Cadence Raises 2026 Outlook After 22% Third-Quarter Revenue Growth

Cadence Design Systems raised its annual financial outlook on Monday, October 26, after reporting a 22% increase in third-quarter revenue, supported by demand for semiconductor design software and related engineering tools.

The California-based company recorded $1.633 billion in revenue for the quarter ended September 30, up from $1.339 billion a year earlier. Its diluted earnings under generally accepted accounting principles were $1.05 per share, unchanged from the comparable quarter, while non-GAAP diluted earnings increased to $2.11 from $1.93 per share.

Cadence now expects full-year 2026 revenue of between $6.387 billion and $6.417 billion, equivalent to about 21% growth at the midpoint. It forecasts non-GAAP earnings per share of $8.37 to $8.43. The revised outlook is a management projection and not a guarantee of future results.

The company reported a quarter-end backlog of $8.2 billion. Of its remaining performance obligations, approximately $4.2 billion is expected to be recognized as revenue during the next 12 months. A backlog indicates contracted work or commitments subject to the company's revenue-recognition policies; it is not the same as cash already received.

Growth extended across several parts of the business. Core electronic design automation revenue increased 20% year over year, intellectual-property revenue rose 24%, and system design and analysis revenue grew 30%, according to Cadence.

Management also highlighted Maestro, a portfolio of specialized artificial intelligence models intended to support chip and system design, and said its AI-focused engineering tools were gaining customer engagement. Performance claims about the new models were presented by the company and should not be treated as independently demonstrated results across all uses.

During the quarter, Cadence repurchased $400 million of its shares, and its board authorized an additional $2.5 billion for repurchases. The company released its results shortly after the US market close on October 26 and scheduled an investor webcast for 17:00 Eastern time.

The earnings announcement is a completed financial disclosure; the outlook, customer adoption forecasts and anticipated benefits of new products remain forward-looking.