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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cadence Design Systems Inc | NASDAQ:CDNS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.01 | 0.00% | 288.94 | 288.98 | 289.14 | 290.28 | 288.45 | 289.19 | 423,965 | 19:40:19 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Exhibit No. | Description | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
CADENCE DESIGN SYSTEMS, INC. | ||||||||
By: | /s/ John M. Wall | |||||||
John M. Wall | ||||||||
Senior Vice President and Chief Financial Officer |
Operating Margin Reconciliation | Three Months Ended | |||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||
(unaudited) | ||||||||||||||
GAAP operating margin as a percent of total revenue | 31% | 23% | ||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue: | ||||||||||||||
Stock-based compensation expense | 8% | 8% | ||||||||||||
Amortization of acquired intangibles | 2% | 2% | ||||||||||||
Acquisition and integration-related costs | 1% | 2% | ||||||||||||
Restructuring | 0% | 0% | ||||||||||||
Non-qualified deferred compensation expenses | 1% | 1% | ||||||||||||
Non-GAAP operating margin as a percent of total revenue | 43% | 36% |
Operating Margin Reconciliation | Years Ended | |||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||
(unaudited) | ||||||||||||||
GAAP operating margin as a percent of total revenue | 31% | 30% | ||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue: | ||||||||||||||
Stock-based compensation expense | 8% | 8% | ||||||||||||
Amortization of acquired intangibles | 2% | 2% | ||||||||||||
Acquisition and integration-related costs | 1% | 1% | ||||||||||||
Restructuring | 0% | 0% | ||||||||||||
Non-qualified deferred compensation expenses (credits) | 0% | (1)% | ||||||||||||
Non-GAAP operating margin as a percent of total revenue | 42% | 40% |
Net Income Reconciliation | Three Months Ended | |||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (unaudited) | |||||||||||||
Net income on a GAAP basis | $ | 323,899 | $ | 240,392 | ||||||||||
Stock-based compensation expense | 86,683 | 73,249 | ||||||||||||
Amortization of acquired intangibles | 16,920 | 15,369 | ||||||||||||
Acquisition and integration-related costs | 12,583 | 17,510 | ||||||||||||
Restructuring | (569) | 13 | ||||||||||||
Non-qualified deferred compensation expenses | 6,295 | 3,233 | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets* | (27,966) | (2,584) | ||||||||||||
Income tax effect of non-GAAP adjustments | (41,638) | (85,397) | ||||||||||||
Net income on a non-GAAP basis | $ | 376,207 | $ | 261,785 |
* | 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, 2023 | December 31, 2022 | |||||||||||||
(in thousands) | (unaudited) | |||||||||||||
Net income on a GAAP basis | $ | 1,041,144 | $ | 848,952 | ||||||||||
Stock-based compensation expense | 325,611 | 270,439 | ||||||||||||
Amortization of acquired intangibles | 61,970 | 59,818 | ||||||||||||
Acquisition and integration-related costs | 56,542 | 41,103 | ||||||||||||
Restructuring | 11,013 | 55 | ||||||||||||
Non-qualified deferred compensation expenses (credits) | 10,851 | (8,744) | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets* | (45,502) | 14,171 | ||||||||||||
Income tax effect of non-GAAP adjustments | (57,139) | (52,475) | ||||||||||||
Net income on a non-GAAP basis | $ | 1,404,490 | $ | 1,173,319 |
* | 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 | Three Months Ended | |||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||
(in thousands, except per share data) | (unaudited) | |||||||||||||
Diluted net income per share on a GAAP basis | $ | 1.19 | $ | 0.88 | ||||||||||
Stock-based compensation expense | 0.32 | 0.27 | ||||||||||||
Amortization of acquired intangibles | 0.06 | 0.06 | ||||||||||||
Acquisition and integration-related costs | 0.04 | 0.06 | ||||||||||||
Restructuring | — | — | ||||||||||||
Non-qualified deferred compensation expenses | 0.02 | 0.01 | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets* | (0.10) | (0.01) | ||||||||||||
Income tax effect of non-GAAP adjustments | (0.15) | (0.31) | ||||||||||||
Diluted net income per share on a non-GAAP basis | $ | 1.38 | $ | 0.96 | ||||||||||
Shares used in calculation of diluted net income per share | 272,419 | 272,997 | ||||||||||||
* | 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, 2023 | December 31, 2022 | |||||||||||||
(in thousands, except per share data) | (unaudited) | |||||||||||||
Diluted net income per share on a GAAP basis | $ | 3.82 | $ | 3.09 | ||||||||||
Stock-based compensation expense | 1.19 | 0.98 | ||||||||||||
Amortization of acquired intangibles | 0.23 | 0.22 | ||||||||||||
Acquisition and integration-related costs | 0.21 | 0.15 | ||||||||||||
Restructuring | 0.04 | — | ||||||||||||
Non-qualified deferred compensation expenses (credits) | 0.04 | (0.03) | ||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets* | (0.17) | 0.05 | ||||||||||||
Income tax effect of non-GAAP adjustments | (0.21) | (0.19) | ||||||||||||
Diluted net income per share on a non-GAAP basis | $ | 5.15 | $ | 4.27 | ||||||||||
Shares used in calculation of diluted net income per share | 272,748 | 275,011 | ||||||||||||
* | 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. |
December 31, 2023 | December 31, 2022 | |||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 1,008,152 | $ | 882,325 | ||||||||||
Receivables, net | 489,224 | 486,710 | ||||||||||||
Inventories | 181,661 | 128,005 | ||||||||||||
Prepaid expenses and other | 297,180 | 209,727 | ||||||||||||
Total current assets | 1,976,217 | 1,706,767 | ||||||||||||
Property, plant and equipment, net | 403,213 | 371,451 | ||||||||||||
Goodwill | 1,535,845 | 1,374,268 | ||||||||||||
Acquired intangibles, net | 336,843 | 354,617 | ||||||||||||
Deferred taxes | 880,001 | 853,691 | ||||||||||||
Other assets | 537,372 | 476,277 | ||||||||||||
Total assets | $ | 5,669,491 | $ | 5,137,071 | ||||||||||
Current liabilities: | ||||||||||||||
Revolving credit facility | $ | — | $ | 100,000 | ||||||||||
Current portion of long-term debt | 349,285 | — | ||||||||||||
Accounts payable and accrued liabilities | 576,558 | 557,158 | ||||||||||||
Current portion of deferred revenue | 665,024 | 690,538 | ||||||||||||
Total current liabilities | 1,590,867 | 1,347,696 | ||||||||||||
Long-term liabilities: | ||||||||||||||
Long-term portion of deferred revenue | 98,931 | 91,524 | ||||||||||||
Long-term debt | 299,771 | 648,078 | ||||||||||||
Other long-term liabilities | 275,651 | 304,660 | ||||||||||||
Total long-term liabilities | 674,353 | 1,044,262 | ||||||||||||
Stockholders’ equity | 3,404,271 | 2,745,113 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 5,669,491 | $ | 5,137,071 |
Three Months Ended | Years Ended | |||||||||||||||||||||||||
December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||
Product and maintenance | $ | 981,987 | $ | 845,880 | $ | 3,834,359 | $ | 3,340,197 | ||||||||||||||||||
Services | 86,636 | 53,997 | 255,627 | 221,521 | ||||||||||||||||||||||
Total revenue | 1,068,623 | 899,877 | 4,089,986 | 3,561,718 | ||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||
Cost of product and maintenance | 71,491 | 69,702 | 331,760 | 273,565 | ||||||||||||||||||||||
Cost of services | 32,639 | 23,813 | 103,281 | 98,058 | ||||||||||||||||||||||
Marketing and sales | 180,368 | 171,817 | 690,319 | 604,224 | ||||||||||||||||||||||
Research and development | 367,443 | 350,423 | 1,441,796 | 1,251,544 | ||||||||||||||||||||||
General and administrative | 75,742 | 68,065 | 242,430 | 242,116 | ||||||||||||||||||||||
Amortization of acquired intangibles | 4,981 | 4,927 | 18,162 | 18,470 | ||||||||||||||||||||||
Restructuring | (569) | 13 | 11,013 | 55 | ||||||||||||||||||||||
Total costs and expenses | 732,095 | 688,760 | 2,838,761 | 2,488,032 | ||||||||||||||||||||||
Income from operations | 336,528 | 211,117 | 1,251,225 | 1,073,686 | ||||||||||||||||||||||
Interest expense | (8,989) | (9,082) | (36,185) | (22,934) | ||||||||||||||||||||||
Other income (expense), net | 34,523 | 8,490 | 66,886 | (5,389) | ||||||||||||||||||||||
Income before provision (benefit) for income taxes | 362,062 | 210,525 | 1,281,926 | 1,045,363 | ||||||||||||||||||||||
Provision (benefit) for income taxes | 38,163 | (29,867) | 240,782 | 196,411 | ||||||||||||||||||||||
Net income | $ | 323,899 | $ | 240,392 | $ | 1,041,144 | $ | 848,952 | ||||||||||||||||||
Net income per share - basic | $ | 1.20 | $ | 0.89 | $ | 3.86 | $ | 3.13 | ||||||||||||||||||
Net income per share - diluted | $ | 1.19 | $ | 0.88 | $ | 3.82 | $ | 3.09 | ||||||||||||||||||
Weighted average common shares outstanding - basic | 269,088 | 269,709 | 269,381 | 271,198 | ||||||||||||||||||||||
Weighted average common shares outstanding - diluted | 272,419 | 272,997 | 272,748 | 275,011 |
Years Ended | |||||||||||
December 31, 2023 | December 31, 2022 | ||||||||||
Cash and cash equivalents at beginning of year | $ | 882,325 | $ | 1,088,940 | |||||||
Cash flows from operating activities: | |||||||||||
Net income | 1,041,144 | 848,952 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 145,292 | 132,088 | |||||||||
Amortization of debt discount and fees | 1,262 | 1,134 | |||||||||
Stock-based compensation | 325,611 | 270,439 | |||||||||
(Gain) loss on investments, net | (34,602) | 5,425 | |||||||||
Deferred income taxes | (36,512) | (107,606) | |||||||||
Provisions for losses on receivables | 3,325 | 204 | |||||||||
ROU asset amortization and change in operating lease liabilities | 451 | 3,342 | |||||||||
Other non-cash items | 1,983 | 371 | |||||||||
Changes in operating assets and liabilities, net of effect of acquired businesses: | |||||||||||
Receivables | (11,748) | (138,471) | |||||||||
Inventories | (65,895) | (23,073) | |||||||||
Prepaid expenses and other | 39,015 | (38,927) | |||||||||
Other assets | (45,784) | (933) | |||||||||
Accounts payable and accrued liabilities | 5,415 | 113,945 | |||||||||
Deferred revenue | (21,583) | 131,462 | |||||||||
Other long-term liabilities | 1,802 | 43,542 | |||||||||
Net cash provided by operating activities | 1,349,176 | 1,241,894 | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of investments | (176,170) | (1,000) | |||||||||
Proceeds from the sale and maturity of investments | 64,775 | 366 | |||||||||
Purchases of property, plant and equipment | (102,337) | (123,215) | |||||||||
Purchases of intangible assets | (166) | (1,000) | |||||||||
Cash paid in business combinations, net of cash acquired | (198,351) | (613,785) | |||||||||
Net cash used for investing activities | (412,249) | (738,634) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving credit facility | 50,000 | 585,000 | |||||||||
Payments on revolving credit facility | (150,000) | (485,000) | |||||||||
Proceeds from term loan | — | 300,000 | |||||||||
Payment of debt issuance costs | — | (425) | |||||||||
Proceeds from issuance of common stock | 132,957 | 105,331 | |||||||||
Stock received for payment of employee taxes on vesting of restricted stock | (136,396) | (111,864) | |||||||||
Payments for repurchases of common stock | (700,134) | (1,050,091) | |||||||||
Net cash used for financing activities | (803,573) | (657,049) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (7,527) | (52,826) | |||||||||
Increase (decrease) in cash and cash equivalents | 125,827 | (206,615) | |||||||||
Cash and cash equivalents at end of year | $ | 1,008,152 | $ | 882,325 |
2022 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GEOGRAPHY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||||||||||||||||||||||||||||||||||||
Americas | 47 | % | 45 | % | 45 | % | 46 | % | 46 | % | 44 | % | 41 | % | 43 | % | 44 | % | 43 | % | |||||||||||||||||||||||||||||||||||||||
China | 16 | % | 13 | % | 17 | % | 13 | % | 15 | % | 17 | % | 18 | % | 17 | % | 15 | % | 17 | % | |||||||||||||||||||||||||||||||||||||||
Other Asia | 18 | % | 18 | % | 17 | % | 18 | % | 18 | % | 18 | % | 18 | % | 19 | % | 19 | % | 19 | % | |||||||||||||||||||||||||||||||||||||||
Europe, Middle East and Africa | 14 | % | 18 | % | 16 | % | 17 | % | 16 | % | 15 | % | 17 | % | 15 | % | 16 | % | 16 | % | |||||||||||||||||||||||||||||||||||||||
Japan | 5 | % | 6 | % | 5 | % | 6 | % | 5 | % | 6 | % | 6 | % | 6 | % | 6 | % | 5 | % | |||||||||||||||||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
2022 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PRODUCT CATEGORY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | Q4 | Year | |||||||||||||||||||||||||||||||||||||||||||||||||
Custom IC Design and Simulation | 22 | % | 23 | % | 22 | % | 22 | % | 22 | % | 20 | % | 22 | % | 22 | % | 22 | % | 22 | % | |||||||||||||||||||||||||||||||||||||||
Digital IC Design and Signoff | 27 | % | 27 | % | 29 | % | 28 | % | 28 | % | 25 | % | 27 | % | 28 | % | 29 | % | 27 | % | |||||||||||||||||||||||||||||||||||||||
Functional Verification, including Emulation and Prototyping Hardware | 28 | % | 24 | % | 25 | % | 25 | % | 26 | % | 32 | % | 27 | % | 26 | % | 24 | % | 27 | % | |||||||||||||||||||||||||||||||||||||||
IP | 13 | % | 14 | % | 12 | % | 12 | % | 12 | % | 11 | % | 11 | % | 11 | % | 13 | % | 12 | % | |||||||||||||||||||||||||||||||||||||||
System Design and Analysis | 10 | % | 12 | % | 12 | % | 13 | % | 12 | % | 12 | % | 13 | % | 13 | % | 12 | % | 12 | % | |||||||||||||||||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Three Months Ending March 31, 2024 | Year Ending December 31, 2024 | |||||||||||||
Forecast | Forecast | |||||||||||||
GAAP operating margin as a percent of total revenue | 24.5% - 25.5% | 32% - 33% | ||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue: | ||||||||||||||
Stock-based compensation expense | 9% | 8% | ||||||||||||
Amortization of acquired intangibles | 2% | 1% | ||||||||||||
Acquisition and integration-related costs | 1% | 1% | ||||||||||||
Non-GAAP operating margin as a percent of total revenue† | 36.5% - 37.5% | 42% - 43% |
† | 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. |
Three Months Ending March 31, 2024 | Year Ending December 31, 2024 | |||||||||||||
Forecast | Forecast | |||||||||||||
Diluted net income per share on a GAAP basis | $0.74 to $0.78 | $4.08 to $4.18 | ||||||||||||
Stock-based compensation expense | 0.32 | 1.36 | ||||||||||||
Amortization of acquired intangibles | 0.06 | 0.24 | ||||||||||||
Acquisition and integration-related costs | 0.04 | 0.14 | ||||||||||||
Income tax effect of non-GAAP adjustments | (0.06) | 0.05 | ||||||||||||
Diluted net income per share on a non-GAAP basis† | $1.10 to $1.14 | $5.87 to $5.97 |
Three Months Ending March 31, 2024 | Year Ending December 31, 2024 | |||||||||||||
($ in millions) | Forecast | Forecast | ||||||||||||
Net income on a GAAP basis | $202 to $213 | $1,111 to $1,138 | ||||||||||||
Stock-based compensation expense | 88 | 370 | ||||||||||||
Amortization of acquired intangibles | 16 | 66 | ||||||||||||
Acquisition and integration-related costs | 12 | 39 | ||||||||||||
Income tax effect of non-GAAP adjustments | (16) | 13 | ||||||||||||
Net income on a non-GAAP basis† | $302 to $313 | $1,599 to $1,626 |
† | 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 REPORTS FOURTH QUARTER AND FISCAL YEAR 2023 | ||||||||
CADENCE DESIGN SYSTEMS, INC. | ||||||||
CFO COMMENTARY | ||||||||
Key Takeaways for 2023 • Revenue growth of 15%, and EPS growth of >20% • A seventh consecutive year of >50% incremental non-GAAP operating margin, resulting in non-GAAP operating margin of 42% • Record year-end backlog of $6.0B and current RPO of $3.2B | Q1 2024 Outlook • Revenue : $990 million - $1.010 billion • GAAP operating margin: 24.5% - 25.5% • Non-GAAP operating margin: 36.5% - 37.5% • GAAP EPS: $0.74 - $0.78 • Non-GAAP EPS: $1.10 - $1.14 • Expect to use approximately $125 million to repurchase Cadence shares in Q1 | Q4 2023 KEY METRICS | ||||||
• Revenue $1.069 billion • GAAP operating margin 31% • Non-GAAP operating margin 43% • GAAP EPS $1.19 • Non-GAAP EPS $1.38 • Operating cash flow $272 million | ||||||||
FY 2024 Outlook • Revenue: $4.55 - $4.61 billion • GAAP operating margin: 32% - 33% • Non-GAAP operating margin: 42% - 43% • GAAP EPS: $4.08 - $4.18 • Non-GAAP EPS $5.87 - $5.97 • Operating cash flow: $1.35 - $1.45 billion • Expect to use approximately 50% of free cash flow to repurchase Cadence shares for the year | Financial Results Webcast | FY 2023 KEY METRICS | ||||||
Our Q4 2023 financial results webcast will begin February 12, 2024 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 12, 2024 until 5:00 p.m. (Pacific) on March 15, 2024. | • Revenue $4.090 billion • GAAP operating margin 31% • Non-GAAP operating margin 42% • GAAP EPS $3.82 • Non-GAAP EPS $5.15 • Operating cash flow $1.349 billion | |||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 1 |
Cadence Design Systems, Inc. | ||||||||
(In Millions, except per share data) | 2018 | 2019 | 2020* | 2021 | 2022 | 2023* | 2024E | ||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,138 | $ | 2,336 | $ | 2,683 | $ | 2,988 | $ | 3,562 | $ | 4,090 | $4,550- $4,610 | ||||||||||||||||||||||||||||||||||
Revenue growth* | 10% | 9% | 15% | 11% | 19% | 15% | 11% - 13% | ||||||||||||||||||||||||||||||||||||||||
3-year CAGR | 8% | 9% | 11% | 12% | 15% | 15% | ~15% | ||||||||||||||||||||||||||||||||||||||||
3-year CAGR without 53rd week impact | 11% | 16% | |||||||||||||||||||||||||||||||||||||||||||||
GAAP operating expenses | $ | 1,742 | $ | 1,845 | $ | 2,037 | $ | 2,209 | $ | 2,488 | $ | 2,839 | ~$3,109 | ||||||||||||||||||||||||||||||||||
GAAP operating expense growth | 8% | 6% | 10% | 8% | 13% | 14% | ~10% | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating expenses | $ | 1,491 | $ | 1,587 | $ | 1,739 | $ | 1,877 | $ | 2,125 | $ | 2,373 | ~$2,634 | ||||||||||||||||||||||||||||||||||
Non-GAAP operating expense growth | 6% | 6% | 10% | 8% | 13% | 12% | ~11% | ||||||||||||||||||||||||||||||||||||||||
GAAP operating margin** | 19% | 21% | 24% | 26% | 30% | 31% | 32.5 | % | |||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin** | 30% | 32% | 35% | 37% | 40% | 42% | 42.5 | % | |||||||||||||||||||||||||||||||||||||||
GAAP earnings per share | $ | 1.23 | $ | 3.53 | $ | 2.11 | $ | 2.50 | $ | 3.09 | $ | 3.82 | $4.08 - $4.18 | ||||||||||||||||||||||||||||||||||
Non-GAAP earning per share | $ | 1.87 | $ | 2.20 | $ | 2.80 | $ | 3.29 | $ | 4.27 | $ | 5.15 | $5.87 - $5.97 | ||||||||||||||||||||||||||||||||||
Non-GAAP EPS growth** | 34% | 18% | 27% | 18% | 30% | 21% | 15 | % | |||||||||||||||||||||||||||||||||||||||
3-year Non-GAAP EPS CAGR** | 20% | 22% | 26% | 21% | 25% | 23% | 22 | % | |||||||||||||||||||||||||||||||||||||||
Weighted average shares diluted outstanding | 281.1 | 280.5 | 279.6 | 278.9 | 275.0 | 272.7 | 271.5 - 273.5 | ||||||||||||||||||||||||||||||||||||||||
Cash flow from operations | 605 | 730 | 905 | 1,101 | 1,242 | 1,349 | $1,350 - $1,450 | ||||||||||||||||||||||||||||||||||||||||
Capital expenditures | 62 | 75 | 95 | 65 | 123 | 102 | ~$120 | ||||||||||||||||||||||||||||||||||||||||
(In Millions) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024E* | ||||||||||||||||||||||||||||||||||||||||
Revenue | $ | 2,138 | $ | 2,336 | $ | 2,683 | $ | 2,988 | $ | 3,562 | $ | 4,090 | $ | 4,580 | |||||||||||||||||||||||||||||||||
Revenue Growth | 10% | 9% | 15% | 11% | 19% | 15% | 12% | ||||||||||||||||||||||||||||||||||||||||
3-Year Revenue Growth CAGR | 8% | 9% | 11% | 12% | 15% | 15% | 15% | ||||||||||||||||||||||||||||||||||||||||
GAAP operating margin | 19% | 21% | 24% | 26% | 30% | 31% | 32.5% | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin | 30% | 32% | 35% | 37% | 40% | 42% | 42.5% | ||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | (8)% | (8)% | (7)% | (7)% | (8)% | (8)% | (8)% | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin adjusted for stock-based compensation | 22% | 24% | 28% | 30% | 32% | 34% | 34.5% | ||||||||||||||||||||||||||||||||||||||||
GAAP operating income | $ | 396 | $ | 492 | $ | 646 | $ | 779 | $ | 1,074 | $ | 1,251 | $ | 1,471 | |||||||||||||||||||||||||||||||||
Non-GAAP operating income | $ | 647 | $ | 749 | $ | 944 | $ | 1,111 | $ | 1,436 | $ | 1,717 | $ | 1,946 | |||||||||||||||||||||||||||||||||
Non-GAAP operating income adjusted for stock-based compensation | $ | 479 | $ | 567 | $ | 747 | $ | 901 | $ | 1,166 | $ | 1,391 | $ | 1,576 | |||||||||||||||||||||||||||||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 2 |
Cadence Design Systems, Inc. | ||||||||
Q1 2023 | Q4 2023 | Q1 2024E | |||||||||||||||||||||
Total Revenue ($ Millions) | $ | 1,022 | $ | 1,069 | $990 - $1,010 | ||||||||||||||||||
Q/Q Growth | 4% | (7)% - (6)% | |||||||||||||||||||||
Y/Y Growth | 19% | (3)% - (1)% | |||||||||||||||||||||
GAAP Operating Margin | 32% | 31% | 24.5% - 25.5% | ||||||||||||||||||||
Non-GAAP Operating Margin | 42% | 43% | 36.5% - 37.5% | ||||||||||||||||||||
GAAP EPS | $ | 0.89 | $ | 1.19 | $0.74 - $0.78 | ||||||||||||||||||
Non-GAAP EPS | $ | 1.29 | $ | 1.38 | $1.10 - $1.14 | ||||||||||||||||||
FY 2023 | FY 2024E | ||||||||||||||||
Recurring Revenue | 84% | 80% - 85% | |||||||||||||||
Total Revenue ($ Millions) | $ | 4,090 | $4,550 - $4,610 | ||||||||||||||
Y/Y Growth | 15% | 11% - 13% | |||||||||||||||
Revenue from Beginning Backlog | ~75% | ~70% | |||||||||||||||
GAAP Operating Margin | 30.6% | 32% - 33% | |||||||||||||||
Non-GAAP Operating Margin | 42.0% | 42% - 43% | |||||||||||||||
GAAP Other Income & Expense ($ Millions) | $ | 31 | $(10) - $(18) | ||||||||||||||
Non-GAAP Other Income & Expense ($ Millions) | $ | (15) | $(10) - $(18) | ||||||||||||||
GAAP Tax Rate | 19% | ~23% | |||||||||||||||
Non-GAAP Tax Rate | 17.5% | 16.5% | |||||||||||||||
Weighted Average Diluted Shares Outstanding (Millions) | 272.7 | 271.5 - 273.5 | |||||||||||||||
GAAP EPS | $ | 3.82 | $4.08 - $4.18 | ||||||||||||||
Y/Y Growth | 24% | 7% - 9% | |||||||||||||||
Non-GAAP EPS | $ | 5.15 | $5.87 - $5.97 | ||||||||||||||
Y/Y Growth | 21% | 14% - 16% | |||||||||||||||
Cash Flow from Operations ($ Millions) | $ | 1,349 | $1,350 - $1,450 | ||||||||||||||
DSO | 43 | ~45 | |||||||||||||||
Capital Expenditures ($ Millions) | $ | 102 | ~$120 | ||||||||||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 3 |
Cadence Design Systems, Inc. | ||||||||
(In Billions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Backlog | $ | 3.6 | $ | 3.9 | $ | 4.4 | $ | 5.8 | $ | 6.0 | |||||||||||||||||||||||||
(In Millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
Product and Maintenance | $ | 846 | $ | 964 | $ | 923 | $ | 966 | $ | 982 | |||||||||||||||||||||||||
Services | 54 | 58 | 54 | 57 | 87 | ||||||||||||||||||||||||||||||
Total Revenue | $ | 900 | $ | 1,022 | $ | 977 | $ | 1,023 | $ | 1,069 | |||||||||||||||||||||||||
(In Millions) | 2019 | 2020* | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Product and Maintenance | $ | 2,204 | $ | 2,537 | $ | 2,813 | $ | 3,340 | $ | 3,834 | |||||||||||||||||||||||||
Services | 132 | 146 | 175 | 222 | 256 | ||||||||||||||||||||||||||||||
Total Revenue | $ | 2,336 | $ | 2,683 | $ | 2,988 | $ | 3,562 | $ | 4,090 |
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
Revenue recognized over time | 84 | % | 77 | % | 82 | % | 83 | % | 85 | % | |||||||||||||||||||||||||
Revenue from arrangements with non-cancelable commitments | 3 | % | 3 | % | 3 | % | 2 | % | 2 | % | |||||||||||||||||||||||||
Recurring Revenue | 87 | % | 80 | % | 85 | % | 85 | % | 87 | % | |||||||||||||||||||||||||
Up-Front Revenue | 13 | % | 20 | % | 15 | % | 15 | % | 13 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||
2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||||
Revenue recognized over time | 85 | % | 85 | % | 83 | % | 81 | % | |||||||||||||||||||||||||||
Revenue from arrangements with non-cancelable commitments | 3 | % | 3 | % | 2 | % | 3 | % | |||||||||||||||||||||||||||
Recurring Revenue | 88 | % | 88 | % | 85 | % | 84 | % | |||||||||||||||||||||||||||
Up-Front Revenue | 12 | % | 12 | % | 15 | % | 16 | % | |||||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||||
Trailing Twelve Months Ended | |||||||||||||||||||||||||||||||||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
Recurring Revenue | 85 | % | 84 | % | 84 | % | 84 | % | 84 | % | |||||||||||||||||||||||||
Up-Front Revenue | 15 | % | 16 | % | 16 | % | 16 | % | 16 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 4 |
Cadence Design Systems, Inc. | ||||||||
(% of Total Revenue) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
Americas | 46 | % | 44 | % | 41 | % | 43 | % | 44 | % | |||||||||||||||||||||||||
China | 13 | % | 17 | % | 18 | % | 17 | % | 15 | % | |||||||||||||||||||||||||
Other Asia | 18 | % | 18 | % | 18 | % | 19 | % | 19 | % | |||||||||||||||||||||||||
Europe, Middle East and Africa | 17 | % | 15 | % | 17 | % | 15 | % | 16 | % | |||||||||||||||||||||||||
Japan | 6 | % | 6 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(% of Total Revenue) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Americas | 44 | % | 42 | % | 45 | % | 46 | % | 43 | % | |||||||||||||||||||||||||
China | 10 | % | 15 | % | 13 | % | 15 | % | 17 | % | |||||||||||||||||||||||||
Other Asia | 20 | % | 18 | % | 19 | % | 18 | % | 19 | % | |||||||||||||||||||||||||
Europe, Middle East and Africa | 18 | % | 18 | % | 17 | % | 16 | % | 16 | % | |||||||||||||||||||||||||
Japan | 8 | % | 7 | % | 6 | % | 5 | % | 5 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(% of Total Revenue) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
Custom IC Design and Simulation | 22 | % | 20 | % | 22 | % | 22 | % | 22 | % | |||||||||||||||||||||||||
Digital IC Design and Signoff | 28 | % | 25 | % | 27 | % | 28 | % | 29 | % | |||||||||||||||||||||||||
Functional Verification | 25 | % | 32 | % | 27 | % | 26 | % | 24 | % | |||||||||||||||||||||||||
IP | 12 | % | 11 | % | 11 | % | 11 | % | 13 | % | |||||||||||||||||||||||||
System Design and Analysis | 13 | % | 12 | % | 13 | % | 13 | % | 12 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(% of Total Revenue) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Custom IC Design and Simulation | 25 | % | 25 | % | 23 | % | 22 | % | 22 | % | |||||||||||||||||||||||||
Digital IC Design and Signoff | 30 | % | 29 | % | 29 | % | 28 | % | 27 | % | |||||||||||||||||||||||||
Functional Verification | 23 | % | 22 | % | 24 | % | 26 | % | 27 | % | |||||||||||||||||||||||||
IP | 13 | % | 14 | % | 13 | % | 12 | % | 12 | % | |||||||||||||||||||||||||
System Design and Analysis | 9 | % | 10 | % | 11 | % | 12 | % | 12 | % | |||||||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 5 |
Cadence Design Systems, Inc. | ||||||||
(% of Total Revenue) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Custom IC Design and Simulation | 9 | % | 9 | % | 8 | % | 10 | % | 10 | % | |||||||||||||||||||||||||
Digital IC Design and Signoff | 10 | % | 11 | % | 11 | % | 13 | % | 13 | % | |||||||||||||||||||||||||
Functional Verification | 5 | % | 11 | % | 11 | % | 20 | % | 23 | % | |||||||||||||||||||||||||
IP | 16 | % | 18 | % | 16 | % | 15 | % | 8 | % | |||||||||||||||||||||||||
System Design and Analysis | 7 | % | 13 | % | 19 | % | 24 | % | 22 | % | |||||||||||||||||||||||||
Total 3 Year CAGR | 9 | % | 11 | % | 12 | % | 15 | % | 15 | % |
(% of Total Revenue) | 2019 | 2020* | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Custom IC Design and Simulation | 9 | % | 8 | % | 8 | % | 10 | % | 11 | % | |||||||||||||||||||||||||
Digital IC Design and Signoff | 10 | % | 10 | % | 11 | % | 13 | % | 14 | % | |||||||||||||||||||||||||
Functional Verification | 5 | % | 10 | % | 11 | % | 20 | % | 24 | % | |||||||||||||||||||||||||
IP | 16 | % | 18 | % | 16 | % | 15 | % | 9 | % | |||||||||||||||||||||||||
System Design and Analysis | 7 | % | 12 | % | 19 | % | 24 | % | 23 | % | |||||||||||||||||||||||||
Total 3 Year CAGR | 9 | % | 11 | % | 12 | % | 15 | % | 16 | % |
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
GAAP Gross Margin | 89.6 | % | 87.8 | % | 90.1 | % | 89.3 | % | 90.3 | % | |||||||||||||||||||||||||
Non-GAAP Gross Margin | 91.1 | % | 89.1 | % | 91.4 | % | 90.6 | % | 91.7 | % | |||||||||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||||||||||||||
GAAP Gross Margin | 88.6 | % | 88.6 | % | 89.7 | % | 89.6 | % | 89.4 | % | |||||||||||||||||||||||||
Non-GAAP Gross Margin | 90.6 | % | 90.6 | % | 91.7 | % | 91.0 | % | 90.7 | % | |||||||||||||||||||||||||
(In Millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
Total GAAP Costs and Expenses | $ | 689 | $ | 699 | $ | 677 | $ | 730 | $ | 732 | |||||||||||||||||||||||||
Total Non-GAAP Costs and Expenses | $ | 579 | $ | 591 | $ | 569 | $ | 603 | $ | 610 | |||||||||||||||||||||||||
(In Millions) | 2019 | 2020* | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Total GAAP Costs and Expenses | $ | 1,845 | $ | 2,037 | $ | 2,209 | $ | 2,488 | $ | 2,839 | |||||||||||||||||||||||||
Total Non-GAAP Costs and Expenses | $ | 1,587 | $ | 1,739 | $ | 1,877 | $ | 2,125 | $ | 2,373 | |||||||||||||||||||||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 6 |
Cadence Design Systems, Inc. | ||||||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
GAAP Operating Margin | 23.5 | % | 31.6 | % | 30.7 | % | 28.6 | % | 31.5 | % | |||||||||||||||||||||||||
Non-GAAP Operating Margin | 35.6 | % | 42.1 | % | 41.8 | % | 41.1 | % | 42.9 | % | |||||||||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||||||||||||||
GAAP Operating Margin | 21.1 | % | 24.1 | % | 26.1 | % | 30.1 | % | 30.6 | % | |||||||||||||||||||||||||
Non-GAAP Operating Margin | 32.1 | % | 35.2 | % | 37.2 | % | 40.3 | % | 42.0 | % | |||||||||||||||||||||||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
GAAP Net Income Per Share | $ | 0.88 | $ | 0.89 | $ | 0.81 | $ | 0.93 | $ | 1.19 | |||||||||||||||||||||||||
Non-GAAP Net Income Per Share | $ | 0.96 | $ | 1.29 | $ | 1.22 | $ | 1.26 | $ | 1.38 | |||||||||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||||||||||||||
GAAP Net Income Per Share | $ | 3.53 | $ | 2.11 | $ | 2.50 | $ | 3.09 | $ | 3.82 | |||||||||||||||||||||||||
Non-GAAP Net Income Per Share | $ | 2.20 | $ | 2.80 | $ | 3.29 | $ | 4.27 | $ | 5.15 | |||||||||||||||||||||||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
DSO | 49 | 44 | 42 | 39 | 43 | ||||||||||||||||||||||||||||||
(In Millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
Net Cash from Operating Activities | $ | 264 | $ | 267 | $ | 414 | $ | 396 | $ | 272 | |||||||||||||||||||||||||
Capital Expenditures | 37 | 26 | 20 | 22 | 34 | ||||||||||||||||||||||||||||||
Free Cash Flow | $ | 227 | $ | 241 | $ | 394 | $ | 374 | $ | 238 | |||||||||||||||||||||||||
(In Millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Net Cash from Operating Activities | $ | 730 | $ | 905 | $ | 1,101 | $ | 1,242 | $ | 1,349 | |||||||||||||||||||||||||
Capital Expenditures | 75 | 95 | 65 | 123 | 102 | ||||||||||||||||||||||||||||||
Free Cash Flow | $ | 655 | $ | 810 | $ | 1,036 | $ | 1,119 | $ | 1,247 | |||||||||||||||||||||||||
(In Millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
Cash and Cash Equivalents | $ | 882 | $ | 917 | $ | 874 | $ | 962 | $ | 1,008 | |||||||||||||||||||||||||
(In Millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Cash and Cash Equivalents | $ | 705 | $ | 928 | $ | 1,089 | $ | 882 | $ | 1,008 | |||||||||||||||||||||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 7 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
Share Repurchase | $ | 300 | $ | 125 | $ | 265 | $ | 185 | $ | 125 | |||||||||||||||||||||||||
Number of Shares | 1.939 | 0.668 | 1.178 | 0.811 | 0.488 | ||||||||||||||||||||||||||||||
(In Millions) | 2019 | 2020 | 2021 | 2022 | 2023 | ||||||||||||||||||||||||||||||
Share Repurchase | $ | 306 | $ | 380 | $ | 612 | $ | 1,050 | $ | 700 | |||||||||||||||||||||||||
Number of Shares | 4.841 | 4.247 | 4.401 | 6.602 | 3.145 | ||||||||||||||||||||||||||||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
Headcount | 10,228 | 10,579 | 10,832 | 11,139 | 11,226 | ||||||||||||||||||||||||||||||
2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||||||||||||||
Headcount | 8,078 | 8,746 | 9,298 | 10,228 | 11,226 | ||||||||||||||||||||||||||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 8 |
Cadence Design Systems, Inc. | ||||||||
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 9 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | ||||||||||||||||||||||||||||||
GAAP total costs and expenses | $ | 689 | $ | 699 | $ | 677 | $ | 730 | $ | 732 | |||||||||||||||||||||||||
Reconciling items to non-GAAP total costs and expenses | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | (73) | (74) | (76) | (88) | (87) | ||||||||||||||||||||||||||||||
Amortization of acquired intangibles | (16) | (15) | (15) | (15) | (17) | ||||||||||||||||||||||||||||||
Acquisition and integration-related costs | (18) | (16) | (14) | (14) | (13) | ||||||||||||||||||||||||||||||
Restructuring | — | — | — | (12) | 1 | ||||||||||||||||||||||||||||||
Non-qualified deferred compensation (expenses) credits | (3) | (3) | (3) | 2 | (6) | ||||||||||||||||||||||||||||||
Non-GAAP total costs and expenses* | $ | 579 | $ | 591 | $ | 569 | $ | 603 | $ | 610 | |||||||||||||||||||||||||
* | 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. |
(In Millions) | 2018 | 2019 | 2020* | 2021 | 2022 | 2023 | 2024E | ||||||||||||||||||||||||||||||||||||||||
GAAP total costs and expenses | $ | 1,742 | $ | 1,845 | $ | 2,037 | $ | 2,209 | $ | 2,488 | $ | 2,839 | $ | 3,109 | |||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP total costs and expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | (168) | (182) | (197) | (210) | (270) | (326) | (370) | ||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | (53) | (53) | (64) | (67) | (60) | (62) | (66) | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | (20) | (8) | (23) | (23) | (41) | (56) | (39) | ||||||||||||||||||||||||||||||||||||||||
Restructuring | (11) | (9) | (9) | 1 | — | (11) | — | ||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation (expenses) credits | 1 | (5) | (5) | (6) | 8 | (11) | — | ||||||||||||||||||||||||||||||||||||||||
Special charges** | — | (1) | — | (27) | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP total costs and expenses*** | $ | 1,491 | $ | 1,587 | $ | 1,739 | $ | 1,877 | $ | 2,125 | $ | 2,373 | $ | 2,634 | |||||||||||||||||||||||||||||||||
* | Fiscal 2020 was a 53-week year. | ||||
** | 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 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 10 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | 2018 | 2019 | 2020* | 2021 | 2022 | 2023 | 2024E | ||||||||||||||||||||||||||||||||||||||||
GAAP operating income | $ | 396 | $ | 492 | $ | 646 | $ | 779 | $ | 1,074 | $ | 1,251 | $ | 1,471 | |||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP operating income | |||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 168 | 182 | 197 | 210 | 270 | 326 | 370 | ||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 53 | 53 | 64 | 67 | 60 | 62 | 66 | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 20 | 8 | 23 | 23 | 41 | 56 | 39 | ||||||||||||||||||||||||||||||||||||||||
Restructuring | 11 | 9 | 9 | (1) | — | 11 | — | ||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | (1) | 5 | 5 | 6 | (8) | 11 | — | ||||||||||||||||||||||||||||||||||||||||
Special charges** | — | 1 | — | 27 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating income*** | $ | 647 | $ | 749 | $ | 944 | $ | 1,111 | $ | 1,436 | $ | 1,717 | $ | 1,946 | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | (168) | (182) | (197) | (210) | (270) | (326) | $ | (370) | |||||||||||||||||||||||||||||||||||||||
Non-GAAP operating income adjusted for stock-based compensation*** | $ | 479 | $ | 567 | $ | 747 | $ | 901 | $ | 1,166 | $ | 1,391 | $ | 1,576 | |||||||||||||||||||||||||||||||||
* | Fiscal 2020 was a 53-week year. | ||||
** | 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 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 11 |
Cadence Design Systems, Inc. | ||||||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |||||||||||||||||||||||||||||||
GAAP gross margin as a percent of total revenue | 89.6% | 87.8% | 90.1% | 89.3% | 90.3% | ||||||||||||||||||||||||||||||
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 | 1.2% | 1.0% | 1.1% | 1.1% | 1.1% | ||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||||||||||||||||||||||||||
Non-GAAP gross margin as a percent of total revenue* | 91.1% | 89.1% | 91.4% | 90.6% | 91.7% | ||||||||||||||||||||||||||||||
* | 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. |
2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||||||||||||||
GAAP gross margin as a percent of total revenue | 88.6% | 88.6% | 89.7% | 89.6% | 89.4% | ||||||||||||||||||||||||||||||
Reconciling items to non-GAAP gross margin as a percent of total revenue | |||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 0.3% | 0.3% | 0.3% | 0.2% | 0.2% | ||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 1.7% | 1.7% | 1.6% | 1.2% | 1.1% | ||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||||||||||||||||||||||||||
Special charges * | 0.0% | 0.0% | 0.1% | 0.0% | 0.0% | ||||||||||||||||||||||||||||||
Non-GAAP gross margin as a percent of total revenue** | 90.6% | 90.6% | 91.7% | 91.0% | 90.7% | ||||||||||||||||||||||||||||||
* | 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 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 12 |
Cadence Design Systems, Inc. | ||||||||
Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024E | |||||||||||||||||||||||||||||||||||||||
GAAP operating margin as a percent of total revenue | 23% | 32% | 31% | 29% | 31% | 24.5% - 25.5% | ||||||||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 8% | 7% | 8% | 9% | 8% | 9% | ||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 2% | 1% | 2% | 1% | 2% | 2% | ||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 2% | 2% | 1% | 1% | 1% | 1% | ||||||||||||||||||||||||||||||||||||||
Restructuring | 0% | 0% | 0% | 1% | 0% | 0% | ||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 1% | 0% | 0% | 0% | 1% | 0% | ||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin as a percent of total revenue* | 36% | 42% | 42% | 41% | 43% | 36.5% - 37.5% | ||||||||||||||||||||||||||||||||||||||
* | 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. |
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024E | ||||||||||||||||||||||||||||||||||||||||||||
GAAP operating margin as a percent of total revenue | 19% | 21% | 24% | 26% | 30% | 31% | 32% - 33% | |||||||||||||||||||||||||||||||||||||||||||
Reconciling items to non-GAAP operating margin as a percent of total revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 8% | 8% | 7% | 7% | 8% | 8% | 8% | |||||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 2% | 2% | 3% | 2% | 2% | 2% | 1% | |||||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 1% | 0% | 1% | 1% | 1% | 1% | 1% | |||||||||||||||||||||||||||||||||||||||||||
Restructuring | 0% | 1% | 0% | 0% | 0% | 0% | 0% | |||||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 0% | 0% | 0% | 0% | (1)% | 0% | 0% | |||||||||||||||||||||||||||||||||||||||||||
Special charges * | 0% | 0% | 0% | 1% | 0% | 0% | 0% | |||||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin as a percent of total revenue** | 30% | 32% | 35% | 37% | 40% | 42% | 42% - 43% | |||||||||||||||||||||||||||||||||||||||||||
* | 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 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 13 |
Cadence Design Systems, Inc. | ||||||||
(In Thousands, Except Per Share Data) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024E | ||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a GAAP basis | $ | 0.88 | $ | 0.89 | $ | 0.81 | $ | 0.93 | $ | 1.19 | $0.74 - $0.78 | |||||||||||||||||||||||||||||||||
Stock-based compensation expense | 0.27 | 0.27 | 0.28 | 0.32 | 0.32 | 0.32 | ||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 0.06 | 0.05 | 0.06 | 0.06 | 0.06 | 0.06 | ||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.06 | 0.06 | 0.05 | 0.05 | 0.04 | 0.04 | ||||||||||||||||||||||||||||||||||||||
Restructuring | — | — | — | 0.04 | — | — | ||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | 0.01 | 0.01 | 0.01 | — | 0.02 | — | ||||||||||||||||||||||||||||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** | (0.01) | (0.01) | (0.01) | (0.04) | (0.10) | — | ||||||||||||||||||||||||||||||||||||||
Income tax effect of non-GAAP adjustments | (0.31) | 0.02 | 0.02 | (0.10) | (0.15) | (0.06) | ||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a non-GAAP basis* | $ | 0.96 | $ | 1.29 | $ | 1.22 | $ | 1.26 | $ | 1.38 | $1.10 - $1.14 | |||||||||||||||||||||||||||||||||
Shares used in calculation of diluted net income per share | 272,997 | 273,159 | 272,996 | 272,427 | 272,419 | |||||||||||||||||||||||||||||||||||||||
* | 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. | ||||
** | 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. |
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 14 |
Cadence Design Systems, Inc. | ||||||||
(In Thousands, Except Per Share Data) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024E | ||||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a GAAP basis | $ | 1.23 | $ | 3.53 | $ | 2.11 | $ | 2.50 | $ | 3.09 | $ | 3.82 | $4.08 - $4.18 | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense | 0.60 | 0.65 | 0.71 | 0.75 | 0.98 | 1.19 | 1.36 | ||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles | 0.19 | 0.19 | 0.23 | 0.24 | 0.22 | 0.23 | 0.24 | ||||||||||||||||||||||||||||||||||||||||
Acquisition and integration-related costs | 0.07 | 0.03 | 0.08 | 0.08 | 0.15 | 0.21 | 0.14 | ||||||||||||||||||||||||||||||||||||||||
Restructuring | 0.04 | 0.03 | 0.03 | — | — | 0.04 | — | ||||||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation expenses (credits) | (0.01) | 0.02 | 0.02 | 0.02 | (0.03) | 0.04 | — | ||||||||||||||||||||||||||||||||||||||||
Special charges** | — | — | — | 0.10 | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets*** | — | (0.01) | — | (0.03) | 0.05 | (0.17) | — | ||||||||||||||||||||||||||||||||||||||||
Income tax benefit related to intercompany transfers of certain intellectual property rights | — | (2.05) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Income tax effect of non-GAAP adjustments | (0.25) | (0.19) | (0.38) | (0.37) | (0.19) | (0.21) | 0.05 | ||||||||||||||||||||||||||||||||||||||||
Diluted net income per share on a non-GAAP basis* | $ | 1.87 | $ | 2.20 | $ | 2.80 | $ | 3.29 | $ | 4.27 | $ | 5.15 | $5.87 - $5.97 | ||||||||||||||||||||||||||||||||||
Shares used in calculation of diluted net income per share | 281,144 | 280,515 | 279,641 | 278,858 | 275,011 | 272,748 | 271.5 - 273.5M | ||||||||||||||||||||||||||||||||||||||||
* | 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. | ||||
** | 2021 includes costs related to a voluntary retirement program. | ||||
*** | 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. |
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 15 |
Cadence Design Systems, Inc. | ||||||||
(In Millions) | FY 2022 | FY 2023 | FY 2024E | |||||||||||||||||||||||
GAAP total other income and expense | $ | (28) | $ | 31 | $(10) - $(18) | |||||||||||||||||||||
Reconciling items to non-GAAP total income and expense | ||||||||||||||||||||||||||
Other income or expense related to investments and non-qualified deferred compensation plan assets** | 14 | (46) | — | |||||||||||||||||||||||
Non-GAAP total other income and expense* | $ | (14) | $ | (15) | $(10) - $(18) | |||||||||||||||||||||
* | 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. | ||||
** | 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. |
February 12, 2024 | Cadence Q4 and Fiscal Year 2023 Financial Results | 16 |
Document and Entity Information |
Feb. 12, 2024 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Document Period End Date | Feb. 12, 2024 |
Entity Registrant Name | CADENCE DESIGN SYSTEMS, INC. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 000-15867 |
Entity Tax Identification Number | 00-0000000 |
Entity Address, Address Line One | 2655 Seely Avenue, |
Entity Address, City or Town | San Jose, |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 95134 |
City Area Code | (408) |
Local Phone Number | 943-1234 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, $0.01 par value per share |
Trading Symbol | CDNS |
Security Exchange Name | NASDAQ |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0000813672 |
Amendment Flag | false |
1 Year Cadence Design Systems Chart |
1 Month Cadence Design Systems Chart |
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