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Cadence Design Systems Raises 2026 Revenue Outlook to 21% Growth on $1.63 Billion Quarter

Cadence also authorized an additional $2.5 billion in share repurchases and reported a record backlog of $8.2 billion.

By Zintick Team · Editor: Kratik Mehta
Published

Printed circuit board with electronic chips, electronics components and electronic scheme
Photo: Pedal to the Stock/Shutterstock.com

Key points

  • Q3 revenue $1.633 billion, up 22% from $1.339 billion a year earlier
  • Non-GAAP EPS $2.11 vs $1.93; GAAP EPS $1.05, flat year over year
  • 2026 revenue outlook raised to 21% growth; non-GAAP EPS guided to $8.37-$8.43
  • Backlog a record $8.2 billion; additional $2.5 billion buyback authorized

Cadence Design Systems (Nasdaq: CDNS) reported third-quarter revenue of $1.633 billion, up from $1.339 billion a year earlier, and non-GAAP diluted earnings of $2.11 per share, compared with $1.93 a year earlier, in an 8-K filed Monday.

GAAP diluted earnings were $1.05 per share, matching the prior-year quarter. GAAP operating margin was 26.2%, down from 31.8%, while non-GAAP operating margin was 44.1%, compared with 47.6%.

Growth and product lines

Chief Executive Anirudh Devgan said the company was raising its 2026 revenue outlook to 21% year-over-year growth. Third-quarter revenue grew 22%, and the company said it saw strong double-digit growth across all product categories. Core EDA revenue rose 20%, IP revenue increased 24%, and System Design and Analysis revenue grew 30%.

The company launched Maestro, a portfolio of domain-specialized AI models for chip and system design, and said its AI Super Agents had more than 100 active customer engagements.

Backlog and capital returns

Quarter-end backlog was $8.2 billion, and revenue expected to be recognized in the next 12 months from remaining performance obligations was $4.2 billion. Cadence used $400 million to repurchase its shares during the quarter.

On Oct. 23, 2026, the board approved up to an additional $2.5 billion in share repurchases under the existing program. The program has no expiration date.

Full-year outlook

For fiscal 2026, Cadence expects revenue of $6.387 billion to $6.417 billion, non-GAAP diluted earnings of $8.37 to $8.43 per share, and GAAP diluted earnings of $4.84 to $4.90 per share. It expects a non-GAAP operating margin of 44.2% to 45.2%.

For the fourth quarter, the company expects non-GAAP diluted earnings of $2.19 to $2.25 per share.

Cadence's shares last closed at $322.17 on Monday, Oct. 26, 2026, before the filing. The company hosted an audio webcast on the results at 2 p.m. Pacific that day.

Sources

Written with AI from the company's results filing with the SEC, analysts' estimates where we had them, and our market data, and checked against those sources before publishing. Our editorial standards.

CDNS page →

Filings, figures and price history are on the Cadence Design Systems page.