Cadence Design Systems, Inc.CDNS
NasdaqGS•Technology•Software - Application
Cadence Design Systems, Inc. develops computational, AI-driven software, hardware, and silicon intellectual property products and solutions. The company offers functional verification services, such as Jasper, a formal verification platform; Xcelium, a parallel logic simulation platform; Verisium, a generative AI solution; Palladium, an enterprise emulation platform; and Protium, a prototyping platform for chip verification, as well as digital IC design and sign off products, including In novus platform; and custom IC design and simulation product include Virtuoso, a platform to design and verify analog. It also provides Xcelium logic simulator and other front-end verification and virtual prototyping technologies; controllers and physical interfaces; PCI Express, universal accelerator and compute express links, and multiple memory interfaces; and Ten Silica, a digital signal processor. In addition, the company's design IP portfolio includes serializer/deserializer, peripheral component interconnect, USB, and other standard protocols; and Secure-IC, a solution for embedded security IP. Additionally, it provides System Design and Analysis (SD&A) platform, a solution that enables end-to-end system-level design and verification across chips, packages, PCBs, and electronic systems; Allegro X and Orca X platforms for PCB and advanced packaging; Sigrity X for signal and power integrity; AIR for RF design; Fidelity for computational fluid dynamics; Celsius for thermal and airflow analysis; Clarity 3D solver for electromagnetic and power electronics analysis and simulation; Integrity 3D-IC solution for 3D-IC and multi-chiplet designs; the Optimality Intelligent System Explorer, Reality digital twin, and Millennium enterprise multiphasic platforms; Allegro system design platform; and molecular modeling and simulation solutions and services. The company has a strategic collaboration with NVIDIA. The company was incorporated in 1987 and is headquartered in San Jose, California.
Cadence Design Systems, Inc. (CDNS) reported trailing twelve months revenue of $5.53B as of March 2026, a 13.4% increase year-over-year. Quarterly revenue reached $1.47B, reflecting continued top-line momentum.
Cadence Design Systems, Inc. generated $1.17B in TTM net income, with quarterly EBITDA of $515.95M. The operating margin expanded from 29.1% to 29.3%, suggesting improving cost efficiency and pricing discipline.
The spread between operating margin (29.3%) and net margin (22.8%) indicates moderate non-operating costs. Net margin has improved from 22.0% a year ago, signaling stronger bottom-line efficiency.
CDNS trades at a P/E of 90.1x (a premium multiple) and a P/S of 19.1x. The price-to-book ratio of 16.1x indicates a significant premium over book value.
The company generated $306.96M in free cash flow over the trailing twelve months, a 33.8% decrease year-over-year, indicating cash generation ability. The balance sheet shows $12.10B in total assets with $2.48B in long-term debt against $6.56B in stockholders equity for a debt-to-equity ratio of 0.4, a conservative capital structure. Data based on the most recent quarterly reports.
Competitive analysis based on 21 quarters of fundamental data
Operating margins are positive at ~28.9% on average, but show some variability — pricing power may be sensitive to market conditions.
Consistently high ROE averaging 21.4% suggests a durable competitive advantage and efficient capital allocation.
Free cash flow is consistently positive and growing — a hallmark of a capital-light business that can self-fund growth.
TTM revenue has grown consistently (7 of 7 quarters up), with ~32.9% growth over the period. Strong demand durability.
Data-driven red flags and warnings across 21 quarters
Operating margins declined 6.0% — watch for continued compression, which may signal competitive or cost pressure.
FCF covers net income by 1.3x on average — earnings are well-supported by cash generation.
D/E ratio is 0.4 — conservative capital structure with low financial risk.
Revenue is stable or growing over recent quarters — demand appears durable.
Free cash flow is consistently positive — the business self-funds without external capital reliance.
Share count is stable — no significant dilution or buyback activity.