Cadence(US:CDNS)2025-02-18 21:04Financial Performance - Revenue growth of 13.5% year-over-year, with total revenue reaching $4.641 billion for FY 2024[6] - GAAP EPS for FY 2024 was $3.85, while Non-GAAP EPS was $5.97[6] - FY 2025 revenue guidance is projected between $5.14 billion and $5.22 billion, reflecting a year-over-year growth of 11% to 12%[7] - Operating cash flow for FY 2024 was $1.261 billion, with expectations of $1.6 billion to $1.7 billion for FY 2025[7] - Recurring revenue accounted for 82.6% of total revenue in FY 2024, projected to be around 80% in FY 2025[13] - The GAAP operating income for 2024 is projected to be $1,351 million, an increase from $1,251 million in 2023, representing a growth of 8%[48] - Non-GAAP operating income for 2024 is expected to reach $1,974 million, up from $1,717 million in 2023, reflecting a growth of 15%[48] - The diluted net income per share on a non-GAAP basis for FY 2025 is projected to be between $6.65 - $6.75[67] Margins and Expenses - Non-GAAP operating margin of 42.5% and GAAP operating margin of 29.1% for FY 2024[6] - The company plans to maintain a GAAP operating margin of 30.25% to 31.25% for FY 2025[13] - Non-GAAP gross margin decreased to 85.5% in Q4 2024 from 91.7% in Q4 2023[23] - Total GAAP costs and expenses rose to $899 million in Q4 2024, compared to $732 million in Q4 2023[24] - Non-GAAP total costs and expenses for Q4 2024 were $733 million, compared to $671 million in Q3 2024, indicating a sequential increase of 9.2%[43] - The GAAP gross margin as a percentage of total revenue for Q4 2024 was 83.8%, down from 86.6% in Q3 2024[51] - Non-GAAP gross margin as a percentage of total revenue for Q4 2024 was 85.5%, compared to 88.6% in Q3 2024, indicating a decline of 3.5%[51] - Stock-based compensation expense for Q4 2024 was $107 million, slightly down from $109 million in Q3 2024[43] Cash Flow and Capital Expenditures - Approximately 50% of free cash flow is expected to be used for share repurchases in FY 2025[7] - Free cash flow reached $404 million in Q4 2024, up from $238 million in Q4 2023[29] - The total capital expenditures for FY 2025 are estimated to be around $150 million[13] Revenue Composition - Recurring revenue accounted for 83% of total revenue in Q4 2024, while up-front revenue was 17%[17] - The Americas contributed 49% to total revenue in Q4 2024, showing a significant increase from 44% in Q4 2023[18] - Core EDA revenue represented 68% of total revenue in Q4 2024, down from 75% in Q4 2023[19] Debt and Headcount - Total debt (principal value) was $2.5 billion in Q4 2024, reflecting an increase from $650 million in Q4 2023[31] - The headcount increased to 12,705 in Q4 2024, up from 11,226 in Q4 2023[33] Strategic Initiatives - Cadence anticipates continued investment in AI and operational efficiency to drive future growth despite competitive pressures[36] - The company plans to focus on strategic acquisitions and technology integration to enhance its market position[36] - Cadence's management emphasizes the importance of maintaining strong cash flow and liquidity to support ongoing business operations and strategic initiatives[36] Future Projections - GAAP operating margin for Q4 2023 was 31.5%, with a projected range of 27% - 28% for Q1 2025[56] - Non-GAAP operating margin for Q4 2024 is expected to be 46.0%, compared to 42.9% in Q4 2023[56] - Diluted net income per share on a GAAP basis for Q4 2023 was $1.19, with an estimated range of $0.93 - $0.99 for Q1 2025[62] - Non-GAAP diluted net income per share for Q4 2024 is projected to be $1.88, compared to $1.38 in Q4 2023[62] - GAAP total other income and expense for FY 2023 was $31 million, expected to increase to $45 million in FY 2024[72] - The company anticipates a non-GAAP total other income and expense of $(16) million for FY 2024[72]