Core Viewpoint - Cadence Design Systems (CDNS) reported better-than-expected second-quarter 2024 results, but provided lower-than-expected guidance for the third quarter of 2024 due to the dilutive impact of the BETA CAE acquisition [1][4]. Financial Performance - Revenues for Q2 2024 reached $1.061 billion, an increase of 8.6% year-over-year, while non-GAAP earnings per share (EPS) improved by 4.9% to $1.28 [1]. - For the full year 2024, non-GAAP EPS is expected to be between $5.77 and $5.97, down from previous guidance of $5.88 to $5.98 [4]. - Projected revenues for 2024 are in the range of $4.6 billion to $4.66 billion, slightly up from the previous guidance of $4.56 billion to $4.62 billion [4]. Growth Catalysts - Strengthening demand for differentiated solutions, solid bookings, and a healthy backlog are key growth drivers for CDNS [2]. - The latest hardware solutions, Palladium Z3 Emulation and Protium X3 FPGA Prototyping systems, are expected to see strong demand, particularly from AI, hyperscale, and automotive sectors [2]. Focus on AI Solutions - The design activity remains robust due to trends like hyperscale computing, 5G, and autonomous driving, driven by the rise of AI [3]. - Increased R&D budgets in AI-driven automation are beneficial for the Cadence.AI portfolio [3]. Outlook and Guidance - Despite positive trends, CDNS' guidance for Q3 revenues and EPS is lower than expected, with management indicating a cautious outlook for the Verification business in 2024 [4]. - The launch of new hardware systems in April 2024 is expected to skew upfront revenues towards the second half of the year [4]. Cost and Margin Analysis - Total non-GAAP costs and expenses increased by 11.6% year-over-year to $635 million, with non-GAAP gross margin contracting by 290 basis points to 88.5% [5]. - Non-GAAP operating margin also contracted by 170 basis points year-over-year to 40.1% [5]. Market Performance - CDNS stock has declined by 1.8% year-to-date, contrasting with the industry's growth of 11.2% and the S&P 500's increase of 14.1% [7]. - Compared to peers in the EDA space, Synopsys shares have appreciated by 7.5%, while Keysight Technologies and ANSYS shares have dropped by 14.5% and 14.4%, respectively [7]. Valuation Perspective - CDNS is trading at a forward 12-month price-to-earnings ratio of 0.41X, below its five-year median of 0.54X, and at a premium compared to the industry's ratio of 0.32X [8].

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?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 brokerage ...

Cadence Design Systems Today M CDNS Cadence Design Systems $282.99 -4.09 (-1.42%) 52-Week Range $217.77 P/E Ratio 73.70 Price Target $334.56 Add to Watchlist Cadence Design Systems NASDAQ: CDNS is a software company that makes programs essential to semiconductor design. The firm announced Q2 2024 earnings on July 22, 2024. Let's break down Cadence's operations and products to get a better understanding of the business. We'll then review the earnings report. We'll finish off with what to look out for next ab ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________________ FORM 10-Q _____________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-15867 _____________________________________ CADENCE D ...

EschCollection/DigitalVision via Getty Images Cadence Design Systems, Inc. (NASDAQ:CDNS), a primary player in the electronic design automation, or EDA, market alongside Synopsys (SNPS), reported its Q2 earnings for FY2024 after the bell yesterday. We reiterate our buy-rating but update our investment thesis. We wrote on CDNS back in January, forecasting “the stock outperforming the S&P 500 and SOX index in 2024” on “more optimistic [view] about CDNS' FY24 guidance as the semi-slowdown eases and WFE spen ...

Cadence Design Systems (CDNS) reported second-quarter 2024 non-GAAP earnings per share (EPS) of $1.28, which beat the Zacks Consensus Estimate by 4.1%. The bottom-line number improved 4.9% year over year and exceeded the management’s guided range of $1.20-$1.24.Revenues of $1.061 billion topped the Zacks Consensus Estimate by 1.2% and increased 8.6% on a year-over-year basis. It surpassed the management’s guided range of $1.03-$1.05 billion.The top line was driven by broad-based customer demand. CDNS ended ...

no_limit_pictures/E+ via Getty Images I gave Cadence Design Systems (NASDAQ:CDNS) a 'Hold' rating in my initiation article published in July 2023. I highlighted their leadership position in the semiconductor electronic design automation (EDA) software industry but expressed my concerns about the stock price valuation. They released their Q2 FY24 earnings on July 22nd after the market close, beating the market consensus and gaining momentum with its AI portfolio. As its stock price is overvalued, as per my c ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $1.061 billion, with GAAP operating margin at 27.7% and non-GAAP operating margin at 40.1% [17] - GAAP EPS was $0.84, while non-GAAP EPS was $1.28 [17] - The company has a backlog of approximately $6 billion at the end of Q2 [17] - The updated revenue guidance for 2024 is projected to be between $4.6 billion and $4.66 billion, reflecting over 13% year-over-year growth [18] Business Line Data and Key Metrics Changes - The IP business experienced a 25% year-over-year growth in Q2 [11] - The system design and analysis business delivered 20% year-over-year revenue growth [13] - The AI-driven Cadence.AI portfolio saw orders more than tripling over the last year [8] Market Data and Key Metrics Changes - The company noted strong design activity driven by trends such as hyperscale computing, 5G, and autonomous driving, particularly in data center and automotive sectors [8] - The foundry ecosystem is expanding, leading to increased design activity and opportunities for Cadence's products [9] Company Strategy and Development Direction - Cadence is executing its intelligent system design strategy, focusing on extending leadership in core EDA while expanding into new system design analysis areas [8] - The company is embedding AI into its EDA, SDA, and digital biology solutions to enhance productivity and results [8] - The acquisition of BETA CAE is expected to strengthen the company's position in automotive and data center verticals [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for solutions, with a healthy backlog and expectations for strong growth in the second half of 2024 [19] - The management highlighted that AI is broadening beyond data centers into automotive and consumer devices, which is expected to drive future growth [25] Other Important Information - The company repurchased $125 million of its shares in Q2 [17] - Cash balance at the end of the quarter was $1.059 billion, with a principal value of debt outstanding at $1.350 billion [17] Q&A Session Summary Question: Thoughts on semiconductor sales growth and Cadence's market share - Management noted that they are pleased with their performance and expect over 13% revenue growth, emphasizing their strong position in R&D spending [22][24] Question: China revenue expectations - Management indicated that they only need China to contribute 13% of overall revenue to meet guidance, with expectations for gradual improvement [26][28] Question: Confidence in Q4 growth - Management explained that the revenue curve is back-end loaded, with expectations for higher upfront revenue in Q4 due to hardware and IP [30][31] Question: Visibility on hardware demand - Management confirmed strong demand for hardware systems, with plans to build inventory to meet this demand [32][34] Question: Impact of BETA CAE acquisition - Management clarified that BETA CAE is expected to contribute $40 million in revenue and $0.12 dilution to non-GAAP EPS, with operational accretion anticipated next year [41][43] Question: Memory customers' adoption of advanced design products - Management acknowledged increased adoption of advanced digital design products by memory customers, driven by trends in HBM and 3D-IC [72][74]

Exhibit 99.02 CADENCE REPORTS SECOND QUARTER 2024 CADENCE DESIGN SYSTEMS, INC. CFO COMMENTARY | --- | --- | --- | |------------------------------------|-----------------------------------------------|------------------------------| | Key Takeaways | Q3 2024 Outlook | Q2 2024 KEYMETRICS | | • Annual revenue growth outlook is | • Revenue: $1.165 billion - $1.195 billion | | | now 13%, including $40 million | • GAAP operating margin: 27.7% - 29.3% | • Revenue: $1.061 billion | | from BETA CAE at the midpoint | ...

Cadence Design Systems, Inc (CDNS) is scheduled to release second-quarter 2024 results on Jul 22. The Zacks Consensus Estimate for second-quarter 2024 earnings has been unchanged in the past 60 days and is pegged at $1.23 per share. The consensus mark implies a marginal increase of 0.8% from the year-ago actual. The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $1.05 billion, suggesting a 7.4% uptick from the year-ago actual.CDNS Estimate Trend Image Source: Zacks Investment Researc ...