Core Viewpoint - Cadence Design Systems has forecasted fourth-quarter profit that is slightly below market estimates due to concerns over Sino-U.S. trade tensions impacting demand for its chip design software in China [1] Company Summary - The company is facing challenges in its key market, China, as trade tensions between the U.S. and China threaten to reduce demand for its products [1] Industry Summary - The chip design software industry may experience fluctuations in demand as geopolitical factors, particularly Sino-U.S. relations, continue to evolve [1]

Core Insights - Cadence Design Systems reported strong third-quarter earnings, with earnings per share of $1.93, surpassing the Street estimate of $1.79 [1] - The company achieved quarterly revenue of $1.38 billion, exceeding the analyst consensus estimate of $1.32 billion and showing a year-over-year increase from $1.21 billion [2] - CEO Anirudh Devgan highlighted a record backlog and broad-based business strength, raising the full-year revenue outlook to approximately 14% growth year-over-year [3] Financial Performance - The fiscal 2025 GAAP EPS guidance was lowered to a range of $3.80 to $3.86 per share, compared to the previous analyst estimate of $4.30 [4] - Revenue outlook for fiscal 2025 was raised to between $5.26 billion and $5.29 billion, against the prior estimate of $5.24 billion [4] Market Reaction - Following the earnings report, Cadence Design Systems stock was down 1.11% at $347.50 in extended trading [5]

Market Performance - Major U.S. stock indices, including the S&P 500, Nasdaq, and Dow Jones, closed at record highs for the second consecutive day, reflecting robust market performance [2][9] - The Dow Jones surged 324 points, or 0.69%, closing at 47,531.10, while the Nasdaq climbed 439 points, or 1.89%, reaching 23,644.20, and the S&P 500 advanced 83.72 points, or 1.23%, closing at 6,875.41 [2][9] Corporate Earnings - Cadence Design Systems (CDNS) reported strong Q3 results with adjusted earnings per share of $1.93, exceeding analyst estimates of $1.79, and revenue of $1.34 billion, surpassing expectations of $1.32 billion [3][9] - NXP Semiconductors (NXP) presented a mixed Q3 earnings report, with reported EPS of $2.48 lower than last year's $2.79, while revenue of $3.17 billion slightly exceeded the estimated $3.16 billion [4][9] - Welltower (WELL) announced solid Q3 results, with rental income reaching $499.48 million and declared a dividend of $0.74 per share, reaffirming its full-year adjusted FFO per share guidance between $5.24 and $5.30 [5][9] Strategic Developments - IBM (IBM) launched a new platform aimed at supporting financial institutions in navigating the evolving digital asset economy, positioning itself to capitalize on the growing interest in blockchain and digital currencies [6][9]

CADENCE REPORTS THIRD QUARTER 2025 CADENCE DESIGN SYSTEMS, INC. CFO COMMENTARY Key Takeaways Exhibit 99.02 Our Q3 2025 financial results webcast will begin October 27, 2025 at 2:00 p.m. (Pacific). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on October 27, 2025 until 5:00 p.m. (Pacific) on December 17, 2025. October 27, 2025 Cadence Q3 2025 Financial Results 1 Q4 2025 Outlook Q3 2025 KEY METRICS FY 2025 Outlook Financial Results Webca ...

Market Overview - All three major stock benchmarks (Dow, S&P 500, Nasdaq) reached new all-time intraday highs, driven by a cooling of trade tensions between the U.S. and China, which agreed on a framework to avoid increased tariffs [1] - A surge in mergers and acquisitions across various industries and an anticipated 25-basis-point interest rate cut by the Federal Reserve further enhanced market sentiment [1] - The S&P Short Range Oscillator has moved into overbought territory, prompting a cautious approach to selling and increasing cash positions [1] Retail Sector Insights - JPMorgan's analyst Matt Boss expressed optimism for the retail sector heading into earnings season, supported by Chase Credit Card data indicating sequential growth in U.S. spending, particularly among higher-income consumers [1] - The retail sector benefited from a strong start to August, attributed to the Back-to-School season and early cold weather, alongside conservative expectations set by management teams in the previous earnings season [1] - Boss highlighted off-price retailers, particularly TJX, increasing its price target to $150 while maintaining an overweight buy rating, noting that TJX stores had significant inventory from well-known brands at prices averaging 70% below original [1] Upcoming Earnings Reports - The week marks a significant period for third-quarter earnings, with companies like Nucor, Whirlpool, and Corning set to report their results [1] - The Conference Board is expected to release its latest consumer confidence data, which will provide further insights into consumer sentiment [1]

Market Overview - U.S. markets opened with significant gains, with the Nasdaq rising by 1.47% to reach 8,532.62 and the S&P 500 increasing by 0.91% to 23,546.16, both setting new records [2] - The Dow Jones Industrial Average jumped 310 points, or 0.66%, to 47,517.13 [2] - Small caps, represented by the Russell 2000, initially rose by 0.53% before pulling back [2] Premarket Movers - Notable gainers in premarket trading included Janus Henderson (+14% on buyout rumors), Darling Ingredients (+14%), and Keurig Dr. Pepper (+9.7% following earnings) [4] - Major losers included Organon & Co (-21% due to CEO resignation amid controversy), Carter's Inc. (-9.4% after earnings), and Newmont Corp (-5.1% linked to declining gold prices) [4] Economic Context - U.S. stock futures were on the rise, buoyed by strong earnings reports and a softer-than-expected inflation report from the previous week [5] - The S&P 500 and Nasdaq Composite reached new intraday records, surpassing 6.8K and 23.2K, respectively, while the Dow Jones also exceeded 47.2K [5] - Hopes for a U.S.-China trade deal have increased, with a framework being discussed that includes issues like fentanyl, rare earth metals, and tariffs, as President Trump and President Xi are expected to meet at the APEC [6] Earnings Reports - The week is anticipated to be busy for earnings, with reports from Keurig Dr. Pepper and others, including Welltower, Cadence Design, and Waste Management, expected later in the day [7]

Core Insights - Cadence Design Systems, Inc. (CDNS) is set to release its third-quarter 2025 results on October 27, with earnings estimated at $1.79 per share, reflecting a 9.2% increase year-over-year, and revenues projected at $1.32 billion, indicating a nearly 9% growth from the previous year [1][2][8] Financial Performance Expectations - Management anticipates revenues between $1.305 billion and $1.335 billion for Q3, compared to $1.215 billion in the same quarter last year. Non-GAAP EPS is expected to range from $1.75 to $1.81, up from $1.64 year-over-year [2] - The company has a strong earnings surprise history, beating the Zacks Consensus Estimate in the last four quarters with an average surprise of 6.9% [2] Stock Performance - CDNS stock has appreciated by 31.1% over the past year, outperforming the Computer-Software industry, which grew by 19.5%, and the S&P 500 composite, which rose by 17.5% [3] Market Drivers - The ongoing AI transformation in semiconductor and system design is a significant driver for Cadence, with robust design activity noted in data centers and automotive sectors due to advancements in AI, hyperscale computing, and 5G [4] - Increased R&D budgets from customers in AI-driven automation are expected to enhance demand for Cadence's solutions, particularly its AI portfolio [5][6] Product and Service Developments - Recent product launches, including the Cerebrus AI Studio and Millennium M2000 AI Supercomputer, are anticipated to contribute positively to quarterly performance amid rising chip complexity [12] - The Core EDA business is projected to generate revenues of $962.4 million, reflecting a year-over-year growth of 13.1% [11] Strategic Acquisitions - Cadence's acquisition of Hexagon AB's Design & Engineering division for €2.7 billion and the completion of the acquisition of Arm's Artisan foundation IP business are significant steps in enhancing its Intelligent System Design strategy [16][17] Segment Performance - The System Design and Analysis division is expected to see revenues of $187.9 million, a decline of 3.4% year-over-year, while the IP business division is projected to grow by 1.5% to $172.7 million [14][15] Collaborations and Partnerships - Cadence is collaborating with major tech companies like Qualcomm and NVIDIA on next-generation AI designs, which is expected to bolster its market position [10]

Core Viewpoint - A new wave of trade tensions between the U.S. and China has emerged, primarily driven by President Trump's hints at imposing restrictions on technology exports that utilize American software, leading to a decline in tech stocks [1][2]. Trade Policy Developments - The Trump administration is considering a proposal to limit a wide range of software-powered exports to China, including laptops and jet engines, in response to China's recent restrictions on rare earth exports [2][5]. - If enacted, the policy would extend U.S. influence beyond its borders, affecting global supply chains reliant on American software, which encompasses semiconductors, AI processors, aerospace systems, and consumer electronics [3][6]. Market Reactions - Following the news, the S&P 500 fell by 0.6% to below 6,700 points, while the Nasdaq 100 dropped 1.2% to 24,820 points, with chipmakers and electronic design automation firms experiencing significant declines [8]. - The iShares Semiconductor ETF (NYSE:SMH) decreased by 2.8% during the session, reflecting the negative sentiment in the tech sector [8]. Impacted Companies - Notable declines in stock prices were observed among several companies, including: - Synopsys Inc. (NASDAQ:SNPS) down 1.97% to $452.70 - Cadence Design Systems Inc. (NASDAQ:CDNS) down 1.54% to $329.94 - Robinhood Markets Inc. (NASDAQ:HOOD) down 7.10% to $123.49 - ARM Holdings plc (NASDAQ:ARM) down 2.97% to $164.36 [9][11].

Core Insights - Cadence Design Systems, Inc. (CDNS) is enhancing its business through strategic acquisitions in the electronic design automation (EDA) space [1] Inorganic Growth Strategy - Inorganic expansion provides valuable tools, technologies, and market access that accelerate organic growth, allowing companies to increase product offerings without starting from scratch [2] - Acquiring firms with strong R&D capabilities speeds up innovation processes and helps achieve synergies, leading to cost reductions and improved operational efficiency [2] Market Demand and Strategic Response - CDNS's M&A strategy is a response to the growing demand for AI-driven custom chips and the convergence of electronic, mechanical, and physical domains in next-generation designs [3] - The transformation in semiconductor and system design driven by AI is integral to CDNS's strategy, supported by secular growth drivers such as 5G, hyperscale computing, and autonomous vehicles [4] Recent Acquisitions - In September 2025, CDNS agreed to acquire the Design & Engineering division of Hexagon AB for €2.7 billion, which includes the MSC Software business [5] - The Hexagon acquisition will enhance Cadence's System Design & Analysis portfolio and expand its presence in the structural analysis market, building on the earlier acquisition of Beta CAE in 2024 [6] - Hexagon's D&E division generated approximately $280 million in 2024 revenues and employs over 1,100 experts in R&D, sales, and support [6] - The acquisition will allow Cadence to reach top-tier aerospace and automotive clients, including Boeing, Lockheed Martin, and Toyota, as industries shift towards electric vehicles and advanced materials [7] Additional Strategic Acquisitions - In April 2025, Cadence signed an agreement to acquire Arm Holdings' Artisan foundation IP business, and in January 2025, it agreed to acquire Secure-IC, enhancing its security solutions capabilities [8] - The acquisition of BETA CAE has broadened Cadence's multiphysics system analysis offerings, while the purchase of OpenEye Scientific Software opened a new vertical in drug discovery [9][10] - Other significant acquisitions include Future Facilities, Pointwise, and NUMECA, which have increased the system analysis portfolio with more CFD solutions [12] Competitive Landscape - Cadence's acquisition strategy is aimed at solidifying its position in the EDA space amid increasing competition from Siemens EDA, Synopsys, Keysight Technologies, and CEVA Inc [14] - The acquisition of ANSYS by Synopsys is expected to intensify competition in the EDA space [15]

Core Insights - The 3D IC market is projected to grow from USD 16.85 billion in 2025 to USD 50.19 billion by 2033, with a CAGR of 14.64% from 2026 to 2033 [1][7] - The market is driven by the increasing demand for high-performance and energy-efficient chips across various applications, including AI, 5G, HPC, and smartphones [1] Market Size and Growth - The U.S. 3D IC market is estimated at USD 4.75 billion in 2025 and is expected to grow at a CAGR of 14.33%, reaching USD 13.86 billion by 2033 [2] Key Segmentation By 3D Technology - Wafer-level packaging is expected to hold the largest market share at 68.23% in 2025, driven by trends in miniaturization and cost savings [8] - System integration is projected to be the fastest-growing technology with a CAGR of 14.79% due to rising demand for heterogeneous integration [8] By Product - Sensors are anticipated to lead the market with a 33.14% share in 2025, crucial for real-time data processing in various applications [9] - The memories segment is expected to grow the fastest, with a CAGR of 15.33%, driven by the needs of cloud computing and AI [9] By Application - The ICT/Telecommunication segment is expected to dominate with a 34.65% share in 2025, fueled by high-speed networking and 5G adoption [10] - Consumer electronics are projected to witness the fastest growth at a CAGR of 15.92%, driven by advanced smartphones and gaming systems [10] By Component - The Through Silicon Vias (TSVs) segment is projected to hold the largest share at 46.32% in 2025, known for better interconnections and lower power consumption [11] - The Through Glass Vias (TGVs) segment is expected to grow at the fastest CAGR of 15.16% due to superior electrical properties [12] Regional Insights - North America is expected to dominate the 3D IC market in 2025, accounting for 39.12% of revenue, driven by R&D in AI and cloud computing [13] - The Asia Pacific region is projected to experience the fastest growth from 2026 to 2033, with a CAGR of 15.45%, supported by a strong semiconductor manufacturing base [13] Leading Market Players - Key players in the 3D IC market include IBM, ASE Technology Holding Co. Ltd., STMicroelectronics, SAMSUNG, Taiwan Semiconductor Co. Ltd., TOSHIBA CORPORATION, Micron Technology Inc., MonolithIC 3D Inc., Intel Corporation, TEZZARON, Amkor Technology, Jiangsu Changdian Technology Co. Ltd., and United Microelectronics Corporation [5]