0000813672false00008136722025-02-182025-02-18

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 8-K
 
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 18, 2025
CADENCE DESIGN SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
 
Delaware 000-15867 00-0000000
(State or Other Jurisdiction
of Incorporation)		 (Commission File Number) (I.R.S. Employer
Identification No.)
2655 Seely Avenue, San Jose, California 95134
(Address of Principal Executive Offices) (Zip Code)
(408) 943-1234
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareCDNSNasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐







Item 2.02. Results of Operations and Financial Condition.

On February 18, 2025 Cadence Design Systems, Inc. (“Cadence”) issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2024.
A copy of the press release is attached hereto as Exhibit 99.01 and a copy of the commentary by the Chief Financial Officer of Cadence regarding Cadence's financial results for the quarter and fiscal year ended December 31, 2024 is attached hereto as Exhibit 99.02, and the press release and the commentary are incorporated herein by reference.
The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits

Exhibit No.  Description
104Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: February 18, 2025
CADENCE DESIGN SYSTEMS, INC.
By: 
/s/ John M. Wall
 
John M. Wall
 
Senior Vice President and Chief Financial Officer

Exhibit 99.01
Cadence Reports Fourth Quarter and Fiscal Year 2024 Financial Results
Record Backlog of $6.8 Billion
Exceeded Q4 and 2024 Outlook for Revenue and EPS

SAN JOSE, Calif. — February 18, 2025 — Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the fourth quarter and fiscal year 2024.
Fourth Quarter 2024 Financial Results
•Revenue of $1.356 billion, compared to revenue of $1.069 billion in Q4 2023
•GAAP operating margin of 33.7%, compared to 31.5% in Q4 2023
•Non-GAAP operating margin of 46.0%, compared to 42.9% in Q4 2023
•GAAP diluted net income per share of $1.24, compared to $1.19 in Q4 2023
•Non-GAAP diluted net income per share of $1.88, compared to $1.38 in Q4 2023
Fiscal Year 2024 Financial Results
•Revenue of $4.641 billion, compared to revenue of $4.090 billion in 2023
•GAAP operating margin of 29.1%, compared to 30.6% in 2023
•Non-GAAP operating margin of 42.5%, compared to 42.0% in 2023
•GAAP diluted net income per share of $3.85, compared to $3.82 in 2023
•Non-GAAP diluted net income per share of $5.97, compared to $5.15 in 2023
•Year-end backlog was $6.8 billion and current remaining performance obligations ("cRPO"), contract revenue expected to be recognized as revenue in the next 12 months, was $3.4 billion

“Cadence delivered exceptional results in the fourth quarter, capping off a strong 2024 with 13.5% revenue growth and 42.5% non-GAAP operating margin for the year,” said Anirudh Devgan, president and chief executive officer. “Our momentum continues to build as we exited 2024 with record bookings and record backlog. Cadence is very well positioned to benefit from the various phases of AI, including the current AI infrastructure buildout, applying AI to our own products, and expanding into new markets such as life sciences.”

“We had a strong finish to 2024, driven by broad based strength across all our businesses,” said John Wall, senior vice president and chief financial officer. “I’m pleased with our record year-end backlog of $6.8 billion and cRPO of $3.4 billion, and I look forward to building on that strength in 2025.”

CFO Commentary
Commentary on the fourth quarter and fiscal year 2024 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.
Business Outlook
For fiscal year 2025, the company expects:
•Revenue in the range of $5.14 billion to $5.22 billion
•GAAP operating margin in the range of 30.25% to 31.25%
•Non-GAAP operating margin in the range of 43.25% to 44.25%
•GAAP diluted net income per share in the range of $4.19 to $4.29
•Non-GAAP diluted net income per share in the range of $6.65 to $6.75
The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.


Reconciliations of the financial results and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release.

Business Highlights
•The Cadence.ai portfolio continued to gain momentum with market shaping customers, as Cadence's AI-driven optimization products including Cadence Cerebrus, Verisium SimAI and Allegro X AI are proliferating at scale. Additionally, Cadence's LLM based Design Agents powered by JedAI data platform, are showing promising results in early engagements.
•System Design & Analysis achieved strong results with over 40% growth in 2024 driven by Cadence's multi-physics analysis platform and AI-driven optimization, which delivered superior results to a rapidly expanding customer base across multiple verticals, especially Aerospace & Defense and Automotive.
•Cadence's IP business grew 28% year over year in Q4 as Cadence's AI HPC protocols including Cadence's flagship HBM, DDR, PCIe and UCIe solutions continued propelling Cadence's business with significant expansions and competitive displacements at top tier customers.
•Core EDA, which comprises of Cadence's digital, custom/analog and verification portfolios grew 15% year over year in Q4.
•The hardware business, consisting of the Palladium Z3 and Protium X3, delivered another record year, with Q4 being the best quarter ever.

Audio Webcast Scheduled
Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the fourth quarter and fiscal year 2024 financial results audio webcast today, February 18, 2025, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting February 18, 2025 at 5 p.m. (Pacific) and ending March 17, 2025 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
About Cadence
Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence customers are the world’s most innovative companies, delivering extraordinary electronic products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For 10 years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.

© 2025 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.


This press release contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business prospects, technology and product developments, industry trends, market growth and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions and armed conflicts around the world; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xii) Cadence’s ability to successfully meet any governance, environmental and social targets and strategies. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.
For a detailed discussion of these and other cautionary statements related to Cadence’s business, please refer to Cadence’s filings with the U.S. Securities and Exchange Commission, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.
All forward-looking statements in this press release are based on management's expectations as of the date of this press release and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.



GAAP to Non-GAAP Reconciliation

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance.

To supplement Cadence’s financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence’s performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, investment gains or losses, income or expenses related to Cadence’s non-qualified deferred compensation plan, restructuring and other significant items not directly related to Cadence’s core business operations, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence’s core business operations and therefore provides supplemental information to Cadence management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence management, including forecasting and budgeting.
The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:
 
Operating Margin ReconciliationThree Months Ended
December 31, 2024December 31, 2023
 (unaudited)
GAAP operating margin as a percent of total revenue
33.7%
31.5%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense
7.9%
8.1%
Amortization of acquired intangibles
2.0%
1.6%
Acquisition and integration-related costs
1.7%
1.2%
Restructuring
(0.1)%
(0.1)%
Non-qualified deferred compensation expenses
0.0%
0.6%
Special charges*
0.8%
0.0%
Non-GAAP operating margin as a percent of total revenue
46.0%
42.9%
*
Includes costs related to adjustments to estimated legal liabilities and executive severance.



 


Operating Margin Reconciliation
Years Ended
December 31, 2024December 31, 2023
 (unaudited)
GAAP operating margin as a percent of total revenue
29.1%
30.6%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense
8.4%
8.0%
Amortization of acquired intangibles
2.0%
1.5%
Acquisition and integration-related costs
2.1%
1.4%
Restructuring
0.5%
0.3%
Non-qualified deferred compensation expenses
0.2%
0.2%
Special charges*
0.2%
0.0%
Non-GAAP operating margin as a percent of total revenue
42.5%
42.0%
*
Includes costs related to adjustments to estimated legal liabilities and executive severance.

Net Income ReconciliationThree Months Ended
December 31, 2024December 31, 2023
(in thousands)(unaudited)
Net income on a GAAP basis$340,210 $323,899 
Stock-based compensation expense106,508 86,683 
Amortization of acquired intangibles26,776 16,920 
Acquisition and integration-related costs23,477 12,583 
Restructuring (1,020)(569)
Non-qualified deferred compensation expenses
293 6,295 
Special charges*
10,224 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**
14,654 (27,966)
Income tax effect of non-GAAP adjustments(5,456)(41,638)
Net income on a non-GAAP basis$515,666 $376,207 

*
Includes costs related to adjustments to estimated legal liabilities and executive severance.
**
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.



Net Income Reconciliation
Years Ended
December 31, 2024December 31, 2023
(in thousands)(unaudited)
Net income on a GAAP basis$1,055,484 $1,041,144 
Stock-based compensation expense391,219 325,611 
Amortization of acquired intangibles90,449 61,970 
Acquisition and integration-related costs95,562 56,542 
Restructuring 23,765 11,013 
Non-qualified deferred compensation expenses
11,145 10,851 
Special charges*
11,457 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**
(60,798)(45,502)
Income tax effect of non-GAAP adjustments17,162 (57,139)
Net income on a non-GAAP basis$1,635,445 $1,404,490 

*Includes costs related to adjustments to estimated legal liabilities and executive severance.
**
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.


Diluted Net Income Per Share ReconciliationThree Months Ended
December 31, 2024December 31, 2023
(in thousands, except per share data)(unaudited)
Diluted net income per share on a GAAP basis$1.24 $1.19 
Stock-based compensation expense0.39 0.32 
Amortization of acquired intangibles0.10 0.06 
Acquisition and integration-related costs0.08 0.04 
Restructuring — — 
Non-qualified deferred compensation expenses
— 0.02 
Special charges*
0.04 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**
0.05 (0.10)
Income tax effect of non-GAAP adjustments(0.02)(0.15)
Diluted net income per share on a non-GAAP basis$1.88 $1.38 
Shares used in calculation of diluted net income per share274,292 272,419 
*Includes costs related to adjustments to estimated legal liabilities and executive severance.
**
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.



Diluted Net Income Per Share Reconciliation
Years Ended
December 31, 2024December 31, 2023
(in thousands, except per share data)(unaudited)
Diluted net income per share on a GAAP basis$3.85 $3.82 
Stock-based compensation expense1.43 1.19 
Amortization of acquired intangibles0.33 0.23 
Acquisition and integration-related costs0.35 0.21 
Restructuring 0.09 0.04 
Non-qualified deferred compensation expenses
0.04 0.04 
Special charges*
0.04 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**
(0.22)(0.17)
Income tax effect of non-GAAP adjustments0.06 (0.21)
Diluted net income per share on a non-GAAP basis$5.97 $5.15 
Shares used in calculation of diluted net income per share273,833 272,748 
*Includes costs related to adjustments to estimated legal liabilities and executive severance.
**
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.
For more information, please contact:
Cadence Investor Relations
408-944-7100
investor_relations@cadence.com
Cadence Newsroom
408-944-7039
newsroom@cadence.com



Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
December 31, 2024 and December 31, 2023
(In thousands)
(Unaudited)
 
December 31, 2024December 31, 2023
Current assets:
Cash and cash equivalents$2,644,030 $1,008,152 
Receivables, net 680,460 489,224 
Inventories257,711 181,661 
Prepaid expenses and other433,878 297,180 
Total current assets4,016,079 1,976,217 
Property, plant and equipment, net 458,200 403,213 
Goodwill2,378,671 1,535,845 
Acquired intangibles, net 594,734 336,843 
Deferred taxes982,057 880,001 
Other assets544,741 537,372 
Total assets$8,974,482 $5,669,491 
Current liabilities:
Current portion of long-term debt
$— $349,285 
Accounts payable and accrued liabilities632,692 576,558 
Current portion of deferred revenue737,413 665,024 
Total current liabilities1,370,105 1,590,867 
Long-term liabilities:
Long-term portion of deferred revenue115,168 98,931 
Long-term debt2,476,183 299,771 
Other long-term liabilities339,448 275,651 
Total long-term liabilities2,930,799 674,353 
Stockholders’ equity4,673,578 3,404,271 
Total liabilities and stockholders’ equity$8,974,482 $5,669,491 




Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three Months and Years Ended December 31, 2024 and December 31, 2023
(In thousands, except per share amounts)
(Unaudited)
 
 Three Months Ended
Years Ended
 December 31, 2024December 31, 2023December 31, 2024December 31, 2023
Revenue:
Product and maintenance$1,239,287 $981,987 $4,213,509 $3,834,359 
Services116,694 86,636 427,755 255,627 
Total revenue1,355,981 1,068,623 4,641,264 4,089,986 
Costs and expenses:
Cost of product and maintenance157,249 71,491 436,600 331,760 
Cost of services62,742 32,639 210,902 103,281 
Marketing and sales200,406 180,368 757,483 690,319 
Research and development392,026 367,443 1,549,093 1,441,796 
General and administrative78,550 75,742 282,283 242,430 
Amortization of acquired intangibles9,153 4,981 30,375 18,162 
Restructuring (1,020)(569)23,765 11,013 
Total costs and expenses899,106 732,095 3,290,501 2,838,761 
Income from operations456,875 336,528 1,350,763 1,251,225 
Interest expense(29,907)(8,989)(75,999)(36,185)
Other income, net
9,684 34,523 121,055 66,886 
Income before provision for income taxes
436,652 362,062 1,395,819 1,281,926 
Provision for income taxes
96,442 38,163 340,335 240,782 
Net income$340,210 $323,899 $1,055,484 $1,041,144 
Net income per share - basic$1.25 $1.20 $3.89 $3.86 
Net income per share - diluted$1.24 $1.19 $3.85 $3.82 
Weighted average common shares outstanding - basic272,069 269,088 271,212 269,381 
Weighted average common shares outstanding - diluted274,292 272,419 273,833 272,748 



Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Years Ended December 31, 2024 and December 31, 2023
(In thousands)
(Unaudited) 
Years Ended
 December 31, 2024December 31, 2023
Cash and cash equivalents at beginning of year
$1,008,152 $882,325 
Cash flows from operating activities:
Net income1,055,484 1,041,144 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization196,935 145,292 
Amortization of debt discount and fees3,473 1,262 
Stock-based compensation391,219 325,611 
Gain on investments, net
(49,593)(34,602)
Deferred income taxes(128,737)(36,512)
Provisions for losses on receivables2,078 3,325 
ROU asset amortization and change in operating lease liabilities(1,920)451 
Other non-cash items587 1,983 
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables(180,287)(11,748)
Inventories(82,771)(65,895)
Prepaid expenses and other(81,529)39,015 
Other assets11,866 (45,784)
Accounts payable and accrued liabilities33,676 5,415 
Deferred revenue66,478 (21,583)
Other long-term liabilities23,592 1,802 
Net cash provided by operating activities1,260,551 1,349,176 
Cash flows from investing activities:
Purchases of investments(4,982)(176,170)
Proceeds from the sale and maturity of investments47,980 64,775 
Purchases of property, plant and equipment(142,542)(102,337)
Purchases of intangible assets— (166)
Cash paid in business combinations, net of cash acquired (737,574)(198,351)
Net cash used for investing activities(837,118)(412,249)
Cash flows from financing activities:
Proceeds from revolving credit facility
— 50,000 
Payments on revolving credit facility
— (150,000)
Proceeds from issuance of debt
3,196,595 — 
Payments of debt
(1,350,000)— 
Payments of debt issuance costs
(23,828)— 
Proceeds from issuance of common stock204,237 132,957 
Stock received for payment of employee taxes on vesting of restricted stock(237,737)(136,396)
Payments for repurchases of common stock(550,026)(700,134)
Net cash provided by (used for) financing activities
1,239,241 (803,573)
Effect of exchange rate changes on cash and cash equivalents(26,796)(7,527)
Increase in cash and cash equivalents
1,635,878 125,827 
Cash and cash equivalents at end of year
$2,644,030 $1,008,152 






Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
 
 20232024
GEOGRAPHYQ1Q2Q3Q4YearQ1Q2Q3Q4Year
Americas44 %41 %43 %44 %43 %46 %49 %50 %49 %49 %
China17 %18 %17 %15 %17 %12 %12 %13 %13 %12 %
Other Asia18 %18 %19 %19 %19 %20 %19 %17 %17 %18 %
Europe, Middle East and Africa15 %17 %15 %16 %16 %17 %14 %14 %15 %15 %
Japan6 %6 %6 %6 %5 %5 %6 %6 %6 %6 %
Total100 %100 %100 %100 %100 %100 %100 %100 %100 %100 %

Revenue Mix by Product Category (% of Total Revenue)
 
 20232024
PRODUCT CATEGORYQ1Q2Q3Q4YearQ1Q2Q3Q4Year
Core EDA
77 %76 %76 %75 %76 %76 %73 %70 %68 %71 %
IP11 %11 %11 %13 %12 %12 %13 %14 %13 %13 %
System Design and Analysis12 %13 %13 %12 %12 %12 %14 %16 %19 %16 %
Total100 %100 %100 %100 %100 %100 %100 %100 %100 %100 %

















Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Operating Margin
As of February 18, 2025
(Unaudited)
 
Three Months Ending
March 31, 2025
Year Ending
December 31, 2025
 ForecastForecast
GAAP operating margin as a percent of total revenue
27% - 28%
30.25% - 31.25%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense
9%
9%
Amortization of acquired intangibles2%
2%
Acquisition and integration-related costs
2%
2%
Non-GAAP operating margin as a percent of total revenue†
40% - 41%
43.25% - 44.25%
†The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.








































Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
As of February 18, 2025
(Unaudited)
 
Three Months Ending
March 31, 2025
Year Ending
December 31, 2025
 ForecastForecast
Diluted net income per share on a GAAP basis
$0.93 to $0.99
$4.19 to $4.29
Stock-based compensation expense0.401.69
Amortization of acquired intangibles0.090.36
Acquisition and integration-related costs0.080.31
Income tax effect of non-GAAP adjustments(0.04)0.10
Diluted net income per share on a non-GAAP basis†
$1.46 to $1.52
$6.65 to $6.75
†
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Net Income
As of February 18, 2025
(Unaudited)
 
Three Months Ending
March 31, 2025
Year Ending
December 31, 2025
($ in millions)ForecastForecast
Net income on a GAAP basis
$256 to $273
$1,151 to $1,179
Stock-based compensation expense109466
Amortization of acquired intangibles2598
Acquisition and integration-related costs2385
Income tax effect of non-GAAP adjustments(11)28
Net income on a non-GAAP basis†
$402 to $419
$1,828 to $1,856
†
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
Exhibit 99.02
image0a22a.jpg

CADENCE REPORTS FOURTH QUARTER
AND FISCAL YEAR 2024
CADENCE DESIGN SYSTEMS, INC.
CFO COMMENTARY
Key Takeaways for 2024
• Record year-end backlog of $6.8B and current RPO of $3.4B
• Revenue growth of 13.5%
• Non-GAAP operating margin of 42.5%

Q1 2025 Outlook
• Revenue: $1.23 billion - $1.25 billion
• GAAP operating margin: 27% - 28%
• Non-GAAP operating margin: 40% - 41%
• GAAP EPS: $0.93 - $0.99
• Non-GAAP EPS: $1.46 - $1.52
• Expect to use approximately $175 million to repurchase Cadence shares in Q1
Q4 2024 KEY METRICS
• Revenue: $1.356 billion
• GAAP operating margin: 33.7%
• Non-GAAP operating margin: 46.0%
• GAAP EPS: $1.24
• Non-GAAP EPS: $1.88
• Operating cash flow: $441 million

FY 2025 Outlook
• Revenue: $5.14 billion - $5.22 billion
• GAAP operating margin: 30.25% - 31.25%
• Non-GAAP operating margin: 43.25% - 44.25%
• GAAP EPS: $4.19 - $4.29
• Non-GAAP EPS: $6.65 - $6.75
• Operating cash flow: $1.6 billion - $1.7 billion
• Expect to use approximately 50% of free cash flow to repurchase Cadence shares for the year
Financial Results Webcast
FY 2024 KEY METRICS
Our Q4 2024 financial results webcast will begin February 18, 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 February 18, 2025 until 5:00 p.m. (Pacific) on March 17, 2025.
• Revenue: $4.641 billion
• GAAP operating margin: 29.1%
• Non-GAAP operating margin: 42.5%
• GAAP EPS: $3.85
• Non-GAAP EPS: $5.97
• Operating cash flow: $1.261 billion
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
1

Cadence Design Systems, Inc.
Financial Metrics
(In Millions, except per share data)20192020*20212022
2023*
2024
2025E
Revenue$2,336 $2,683 $2,988 $3,562 $4,090 $4,641 
$5,140- $5,220
Revenue growth*9%15%11%19%
15%
13%
11% - 12%
3-year CAGR9%11%12%15%15%
16%
~13%
3-year CAGR without 53rd week impact11%
16%
GAAP operating expenses$1,845 $2,037 $2,209 $2,488 $2,839 $3,291 
~$3,563
GAAP operating expense growth6%10%8%13%
14%
16%
~8%
Non-GAAP operating expenses$1,587 $1,739 $1,877 $2,125 $2,373 $2,667 
~$2,914
Non-GAAP operating expense growth6%10%8%13%
12%
12%
~9%
GAAP operating margin**
21.1%
24.1%
26.1%
30.1%
30.6%
29.1%
30.75 %
Non-GAAP operating margin**
32.1%
35.2%
37.2%
40.3%
42.0%
42.5%
43.75 %
GAAP earnings per share$3.53 $2.11 $2.50 $3.09 $3.82 $3.85 
$4.19 - $4.29
Non-GAAP earning per share$2.20 $2.80 $3.29 $4.27 $5.15 $5.97 
$6.65 - $6.75
Non-GAAP EPS growth**18%27%18%30%
21%
16%
12 %
3-year Non-GAAP EPS CAGR**22%26%21%25%
23%
22%
16 %
Weighted average shares diluted outstanding280.5279.6278.9275.0
272.7
273.8
274 - 276
Cash flow from operations7309051,1011,242
1,349
1261
$1,600 - $1,700
Capital expenditures759565123
102
143
~$150
* Fiscal 2020 was a 53-week year, compared to all other years which were 52 week years. 2020 (which impacts the 3 year CAGR in 2023) included approximately $45 million revenue impact for the extra week.
** At midpoint of outlook.
Profitability Trends
(In Millions)2019202020212022
2023
2024
2025E*
Revenue$2,336 $2,683 $2,988 $3,562 $4,090 $4,641 $5,180 
Revenue Growth 9%15%11%19%
15%
13%
12%
3-Year Revenue Growth CAGR 9%11%12%15%15%
16%
13%
GAAP operating margin
21.1%
24.1%
26.1%
30.1%
30.6%
29.1%
30.75%
Non-GAAP operating margin
32.1%
35.2%
37.2%
40.3%
42.0%
42.5%
43.75%
Stock-based compensation
(7.8)%
(7.4)%
(7.0)%
(7.6)%
(8.0)%
(8.4)%
(9.0)%
Non-GAAP operating margin adjusted for stock-based compensation
24.3%
27.8%
30.2%
32.7%
34.0%
34.1%
34.75%
GAAP operating income$492 $646 $779 $1,074 $1,251 $1,351 $1,617 
Non-GAAP operating income $749 $944 $1,111 $1,436 $1,717 $1,974 $2,266 
Non-GAAP operating income adjusted for stock-based compensation$567 $747 $901 $1,166 $1,391 $1,583 $1,800 
* At midpoint of outlook.
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
2
Cadence Design Systems, Inc.
First Quarter 2025 Financial Outlook
Q1 2024
Q4 2024
Q1 2025E
Total Revenue ($ Millions)$1,009 $1,356 
$1,230 - $1,250
   Q/Q Growth
12%
(8)% - (9)%
   Y/Y Growth
27%
22% - 24%
GAAP Operating Margin
24.8%
33.7%
30.25% - 31.25%
Non-GAAP Operating Margin
37.8%
46.0%
43.25% - 44.25%
GAAP EPS$0.91 $1.24 
$0.93 - $0.99
Non-GAAP EPS$1.17 $1.88 
$1.46 - $1.52

Fiscal Year 2025 Financial Outlook
FY 2024
FY 2025E
Recurring Revenue
82.6%
~80%
Total Revenue ($ Millions)$4,641 
$5,140 - $5,220
   Y/Y Growth
13%
11% - 12%
Revenue from Beginning Backlog
~70%
~70%
GAAP Operating Margin
29.1%
30.25% - 31.25%
Non-GAAP Operating Margin
42.5%
43.25% - 44.25%
GAAP Other Income & Expense ($ Millions)$45 
$(53) - $(67)
Non-GAAP Other Income & Expense ($ Millions)$(16)
$(53) - $(67)
GAAP Tax Rate
24.4%
~25%
Non-GAAP Tax Rate
16.5%
16.5%
Weighted Average Diluted Shares Outstanding (Millions)
273.8
274 - 276
GAAP EPS$3.85 
$4.19 - $4.29
   Y/Y Growth
1%
9% - 11%
Non-GAAP EPS$5.97 
$6.65 - $6.75
   Y/Y Growth
16%
11% - 13%
Cash Flow from Operations ($ Millions)$1,261 
$1,600 - $1,700
DSO
48
~50
Capital Expenditures ($ Millions)$143 
~$150


February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
3
Cadence Design Systems, Inc.
Fourth Quarter and Fiscal Year Financial Results
Backlog
(In Billions)202020212022
2023
2024
Backlog$3.9 $4.4 $5.8 $6.0 $6.8 
Revenue
(In Millions)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Product and Maintenance$982 $913 $961 $1,100 $1,239 
Services87 96 100 115 117 
   Total Revenue$1,069 $1,009 $1,061 $1,215 $1,356 
(In Millions)
2020*
2021
2022
2023
2024
Product and Maintenance$2,537 $2,813 $3,340 $3,834 $4,213 
Services146 175 222 256 428 
   Total Revenue$2,683 $2,988 $3,562 $4,090 $4,641 
* Fiscal 2020 was a 53-week year.
Recurring and Up-Front Revenue
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Revenue recognized over time85 %87 %85 %80 %72 %
Revenue from arrangements with non-cancelable commitments2 %3 %3 %2 %2 %
Recurring Revenue87 %90 %88 %82 %74 %
Up-Front Revenue
13 %10 %12 %18 %26 %
Total100 %100 %100 %100 %100 %
2020
2021
2022
2023
2024
Revenue recognized over time85 %85 %83 %81 %80 %
Revenue from arrangements with non-cancelable commitments3 %3 %2 %3 %3 %
Recurring Revenue88 %88 %85 %84 %83 %
Up-Front Revenue
12 %12 %15 %16 %17 %
Total100 %100 %100 %100 %100 %
Trailing Twelve Months Recurring and Up-Front Revenue
Trailing Twelve Months Ended
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Recurring Revenue84 %87 %87 %86 %83 %
Up-Front Revenue16 %13 %13 %14 %17 %
   Total 100 %100 %100 %100 %100 %
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
4
Cadence Design Systems, Inc.
Revenue Mix by Geography
(% of Total Revenue)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Americas44 %46 %49 %50 %49 %
China15 %12 %12 %13 %13 %
Other Asia19 %20 %19 %17 %17 %
Europe, Middle East and Africa16 %17 %14 %14 %15 %
Japan6 %5 %6 %6 %6 %
   Total100 %100 %100 %100 %100 %
(% of Total Revenue)
2020
2021
2022
2023
2024
Americas42 %45 %46 %43 %49 %
China15 %13 %15 %17 %12 %
Other Asia18 %19 %18 %19 %18 %
Europe, Middle East and Africa18 %17 %16 %16 %15 %
Japan7 %6 %5 %5 %6 %
   Total100 %100 %100 %100 %100 %
Revenue Mix by Product Category
(% of Total Revenue)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Core EDA
75 %76 %73 %70 %68 %
IP13 %12 %13 %14 %13 %
System Design and Analysis12 %12 %14 %16 %19 %
   Total100 %100 %100 %100 %100 %
(% of Total Revenue)
2020
2021
2022
2023
2024
Core EDA
76 %76 %76 %76 %71 %
IP14 %13 %12 %12 %13 %
System Design and Analysis10 %11 %12 %12 %16 %
   Total100 %100 %100 %100 %100 %
3 Year Revenue CAGR by Product Category

2020
2021
2022
2023
2024
Core EDA
10 %10 %14 %15 %13 %
IP18 %16 %15 %8 %15 %
System Design and Analysis13 %19 %24 %22 %30 %
   Total 3 Year CAGR
11 %12 %15 %15 %16 %
3 Year Revenue CAGR by Product Category Without 53rd Week Impact*

2020*
2021
2022
2023
2024
Core EDA
9 %10 %14 %16 %13 %
IP18 %16 %15 %9 %15 %
System Design and Analysis12 %19 %24 %23 %30 %
   Total 3 Year CAGR
11 %12 %15 %16 %16 %
* Fiscal 2020 was a 53-week year and included approximately $45 million revenue impact for the extra week.
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
5
Cadence Design Systems, Inc.
Gross Margin
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
GAAP Gross Margin90.3 %87.6 %86.9 %86.6 %83.8 %
Non-GAAP Gross Margin91.7 %89.1 %88.5 %88.6 %85.5 %
2020
2021
2022
2023
2024
GAAP Gross Margin88.6 %89.7 %89.6 %89.4 %86.0 %
Non-GAAP Gross Margin90.6 %91.7 %91.0 %90.7 %87.8 %
Total Costs and Expenses
(In Millions)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Total GAAP Costs and Expenses$732 $759 $767 $865 $899 
Total Non-GAAP Costs and Expenses$610 $627 $635 $671 $733 
(In Millions)
2020*
2021
2022
2023
2024
Total GAAP Costs and Expenses$2,037 $2,209 $2,488 $2,839 $3,291 
Total Non-GAAP Costs and Expenses$1,739 $1,877 $2,125 $2,373 $2,667 
* Fiscal 2020 was a 53-week year.
Operating Margin
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
GAAP Operating Margin31.5 %24.8 %27.7 %28.8 %33.7 %
Non-GAAP Operating Margin42.9 %37.8 %40.1 %44.8 %46.0 %
2020
2021
2022
2023
2024
GAAP Operating Margin24.1 %26.1 %30.1 %30.6 %29.1 %
Non-GAAP Operating Margin35.2 %37.2 %40.3 %42.0 %42.5 %
Net Income Per Share
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
GAAP Net Income Per Share$1.19 $0.91 $0.84 $0.87 $1.24 
Non-GAAP Net Income Per Share$1.38 $1.17 $1.28 $1.64 $1.88 
2020
2021
2022
2023
2024
GAAP Net Income Per Share$2.11 $2.50 $3.09 $3.82 $3.85 
Non-GAAP Net Income Per Share$2.80 $3.29 $4.27 $5.15 $5.97 
Total DSO
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
DSO
43
36
49
44
48





February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
6
Cadence Design Systems, Inc.
Balance Sheet and Cash Review
Free Cash Flow
(In Millions)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Net Cash from Operating Activities$272 $253 $156 $410 $441 
Capital Expenditures34 49 29 27 37 
Free Cash Flow$238 $204 $127 $383 $404 
(In Millions)
2020
2021
2022
2023
2024
Net Cash from Operating Activities$905 $1,101 $1,242 $1,349 $1,261 
Capital Expenditures95 65 123 102 143 
Free Cash Flow$810 $1,036 $1,119 $1,247 $1,118 
Cash and Cash Equivalents
(In Millions)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Cash and Cash Equivalents$1,008 $1,012 $1,059 $2,786 $2,644 
(In Millions)
2020
2021
2022
2023
2024
Cash and Cash Equivalents$928 $1,089 $882 $1,008 $2,644 
•Approximately 66 percent of our cash and cash equivalents were in the U.S. at quarter-end.
Debt
(In Millions)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Debt (principal value)
$650 $650 $1,350 $2,850 $2,500 
(In Millions)
2020
2021
2022
2023
2024
Debt (principal value)
$350 $350 $750 $650 $2,500 
•In September 2024, Cadence issued $2.5 billion of Senior Notes at a weighted average interest rate of 4.44%.
Share Repurchase
(In Millions)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Share Repurchase$125 $125 $125 $150 $150 
Number of Shares0.488 0.425 0.423 0.563 0.519 
(In Millions)
2020
2021
2022
2023
2024
Share Repurchase$380 $612 $1,050 $700 $550 
Number of Shares4.247 4.401 6.602 3.145 1.930 
Employees
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Headcount11,226 11,753 12,665 12,703 12,705 
2020
2021
2022
2023
2024
Headcount8,746 9,298 10,228 11,226 12,705 
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
7
Cadence Design Systems, Inc.
Forward Looking Statements
This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business prospects, technology and product developments, industry trends, market growth and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions and armed conflicts around the world; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xii) Cadence’s ability to successfully meet any governance, environmental and social targets and strategies. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

For a detailed discussion of these and other cautionary statements related to Cadence’s business, please refer to Cadence’s filings with the U.S. Securities and Exchange Commission, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.

All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.
GAAP to Non-GAAP Reconciliation
Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this CFO Commentary with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. See our earnings press release issued today for further discussion of our non-GAAP financial measures, as well as the reconciliation provided in the Appendix to this CFO Commentary.

Cadence’s management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company’s core business operations and therefore provides supplemental information to Cadence’s management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence’s business from the same perspective as Cadence’s management, including forecasting and budgeting.

© 2025 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
8
Cadence Design Systems, Inc.
APPENDIX I
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses
(In Millions)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
GAAP total costs and expenses$732 $759 $767 $865 $899 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(87)(88)(88)(109)(107)
Amortization of acquired intangibles(17)(17)(20)(27)(27)
Acquisition and integration-related costs(13)(22)(21)(29)(23)
Restructuring1 — — (25)1 
Non-qualified deferred compensation expenses
(6)(5)(2)(4)— 
Special charges*
— — (1)— (10)
Non-GAAP total costs and expenses**
$610 $627 $635 $671 $733 
*
Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses
(In Millions)20192020*20212022
2023
2024
2025E
GAAP total costs and expenses$1,845 $2,037 $2,209 $2,488 $2,839 $3,291 $3,563 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(182)(197)(210)(270)(326)(391)(466)
Amortization of acquired intangibles(53)(64)(67)(60)(62)(90)(98)
Acquisition and integration-related costs(8)(23)(23)(41)(56)(96)(85)
Restructuring (9)(9)1 — (11)(24)— 
Non-qualified deferred compensation (expenses) credits(5)(5)(6)8 (11)(11)— 
Special charges**(1)— (27)— — (11)— 
Non-GAAP total costs and expenses***$1,587 $1,739 $1,877 $2,125 $2,373 $2,667 $2,914 
Table may not foot due to rounding
*Fiscal 2020 was a 53-week year.
**
2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
***The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
9
Cadence Design Systems, Inc.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP Operating Income Adjusted for Stock-based Compensation
(In Millions)20192020*20212022
2023
2024
2025E
GAAP operating income
$492 $646 $779 $1,074 $1,251 $1,351 $1,617 
Reconciling items to non-GAAP operating income
Stock-based compensation expense182 197 210 270 326 391 466 
Amortization of acquired intangibles53 64 67 60 62 90 98 
Acquisition and integration-related costs8 23 23 41 56 96 85 
Restructuring 9 9 (1)— 11 24 — 
Non-qualified deferred compensation expenses (credits)
5 5 6 (8)11 11 — 
Special charges**1 — 27 — — 11 — 
Non-GAAP operating income***
$749 $944 $1,111 $1,436 $1,717 $1,974 $2,266 
Stock-based compensation expense(182)(197)(210)(270)(326)(391)$(466)
Non-GAAP operating income adjusted for stock-based compensation***
$567 $747 $901 $1,166 $1,391 $1,583 $1,800 
Table may not foot due to rounding
*Fiscal 2020 was a 53-week year.
**
2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
***The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
10
Cadence Design Systems, Inc.
Reconciliation of GAAP Gross Margin as a Percent of Total Revenue to Non-GAAP Gross Margin as a Percent of Total Revenue
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
GAAP gross margin as a percent of total revenue
90.3%
87.6%
86.9%
86.6%
83.8%
Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense
0.3%
0.3%
0.3%
0.3%
0.3%
Amortization of acquired intangibles1.1%1.1%
1.2%
1.5%
1.3%
Non-qualified deferred compensation expenses
0.0%0.0%0.0%0.0%0.0%
Acquisition and integration-related costs0.0%
0.1%
0.1%
0.2%
0.1%
Non-GAAP gross margin as a percent of total revenue*
91.7%
89.1%
88.5%
88.6%
85.5%
*The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

2020
2021
2022
2023
2024
GAAP gross margin as a percent of total revenue
88.6%
89.7%
89.6%
89.4%
86.0%
Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense
0.3%
0.3%
0.2%
0.2%
0.3%
Amortization of acquired intangibles
1.7%
1.6%
1.2%
1.1%
1.3%
Non-qualified deferred compensation expenses (credits)0.0%0.0%0.0%0.0%0.0%
Acquisition and integration-related costs0.0%0.0%0.0%
0.0%
0.2%
Special charges*
0.0%
0.1%
0.0%
0.0%
0.0%
Non-GAAP gross margin as a percent of total revenue**
90.6%
91.7%
91.0%
90.7%
87.8%
*2021 includes costs related to a voluntary retirement program.
**
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
11
Cadence Design Systems, Inc.
Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Q1 2025E
GAAP operating margin as a percent of total revenue
31.5%
24.8%
27.7%
28.8%
33.7%
27% - 28%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense
8.1%
8.7%
8.3%
9.0%
7.9%
9%
Amortization of acquired intangibles
1.6%
1.7%
1.9%
2.2%
2.0%
2%
Acquisition and integration-related costs
1.2%
2.2%
1.9%
2.4%
1.7%
2%
Restructuring
(0.1)%
0.0%
0.0%
2.0%
(0.1)%
0%
Non-qualified deferred compensation expenses
0.6%
0.4%
0.2%
0.4%
0.0%
0%
Special charges*
0.0%
0.0%
0.1%
0.0%
0.8%
0%
Non-GAAP operating margin as a percent of total revenue**
42.9%
37.8%
40.1%
44.8%
46.0%
40% - 41%
*
Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
2019202020212022
2023
2024
2025E
GAAP operating margin as a percent of total revenue
21.1%
24.1%
26.1%
30.1%
30.6%
29.1%
30.25% - 31.25%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense
7.8%
7.4%
7.0%
7.6%
8.0%
8.4%
9%
Amortization of acquired intangibles
2.3%
2.4%
2.2%
1.7%
1.5%
2.0%
2%
Acquisition and integration-related costs
0.3%
0.8%
0.8%
1.1%
1.4%
2.1%
2%
Restructuring
0.4%
0.3%
0.0%
0.0%
0.3%
0.5%
0%
Non-qualified deferred compensation expenses (credits)
0.2%
0.2%
0.2%
(0.2)%
0.2%
0.2%
0%
Special charges*
0.0%
0.0%
0.9%
0.0%
0.0%
0.2%
0%
Non-GAAP operating margin as a percent of total revenue**
32.1%
35.2%
37.2%
40.3%
42.0%
42.5%
43.25% - 44.25%
*
2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
12
Cadence Design Systems, Inc.
Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data)
Q4 2023
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Q1 2025E
Diluted net income per share on a GAAP basis$1.19 $0.91 $0.84 $0.87 $1.24 
$0.93 - $0.99
Stock-based compensation expense0.32 0.32 0.32 0.40 0.39 0.40 
Amortization of acquired intangibles0.06 0.06 0.07 0.10 0.10 0.09 
Acquisition and integration-related costs0.04 0.08 0.08 0.11 0.08 0.08 
Restructuring — — — 0.09 — — 
Non-qualified deferred compensation expenses
0.02 0.02 0.01 0.01 — — 
Special charges*
— — — — 0.04 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**(0.10)(0.22)(0.10)0.04 0.05 — 
Income tax effect of non-GAAP adjustments(0.15)— 0.06 0.02 (0.02)(0.04)
Diluted net income per share on a non-GAAP basis***
$1.38 $1.17 $1.28 $1.64 $1.88 
$1.46 - $1.52
Shares used in calculation of diluted net income per share272,419 273,544 273,520 273,958 274,292 
*
Q4 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.
***
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.





February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
13
Cadence Design Systems, Inc.
Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data)2019202020212022
2023
2024
2025E
Diluted net income per share on a GAAP basis$3.53 $2.11 $2.50 $3.09 $3.82 $3.85 
$4.19 - $4.29
Stock-based compensation expense0.65 0.71 0.75 0.98 1.19 1.43 1.69 
Amortization of acquired intangibles0.19 0.23 0.24 0.22 0.23 0.33 0.36 
Acquisition and integration-related costs0.03 0.08 0.08 0.15 0.21 0.35 0.31 
Restructuring 0.03 0.03 — — 0.04 0.09 — 
Non-qualified deferred compensation expenses (credits)0.02 0.02 0.02 (0.03)0.04 0.04 — 
Special charges*
— — 0.10 — — 0.04 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**
(0.01)— (0.03)0.05 (0.17)(0.22)— 
Income tax benefit related to intercompany transfers of certain intellectual property rights(2.05)— — — — — — 
Income tax effect of non-GAAP adjustments(0.19)(0.38)(0.37)(0.19)(0.21)0.06 0.10 
Diluted net income per share on a non-GAAP basis***
$2.20 $2.80 $3.29 $4.27 $5.15 $5.97 
$6.65 - $6.75
Shares used in calculation of diluted net income per share 280,515 279,641 278,858 275,011 272,748 273,833 
274 - 276M
*
2021 includes costs related to a voluntary retirement program. 2024 includes costs related to adjustments to estimated legal liabilities and executive severance.
**Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.
***The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.








February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
14
Cadence Design Systems, Inc.
Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense
(In Millions)
FY 2023
FY 2024
FY 2025E
GAAP total other income and expense$31 $45 
$(53) - $(67)
Reconciling items to non-GAAP total income and expense
Other income or expense related to investments and non-qualified deferred compensation plan assets*
(46)(61)— 
Non-GAAP total other income and expense**
$(15)$(16)
$(53) - $(67)
*Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.
**The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


February 18, 2025Cadence Q4 and Fiscal Year 2024 Financial Results
15