Cadence Design Systems reported a strong start to 2026 with accelerating AI demand and a record backlog, leading to a raised revenue outlook for the full year. The company highlighted broad-based strength across its businesses and the successful launch of its AI-driven platform, AgentStack.
Revenue of $1.474 billion, up 18.7% year-over-year, accelerating from prior quarters.
positiveNon-GAAP operating margin of 44.7%, an expansion of 300 basis points year-over-year.
positiveCore EDA revenue grew 18% year-over-year, driven by expanding customer adoption of AI-driven solutions.
positiveIP business achieved 22% year-over-year growth, fueled by robust demand from AI infrastructure, HPC, and automotive workloads.
positiveSystem Design and Analysis revenue increased 18% year-over-year.
positiveRecord backlog of $8.0 billion, indicating strong customer commitment.
positiveRaised 2026 revenue outlook to ~17% year-over-year growth.
positiveGAAP net income of $335.66 million, while up YoY, is significantly lower than non-GAAP net income of $535.53 million, indicating substantial non-GAAP adjustments.
attentionCash paid in business combinations was $2.07 billion, a significant outflow impacting cash and cash equivalents.
attentionCash and cash equivalents decreased by $1.59 billion to $1.41 billion, primarily due to business combinations and stock repurchases.
attentionServices revenue decreased by 4.8% year-over-year.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total |
|---|---|---|---|---|
Core EDA | N/A | — | — | — |
Semiconductor IP | N/A | — | — | — |
System Design and Analysis | N/A | — | — | — |
| Total Revenue | $0.00M | — | — | 100.0% |
Segment performance shows business unit health and growth drivers.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
| Metric | Value | Period | Specificity | vs Prior |
|---|---|---|---|---|
| revenue_growth | 17% | FY2026 | point | New |
| revenue | $6.125B-$6.225B | FY2026 | tight_range | Raised |
| gap_operating_margin | 27.5-28.5% | FY2026 | tight_range | New |
| non_gap_operating_margin | 43.5-44.5% | FY2026 | tight_range | New |
| gap_ebs | $4.39-$4.49 | FY2026 | tight_range | New |
| non_gap_ebs | $7.85-$7.95 | FY2026 | tight_range | New |
| operating_cash_flow | $1.875B-$1.975B | FY2026 | tight_range | Lowered |
| share_repurchase | 50% | FY2026 | point | New |
| revenue | $1.555B-$1.595B | Q2 2026 | tight_range | New |
| gap_operating_margin | 28.5-29.5% | Q2 2026 | tight_range | New |
| non_gap_operating_margin | 44.5-45.5% | Q2 2026 | tight_range | New |
| gap_ebs | $1.07-$1.13 | Q2 2026 | tight_range | New |
| non_gap_ebs | $2.02-$2.08 | Q2 2026 | tight_range | New |
$200 million · Q1 2026 · funded by free cash flow
approximately 50% of our free cash flow · 2026 · funded by free cash flow
Cadence had a strong start to 2026, delivering a solid Q1 with accelerating AI demand and record backlog, reflecting strong customer commitment to our AI-driven portfolio.
Cadence is leading the agentic AI transformation in semiconductor and system design, pioneering the industry's most advanced and comprehensive agentic AI full-flow platform, AgentStack, integrated with ChipStack, ViraStack, and InnoStack Super Agents.
Cadence delivered excellent results for the first quarter of 2026, with broad-based strength across all our businesses.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.