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SAN JOSE, Calif. - Cadence Design Systems, Inc. (NASDAQ:CDNS) reported fourth-quarter earnings that beat analyst expectations, but its stock fell 5% in after-hours trading on Tuesday.
The electronic design automation software company posted adjusted earnings per share of $1.88, surpassing the analyst consensus of $1.82. Revenue came in at $1.36 billion, slightly above estimates of $1.35 billion and up 26.9% year-over-year.
For the full year 2024, Cadence reported revenue of $4.64 billion, a 13.5% increase from 2023. The company’s non-GAAP operating margin expanded to 42.5% from 42.0% the previous year.
"Cadence delivered exceptional results in the fourth quarter, capping off a strong 2024 with 13.5% revenue growth and 42.5% non-GAAP operating margin for the year," said Anirudh Devgan, president and CEO of Cadence.
Despite the earnings beat, Cadence’s stock declined in after-hours trading, possibly due to concerns about future growth prospects. The company provided 2025 revenue guidance of $5.14 billion to $5.22 billion, representing growth of about 11-12% at the midpoint.
Cadence ended 2024 with a record backlog of $6.8 billion and current remaining performance obligations of $3.4 billion. The company’s core EDA business grew 15% year-over-year in Q4, while its IP business expanded 28%.
Looking ahead, Cadence expects 2025 non-GAAP earnings per share between $6.65 and $6.75, compared to $5.97 in 2024.
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