Cadence blew its Q3 earnings estimates out of the water, and management forecast an even better Q4.Shares of semiconductor design software company Cadence Design Systems (CDNS 12.68%) were rallying on Tuesday, and up by 12.4% as of 2:55 p.m. ET.Cadence is one of two major firms producing software that enables chipmakers to design semiconductors. With more and more companies now designing their own semiconductors, and with the major chip companies diversifying their offerings, Cadence made news Monday night ...

Core Insights - Cadence Design Systems (CDNS) reported strong third-quarter 2024 results, with non-GAAP earnings per share (EPS) of $1.64, exceeding estimates by 13.9% and showing a year-over-year increase of 30.2 [1][6] - Revenues reached $1.215 billion, surpassing estimates by 2.7% and increasing 18.8% year over year, driven by broad-based strength across the portfolio [2][6] Financial Performance - The company ended the quarter with a backlog of $5.6 billion and current remaining performance obligations of $2.9 billion [2] - Management tightened its revenue outlook for 2024 to a range of $4.61-$4.65 billion, indicating a growth of 13.1% from the previous year [6] - Non-GAAP EPS for 2024 is projected between $5.87 and $5.93, reflecting a rise of 14.2% from the prior year [7] - The non-GAAP operating margin for 2024 is forecasted to be between 42% and 43% [8] Segment Performance - Product & Maintenance revenues, which constitute 90.5% of total revenues, rose 13.9% year over year to $1.1 billion, while Services revenues increased 101.8% to $115 million [11] - The System Design & Analysis business saw a 40% year-over-year revenue increase, benefiting from AI-driven design optimization platforms [13] - The IP business experienced a 50% year-over-year revenue growth due to rising demand for solutions in AI and HPC [15] Market Trends - Design activity remains robust, particularly in datacenter and automotive sectors, driven by trends such as hyperscale computing, 5G, and autonomous driving [3] - Customers are significantly increasing R&D budgets in AI-driven automation, positively impacting the Cadence.AI portfolio, which saw sales nearly triple year over year [5] Cash Flow and Shareholder Returns - Operating cash flow for the quarter was $410 million, with free cash flow at $383 million, and the company repurchased shares worth $150 million [18] - CDNS plans to utilize 50% of its free cash flow for share repurchases in 2024 [8] Stock Performance - The stock rose 5.7% in pre-market trading, with an 8.2% increase over the past year compared to the sub-industry's growth of 34.9% [9]

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Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was reported at $1.215 billion, reflecting a 19% year-over-year growth [20] - GAAP operating margin was 28.8%, while non-GAAP operating margin was 44.8% [20] - GAAP EPS was $0.87, and non-GAAP EPS was $1.64 [20] - Recurring revenue growth returned to low teens on a year-over-year basis [20] Business Line Data and Key Metrics Changes - System design and analysis business delivered over 40% year-over-year revenue growth in Q3 [14] - IP business achieved over 50% year-over-year revenue growth in Q3 [15] - Core EDA business, including custom, digital, and functional verification, delivered 9% year-over-year revenue growth in Q3 [16] Market Data and Key Metrics Changes - Strong design activity was noted across multiple verticals, particularly in data center and automotive sectors [7] - The digital transformation in aerospace and defense showed continued strength, with significant commitments from the US Air Force and Army [13] - Demand for AI-driven solutions and hardware systems was robust, particularly from hyperscalers [14][20] Company Strategy and Development Direction - The company is executing an intelligent system design strategy that triples its total addressable market (TAM) opportunity [8] - Continued partnerships with NVIDIA and Arm to enhance AI innovation and design enablement solutions [9][10] - Expansion of the Cadence.AI portfolio, which saw sales nearly triple over the last year [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing AI super cycle and its impact on design activity [7] - The company raised its full-year EPS outlook, indicating confidence in strong performance for the remainder of the year [6][20] - Management noted that the Q4 bookings pipeline is exceptionally strong, reminiscent of previous high-performing years [26] Other Important Information - The company had a cash balance of $2.786 billion at the end of the quarter and used $150 million for share repurchases [21] - The updated outlook for 2024 includes revenue expectations in the range of $4.61 billion to $4.65 billion [22] Q&A Session Summary Question: Insights on advanced foundry efforts and demand from China - Management noted increased global commitment to semiconductor investments and improved relationships with foundries like Intel and Samsung [25] Question: Backlog guidance and Q4 expectations - Management highlighted a strong Q4 pipeline, similar to previous years, but did not provide specific guidance for 2025 [26][30] Question: Revenue expectations from China - Management expects China revenue to be lower than last year but noted a recovery in design activity [32][73] Question: Performance of the Cadence.AI suite - Management reported strong engagement with top customers and significant improvements in performance metrics due to AI solutions [35] Question: Updates on hardware demand and supply constraints - Management confirmed strong demand for hardware but noted that inventory growth was due to strategic purchasing decisions [70] Question: Contribution from BETA CAE products - Management indicated that BETA is contributing positively, particularly in automotive, but did not provide specific revenue guidance [84]

Monday, October 28, 2024A healthy start to the trading week relied mostly on speculative valuation, as much of the factual reportage has yet to materialize. What we mean by this is most of the meaty reports with the potential to sway trading trajectories haven’t happened yet.Even still: the Dow was up +275 points, +0.65%, while the S&P 500 and Nasdaq grew +0.27% and +0.26% on the session, respectively. The small-cap Russell 2000 put up solid numbers for the day, +1.63% by the closing bell.It’s both Jobs Wee ...

Cadence Design Systems (CDNS) came out with quarterly earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.44 per share. This compares to earnings of $1.26 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 13.89%. A quarter ago, it was expected that this maker of hardware and software products for validating chip designs would post earnings of $1.23 per share when it actually produced earnings of $1.28, deliv ...

c ā d e n c e " Exhibit 99.02 CADENCE REPORTS THIRD QUARTER 2024 | --- | --- | --- | |-----------------------------------------------------------------------------|--------------------------------------------------------------------------------------|--------------------------------------| | CFO COMMENTARY | CADENCE DESIGN SYSTEMS, INC. | | | Key Takeaways | Q4 2024 Outlook | Q3 2024 KEY METRICS | | • Q3 revenue growth of ~19% year- | • Revenue: $1.325 billion - $1.365 billion | | | over-year | • GAAP opera ...

Cadence Design Systems, Inc (CDNS) is scheduled to release third-quarter 2024 results on Oct. 28. The Zacks Consensus Estimate for third-quarter 2024 earnings has been unchanged in the past 60 days at $1.44 per share. The consensus mark implies an increase of 14.3% from the year-ago actual. The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $1.18 billion, indicating a 15.7% uptick from the year-ago actual.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.CDNS’ E ...

Analysts on Wall Street project that Cadence Design Systems (CDNS) will announce quarterly earnings of $1.44 per share in its forthcoming report, representing an increase of 14.3% year over year. Revenues are projected to reach $1.18 billion, increasing 15.7% from the same quarter last year.The current level reflects a downward revision of 0.2% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initia ...

Core Viewpoint - Cadence Design Systems (CDNS) is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended September 2024, with the earnings report expected on October 28 [1][2]. Group 1: Earnings Expectations - The consensus estimate for Cadence's quarterly earnings is $1.44 per share, reflecting a year-over-year increase of 14.3% [2]. - Expected revenues for the quarter are $1.18 billion, which is a 15.7% increase from the same quarter last year [2]. Group 2: Estimate Revisions - The consensus EPS estimate has been revised 0.16% lower over the last 30 days, indicating a reassessment by analysts [3]. - Despite the slight downward revision, the Most Accurate Estimate for Cadence is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.69% [6][7]. Group 3: Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [5]. - Cadence holds a Zacks Rank of 2, indicating a favorable outlook for beating the consensus EPS estimate [7]. Group 4: Historical Performance - In the last reported quarter, Cadence exceeded the expected earnings of $1.23 per share by delivering $1.28, resulting in a surprise of +4.07% [8]. - Over the past four quarters, Cadence has consistently beaten consensus EPS estimates [8]. Group 5: Industry Context - SS&C Technologies, another player in the Zacks Computer - Software industry, is expected to report earnings of $1.26 per share for the same quarter, reflecting a year-over-year change of +7.7% [10]. - SS&C's revenues are projected to be $1.44 billion, up 5.5% from the previous year, but it has a negative Earnings ESP of -0.32% [10].