadence Design Systems Inc., a leading provider of electronic design automation (EDA) software, hardware, and IP, has released its Form 10-Q report for the second quarter of fiscal 2025. The report highlights significant growth in revenue and strategic business developments, despite some challenges impacting net income.

Financial Highlights

Total Revenue: Cadence reported total revenue of $1,275.4 million for the three months ended June 30, 2025, marking a 20% increase from $1,060.7 million for the same period in 2024. For the six months ended June 30, 2025, total revenue was $2,517.8 million, up 22% from $2,069.8 million in the same period of the previous year. This growth was driven by strong demand across software, hardware, and IP product offerings.

Income from Operations: The company recorded an income from operations of $241.8 million for the three months ended June 30, 2025, compared to $293.9 million for the same period in 2024. This decrease was primarily due to a loss related to a contingent liability. For the six months ended June 30, 2025, income from operations increased to $603.3 million from $543.8 million in the same period in 2024, despite higher interest expenses.

Net Income: Net income for the three months ended June 30, 2025, was $160.1 million, down from $229.5 million for the same period in 2024, mainly due to a contingent liability charge. For the six months ended June 30, 2025, net income was $433.6 million, compared to $477.2 million for the same period in 2024, reflecting increased operating expenses.

Net Income Per Share – Basic: Basic net income per share was $0.59 for the three months ended June 30, 2025, compared to $0.85 for the same period in 2024. For the six months ended June 30, 2025, basic net income per share was $1.60, compared to $1.77 for the same period in 2024.

Net Income Per Share – Diluted: Diluted net income per share was $0.59 for the three months ended June 30, 2025, compared to $0.84 for the same period in 2024. For the six months ended June 30, 2025, diluted net income per share was $1.59, compared to $1.74 for the same period in 2024.

Business Highlights

Revenue Segments: Cadence's revenue is categorized into three main product lines: Core EDA, Semiconductor IP, and System Design and Analysis. Core EDA contributed 71% of the revenue for the quarter, Semiconductor IP accounted for 13%, and System Design and Analysis made up 16%.

Geographical Performance: The United States remains the largest market, contributing significantly to revenue growth with a 17% increase compared to the previous year. Other Americas saw a substantial increase of 234%, while revenue from China decreased by 6%. Other regions such as EMEA and Japan experienced growth of 31% and 35%, respectively.

New Product Launches: During the second quarter of fiscal 2025, Cadence completed the acquisition of VLAB Works, enhancing its Core EDA product category with virtual models for hardware verification and software development.

Future Outlook: Cadence anticipates an increase in the percentage of annual up-front revenue in 2025, driven by growth in product offerings that recognize revenue up-front. The company is also assessing the impact of the One Big Beautiful Bill Act, which is expected to materially decrease U.S. federal tax payments for the remainder of fiscal 2025.

SEC Filing: CADENCE DESIGN SYSTEMS INC [ CDNS ] - 10-Q - Jul. 29, 2025