Cadence Design Systems (CDNS) reported first-quarter 2024 non-GAAP earnings per share (EPS) of $1.17, which beat the Zacks Consensus Estimate by 3.5%. However, it decreased 9.3% year over year.Revenues of $1.009 billion missed the Zacks Consensus Estimate by 0.5% and decreased 1.2% on a year-over-year basis. The top line was affected by weakness in Product & Maintenance revenues. CDNS ended the quarter with a backlog of $6 billion and current remaining performance obligations of $3.1 billion.Management prov ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $1.009 billion, with GAAP operating margin at 24.8% and non-GAAP operating margin at 37.8% [20] - GAAP EPS was $0.91 and non-GAAP EPS was $1.17 [20] - The cash balance at the end of the quarter was approximately $1.012 billion, with outstanding debt of $650 million and operating cash flow of $253 million [20] Business Line Data and Key Metrics Changes - The System Design and Analysis business showed steady growth, driven by AI-driven design optimization platforms [12] - The Digital IC business experienced strong growth, particularly at hyperscalers, with over 50 customers deploying digital solutions at three nanometer and below design [16] - The IP business benefited from market opportunities related to AI and multi-chiplet architectures, with strong momentum in interface IPs [17] Market Data and Key Metrics Changes - China revenue was down 12% in Q1 compared to the previous year, attributed to lower hardware and functional verification revenue [38] - Despite the decline in China, other Asian markets showed growth, indicating a diversified geographical revenue mix [39] Company Strategy and Development Direction - The company is focused on executing its Intelligent System Design strategy, leveraging long-term trends in hyperscale computing, autonomous driving, and 5G, all accelerated by AI [8] - The recent launch of the Palladium Z3 and Protium X3 platforms aims to meet the increasing demand for higher performance and capacity in hardware accelerated verification solutions [9] - The acquisition of BETA CAE is expected to unlock a multi-billion dollar total addressable market opportunity, particularly in automotive and aerospace sectors [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to 2024, raising the financial outlook for the year based on a record backlog of $6 billion [7] - The company anticipates that hardware revenue will be more weighted towards the second half of 2024 due to new product launches and backlog scaling [21] - Management highlighted the significant impact of AI on design processes, leading to increased customer engagement and potential for larger renewal contracts [34] Other Important Information - Cadence was recognized as one of the 2024's 100 best companies to work for, ranking number 9 [18] - The company is committed to using at least 50% of its annual free cash flow for share repurchases [21] Q&A Session Summary Question: Can you provide your second half assumption before this quarter versus where it stands today? - Management noted that upfront revenue is driving quarter-over-quarter trends, with expectations for a shift towards the second half of the year due to a record backlog and new hardware systems [25][28] Question: What is the outlook for China revenue for the rest of the year? - Management indicated that while China revenue was down, strong design activity remains, and they expect the percentage of revenue from China to increase in the second half as upfront revenue grows [39][40] Question: How do you view the demand for the new Z3 and X3 systems? - Management expects a combination of replacement demand and new customer adoption, with significant capacity increases allowing for the design of larger chips [41][44] Question: Can you comment on the impact of AI on customer engagement and renewals? - Management confirmed that AI is creating stickiness and incentives for broader deployment, leading to larger average renewal contracts [34] Question: How is the IP business expected to perform in 2024? - Management reported strong bookings in Q1 and anticipates a very strong growth year for the IP business, particularly in the second half [59]

Cadence Design Systems (CDNS) came out with quarterly earnings of $1.17 per share, beating the Zacks Consensus Estimate of $1.13 per share. This compares to earnings of $1.29 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 3.54%. A quarter ago, it was expected that this maker of hardware and software products for validating chip designs would post earnings of $1.34 per share when it actually produced earnings of $1.38, deliver ...

Exhibit 99.02 CADENCE REPORTS FIRST QUARTER 2024 CADENCE DESIGN SYSTEMS, INC. CFO COMMENTARY Q1 2024 KEY Key Takeaways Q2 2024 Outlook METRICS • Record Q1 bookings and record Q1 • Revenue : $1.03 billion - $1.05 billion backlog of approximately $6.0 • Revenue $1.009 billion • GAAP operating margin: 26.5% - 27.5% billion • Non-GAAP operating margin: 38.5% - 39.5% • GAAP operating margin 25% • Raising 2024 revenue outlook • GAAP EPS: $0.73 - $0.77 • Non-GAAP operating margin • The pending acquisition of BETA ...

Cadence Design Systems (CDNS) has been beaten down lately with too much selling pressure. While the stock has lost 13.2% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.Here is How to Spot Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscill ...

Cadence Design Systems (CDNS) unveiled the latest Palladium Z3 Emulation and Protium X3 FPGA Prototyping systems. This is an advanced digital twin platform that is aimed at addressing the growing complexity of system and semiconductor design.These new systems will be utilized in automotive, hyperscale, networking, and mobile chip industries. The Palladium and Protium systems provide high throughput pre-silicon hardware debug and software validation. These systems are an integral part of the Cadence Verifica ...

Industry Overview - The technology sector experienced growth in Q1 2024, driven by strong adoption of AI and machine learning, despite persistent inflation delaying potential rate cuts by the Federal Reserve [1] - Global macroeconomic challenges, including conflicts in the Middle East and between Russia and Ukraine, negatively impacted the sector's growth trajectory [1] - Escalating Sino-US tensions and US restrictions on high-tech exports to China, particularly advanced AI chips, have hurt chip providers [1] - Beijing's strategy to phase out foreign chips in critical industries like telecom is expected to negatively impact semiconductor giants such as Intel and AMD [1] Sector Drivers - Ongoing digitalization, including rapid adoption of cloud computing, 5G, IoT, wearables, AR/VR headsets, drones, and blockchain, is benefiting the technology sector [2] - Increasing demand for AI is driving the need for data center capacity expansion, with major cloud computing providers like Amazon, Alphabet, Microsoft, and Meta Platforms having multi-year investment plans [2] - The rise of generative AI has attracted investments, boosting demand for chips, particularly GPUs, benefiting semiconductor companies [2] Market Performance - Semiconductor sales in February 2024 were $46.2 billion, up 16.3% year-over-year, while January sales were $47.6 billion, up 15.2% year-over-year [3] - The PC segment saw growth in Q1 2024, with 59.8 million PCs shipped, a 1.5% increase from the previous year [3] - Lenovo and HP experienced growth of 7.8% and 0.2%, respectively, while Dell Technologies saw a 2.2% decline [3] Earnings Focus - Several technology companies are set to report earnings in the coming weeks, with a focus on stocks that have a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) and a positive Earnings ESP [4] - Earnings ESP is a proprietary methodology that identifies stocks likely to surprise positively in their next earnings announcement, based on the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate [4] - Stocks with this combination have a 70% chance of a positive earnings surprise [5] Top Stock Picks - Vertiv (VRT) has an Earnings ESP of +1.24% and a Zacks Rank of 1, with a consensus earnings estimate of 37 cents per share for Q1 2024 [6][7] - Meta Platforms (META) has an Earnings ESP of +3.26% and a Zacks Rank of 2, with a consensus earnings estimate of $4.31 per share for Q1 2024 [7] - Cadence Design Systems (CDNS) has an Earnings ESP of +0.22% and a Zacks Rank of 2, with a steady consensus earnings estimate of $1.13 per share for Q1 2024 [7] - Itron (ITRI) has an Earnings ESP of +5.88% and a Zacks Rank of 2, with a steady consensus earnings estimate of 85 cents per share for Q1 2024 [7][8] - Silicon Motion Technology (SIMO) has an Earnings ESP of +5.96% and a Zacks Rank of 2, with a consensus earnings estimate of 58 cents per share for Q1 2024 [8]

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Cadence Design Systems (CDNS) .Cadence currently has an average b ...

Investors are always looking for stocks that are poised to beat at earnings season and Cadence Design Systems, Inc. (CDNS) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.That is because Cadence is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings — with the most up-to-date information possible — is a pret ...

Cadence Design Systems (CDNS) is scheduled to release first-quarter 2024 results on Apr 22.For the first quarter, Cadence expects total revenues in the range of $990 million-$1.01 billion. The Zacks Consensus Estimate is currently pegged at $1.01 billion, suggesting a decline of 0.8% from a year ago.Management projects non-GAAP earnings per share (EPS) in the range of $1.10-$1.14. The Zacks Consensus Estimate is pegged at $1.13, indicating a decline of 12.4% from the prior-year quarter’s reported figure.The ...