Cadence Design Systems is a provider of electronic design automation software, intellectual property, and system design and analysis products. EDA software automates and aids in the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution.
It is a $97.2B technology company. Revenue grew 14.7% over the last year, it keeps 24¢ of every dollar of sales as profit, and its net debt equals ~0.0 years of free cash flow. It trades at 70.5× earnings — around the middle of its own history.
- Website
- cadence.com
- Location
- San Jose, CA
- Employees
- 13 800
- Sector
- Technology
- Founded
- 1983
Skills
Six independent scores, 0–100, built from reported numbers and valuation history. Click a row to see how it was scored.
Strong growth, profitability, quality and moat; Valuation lags behind.
Valuation22
- P/E vs own history44th pct · 12/25
- FCF yield1.7% · 5/25
- P/S16.6x · 5/25
- EV/EBITDA53.2x · 0/25
Growth85
- Revenue CAGR15.4% · 20/25
- Net income CAGR12.4% · 20/25
- EPS CAGR ~5Y13.9% · 20/25
- Fwd implied growth112.5% · 25/25
Profitability90
- ROIC21.8% · 20/25
- ROE22.9% · 20/25
- Net margin23.6% · 25/25
- Operating margin30.3% · 25/25
Health63
- Altman Zn/a · 0/25
- Current ratio1.74 · 18/25
- Interest coverage39.1x · 25/25
- Net cash / debtD/A 0% · 20/25
Quality92
- Piotroski F7/9 · 22/25
- Beneish M-2.61 · 25/25
- FCF conversion122% · 25/25
- Margin stabilityσ 6.0% · 20/25
Moat100
- ROIC >12% years10/10 yrs · 25/25
- Median gross margin87.1% · 25/25
- FCF-positive years10/10 yrs · 25/25
- Worst-year net marginworst 10.5% · 25/25
Experience
The company's career so far — founding, the IPO, landmark products and acquisitions, plus revenue milestones and insider buying.
- FY2025FinancialBest year on record$1.11B net income
- 2024ProductCadence "quietly stepped into the supercomputer business", according to TechRadar
- 2024AcquisitionCadence purchased BETA CAE Systems
- 2023AcquisitionCadence purchased several businesses from Rambus in 2023
- 2021ProductCadence launched an artificial intelligence platform to streamline processor development
- 2019ProductProtium X1 rack-based prototyping was introduced in 2019, which Cadence claimed supported a 1.2 billion gate SoCs at…
- FY2018FinancialBecame debt-freecash now exceeds total debt
- FY2016FinancialProfitable every year on record10 consecutive profitable years in our data
- FY2016FinancialRevenue already above $1B$1.82B in first reported year
- FY2016FinancialPositive free cash flow every year since10-year streak
- 2015AcquisitionCadence announced the Palladium Z1 hardware emulation platform, for verifying billion-gate designs
- 2004AcquisitionBetween 2004 and 2007, Cadence purchased four companies, including the software developer Verisity
- 1999AcquisitionCadence acquired Quickturn Design Systems in 1999, preventing a hostile takeover attempt by Mentor Graphics
- 1991AcquisitionCadence acquired its rival Valid Logic Systems for around $200 million, its biggest acquisition yet
- 1983FoundedFounded in 1983 in San Jose, California, Cadence Design Systems began as an electronic design automation (EDA)…
Achievements
Verifiable track record, straight from the reported numbers.
Strengths & watch-outs
What a bull and a bear would each point to. Both lists come from the reported numbers, not opinions.
Strengths
- High gross margin (85.9%)
- Strongly profitable — 23.6% net margin
- Revenue growing 14.7% year over year
- Strong cash conversion — FCF is 28.8% of revenue
- Interest covered 39.1× by operating earnings
Watch-outs
Nothing stands out as a concern in the available data.
Qualifications
The basics a company should meet before you research it further. Each check uses the reported numbers.
- Revenue growing — the company sells more than a year ago+14.7% YoY
- Profitable — makes more than it spends$1.38B TTM
- Profit growing — earnings are higher than last year+9.5% YoY
- Generates cash — cash left after running and investing$1.68B TTM
- Debt under control — could handle its obligations~0.0y of cash flow to repay
- Established company — not a micro-cap — lower blow-up risk$97.2B market cap
- Not printing shares — share count not ballooning — you keep your slice-2.3% shares over ~5y
- Proven track record — years of profitability behind it10/10 profitable years
- Financially stable — balance sheet not near distresshealth score 43/100
- Pays a dividend — returns cash to shareholdersno data
- Valuation not extreme — price not wildly above earningsP/E 70.5
Peer comparisonCadence Design Systems vs 6 largest technology peers — cap, P/E, growth and margin side by sideOpen ▾Close ▴
| Company | Market cap | P/E | Revenue growth | Net margin | Profile |
|---|---|---|---|---|---|
| CDNS this company | $97.2B | 70.5 | +14.7% | 23.6% | Mixed |
| NVDA Nvidia Corp | $5.5T | 28.6 | +83.4% | 63.7% | Mixed |
| AAPL Apple Inc. | $4.9T | 38.1 | +14.2% | 27.6% | Strong |
| GOOGL Alphabet Inc. | $4.3T | 17.6 | +20.1% | 54.8% | Mixed |
| MSFT Microsoft Corp | $4.0T | 29.7 | +17.8% | 40.3% | Strong |
| SPCX Space Exploration Technologies Corp. | $2.1T | — | +33.2% | -34.0% | Strained |
| META Meta Platforms, Inc. | $1.8T | 26.9 | +27.7% | 29.8% | Mixed |
Head-to-head: CDNS vs NVDA · CDNS vs AAPL · CDNS vs GOOGL
References
What covering analysts publish about the company — information only, not a recommendation.
Appendix · Financial records
The full statements behind this CV, FY2016–FY2025. For readers who want to check the numbers.
Live data and quarterly detail: stockcv.com/CDNS
Want the live picture — intraday moves, valuation history and full analysis?
Deeper analysis of CDNS on PreMarketPriceFigures are derived from company filings (quarterly values normalised from as-filed year-to-date data where applicable) and may be delayed, restated or incomplete. This page is information, not investment advice. Latest price $352.84 · market cap $97.2B.