Key Takeaways CDNS has surged 24.6% in a year, beating sector and index gainsAI-driven demand, strong customer R&D spend, and key partnerships are driving revenue gains.Macro weakness, fierce EDA competition and premium valuation weigh on near-term upside potential.Cadence Design Systems (CDNS) stock has risen 24.6% over the past year, higher than the gains registered by the Computer-Software industry (up 23.1%), the broader Computer and Technology sector (up 24.2%) and the S&P 500 composite (up 17.5%).  Im ...

wo[Table_Title] Research Report 30 Jul 2025 中国电子 China (Overseas) Technology 全球科技业绩快报：Cadence 2Q25 Global Tech Earnings Snapshot: Cadence 2Q25 姚书桥 Barney Yao 邓雅文 Linda Deng barney.sq.yao@htisec.com linda.yw.deng@htisec.com [Table_summary] 事件： 美东时间 2025 年 7 月 28 日，Cadence 第二季度以"beat-and-raise"交出了亮眼成绩：总收入 12.75 亿美元（同比增 长 20%），Non-GAAP 经营利润率达 42.8%（同比增长 2.7 个百分点），Non-GAAP 美股收益 1.65 美元（同比增长 29%）。财报发布后其每股盘后一度上涨超 6%。 点评： Cadence第二季度以"beat-and-raise"交出了亮眼成绩：公司当季营收达到 12.75 亿美元（同比增长 20%，超出市场 预期的 12.50 亿美元），Non-GAAP ...

Core Insights - Cadence Design Systems (CDNS) reported Q2 2025 non-GAAP EPS of $1.65, exceeding estimates by 5.1% and showing a year-over-year increase of 28.9% [1][9] - Revenues reached $1.275 billion, surpassing estimates by 1.3% and increasing 20.3% year-over-year, driven by strong demand for AI-driven solutions [2][9] - The company settled with the Department of Justice for $141 million related to investigations into China sales from 2015 to 2021 [3] Financial Performance - CDNS ended the quarter with a backlog of $6.4 billion and current-remaining performance obligations of $3.1 billion [4] - Management raised the 2025 revenue outlook to $5.21-$5.27 billion, up from the previous range of $5.15-$5.23 billion, indicating a 12% growth from the prior year [5] - Non-GAAP EPS for 2025 is now expected to be between $6.85 and $6.95, reflecting a 13.4% increase from the previous year [5] Stock Performance - CDNS stock rose 6.6% in after-market trading and 8.5% in pre-market shares, outperforming the Computer - Software industry which grew 24.1% over the past year [7] Segment Performance - Product & Maintenance revenues, accounting for 91.8% of total revenues, rose 21.7% year-over-year to $1.17 billion, while Services revenues increased 5% to $105 million [10] - Core EDA, IP, and Systems Design & Analysis contributed 71%, 13%, and 16% to total revenues, respectively, with the System Design & Analysis benefiting from 3DIC technologies and AI-driven solutions [11][12] Margin and Cost Analysis - Total non-GAAP costs and expenses increased 14.8% year-over-year to $729 million, while non-GAAP gross margin contracted by 130 basis points to 87.2% [14] - Non-GAAP operating margin expanded by 270 basis points year-over-year to 42.8% [14] Balance Sheet and Cash Flow - As of June 30, 2025, CDNS had cash and cash equivalents of $2.823 billion, with long-term debt at $2.478 billion [15] - Operating cash flow for the quarter was $378 million, with free cash flow at $334 million; the company repurchased shares worth $175 million [16] Future Outlook - For Q3 2025, revenues are estimated to be between $1.305 billion and $1.335 billion, with non-GAAP EPS anticipated between $1.75 and $1.81 [18] - Non-GAAP operating margin for 2025 is forecasted to be between 43.5% and 44.5% [17]