Cadence Design Systems Reports Strong Q4 and Fiscal Year 2024 Financial Results

Cadence Design Systems, Inc., a leader in electronic systems design, has released its financial results for the fourth quarter and fiscal year 2024. The company reported significant growth in revenue and earnings, surpassing its previous outlook for both periods.

Financial Highlights

For the fourth quarter of 2024, Cadence reported:

• Revenue of $1.356 billion, a 26.8% increase from $1.069 billion in Q4 2023.
• GAAP operating margin of 33.7%, up from 31.5% in Q4 2023.
• Non-GAAP operating margin of 46.0%, compared to 42.9% in Q4 2023.
• GAAP diluted net income per share of $1.24, compared to $1.19 in Q4 2023.
• Non-GAAP diluted net income per share of $1.88, up from $1.38 in Q4 2023.

For the fiscal year 2024, the company reported:

• Revenue of $4.641 billion, a 13.5% increase from $4.090 billion in 2023.
• GAAP operating margin of 29.1%, down from 30.6% in 2023.
• Non-GAAP operating margin of 42.5%, slightly up from 42.0% in 2023.
• GAAP diluted net income per share of $3.85, compared to $3.82 in 2023.
• Non-GAAP diluted net income per share of $5.97, up from $5.15 in 2023.
• Year-end backlog of $6.8 billion and current remaining performance obligations (cRPO) of $3.4 billion.

Business and Operational Highlights

Cadence's AI-driven optimization products, including Cadence Cerebrus, Verisium SimAI, and Allegro X AI, have gained significant traction. The company's System Design & Analysis segment achieved over 40% growth in 2024, driven by its multi-physics analysis platform and AI-driven optimization. The IP business grew 28% year-over-year in Q4, with notable expansions in AI HPC protocols. Core EDA, comprising digital, custom/analog, and verification portfolios, grew 15% year-over-year in Q4. The hardware business, including Palladium Z3 and Protium X3, also had a record year.

Strategic Initiatives and Corporate Developments

Cadence ended the year with a record backlog of $6.8 billion and cRPO of $3.4 billion. The company is well-positioned to benefit from various phases of AI, including AI infrastructure buildout and expanding into new markets such as life sciences.

Management's Perspective

Anirudh Devgan, president and CEO, highlighted the company's exceptional performance in 2024, emphasizing the 13.5% revenue growth and 42.5% non-GAAP operating margin. John Wall, senior vice president and CFO, expressed satisfaction with the record year-end backlog and cRPO, looking forward to building on this strength in 2025.

Future Outlook

For fiscal year 2025, Cadence expects:

• Revenue in the range of $5.14 billion to $5.22 billion.
• GAAP operating margin between 30.25% and 31.25%.
• Non-GAAP operating margin between 43.25% and 44.25%.
• GAAP diluted net income per share between $4.19 and $4.29.
• Non-GAAP diluted net income per share between $6.65 and $6.75.

SEC Filing: CADENCE DESIGN SYSTEMS INC [ CDNS ] - 8-K - Feb. 18, 2025