Cadence Design Systems

CDNS · Nasdaq · Information Technology · Financials, fiscal 2016 to 2025

CDNS · Last close · October 26, 2026

$322.17

Cadence Design Systems' revenue rose 14.1% to $5.3 billion in fiscal 2025. Its operating margin was 28.2%, down from 29.1% a year earlier. Free cash flow was $1.6 billion, up 41.9%. It paid out $925 million in dividends and buybacks, 58% of free cash flow. The diluted share count fell 0.2%.

CADENCE DESIGN SYSTEMS, INC. Latest fiscal year ended December 31, 2025 10-K filed February 19, 2026 · 0000813672-26-000016 Updated October 9, 2026

Revenue

$5.3B

14.1%

Operating margin

28.2%

0.9 pts

Net income

$1.1B

5.1%

Free cash flow

$1.6B

41.9%

Return on capital

23.7%

4.3 pts

Market cap

$88.2B

Oct 26 close

P/E

75.1x

On $4.29 EPS, 4 qtrs

Operating margin is operating income as a share of revenue. Free cash flow is cash from operations minus capital spending. Return on capital is after-tax operating income as a share of the money invested in the business: debt plus equity, minus cash. Market cap is the last closing share price times the latest diluted share count, so it is approximate. P/E is the last close divided by diluted earnings per share over the last four quarters, or the latest fiscal year where the quarters aren't available; there is none when the company made a loss.

What Cadence Design Systems does

Cadence Design Systems makes the software, hardware and ready-made circuit designs that engineers use to design electronic products. Its customers are semiconductor companies that design and make integrated circuits (chips), and systems companies that build electronic and electromechanical products that contain chips.

Cadence sells design and verification software, accelerated computing hardware used to test designs, and silicon intellectual property (IP), which is pre-built circuit designs that customers license and drop into their own chips. It also sells tools to analyze whole systems, such as circuit boards. It adds artificial intelligence (AI) features to its products. Many of its software licenses bring revenue over time rather than all at once.

Cadence says its growth depends mainly on the semiconductor and electronics industries. It sells to customers around the world, so export and import controls and trade rules affect it.

Its biggest risks, as it describes them

Its growth depending mainly on the semiconductor and electronics industries.
Operating results that vary from period to period, with licenses recognized over time.
Export and import controls that could limit what it can sell and to whom.
Not getting the expected benefits from companies it acquires.
Protecting its proprietary technology and IP, and claims that it infringes others.

From Cadence Design Systems's annual report on Form 10-K, filed February 19, 2026, in our words; the 10-K has the full description and every risk factor. Updated with each new 10-K.

Charts show fiscal years, from the 10-K filings.

Revenue and margins

Revenue

US$ billions, fiscal years

Margins

Percent of revenue

GrossOperatingNetFree cash flow

Net income and earnings per share

From fiscal 2016 to 2025, earnings per share grew 21.6% a year and net income 20.8% a year, as buybacks cut the share count by 6%.

Net income

US$ billions, fiscal years; loss years in red.

Diluted earnings per share

US$ per share, fiscal years, restated for any stock splits; loss years in red.

Returns on capital

Return on capital and on equity

Percent. Return on capital is after-tax operating income over the money invested in the business (debt plus equity, minus cash); return on equity is net income over shareholders' equity. Both use the average of opening and closing balances.

Return on capitalReturn on equity

Cash flow

Free cash flow

US$ billions. Cash from operations minus capital expenditure; negative years in red.

Payouts and share count

Dividends and buybacks

US$ billions, cash paid in each fiscal year

DividendsShare buybacks

Diluted share count

Weighted-average diluted shares, millions

Valuation

Two ways to value Cadence Design Systems yourself, both starting from its filings: a discounted cash flow model and the price-to-earnings method.

Discounted cash flow (DCF)

A discounted cash flow (DCF) model values a business as the cash it may generate in future, discounted back to today. The starting figures come from Cadence Design Systems' 10-K (or, for net cash and shares, its latest 10-Q) and the assumptions are yours: start from one of three example scenarios, then change any figure to see what it implies for a share, and how that compares with the last share price.

Value per share on three example scenarios, from Cadence Design Systems' fiscal 2025 free cash flow of $1.6B, net cash of $675M at December 31, 2025 and 273 million diluted shares, from its filings. The scenarios are fitted to Cadence Design Systems: the base scenario's growth in years 1 to 5 is its revenue growth over the last 3 years, 14.1% a year; the cautious and optimistic ones are lower and higher, and growth in years 6 to 10 is halfway to the long-run rate. The base scenario's discount rate is 9% for a business of moderate risk (Application Software); the cautious and optimistic ones use a point more and a point less. Select one to load it into the calculator. These are the model's arithmetic on those assumptions, not a forecast or a price target.

From the filings

Starting free cash flow, US$ millions

Cash from operations minus capital spending in fiscal 2025.

Net cash, US$ millions Cash and short-term investments minus debt and finance leases at December 31, 2025. Negative means net debt.

Diluted shares, millions

Weighted-average diluted shares in fiscal 2025.

Your assumptions

Start from

Fitted to Cadence Design Systems's own revenue growth, as above. Cautious: growth of 7% then 4.5% a year, 2% after year 10, a 10% discount rate. Base: growth of 14% then 8% a year, 2.5% after year 10, a 9% discount rate. Optimistic: growth of 21% then 12% a year, 3% after year 10, a 8% discount rate.

Free cash flow growth, years 1 to 5 (% a year)

Free cash flow growth, years 6 to 10 (% a year)

Growth after year 10 (% a year)Long-run growth forever after year 10. Usually close to inflation, and always below the discount rate.

Discount rate (% a year)The yearly return an investor wants for the risk. A higher rate gives a lower value.

Value per share on these assumptions

—

Last close, October 26, 2026: $322.17
Value on these assumptions, against the last close: —

Cash flows in years 1 to 10, valued today: —
Everything after year 10, valued today: —
Plus net cash: —
Share of value from after year 10: —

Projected free cash flow

US$ billions. Each column is one year's projected free cash flow, split into what it is worth today and the part removed by discounting.

Value todayRemoved by discounting

How the value changes with two assumptions

Value per share in US$, with the growth rates above. The highlighted cell matches the current assumptions.

How the model works. Free cash flow grows at the first rate for five years and the second rate for five more, and each year is discounted at the discount rate. Everything after year 10 is valued as year-10 cash flow × (1 + growth after year 10) ÷ (discount rate − growth after year 10), discounted back ten years. Net cash is added and the total is divided by diluted shares. The result depends entirely on the assumptions. It is not a forecast, a price target or a recommendation. The last close is the consolidated US closing price, from Databento.

Price-to-earnings (P/E) method

Another common way to value a company is to multiply its earnings per share by a price-to-earnings (P/E) multiple: the number of years of today's earnings an investor pays for a share. A higher multiple usually means investors expect earnings to grow. Choose a multiple, for example from similar companies, to see the value it gives.

Value per share on three example scenarios, from Cadence Design Systems' earnings per share of $4.29 (over the last four quarters). Each grows earnings for a year at the cash flow scenarios' rates and applies a multiple to next year's earnings: 33.3×, the middle of Cadence Design Systems' own P/E today, its peers' median and its sector's median (the Information Technology median) for the base scenario, 20% less and more for the cautious and optimistic ones. The price is brought back a year at 10%, 9% and 8%. Select one to load it into the calculator. These are the model's arithmetic on those assumptions, not a forecast or a price target.

Earnings per share, US$

Diluted earnings per share over the four quarters to March 31, 2026, from the 10-Qs and 10-K.

P/E multiple

P/E today is the last close divided by the latest earnings per share, the four quarters' where available. Peers: OpenText, Zoom Communications, Palantir.

Earnings growth in the years ahead (% a year) Starts at Cadence Design Systems' revenue growth over the last 3 years, 14.1% a year, as the base scenario does.

Earnings per share in the years ahead, US$

Year 1Year 2Year 3Year 4Year 5

Type your own estimate for any year; the years after it carry on at the growth rate.

Apply the multiple to earnings

A multiple on a future year's earnings gives the price then, brought back to today at the discount rate below.

Discount rate (% a year) The yearly return an investor wants for the risk, as in the cash flow model.

Value per share today at this multiple

—

Last close, October 26, 2026: $322.17
Value at this multiple, against the last close: —
Cadence Design Systems' P/E at the last close: 75.1×

Company	Last close	Earnings per share	P/E today
PalantirPLTR	$198.84	$1.16	171.4×
Cadence Design SystemsCDNS	$322.17	$4.29	75.1×
OpenTextOTEX	$27.63	$2.58	10.7×
Zoom CommunicationsZM	$98.04	$10.79	9.1×

How the P/E method works. Value per share is earnings per share times the multiple. On a future year's earnings, that gives the price in that year, which is brought back to today at the discount rate: price ÷ (1 + discount rate) for each year ahead. It is quick and easy to compare across companies, but it ignores debt and cash, and earnings can swing with one-off gains and charges, so a multiple says most about steady, profitable businesses. Like the cash flow model, the result depends entirely on the assumptions you choose. It is not a forecast, a price target or a recommendation.

Balance sheet

Fiscal year end	FY21	FY22	FY23	FY24	FY25
Cash and short-term investments	1,089	887	1,138	2,785	3,156
Debt incl. finance leases	348	648	649	2,476	2,480
Net debt (negative means net cash)	−741	−239	−489	−308	−675
Net debt to EBITDA	−0.8x	−0.2x	−0.3x	−0.2x	−0.4x
Debt to equity	0.1x	0.2x	0.2x	0.5x	0.5x
Interest coverage	45.9x	46.8x	34.6x	17.8x	12.8x
Current ratio	1.8x	1.3x	1.2x	2.9x	2.9x
Quick ratio	1.6x	1.2x	1.1x	2.7x	2.7x

US$ millions unless stated, at each fiscal year end. Net debt to EBITDA is debt minus cash, divided by operating income before depreciation and amortization: roughly how many years of those earnings the net debt equals. Debt to equity is debt as a multiple of shareholders' equity. Interest coverage is operating income divided by interest expense. The current ratio is current assets over current liabilities; the quick ratio leaves out inventory.

Insider trades

Over the 12 months between October 27, 2025 and October 26, 2026, no insider bought Cadence Design Systems shares on the open market, and 9 insiders sold $104.2 million, $104.1 million of it under trading plans set up in advance.

Date	Insider	Trade	Shares	Price	Value	Filing
Oct 15, 2026	Paul CunninghamSr. Vice President	Sold plan	2,000	$324.13	$648,260	Form 4
Oct 1, 2026	Vincentelli Alberto SangiovanniDirector	Sold plan	1,250	$350.07	$437,590	Form 4
Sep 15, 2026	Paul CunninghamSr. Vice President	Sold plan	2,000	$277.12	$554,240	Form 4
Sep 10, 2026	Ita M BrennanDirector	Sold plan	180	$285.51	$51,392	Form 4
Aug 26, 2026	Paul ScannellSr. Vice President	Sold plan	280	$339.00	$94,920	Form 4
Aug 25, 2026	Vincentelli Alberto SangiovanniDirector	Sold plan	1,250	$320.87	$401,093	Form 4
Aug 21, 2026	Chin-Chi TengSr. Vice President	Sold plan	4,732	$314.49	$1.5 million	Form 4
Aug 17, 2026	Paul CunninghamSr. Vice President	Sold plan	2,000	$323.32	$646,640	Form 4
Jul 22, 2026	Chin-Chi TengSr. Vice President	Sold plan	4,500	$339.46	$1.5 million	Form 4
Jul 15, 2026	Paul CunninghamSr. Vice President	Sold plan	2,000	$383.36	$766,720	Form 4
Jun 22, 2026	Chin-Chi TengSr. Vice President	Sold plan	4,500	$384.88	$1.7 million	Form 4
Jun 15, 2026	Paul CunninghamSr. Vice President	Sold plan	2,000	$391.00	$782,000	Form 4

The latest 12 of 41 trades. Open-market purchases and sales by officers, directors and 10% owners, from their Form 4 filings with the SEC: one row per person, day and filing, at the day's average price. Grants, option exercises and shares withheld for tax aren't counted. Insiders buy and sell for many reasons, such as taxes, spreading their savings or a plan set up months earlier, so a trade on its own says little about where a company is heading. For information only, not investment advice. Insider trades at all companies

Piotroski F-score

The F-score counts how many of nine simple tests of profitability, funding and efficiency a company passed in a year (Piotroski, 2000). The more tests passed, the stronger the year: 8 or 9 is strong, 0 to 2 weak. Companies that report no gross profit are scored on the other eight.

Test	FY23	FY24	FY25
Net income is positive	Pass	Pass	Pass
Cash from operations is positive	Pass	Pass	Pass
Return on assets rose	Pass	Fail	Fail
Cash from operations exceeds net income	Pass	Pass	Pass
Debt fell relative to assets	Pass	Fail	Pass
Current ratio rose	Fail	Pass	Fail
Share count didn't rise	Pass	Fail	Pass
Gross margin rose	—	—	—
Revenue rose relative to assets	Fail	Pass	Fail
F-score	6 of 8	5 of 8	5 of 8
Accruals ratio	−5.7%	−2.8%	−6.5%

The accruals ratio is net income minus cash from operations, over average total assets.

Compare

Put Cadence Design Systems side by side with any other company we cover: revenue, growth, margins, cash flow and returns, with ten years of charts.

Similar companies

Company	Year	Revenue growth	Operating margin	Free cash flow margin	Return on capital	Net debt to EBITDA	F-score	Compare
Cadence Design Systems	FY25	14.1%	28.2%	30.0%	23.7%	−0.4x	5
OpenText	FY26	1.5%	20.6%	15.4%	9.0%	3.2x	9	Compare
Zoom Communications	FY26	4.4%	23.1%	39.5%	56.2%	−6.2x	6	Compare
Snowflake	FY26	29.2%	−30.6%	23.9%	—	—	6	Compare
Palantir	FY25	56.2%	31.6%	46.9%	—	−5.0x	7	Compare

Each company's latest fiscal year. Fiscal years end in different months, so the periods don't line up exactly. Free cash flow margin is free cash flow as a share of revenue. Net debt to EBITDA is explained under the balance sheet, and the F-score above.

10 years of figures

Fiscal year	FY16	FY17	FY18	FY19	FY20	FY21	FY22	FY23	FY24	FY25
Income statement
Revenue	1,816	1,943	2,138	2,336	2,683	2,988	3,562	4,090	4,641	5,297
Revenue growth	6.7%	7.0%	10.0%	9.3%	14.8%	11.4%	19.2%	14.8%	13.5%	14.1%
Gross profit	—	—	—	—	—	—	—	—	—	—
Research and development	—	—	—	—	—	—	—	—	—	—
Operating income	245	324	396	492	646	779	1,074	1,251	1,351	1,492
Net income	203	204	346	989	591	696	849	1,041	1,056	1,109
Diluted EPS (US$)	0.70	0.73	1.23	3.53	2.11	2.50	3.09	3.82	3.85	4.06
Diluted shares (millions)	291	280	281	280	280	279	275	273	274	273
Cash flow
Cash from operations	445	471	605	730	905	1,101	1,242	1,349	1,261	1,729
Capital expenditure	54	58	62	75	95	65	123	102	142	142
Free cash flow	391	413	543	655	810	1,036	1,119	1,247	1,118	1,587
Dividends paid	0	0	0	0	0	0	0	0	0	0
Share buybacks	960	100	250	306	380	612	1,050	700	550	925
Acquisitions	42	143	0	0	198	226	614	198	738	430
Stock-based compensation	109	130	168	182	197	210	270	326	391	455
Balance sheet at fiscal year end
Cash and short-term investments	468	692	533	705	928	1,089	887	1,138	2,785	3,156
Debt incl. finance leases	644	644	345	346	347	348	648	649	2,476	2,480
Total assets	2,097	2,419	2,469	3,357	3,951	4,386	5,137	5,670	8,974	10,153
Total liabilities	1,355	1,430	1,180	1,254	1,458	1,646	2,392	2,265	4,301	4,679
Shareholders' equity	742	989	1,288	2,103	2,493	2,741	2,745	3,404	4,674	5,474
Margins and ratios
Gross margin	—	—	—	—	—	—	—	—	—	—
Operating margin	13.5%	16.7%	18.5%	21.1%	24.1%	26.1%	30.1%	30.6%	29.1%	28.2%
Net margin	11.2%	10.5%	16.2%	42.3%	22.0%	23.3%	23.8%	25.5%	22.7%	20.9%
Free cash flow margin	21.5%	21.2%	25.4%	28.0%	30.2%	34.7%	31.4%	30.5%	24.1%	30.0%
Return on capital	21.8%	22.6%	35.7%	34.6%	33.0%	36.1%	38.7%	37.5%	28.1%	23.7%
Return on equity	19.2%	23.6%	30.4%	58.3%	25.7%	26.6%	30.9%	33.9%	26.1%	21.9%
Return on assets	9.1%	9.0%	14.2%	34.0%	16.2%	16.7%	17.8%	19.3%	14.4%	11.6%
Net debt to EBITDA	0.5x	−0.1x	−0.4x	−0.6x	−0.7x	−0.8x	−0.2x	−0.3x	−0.2x	−0.4x

US$ millions unless stated. Where a later 10-K restated a year, the latest filed figure is shown. Download all figures (CSV, US$ millions)

Source: Cadence Design Systems' Form 10-K filings, from SEC EDGAR. For information only, not investment advice. The Filing Desk is not affiliated with Cadence Design Systems.