Cadence Design Systems 8-K
PositiveEarningsGuidance raised
AI-related demand and semiconductor IP strength drive broad growth; FY2026 revenue, margin, EPS and cash flow outlooks rise.
Filed 2026-07-27 16:03 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q2 2026 results with raised FY2026 guidance and new Q3 guidance. Revenue grew 24% Y/Y, with strength across businesses and demand for AI-related products; backlog reached a record $8.1B. Cadence raised its FY2026 revenue, margin, EPS and operating cash flow outlook.
Key Figures
| Metric | Q2 2026 | Q2 2025 | Y/Y |
|---|---|---|---|
| Revenue | $1.58B | $1.28B | 24% |
| Operating income | $450M | $242M | 86% |
| GAAP operating margin | 28.4% | 19.0% | +940 bp |
| Non-GAAP operating margin | 45.5% | 42.8% | +270 bp |
| Net income, GAAP | $367M | $160M | 129% |
| Diluted EPS, GAAP | $1.33 | $0.59 | 125% |
| Diluted EPS, non-GAAP | $2.11 | $1.65 | 28% |
| Operating cash flow | $635M | $378M | 68% |
| Free cash flow | $582M | $334M | 74% |
- Growth reflected broad-based demand: Core EDA revenue rose 18% Y/Y, semiconductor IP revenue more than 40%, and System Design and Analysis revenue 37%.
- Backlog was a record $8.1B; $4.2B of remaining performance obligations was expected to be recognized over the next 12 months.
- Q2 repurchases were $200M, covering 0.580M shares vs 0.607M a year earlier. Quarter-end cash was $1.44B and debt principal was $2.50B.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Revenue; Y/Y growth | FY2026 | $6.26B-$6.34B; 18%-20% | $6.125B-$6.225B; 16%-18% | Raised |
| GAAP operating margin | FY2026 | 27.75%-28.75% | 27.5%-28.5% | Raised |
| Non-GAAP operating margin | FY2026 | 43.75%-44.75% | 43.5%-44.5% | Raised |
| Diluted EPS, GAAP | FY2026 | $4.76-$4.86 | $4.39-$4.49 | Raised |
| Diluted EPS, non-GAAP | FY2026 | $8.05-$8.15 | $7.85-$7.95 | Raised |
| Operating cash flow | FY2026 | ≈$2.0B | $1.875B-$1.975B | Raised |
| Revenue; Q/Q growth; Y/Y growth | Q3 2026 | $1.595B-$1.625B; 1%-3%; 19%-21% | — | — |
| GAAP operating margin | Q3 2026 | 27.5%-28.5% | — | — |
| Non-GAAP operating margin | Q3 2026 | 43.5%-44.5% | — | — |
| Diluted EPS, GAAP | Q3 2026 | $1.11-$1.17 | — | — |
| Diluted EPS, non-GAAP | Q3 2026 | $2.01-$2.07 | — | — |
Investor Takeaways
- Q3 revenue, margin and EPS versus guidance will indicate whether the business momentum continues.
- Watch conversion of the $4.2B in remaining performance obligations expected to be recognized over the next 12 months.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3