Cadence Design Systems, Inc. (NASDAQ: CDNS) Q2 2025 Earnings | 07/29/2025

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Cadence Design Systems, Inc. delivered an exceptional Q2 2025, with total revenue reaching $1.275 billion—up 20% year-over-year and surpassing both company guidance and analyst forecasts. The company posted non-GAAP earnings per share of $1.65, beating expectations and continuing a trend of broad-based momentum across all major business lines. Growth was particularly pronounced in the company’s AI-optimized portfolio, with IP business revenue up over 25% and the system design and analysis segment surging 35%. Core EDA revenues increased 16%, reflecting deepening customer adoption and robust secular demand for Cadence’s intelligent system design technologies worldwide. Management noted that, despite some short-term headwinds from export restrictions to China, strong performance in other regions more than offset these challenges. Profitability also improved markedly. Non-GAAP operating margin reached 42.8%, and operating cash flow for the quarter came in at $378 million. Cadence ended Q2 with $2.823 billion in cash and $2.5 billion in outstanding debt. The company returned $175 million to shareholders through share repurchases during the quarter. While the recurring revenue proportion fell to 78%—a multiyear low due to the outperformance of upfront businesses like IP and hardware—management emphasized this reflected healthy demand and did not signal any structural issues. Looking ahead, Cadence raised its full-year 2025 outlook, now forecasting revenue between $5.21–$5.27 billion (representing 13% annual growth) and non-GAAP EPS in the range of $6.85–$6.95, underpinned by strong bookings, a growing backlog, and robust demand across AI, 3D-IC, and system design. Q3 2025 revenue is projected to fall between $1.305–$1.335 billion, with non-GAAP EPS of $1.75–$1.81. Leadership also highlighted the positive impact of U.S. tax reforms enacted in July and confirmed that at least 50% of annual free cash flow will be returned to shareholders via buybacks. While Cadence continues to navigate evolving export regulations and geopolitical uncertainty, the company remains confident in its long-term growth prospects and unique differentiators in the electronic design automation space. About Inside Ticker: For more expert analysis and real-time updates on Cadence Design Systems, Inc. (NASDAQ: CDNS) and other market movers, follow Inside Ticker and visit http://www.insideticker.com/ for in-depth reports, financial insights, and the latest news on leading companies. #CadenceDesign #CDNS #Q22025 #Earnings #FinancialResults #RevenueGrowth #AI #EDA #3DIC #IPRevenue #SystemDesign #NetIncome #OperatingMargin #CashFlow #ShareRepurchase #InsideTicker #Guidance #HardwareSystems #2025Outlook #Innovation #TechLeadership #OperationalExcellence #StockMarket #Backlog #Software #Semiconductors #QuarterlyResults #DigitalTransformation #GrowthStrategy