Form 8-K

8-K — CADENCE DESIGN SYSTEMS INC

Accession: 0000813672-26-000116

Filed: 2026-10-26

Period: 2026-10-23

CIK: 0000813672

SIC: 7372 (SERVICES-PREPACKAGED SOFTWARE)

Item: Results of Operations and Financial Condition

Item: Other Events

Item: Financial Statements and Exhibits

Documents

8-K — cdns-20261023.htm (Primary)

EX-99.01 — PRESS RELEASE (cdns10262026ex9901.htm)

EX-99.02 — CFO COMMENTARY (cfocommentary10262026ex9902.htm)

GRAPHIC (image0a22a.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: cdns-20261023.htm · Sequence: 1

cdns-20261023

0000813672false00008136722026-10-232026-10-23

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): October 23, 2026

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 class Trading Symbol(s) Name of each exchange on which registered

Common Stock, $0.01 par value per share CDNS Nasdaq 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 October 26, 2026 Cadence Design Systems, Inc. (“Cadence”) issued a press release announcing its financial results for the quarter ended September 30, 2026.

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 ended September 30, 2026 is attached hereto as Exhibit 99.02, and the press release and the commentary are incorporated herein by reference.

The information contained in this Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2 attached hereto, 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 8.01. Other Events.

On October 23, 2026, the board of directors of Cadence approved the repurchase of up to an additional $2.5 billion of the Company’s common stock under its existing share repurchase program. The Company may repurchase shares from time to time through open market purchases, in privately negotiated transactions or by other means, including accelerated share repurchase transactions or other structured repurchase transactions, block trades or pursuant to trading plans intended to comply with Rule 10b5-1 of the U.S. Securities Exchange Act of 1934, as amended. The actual timing and amount of future repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. The share repurchase program does not have an expiration date and may be modified, suspended or terminated by the Company at any time without prior notice.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description

99.01

Press Release issued by Cadence Design Systems, Inc. on October 26, 2026.

99.02

CFO Commentary on Results of Quarter Ended September 30, 2026.

104 Cover 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: October 26, 2026

CADENCE DESIGN SYSTEMS, INC.

By:

/s/ John M. Wall

John M. Wall

Senior Vice President and Chief Financial Officer

EX-99.01 — PRESS RELEASE

EX-99.01

Filename: cdns10262026ex9901.htm · Sequence: 2

Document

Exhibit 99.01

Cadence Reports Third Quarter 2026 Financial Results

Raising 2026 Revenue Growth Outlook to 21% and Non-GAAP EPS to $8.40

Q3 Recurring Revenue Up 18% YoY, Record Backlog of $8.2 Billion

SAN JOSE, Calif. — October 26, 2026 — Cadence (Nasdaq: CDNS) today announced results for the third quarter of 2026.

Third Quarter 2026 Financial Results

•Revenue of $1.633 billion, compared to revenue of $1.339 billion in Q3 2025

•GAAP operating margin of 26.2%, compared to 31.8% in Q3 2025

•Non-GAAP operating margin of 44.1%, compared to 47.6% in Q3 2025

•GAAP diluted net income per share of $1.05, compared to $1.05 in Q3 2025

•Non-GAAP diluted net income per share of $2.11, compared to $1.93 in Q3 2025

•Cadence used $400 million to repurchase Cadence shares. Underscoring Cadence's continued commitment to returning capital to shareholders, Cadence's Board of Directors has authorized an additional $2.5 billion for Cadence's share repurchase program.

•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 delivered an outstanding third quarter. With broad-based business momentum, expanding technology leadership and a record backlog, we are raising our 2026 revenue outlook to 21% year-over-year growth,” said Anirudh Devgan, president and chief executive officer. “With the launch of Maestro, our portfolio of domain specialized AI models for chip and system design, and the accelerating deployment of our AI Super Agents, Cadence is exceptionally well positioned to capitalize on the transformational Agentic AI opportunity.”

“Q3 revenue grew 22% year-over-year, with strong double-digit growth across all product categories, driven by growing momentum from AI-driven designs,” said John Wall, senior vice president and chief financial officer. “With record backlog of $8.2 billion and continued strength in recurring revenue, we are poised to deliver a strong 2026.”

CFO Commentary

Commentary on the third quarter of 2026 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 2026, the company expects:

•Revenue in the range of $6.387 billion to $6.417 billion

•GAAP operating margin in the range of 28.2% to 29.2%

•Non-GAAP operating margin in the range of 44.2% to 45.2%

•GAAP diluted net income per share in the range of $4.84 to $4.90

•Non-GAAP diluted net income per share in the range of $8.37 to $8.43

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 2026 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. Revenue growth outlook is based on the midpoint of the range.

Business Highlights

•Launched Maestro, a portfolio of domain-specialized AI models purpose-built for chip and system design, delivering initial workflow results of up to 30% higher quality and 5X greater token efficiency versus general-purpose foundation models, with several customer deployments underway

•Cadence AI Super Agents continued to gain momentum with more than 100 active customer engagements, delivering significant productivity and design improvements across digital, analog and custom, and system design workflows

•Core EDA revenue grew 20% year-over-year, driven by broad-based strength across the portfolio, including 16 new digital and signoff full-flow wins and growing adoption among memory and hyperscaler customers

•Hardware delivered another record quarter, fueled by meaningful expansions with marquee customers and strong growth in Cadence's hardware cloud offering

•IP revenue increased 24% year-over-year, driven by strong demand for Cadence's differentiated Star IP portfolio across interface, memory and foundation IP, and continued engagement with leading hyperscalers, semiconductor companies and foundries

•System Design and Analysis revenue grew 30% year-over-year, driven by continued strength in Cadence’s PCB and advanced packaging solutions, strong adoption of the Millennium platform and growing momentum across Cadence's physical SDA portfolio

Audio Webcast Scheduled

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the third quarter 2026 financial results audio webcast today, October 26, 2026, 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 October 26, 2026 at 5 p.m. (Pacific) and ending December 17, 2026 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

About Cadence

Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence’s Intelligent System Design™ strategy, are essential for the world’s leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2025, Cadence was recognized by Fortune as one of the world’s top 100 best companies to work for. Cadence solutions offer limitless opportunities—learn more at www.cadence.com.

© 2026 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 and related webcast contain forward-looking statements, including Cadence’s outlook on future operating results, financial condition, strategic objectives, capital allocation and share repurchase program, business model and prospects, technology and product developments and performance, customer adoption and demand, strategic relationships, backlog, industry trends and Cadence's ability to capitalize on them, market dynamics and market growth, tax rates, legislative and regulatory developments 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, armed conflicts around the world, increased energy costs and supply chain constraints; (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 repay debt or 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) 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, including Cadence’s ongoing obligations under its July 2025 settlement agreements with the U.S. Department of Justice (“DOJ”) and Bureau of Industry and Security (“BIS”), any further inquiries or adverse actions by the DOJ, BIS or other foreign governmental authorities and any impact of the settlements on Cadence’s operations and business dealings; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. 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. Cadence's share repurchase program may be modified, suspended or terminated without prior notice.

For a detailed discussion of these and other cautionary statements related to Cadence and its 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, income or expenses related to foreign currency forward exchange contract and settlement associated with an acquisition, investments, divestitures and Cadence’s non-qualified deferred compensation plan, restructuring, loss related to contingent liability 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 Reconciliation Three Months Ended

September 30, 2026 September 30, 2025

(unaudited)

GAAP operating margin as a percent of total revenue 26.2% 31.8%

Reconciling items to non-GAAP operating margin as a percent of total revenue:

Stock-based compensation expense 8.9% 8.7%

Amortization of acquired intangibles 4.9% 1.9%

Acquisition and integration-related costs 1.5% 2.8%

Restructuring 2.6% 2.0%

Non-qualified deferred compensation expenses (credits) 0.0% 0.4%

Non-GAAP operating margin as a percent of total revenue 44.1% 47.6%

Net Income Reconciliation Three Months Ended

September 30, 2026 September 30, 2025

(in thousands) (unaudited)

Net income on a GAAP basis $ 289,747 $ 287,122

Stock-based compensation expense 144,763 116,073

Amortization of acquired intangibles 79,870 25,984

Acquisition and integration-related costs 25,031 37,295

Restructuring 42,159 27,394

Non-qualified deferred compensation expenses (credits) (42) 5,760

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— 18,561

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(2,886) 8,741

Income tax effect of non-GAAP adjustments 3,545 1,283

Net income on a non-GAAP basis $ 582,187 $ 528,213

Diluted Net Income Per Share Reconciliation Three Months Ended

September 30, 2026 September 30, 2025

(in thousands, except per share data) (unaudited)

Diluted net income per share on a GAAP basis $ 1.05 $ 1.05

Stock-based compensation expense 0.53 0.42

Amortization of acquired intangibles 0.29 0.10

Acquisition and integration-related costs 0.09 0.14

Restructuring 0.15 0.10

Non-qualified deferred compensation expenses (credits) — 0.02

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— 0.07

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(0.01) 0.03

Income tax effect of non-GAAP adjustments 0.01 —

Diluted net income per share on a non-GAAP basis $ 2.11 $ 1.93

Shares used in calculation of diluted net income per share 275,278 273,798

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

September 30, 2026 and December 31, 2025

(In thousands)

(Unaudited)

September 30, 2026 December 31, 2025

Current assets:

Cash and cash equivalents $ 1,452,020 $ 3,001,317

Receivables, net 1,110,591 944,939

Inventories 448,824 303,545

Prepaid expenses and other 342,452 419,872

Total current assets 3,353,887 4,669,673

Property, plant and equipment, net 603,189 517,004

Goodwill 4,926,955 2,749,143

Acquired intangibles, net 1,792,006 718,223

Deferred taxes 789,077 917,733

Other assets 759,660 581,372

Total assets $ 12,224,774 $ 10,153,148

Current liabilities:

Revolving credit facility $ 150,000 $ —

Current portion of long-term debt

498,809 —

Accounts payable and accrued liabilities 805,365 856,856

Current portion of deferred revenue 1,012,305 778,435

Total current liabilities 2,466,479 1,635,291

Long-term liabilities:

Long-term portion of deferred revenue 138,228 155,997

Long-term debt 1,984,433 2,480,150

Other long-term liabilities 760,383 407,529

Total long-term liabilities 2,883,044 3,043,676

Stockholders’ equity 6,875,251 5,474,181

Total liabilities and stockholders’ equity $ 12,224,774 $ 10,153,148

Cadence Design Systems, Inc.

Condensed Consolidated Income Statements

For the Three and Nine Months Ended September 30, 2026 and September 30, 2025

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended Nine Months Ended

September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025

Revenue:

Product and maintenance $ 1,487,311 $ 1,207,703 $ 4,266,901 $ 3,489,063

Services 146,000 131,135 425,081 367,582

Total revenue 1,633,311 1,338,838 4,691,982 3,856,645

Costs and expenses:

Cost of product and maintenance 173,867 118,702 502,362 374,672

Cost of services 61,753 63,493 187,123 158,823

Marketing and sales 242,476 192,560 694,995 595,855

Research and development 537,541 423,031 1,577,251 1,304,190

General and administrative 113,020 78,035 289,785 210,162

Amortization of acquired intangibles 33,779 10,233 88,304 28,359

Loss related to contingent liability

— — — 128,545

Restructuring 42,159 27,394 41,802 27,332

Total costs and expenses 1,204,595 913,448 3,381,622 2,827,938

Income from operations 428,716 425,390 1,310,360 1,028,707

Interest expense (30,375) (29,035) (97,124) (87,101)

Other income (expense), net 9,994 (3,572) 133,436 87,476

Income before provision for income taxes

408,335 392,783 1,346,672 1,029,082

Provision for income taxes

118,588 105,661 354,189 308,330

Net income $ 289,747 $ 287,122 $ 992,483 $ 720,752

Net income per share - basic $ 1.06 $ 1.06 $ 3.63 $ 2.65

Net income per share - diluted $ 1.05 $ 1.05 $ 3.61 $ 2.64

Weighted average common shares outstanding - basic 273,748 271,152 273,260 271,471

Weighted average common shares outstanding - diluted 275,278 273,798 275,061 273,440

Cadence Design Systems, Inc.

Condensed Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2026 and September 30, 2025

(In thousands)

(Unaudited)

Nine Months Ended

September 30, 2026 September 30, 2025

Cash and cash equivalents at beginning of period

$ 3,001,317 $ 2,644,030

Cash flows from operating activities:

Net income 992,483 720,752

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 320,159 163,269

Stock-based compensation 429,836 342,011

Gain on divestitures and investments, net (88,611) (22,135)

Deferred income taxes 118,684 89,756

ROU asset amortization and change in operating lease liabilities (2,105) 1,702

Other non-cash items 7,266 4,713

Changes in operating assets and liabilities, net of effect of acquired businesses:

Receivables (84,285) (90,666)

Inventories (172,927) (60,858)

Prepaid expenses and other 39,812 (14,834)

Other assets (38,982) 5,811

Accounts payable and accrued liabilities (263,024) (23,237)

Deferred revenue 148,835 44,456

Other long-term liabilities 7,295 14,546

Net cash provided by operating activities 1,414,436 1,175,286

Cash flows from investing activities:

Purchases of investments (98,481) (35,182)

Proceeds from the sale and maturity of investments 166,529 3,493

Proceeds from the sale of IP and other assets

— 11,500

Purchases of property, plant and equipment (163,254) (100,830)

Purchases of intangible assets (6,975) —

Cash paid in business combinations, net of cash acquired (2,143,429) (250,695)

Net cash used for investing activities (2,245,610) (371,714)

Cash flows from financing activities:

Proceeds from revolving credit facility

875,000 —

Payments on revolving credit facility

(725,000) —

Proceeds from issuance of common stock 139,073 138,069

Stock received for payment of employee taxes on vesting of restricted stock (195,608) (148,130)

Payments for repurchases of common stock (800,025) (725,025)

Net cash used for financing activities (706,560) (735,086)

Effect of exchange rate changes on cash and cash equivalents (11,563) 40,730

Increase (decrease) in cash and cash equivalents

(1,549,297) 109,216

Cash and cash equivalents at end of period

$ 1,452,020 $ 2,753,246

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)

2025 2026

GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2 Q3

Americas 48 % 49 % 43 % 47 % 47 % 45 % 43 % 43 %

China 11 % 9 % 18 % 12 % 13 % 13 % 15 % 16 %

Other Asia 19 % 19 % 18 % 20 % 19 % 20 % 20 % 19 %

Europe, Middle East and Africa 16 % 16 % 14 % 14 % 15 % 16 % 15 % 15 %

Japan 6 % 7 % 7 % 7 % 6 % 6 % 7 % 7 %

Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %

Revenue Mix by Product Category (% of Total Revenue)

2025 2026

PRODUCT CATEGORY Q1 Q2 Q3 Q4 Year Q1 Q2 Q3

Core EDA

71 % 71 % 71 % 69 % 70 % 71 % 68 % 69 %

Semiconductor IP

14 % 13 % 14 % 15 % 14 % 14 % 15 % 15 %

System Design and Analysis 15 % 16 % 15 % 16 % 16 % 15 % 17 % 16 %

Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Operating Margin

As of October 26, 2026

(Unaudited)

Three Months Ending

December 31, 2026

Year Ending

December 31, 2026

Forecast Forecast

GAAP operating margin as a percent of total revenue 30% - 31% 28.2% - 29.2%

Reconciling items to non-GAAP operating margin as a percent of total revenue:

Stock-based compensation expense 8%

Amortization of acquired intangibles

Acquisition and integration-related costs 1%

Restructuring 0%

Non-GAAP operating margin as a percent of total revenue† 44% - 45% 44.2% - 45.2%

† 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 October 26, 2026

(Unaudited)

Three Months Ending

December 31, 2026

Year Ending

December 31, 2026

Forecast Forecast

Diluted net income per share on a GAAP basis $1.23 to $1.29 $4.84 to $4.90

Stock-based compensation expense 0.51 2.07

Amortization of acquired intangibles 0.29 1.05

Acquisition and integration-related costs 0.08 0.45

Restructuring — 0.15

Non-qualified deferred compensation expenses — 0.03

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— (0.01)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

— (0.35)

Income tax effect of non-GAAP adjustments 0.08 0.14

Diluted net income per share on a non-GAAP basis† $2.19 to $2.25 $8.37 to $8.43

†

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.

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Net Income

As of October 26, 2026

(Unaudited)

Three Months Ending

December 31, 2026

Year Ending

December 31, 2026

($ in millions) Forecast Forecast

Net income on a GAAP basis $339 to $355 $1,331 to $1,347

Stock-based compensation expense 139 569

Amortization of acquired intangibles 78 289

Acquisition and integration-related costs 23 122

Restructuring — 42

Non-qualified deferred compensation expenses — 9

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— (3)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

— (98)

Income tax effect of non-GAAP adjustments 22 40

Net income on a non-GAAP basis† $601 to $617 $2,301 to $2,317

†

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.

EX-99.02 — CFO COMMENTARY

EX-99.02

Filename: cfocommentary10262026ex9902.htm · Sequence: 3

Document

Exhibit 99.02

CADENCE REPORTS THIRD QUARTER

2026

CADENCE DESIGN SYSTEMS, INC.

CFO COMMENTARY

Key Takeaways

• Exceeded Q3 guidance for revenue, non-GAAP operating margin, and non-GAAP EPS

• Raising 2026 revenue growth outlook for the third time this year to ~21%

• Achieved new record backlog of $8.2 billion

Q4 2026 Outlook

• Revenue: $1.695 billion - $1.725 billion

• GAAP operating margin: 30% - 31%

• Non-GAAP operating margin: 44% - 45%

• GAAP EPS: $1.23 - $1.29

• Non-GAAP EPS: $2.19 - $2.25

• Expect to use approximately $400 million to repurchase Cadence shares in Q4

Q3 2026 KEY METRICS

• Revenue: $1.633 billion

• GAAP operating margin: 26.2%

• Non-GAAP operating margin: 44.1%

• GAAP EPS: $1.05

• Non-GAAP EPS: $2.11

• Operating cash flow: $424 million

FY 2026 Outlook

• Revenue: $6.387 billion - $6.417 billion

• GAAP operating margin: 28.2% - 29.2%

• Non-GAAP operating margin: 44.2% - 45.2%

• GAAP EPS: $4.84 - $4.90

• Non-GAAP EPS: $8.37 - $8.43

• Operating cash flow: ~$2.0 billion

• Expect to use more than 50% of free cash flow to repurchase Cadence shares for the year

Financial Results Webcast

Our Q3 2026 financial results webcast will begin October 26, 2026 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 October 26, 2026 until 5:00 p.m. (Pacific) on December 17, 2026.

October 26, 2026 Cadence Q3 2026 Financial Results

Cadence Design Systems, Inc.

Financial Metrics

(In Millions, except per share data) 2021 2022

2023

2024

2025

2026E

Revenue $ 2,988 $ 3,562 $ 4,090 $ 4,641 $ 5,297 $6,387- $6,417

Revenue growth 11% 19% 15% 13%

14%

21% - 21%

3-year CAGR*

12% 15% 15% 16%

14%

~16%

GAAP operating expenses $ 2,209 $ 2,488 $ 2,839 $ 3,291 $ 3,805 $4,571

GAAP operating expense growth 8% 13% 14% 16% 16% ~20%

Non-GAAP operating expenses $ 1,877 $ 2,125 $ 2,373 $ 2,667 $ 2,935 $3,540

Non-GAAP operating expense growth 8% 13% 12% 12%

10%

~21%

GAAP operating margin

26.1% 30.1% 30.6% 29.1%

28.2%

28.2% - 29.2%

Non-GAAP operating margin 37.2% 40.3% 42.0% 42.5%

44.6%

44.2% - 45.2%

Rule of 40 Metric**

48.6%

59.5%

56.8%

56.0%

58.7%

~66%

GAAP earnings per share $ 2.50 $ 3.09 $ 3.82 $ 3.85 $ 4.06 $4.84 - $4.90

Non-GAAP earning per share $ 3.29 $ 4.27 $ 5.15 $ 5.97 $ 7.14 $8.37 - $8.43

Non-GAAP EPS growth*

18% 30% 21% 16%

20%

18 %

3-year Non-GAAP EPS CAGR*

21% 25% 23% 22%

19%

18 %

Weighted average diluted shares outstanding

278.9 275.0

272.7

273.8

273.3

274 - 276

Cash flow from operations 1,101 1,242

1,349

1,261

1,729

~$2,000

Capital expenditures 65 123

102

143

142

~$240

* At midpoint of outlook.

** Rule of 40 Metric = Revenue growth % + Non-GAAP operating margin %.

Profitability Trends

(In Millions) 2021 2022

2023

2024

2025

2026E*

GAAP operating margin 26.1% 30.1% 30.6% 29.1%

28.2%

28.7%

Non-GAAP operating margin 37.2% 40.3% 42.0% 42.5%

44.6%

44.7%

Stock-based compensation

(7.0)%

(7.6)%

(8.0)%

(8.4)%

(8.6)%

(8.9)%

Non-GAAP operating margin adjusted for stock-based compensation

30.2%

32.7%

34.0%

34.1%

36.0%

35.8%

GAAP operating income $ 779 $ 1,074 $ 1,251 $ 1,351 $ 1,492 $ 1,831

Non-GAAP operating income $ 1,111 $ 1,436 $ 1,717 $ 1,974 $ 2,361 $ 2,862

Non-GAAP operating income adjusted for stock-based compensation $ 901 $ 1,166 $ 1,391 $ 1,583 $ 1,906 $ 2,293

* At midpoint of outlook.

October 26, 2026 Cadence Q3 2026 Financial Results

Cadence Design Systems, Inc.

Fourth Quarter 2026 Financial Outlook

Q4 2025 Q3 2026 Q4 2026E

Total Revenue ($ Millions) $ 1,440 $ 1,633 $1,695 - $1,725

Q/Q Growth 3% 4% - 6%

Y/Y Growth 22% 18% - 20%

GAAP Operating Margin 32.2% 26.2% 30% - 31%

Non-GAAP Operating Margin 45.8% 44.1% 44% - 45%

GAAP EPS $ 1.42 $ 1.05 $1.23 - $1.29

Non-GAAP EPS $ 1.99 $ 2.11 $2.19 - $2.25

Fiscal Year 2026 Financial Outlook

Previous Current

FY 2025

FY 2026E

Recurring Revenue

80%

~80%

Total Revenue ($ Millions) $ 5,297 $6,260 - $6,340 $6,387 - $6,417

Y/Y Growth

14%

18% - 20% 21% - 21%

Revenue from Beginning Backlog

~69%

~65% ~64%

GAAP Operating Margin

28.2%

27.75% - 28.75% 28.2% - 29.2%

Non-GAAP Operating Margin

44.6%

43.75% - 44.75% 44.2% - 45.2%

GAAP Other Income & Expense ($ Millions) $ 30 $(17) - $3 $0 - $10

Non-GAAP Other Income & Expense ($ Millions) $ (24) $(115) - $(95) $(101) - $(91)

GAAP Tax Rate

27.1%

~26% ~27%

Non-GAAP Tax Rate 16.5% 16.5% 16.5%

Weighted Average Diluted Shares Outstanding (Millions)

273.3

275.5 - 277.5 274 - 276

GAAP EPS $ 4.06 $4.76 - $4.86 $4.84 - $4.90

Y/Y Growth

17% - 20% 19% - 21%

Non-GAAP EPS $ 7.14 $8.05 - $8.15 $8.37 - $8.43

Y/Y Growth

20%

13% - 14% 17% - 18%

Cash Flow from Operations ($ Millions) $ 1,729 ~$2,000 ~$2,000

DSO

~65

Capital Expenditures ($ Millions) $ 142 ~$240

~$240

October 26, 2026 Cadence Q3 2026 Financial Results

Cadence Design Systems, Inc.

Third Quarter Financial Results

Backlog

(In Billions)

2022

2023

2024

2025

Q3 2026

Backlog $ 5.8 $ 6.0 $ 6.8 $ 7.8 $ 8.2

Revenue

(In Millions) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Product and Maintenance $ 1,208 $ 1,332 $ 1,349 $ 1,431 $ 1,487

Services 131 108 125 154 146

Total Revenue $ 1,339 $ 1,440 $ 1,474 $ 1,584 $ 1,633

Table may not foot due to rounding

Recurring and Up-Front Revenue

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Revenue Recognized Over Time

78 % 77 % 73 % 72 % 74 %

Other Recurring Revenue

4 % 2 % 4 % 6 % 5 %

Recurring Revenue

82 % 79 % 77 % 78 % 79 %

Up-Front Revenue

18 % 21 % 23 % 22 % 21 %

Total Revenue

100 % 100 % 100 % 100 % 100 %

Trailing Twelve Months Recurring and Up-Front Revenue

Trailing Twelve Months Ended

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Recurring Revenue 80 % 80 % 79 % 79 % 78 %

Up-Front Revenue 20 % 20 % 21 % 21 % 22 %

Total 100 % 100 % 100 % 100 % 100 %

Revenue Mix by Geography

(% of Total Revenue) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Americas 43 % 47 % 45 % 43 % 43 %

China 18 % 12 % 13 % 15 % 16 %

Other Asia 18 % 20 % 20 % 20 % 19 %

Europe, Middle East and Africa 14 % 14 % 16 % 15 % 15 %

Japan 7 % 7 % 6 % 7 % 7 %

Total 100 % 100 % 100 % 100 % 100 %

Revenue Mix by Product Category

(% of Total Revenue) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Core EDA

71 % 69 % 71 % 68 % 69 %

Semiconductor IP

14 % 15 % 14 % 15 % 15 %

System Design and Analysis 15 % 16 % 15 % 17 % 16 %

Total 100 % 100 % 100 % 100 % 100 %

October 26, 2026 Cadence Q3 2026 Financial Results

Cadence Design Systems, Inc.

Gross Margin

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

GAAP Gross Margin 86.4 % 86.9 % 85.4 % 84.9 % 85.6 %

Non-GAAP Gross Margin 88.0 % 88.5 % 88.0 % 88.2 % 88.8 %

Total Costs and Expenses

(In Millions) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Total GAAP Costs and Expenses $ 913 $ 977 $ 1,043 $ 1,134 $ 1,205

Total Non-GAAP Costs and Expenses $ 701 $ 781 $ 815 $ 863 $ 913

Operating Margin

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

GAAP Operating Margin 31.8 % 32.2 % 29.3 % 28.4 % 26.2 %

Non-GAAP Operating Margin 47.6 % 45.8 % 44.7 % 45.5 % 44.1 %

Net Income Per Share

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

GAAP Net Income Per Share $ 1.05 $ 1.42 $ 1.23 $ 1.33 $ 1.05

Non-GAAP Net Income Per Share $ 1.93 $ 1.99 $ 1.96 $ 2.11 $ 2.11

Total DSO

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

DSO 55 64 67 65 66

Balance Sheet and Cash Review

Free Cash Flow

(In Millions) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Net Cash from Operating Activities $ 311 $ 553 $ 356 $ 635 $ 424

Capital Expenditures 34 41 49 53 62

Free Cash Flow $ 277 $ 512 $ 307 $ 582 $ 362

Cash and Cash Equivalents

(In Millions) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Cash and Cash Equivalents $ 2,753 $ 3,001 $ 1,407 $ 1,440 $ 1,452

•Approximately 15 percent of our cash and cash equivalents were in the U.S. at quarter-end.

Debt

(In Millions) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Debt (principal value)

$ 2,500 $ 2,500 $ 2,925 $ 2,500 $ 2,650

Share Repurchase

(In Millions) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Share Repurchase $ 200 $ 200 $ 200 $ 200 $ 400

Number of Shares 0.584 0.613 0.671 0.580 1.305

Employees

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

Headcount 13,693 13,800 15,110 15,445 15,753

October 26, 2026 Cadence Q3 2026 Financial Results

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, capital allocation and share repurchase program, business model and prospects, technology and product developments and performance, customer adoption and demand, strategic relationships, backlog, industry trends and Cadence's ability to capitalize on them, market dynamics and market growth, tax rates, legislative and regulatory developments 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, armed conflicts around the world, increased energy costs and supply chain constraints; (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 repay debt or 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) 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, including Cadence’s ongoing obligations under its July 2025 settlement agreements with the U.S. Department of Justice (“DOJ”) and Bureau of Industry and Security (“BIS”), any further inquiries or adverse actions by the DOJ, BIS or other governmental authorities and any impact of the settlements on Cadence’s operations and business dealings; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. 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. Cadence's share repurchase program may be modified, suspended or terminated without prior notice.

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.

October 26, 2026 Cadence Q3 2026 Financial Results

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) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

GAAP total costs and expenses $ 913 $ 977 $ 1,043 $ 1,134 $ 1,205

Reconciling items to non-GAAP total costs and expenses

Stock-based compensation expense (116) (113) (138) (147) (145)

Amortization of acquired intangibles (26) (30) (51) (80) (80)

Acquisition and integration-related costs (37) (49) (41) (33) (25)

Restructuring (27) (2) — — (42)

Non-qualified deferred compensation (expenses) credits

(6) (2) 3 (11) —

Non-GAAP total costs and expenses* $ 701 $ 781 $ 815 $ 863 $ 913

Table may not foot due to rounding

* 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) 2021 2022

2023

2024

2025

2026E

GAAP total costs and expenses $ 2,209 $ 2,488 $ 2,839 $ 3,291 $ 3,805 $ 4,571

Reconciling items to non-GAAP total costs and expenses

Stock-based compensation expense (210) (270) (326) (391) (455) (569)

Amortization of acquired intangibles (67) (60) (62) (90) (105) (289)

Acquisition and integration-related costs (23) (41) (56) (96) (135) (122)

Restructuring 1 — (11) (24) (29) (42)

Non-qualified deferred compensation (expenses) credits (6) 8 (11) (11) (14) (9)

Special charges*

(27) — — (3) (2) —

Loss related to contingent liability**

— — — (8) (129) —

Non-GAAP total costs and expenses***

$ 1,877 $ 2,125 $ 2,373 $ 2,667 $ 2,935 $ 3,540

Table may not foot due to rounding

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

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.

October 26, 2026 Cadence Q3 2026 Financial Results

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) 2021 2022

2023

2024

2025

2026E

GAAP operating income $ 779 $ 1,074 $ 1,251 $ 1,351 $ 1,492 $ 1,831

Reconciling items to non-GAAP operating income

Stock-based compensation expense 210 270 326 391 455 569

Amortization of acquired intangibles 67 60 62 90 105 289

Acquisition and integration-related costs 23 41 56 96 135 122

Restructuring (1) — 11 24 29 42

Non-qualified deferred compensation expenses (credits)

6 (8) 11 11 14 9

Special charges*

27 — — 3 2 —

Loss related to contingent liability**

— — — 8 129 —

Non-GAAP operating income***

$ 1,111 $ 1,436 $ 1,717 $ 1,974 $ 2,361 $ 2,862

Stock-based compensation expense (210) (270) (326) (391) (455) (569)

Non-GAAP operating income adjusted for stock-based compensation***

$ 901 $ 1,166 $ 1,391 $ 1,583 $ 1,906 $ 2,293

Table may not foot due to rounding

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

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.

October 26, 2026 Cadence Q3 2026 Financial Results

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

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026

GAAP gross margin as a percent of total revenue 86.4% 86.9% 85.4% 84.9% 85.6%

Reconciling items to non-GAAP gross margin as a percent of total revenue

Stock-based compensation expense 0.3% 0.3% 0.4% 0.4% 0.4%

Amortization of acquired intangibles 1.2% 1.3% 2.1% 2.9% 2.8%

Non-qualified deferred compensation expenses (credits)

0.0% 0.0% 0.0% 0.0%

0.0%

Acquisition and integration-related costs 0.1% 0.0% 0.1% 0.0% 0.0%

Non-GAAP gross margin as a percent of total revenue* 88.0% 88.5% 88.0% 88.2% 88.8%

* 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.

October 26, 2026 Cadence Q3 2026 Financial Results

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

Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026E

GAAP operating margin as a percent of total revenue 31.8% 32.2% 29.3% 28.4% 26.2% 30% - 31%

Reconciling items to non-GAAP operating margin as a percent of total revenue

Stock-based compensation expense 8.7% 7.9% 9.4% 9.3% 8.9% 8%

Amortization of acquired intangibles 1.9% 2.1% 3.4% 5.0% 4.9%

Acquisition and integration-related costs 2.8% 3.4% 2.8% 2.1% 1.5% 1%

Restructuring 2.0% 0.1% 0.0% 0.0% 2.6%

Non-qualified deferred compensation expenses (credits)

0.4% 0.1% (0.2)% 0.7% 0.0% 0%

Non-GAAP operating margin as a percent of total revenue* 47.6% 45.8% 44.7% 45.5% 44.1% 44% - 45%

* 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.

October 26, 2026 Cadence Q3 2026 Financial Results

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

2021 2022

2023

2024

2025

2026E

GAAP operating margin as a percent of total revenue 26.1% 30.1% 30.6% 29.1%

28.2%

28.2% - 29.2%

Reconciling items to non-GAAP operating margin as a percent of total revenue

Stock-based compensation expense

7.0%

7.6%

8.0%

8.4%

8.6%

Amortization of acquired intangibles

2.2%

1.7%

1.5%

2.0%

Acquisition and integration-related costs

0.8%

1.1%

1.4%

2.1%

2.5%

Restructuring

0.0%

0.3%

0.5%

0.6%

Non-qualified deferred compensation expenses (credits)

0.2%

(0.2)%

0.2%

0.3%

Special charges*

0.9%

0.0%

Loss related to contingent liability**

0.0%

0.2%

2.4%

Non-GAAP operating margin as a percent of total revenue***

37.2%

40.3%

42.0%

42.5%

44.6%

44.2% - 45.2%

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

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.

October 26, 2026 Cadence Q3 2026 Financial Results

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) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026 Q4 2026E

Diluted net income per share on a GAAP basis $ 1.05 $ 1.42 $ 1.23 $ 1.33 $ 1.05 $1.23 - $1.29

Stock-based compensation expense 0.42 0.41 0.50 0.53 0.53 0.51

Amortization of acquired intangibles 0.10 0.11 0.19 0.29 0.29 0.29

Acquisition and integration-related costs 0.14 0.18 0.15 0.12 0.09 0.08

Restructuring 0.10 0.01 — — 0.15 —

Non-qualified deferred compensation expenses (credits)

0.02 0.01 (0.01) 0.04 — —

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

0.07 0.04 (0.01) — — —

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

0.03 (0.18) (0.04) (0.30) (0.01) —

Income tax effect of non-GAAP adjustments — (0.01) (0.05) 0.10 0.01 0.08

Diluted net income per share on a non-GAAP basis* $ 1.93 $ 1.99 $ 1.96 $ 2.11 $ 2.11 $2.19 - $2.25

Shares used in calculation of diluted net income per share 273,798 272,932 273,725 276,163 275,278

* 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.

October 26, 2026 Cadence Q3 2026 Financial Results

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) 2021 2022

2023

2024

2025

2026E

Diluted net income per share on a GAAP basis $ 2.50 $ 3.09 $ 3.82 $ 3.85 $ 4.06 $4.84 - $4.90

Stock-based compensation expense 0.75 0.98 1.19 1.43 1.67 2.07

Amortization of acquired intangibles 0.24 0.22 0.23 0.33 0.38 1.05

Acquisition and integration-related costs 0.08 0.15 0.21 0.35 0.49 0.45

Restructuring — — 0.04 0.09 0.11 0.15

Non-qualified deferred compensation expenses (credits) 0.02 (0.03) 0.04 0.04 0.05 0.03

Special charges*

0.10 — — 0.01 0.01 —

Loss related to contingent liability**

— — — 0.03 0.47 —

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— — — — 0.11 (0.01)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(0.03) 0.05 (0.17) (0.22) (0.31) (0.35)

Income tax effect of non-GAAP adjustments (0.37) (0.19) (0.21) 0.06 0.10 0.14

Diluted net income per share on a non-GAAP basis***

$ 3.29 $ 4.27 $ 5.15 $ 5.97 $ 7.14 $8.37 - $8.43

Shares used in calculation of diluted net income per share 278,858 275,011 272,748 273,833 273,312 274 - 276M

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

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.

October 26, 2026 Cadence Q3 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense

(In Millions)

2024

2025

2026E

GAAP total other income and expense $ 45 $ 30 $0 - $10

Reconciling items to non-GAAP total income and expense

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— 29 (3)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(61) (83) (98)

Non-GAAP total other income and expense*

$ (16) $ (24) $(101) - $(91)

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.

October 26, 2026 Cadence Q3 2026 Financial Results

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Oct. 23, 2026

Cover [Abstract]

Document Type

8-K

Document Period End Date

Oct. 23, 2026

Entity Registrant Name

CADENCE DESIGN SYSTEMS, INC.

Entity Incorporation, State or Country Code

Entity File Number

000-15867

Entity Tax Identification Number

00-0000000

Entity Address, Address Line One

2655 Seely Avenue,

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San Jose,

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95134

City Area Code

(408)

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943-1234

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Area code of city

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No definition available.

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- Definition

Cover page.

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No definition available.

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For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.

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No definition available.

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xbrli:dateItemType

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Period Type:

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- Definition

The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.

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No definition available.

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Name:

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- Definition

Address Line 1 such as Attn, Building Name, Street Name

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No definition available.

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- Definition

Name of the City or Town

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No definition available.

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- Definition

Code for the postal or zip code

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No definition available.

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- Definition

Name of the state or province.

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No definition available.

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Name:

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- Definition

A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Indicate if registrant meets the emerging growth company criteria.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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Name:

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- Definition

Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.

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No definition available.

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- Definition

Two-character EDGAR code representing the state or country of incorporation.

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No definition available.

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- Definition

The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Local phone number for entity.

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No definition available.

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Name:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 13e

-Subsection 4c

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14d

-Subsection 2b

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Name:

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Namespace Prefix:

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- Definition

Title of a 12(b) registered security.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b

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Data Type:

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- Definition

Name of the Exchange on which a security is registered.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection d1-1

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Name:

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Namespace Prefix:

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Data Type:

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Balance Type:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14a

-Subsection 12

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Data Type:

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- Definition

Trading symbol of an instrument as listed on an exchange.

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No definition available.

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Securities Act

-Number 230

-Section 425

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