Cadence Design Systems surges 6.5% on earnings beat, raised outlook

SAN JOSE, California - Cadence Design (NASDAQ:CDNS ) Systems, Inc. (NASDAQ:CDNS) saw its stock surge 6.5% after the company reported third-quarter earnings that exceeded analyst expectations and raised its full-year outlook. The electronic design automation software maker delivered strong results driven by broad-based strength across its portfolio.

Cadence reported adjusted earnings per share of $1.64 for the third quarter, surpassing the analyst consensus of $1.44 by $0.20. Revenue came in at $1.22 billion, beating estimates of $1.18 billion and representing a 19% increase YoY from $1.023 billion in the same quarter last year.

The company's president and CEO, Anirudh Devgan, attributed the exceptional results to "broad-based strength across our portfolio, especially in IP, SD&A, and hardware systems." Devgan also highlighted the rapid adoption of Cadence.AI, stating, "Customers are achieving outstanding results with Cadence.AI, and I'm excited by its accelerating proliferation as AI rapidly becomes an integral part of the design workflow."

Looking ahead, Cadence raised its full-year 2024 guidance. The company now expects revenue between $4.61 billion and $4.65 billion, compared to the analyst consensus of $4.627 billion. Adjusted EPS is projected to be in the range of $5.87 to $5.93, in line with the consensus estimate of $5.89.

CFO John Wall expressed optimism about the company's outlook, stating, "Our Q4 bookings pipeline looks exceptionally strong, and we are well positioned to deliver a strong 2024."

Cadence's System Design & Analysis business achieved 47% YoY revenue growth in the third quarter, while its IP business saw a 59% YoY increase. The company's Functional Verification segment also delivered strong results with 22% YoY revenue growth.

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Source: Investing.com