EarningsQ3 2026 Earnings Report
MX:CDNS Q3 2026 EPS Results
Actual EPS$39.38
Consensus EPS$38.18
Beat/MissBeat by +$1.19
One Year Ago EPS$36.02
MX:CDNS Q3 2026 Revenue Results
Actual Revenue$30.48B
Expected Revenue$30.10B
Beat/MissBeat by +$380.12M
YoY Revenue Growth+21.99%
Earnings Announcement Details
QuarterQ3 2026
Date10/26/2026
TimeAfter Close
Conference CallMonday, October 26, 2026
MX:CDNS Upcoming Earnings
Cadence Design's next earnings date is estimated for February 23, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
MX:CDNS Q3 2026 Earnings Call
0:00 / 0:00
Q3 2026 Earnings Slide Deck
No slide deck is available for this earnings event.
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive, with record backlog, 22% Q3 revenue growth, raised 2026 guidance, broad-based product growth, accelerating Agentic AI adoption, and strong customer and hardware momentum. The main caveats were the sequential moderation in recurring revenue growth, higher hardware inventory, hardware quarter-to-quarter lumpiness, the near-term margin effect of the Hexagon D&E integration, and the outlook's export-control assumption.Company Guidance
Record Backlog and Raised Full-Year Outlook
Backlog reached a record $8.2 billion, reflecting strong bookings and growing customer demand. Cadence raised its 2026 revenue outlook to 21% growth and increased its EPS outlook by $0.30 to $8.40.
Strong Third-Quarter Financial Results
Q3 revenue grew 22% year over year to $1.633 billion, exceeding guidance on every key financial metric. GAAP operating margin was 26.2%, non-GAAP operating margin was 44.1%, GAAP EPS was $1.05, and non-GAAP EPS was $2.11.
Updated 2026 Financial Outlook
Cadence now expects 2026 revenue of $6.387 billion to $6.417 billion, GAAP operating margin of 28.2% to 29.2%, non-GAAP operating margin of 44.2% to 45.2%, GAAP EPS of $4.84 to $4.90, non-GAAP EPS of $8.37 to $8.43, and operating cash flow of approximately $2 billion. At the midpoint, the company expects 21% revenue growth, a 44.7% operating margin, and EPS of $8.40.
Broad-Based Product Group Growth
Year-over-year revenue growth was 20% in core EDA, 24% in IP, and 30% in system design and analysis. Management attributed the performance to accelerating design activity, strong demand for core EDA, SDA, and IP products, and momentum in the Agentic AI portfolio.
Recurring Revenue Momentum
Recurring revenue grew 18% year over year, compared with 11% last year. Management said growth reflected Agentic AI solutions, increased usage of underlying tools, continued strength in IP and hardware, strong software demand, and healthy customer expansions.
Maestro AI Model Portfolio Launch
Cadence introduced Maestro, a portfolio of domain-specialized AI models for chip and system design. Initial results showed up to 30% higher quality and up to 5x greater token efficiency versus general-purpose foundation models. Maestro models can be post-trained on customer proprietary data and deployed in the cloud or on premises, with several customer deployments underway.
Expanding Agentic AI Customer Engagement
Cadence reported more than 100 active customer engagements for its AI super agents. The company said its strategy combines domain-specialized models, model routing, reinforcement-learning loops, and integration with EDA and SDA tools.
ChipStack Productivity Gains
A new ChipStack agent for deal generation and early PPA optimization produced RTL with average reductions of 24% in area and 18% in power versus pure foundation-model-generated code. Honda is using RTL generation and AI-powered automation to improve productivity from specification through RTL development. MediaTek deployed ChipStack into its production digital verification flow and achieved a 50% to 70% improvement in verification coverage and a 1.4x to 2x reduction in engineering effort.
ViraStack and InnoStack Adoption
ViraStack customer engagement increased 4x, with deployments in production designs at multiple customers. Renesas deployed InnoStack across a wide range of engineering tasks and achieved a 34x productivity improvement, while Samsung Foundry used it to improve engineering efficiency and accelerate PPA exploration. Socionext expects up to a 5x overall productivity gain from combining InnoStack with advanced physical design tools.
AuraStack and Millennium Momentum
Nokia is deploying AuraStack on Cadence's Millennium supercomputer and reported 5x acceleration in key design and analysis workflows. Switch selected Millennium and Reality Digital Twin solutions to support the design and simulation of its next-generation AI factory.
Core EDA Expansion and Full-Flow Wins
The digital and signoff business recorded 16 new full-flow wins in Q3. Cadence reported growing adoption of synthesis and signoff solutions, strong growth in verification software among major hyperscaler and memory customers, and continued expansion of Innovus and surrounding tools for advanced-node full-flow deployments.
Record Hardware-Assisted Verification Quarter
Palladium and Protium delivered another record quarter, supported by strong demand from AI and HPC customers. Cadence added several new logos, expanded relationships with marquee customers, and reported strong growth in hardware cloud services. The company entered Q4 with a strong pipeline and continues to expect another record year for hardware.
IP Business Strength and AI Infrastructure Tailwinds
The IP business delivered another outstanding quarter, driven by deeper engagements with hyperscalers and semiconductor customers. Management cited accelerating AI infrastructure investment, greater adoption of custom silicon, advanced-node transitions, chiplet-based architectures, and demand for interface, memory, and foundation IP. Tensilica delivered a record revenue quarter, and Cadence announced a joint development agreement with Analog Devices for next-generation audio applications.
System Design and Analysis Growth
The system design and analysis business delivered another strong quarter, supported by integrated solutions and the expanded electronics and physical systems intelligence portfolio. Allegro gained a competitive displacement at a leading EV customer, while MSC Adams helped secure a competitive displacement at a leading power company alongside adoption of other Cadence products.
Strategic Customer Expansions
Cadence expanded its core EDA, hardware, and SDA relationship with a global marquee systems customer. It also broadened its partnership with a top telecommunications company across AI offerings, EDA software, hardware, and SDA solutions, becoming its primary design partner.
Growing Nontraditional Customer Base
Management stated that 45% of Cadence's business now comes from system companies and other nontraditional semiconductor customers. The company is seeing more chip-design activity from hyperscalers, space companies, finance companies, automotive companies, robotics companies, and other system companies, creating opportunities for IP, hardware, and design services.
Strong Market Position and Profitability
Management said Cadence is gaining share across IP, hardware, EDA, and Agentic AI, with its strongest product portfolio and competitive position to date. The company expects 2026 revenue growth plus non-GAAP operating margin to be above 65%, based on approximately 21% revenue growth and slightly less than 45% margin.
Capital Return and Liquidity
Cadence generated $424 million of operating cash flow in Q3, held $1.452 billion in cash, repurchased $400 million of shares during the quarter, and received authorization for an additional $2.5 billion share repurchase program. The company expects to use more than 50% of 2026 free cash flow for share repurchases.
Analog and Mixed-Signal Recovery
Management reported strong momentum in analog and mixed signal, supported by physical AI and overall market recovery. Cadence cited demand from mixed-signal companies and large AI companies with significant analog teams, as well as growing adoption of ViraStack for analog productivity.
MX:CDNS Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed