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 62.9x (a premium multiple) and a P/S of 13.3x. The price-to-book ratio of 11.2x 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.
Quarterly standardized metrics.
Stock price and market valuation
Revenue and earnings growth across quarters
Assets, cash, debt, and leverage
Price multiples and return ratios
Operating efficiency and return metrics
Free cash flow, earnings quality, and capital allocation