Form 8-K

8-K — CADENCE DESIGN SYSTEMS INC

Accession: 0000813672-26-000089

Filed: 2026-07-27

Period: 2026-07-27

CIK: 0000813672

SIC: 7372 (SERVICES-PREPACKAGED SOFTWARE)

Item: Results of Operations and Financial Condition

Item: Financial Statements and Exhibits

Documents

8-K — cdns-20260727.htm (Primary)

EX-99.01 — PRESS RELEASE (cdns07272026ex9901.htm)

EX-99.02 — CFO COMMENTARY (cfocommentary07272026ex9902.htm)

GRAPHIC (image0a22.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: cdns-20260727.htm · Sequence: 1

cdns-20260727

0000813672false00008136722026-07-272026-07-27

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO

SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 27, 2026

CADENCE DESIGN SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware 000-15867 00-0000000

(State or Other Jurisdiction

of Incorporation) (Commission File Number) (I.R.S. Employer

Identification No.)

2655 Seely Avenue, San Jose, California 95134

(Address of Principal Executive Offices) (Zip Code)

(408) 943-1234

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Common Stock, $0.01 par value per share CDNS Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On July 27, 2026 Cadence Design Systems, Inc. (“Cadence”) issued a press release announcing its financial results for the quarter ended June 30, 2026.

A copy of the press release is attached hereto as Exhibit 99.01 and a copy of the commentary by the Chief Financial Officer of Cadence regarding Cadence's financial results for the quarter ended June 30, 2026 is attached hereto as Exhibit 99.02, and the press release and the commentary are incorporated herein by reference.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description

99.01

Press Release issued by Cadence Design Systems, Inc. on July 27, 2026.

99.02

CFO Commentary on Results of Quarter Ended June 30, 2026.

104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 27, 2026

CADENCE DESIGN SYSTEMS, INC.

By:

/s/ John M. Wall

John M. Wall

Senior Vice President and Chief Financial Officer

EX-99.01 — PRESS RELEASE

EX-99.01

Filename: cdns07272026ex9901.htm · Sequence: 2

Document

Exhibit 99.01

Cadence Reports Second Quarter 2026 Financial Results

Record Backlog of $8.1 Billion

Raising 2026 Revenue Outlook to 19% YoY Growth

Raising 2026 Non-GAAP EPS to $8.10 and Operating Cash Flow to $2 Billion

SAN JOSE, Calif. — July 27, 2026 — Cadence (Nasdaq: CDNS) today announced results for the second quarter of 2026.

Second Quarter 2026 Financial Results

•Revenue of $1.584 billion, compared to revenue of $1.275 billion in Q2 2025

•GAAP operating margin of 28.4%, compared to 19.0% in Q2 2025

•Non-GAAP operating margin of 45.5%, compared to 42.8% in Q2 2025

•GAAP diluted net income per share of $1.33, compared to $0.59 in Q2 2025

•Non-GAAP diluted net income per share of $2.11, compared to $1.65 in Q2 2025

•Quarter-end backlog was $8.1 billion and revenue expected to be recognized in the next 12 months from remaining performance obligations was $4.2 billion

“Cadence delivered an outstanding Q2 driven by broad-based strength and the accelerating demand for our AI-driven solutions across both Design for AI and AI for Design fronts,” said Anirudh Devgan, president and chief executive officer. “Cadence is leading the agentic AI transformation in semiconductor design with a healthy environment. We are uniquely positioned to capitalize on this massive TAM expansion opportunity as the only provider with agentic solutions spanning the full electronic system design flow.”

“Cadence delivered excellent results for the second quarter of 2026, with broad-based strength driving double-digit growth across all our businesses,” said John Wall, senior vice president and chief financial officer. “With a record backlog and continued business momentum, we are now raising our 2026 outlook to 19% revenue growth, non-GAAP operating margin to 44.25%, non-GAAP EPS to $8.10, and operating cash flow to $2 billion at the midpoint.”

CFO Commentary

Commentary on the second quarter of 2026 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For fiscal year 2026, the company expects:

•Revenue in the range of $6.26 billion to $6.34 billion

•GAAP operating margin in the range of 27.75% to 28.75%

•Non-GAAP operating margin in the range of 43.75% to 44.75%

•GAAP diluted net income per share in the range of $4.76 to $4.86

•Non-GAAP diluted net income per share in the range of $8.05 to $8.15

The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use the current normalized non-GAAP tax rate through fiscal 2026 but will re-evaluate this rate periodically for significant items that may materially affect its projections.

Reconciliations of the financial results and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release. Revenue growth outlook is based on the midpoint of the range.

Business Highlights

•Launched AuraStack AI Super Agent, the industry's first agentic AI platform for advanced packaging and PCB, extending Cadence's AI Super Agents portfolio to span the full electronic system design flow

•Strong early traction for the AI Super Agents portfolio, with compelling initial customer results across ChipStack, ViraStack and InnoStack

•IP revenue grew more than 40% year-over-year, driven by strong demand for Cadence’s Star IP portfolio, highlighted by a significant agreement with Intel and additional wins with leading semiconductor companies

•Core EDA revenue grew 18% year-over-year, driven by strong demand for Cadence’s AI portfolio and expanded adoption across hyperscalers, top semiconductor companies and startups

•Hardware delivered another record quarter, adding 12 new customers and significant expansions with hyperscalers and leading AI innovators

•System Design and Analysis revenue grew 37% year-over-year, driven by strong adoption of Cadence's PCB and advanced packaging solutions and continued integration of the Hexagon D&E business

Audio Webcast Scheduled

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the second quarter 2026 financial results audio webcast today, July 27, 2026, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting July 27, 2026 at 5 p.m. (Pacific) and ending September 16, 2026 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

About Cadence

Cadence is a market leader in AI and digital twins, pioneering the application of computational software to accelerate innovation in the engineering design of silicon to systems. Our design solutions, based on Cadence’s Intelligent System Design™ strategy, are essential for the world’s leading semiconductor and systems companies to build their next-generation products from chips to full electromechanical systems that serve a wide range of markets, including hyperscale computing, mobile communications, automotive, aerospace, industrial, life sciences and robotics. In 2025, Cadence was recognized by Fortune as one of the world’s top 100 best companies to work for. Cadence solutions offer limitless opportunities—learn more at www.cadence.com.

© 2026 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

This press release and related webcast contain forward-looking statements, including Cadence’s outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, customer adoption and demand, strategic relationships, backlog, industry trends, market growth, tax rates and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions, armed conflicts around the world, increased energy costs and supply chain constraints; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to repay debt or access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s pending acquisitions, acquisition of the Hexagon D&E business and other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject, including Cadence’s ongoing obligations under its July 2025 settlement agreements with the U.S. Department of Justice (“DOJ”) and Bureau of Industry and Security (“BIS”), any further inquiries or adverse actions by the DOJ, BIS or other foreign governmental authorities and any impact of the settlements on Cadence’s operations and business dealings; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

For a detailed discussion of these and other cautionary statements related to Cadence and its business, please refer to Cadence’s filings with the U.S. Securities and Exchange Commission, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.

All forward-looking statements in this press release are based on management's expectations as of the date of this press release and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

GAAP to Non-GAAP Reconciliation

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance.

To supplement Cadence’s financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence’s performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, income or expenses related to foreign currency forward exchange contract and settlement associated with an acquisition, investments, divestitures and Cadence’s non-qualified deferred compensation plan, restructuring, loss related to contingent liability and other significant items not directly related to Cadence’s core business operations, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence’s core business operations and therefore provides supplemental information to Cadence management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence management, including forecasting and budgeting.

The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:

Operating Margin Reconciliation Three Months Ended

June 30, 2026 June 30, 2025

(unaudited)

GAAP operating margin as a percent of total revenue 28.4% 19.0%

Reconciling items to non-GAAP operating margin as a percent of total revenue:

Stock-based compensation expense 9.3% 9.3%

Amortization of acquired intangibles 5.0% 1.8%

Acquisition and integration-related costs 2.1% 2.0%

Restructuring 0.0% 0.0%

Non-qualified deferred compensation expenses 0.7% 0.6%

Loss related to contingent liability*

0.0%

10.1%

Non-GAAP operating margin as a percent of total revenue 45.5% 42.8%

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

Net Income Reconciliation Three Months Ended

June 30, 2026 June 30, 2025

(in thousands) (unaudited)

Net income on a GAAP basis $ 367,076 $ 160,051

Stock-based compensation expense 146,890 118,325

Amortization of acquired intangibles 79,922 23,703

Acquisition and integration-related costs 32,823 26,021

Restructuring (352) 47

Non-qualified deferred compensation expenses 11,430 7,778

Loss related to contingent liability*

— 128,545

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(83,496) (46,248)

Income tax effect of non-GAAP adjustments 28,079 31,658

Net income on a non-GAAP basis $ 582,372 $ 449,880

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

Diluted Net Income Per Share Reconciliation Three Months Ended

June 30, 2026 June 30, 2025

(in thousands, except per share data) (unaudited)

Diluted net income per share on a GAAP basis $ 1.33 $ 0.59

Stock-based compensation expense 0.53 0.43

Amortization of acquired intangibles 0.29 0.09

Acquisition and integration-related costs 0.12 0.09

Restructuring — —

Non-qualified deferred compensation expenses 0.04 0.03

Loss related to contingent liability*

— 0.47

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(0.30) (0.17)

Income tax effect of non-GAAP adjustments 0.10 0.12

Diluted net income per share on a non-GAAP basis $ 2.11 $ 1.65

Shares used in calculation of diluted net income per share 276,163 272,899

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

For more information, please contact:

Cadence Investor Relations

408-944-7100

investor_relations@cadence.com

Cadence Newsroom

408-944-7039

newsroom@cadence.com

Cadence Design Systems, Inc.

Condensed Consolidated Balance Sheets

June 30, 2026 and December 31, 2025

(In thousands)

(Unaudited)

June 30, 2026 December 31, 2025

Current assets:

Cash and cash equivalents $ 1,440,443 $ 3,001,317

Receivables, net 1,065,023 944,939

Inventories 390,378 303,545

Prepaid expenses and other 326,049 419,872

Total current assets 3,221,893 4,669,673

Property, plant and equipment, net 560,161 517,004

Goodwill 4,914,788 2,749,143

Acquired intangibles, net 1,874,455 718,223

Deferred taxes 832,566 917,733

Other assets 676,462 581,372

Total assets $ 12,080,325 $ 10,153,148

Current liabilities:

Accounts payable and accrued liabilities $ 823,724 $ 856,856

Current portion of deferred revenue 1,025,118 778,435

Total current liabilities 1,848,842 1,635,291

Long-term liabilities:

Long-term portion of deferred revenue 144,453 155,997

Long-term debt 2,482,200 2,480,150

Other long-term liabilities 746,867 407,529

Total long-term liabilities 3,373,520 3,043,676

Stockholders’ equity 6,857,963 5,474,181

Total liabilities and stockholders’ equity $ 12,080,325 $ 10,153,148

Cadence Design Systems, Inc.

Condensed Consolidated Income Statements

For the Three and Six Months Ended June 30, 2026 and June 30, 2025

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Revenue:

Product and maintenance $ 1,430,668 $ 1,170,510 $ 2,779,590 $ 2,281,360

Services 153,783 104,931 279,081 236,447

Total revenue 1,584,451 1,275,441 3,058,671 2,517,807

Costs and expenses:

Cost of product and maintenance 175,183 139,298 328,495 255,970

Cost of services 64,135 44,869 125,370 95,330

Marketing and sales 241,034 200,595 452,519 403,295

Research and development 531,273 442,057 1,039,710 881,159

General and administrative 88,548 69,029 176,765 132,127

Amortization of acquired intangibles 34,315 9,204 54,525 18,126

Loss related to contingent liability

— 128,545 — 128,545

Restructuring (352) 47 (357) (62)

Total costs and expenses 1,134,136 1,033,644 2,177,027 1,914,490

Income from operations 450,315 241,797 881,644 603,317

Interest expense (35,136) (28,948) (66,749) (58,066)

Other income, net

95,055 67,758 123,442 91,048

Income before provision for income taxes

510,234 280,607 938,337 636,299

Provision for income taxes

143,158 120,556 235,601 202,669

Net income $ 367,076 $ 160,051 $ 702,736 $ 433,630

Net income per share - basic $ 1.34 $ 0.59 $ 2.57 $ 1.60

Net income per share - diluted $ 1.33 $ 0.59 $ 2.56 $ 1.59

Weighted average common shares outstanding - basic 273,955 271,294 273,012 271,633

Weighted average common shares outstanding - diluted 276,163 272,899 274,948 273,264

Cadence Design Systems, Inc.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2026 and June 30, 2025

(In thousands)

(Unaudited)

Six Months Ended

June 30, 2026 June 30, 2025

Cash and cash equivalents at beginning of period

$ 3,001,317 $ 2,644,030

Cash flows from operating activities:

Net income 702,736 433,630

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 201,611 106,592

Stock-based compensation 285,073 225,938

Gain on divestitures and investments, net (85,817) (36,654)

Deferred income taxes 76,189 3,241

ROU asset amortization and change in operating lease liabilities 1,072 2,629

Other non-cash items 3,921 3,502

Changes in operating assets and liabilities, net of effect of acquired businesses:

Receivables (38,326) (11,211)

Inventories (106,987) 7,528

Prepaid expenses and other 56,296 (24,201)

Other assets (20,470) 12,239

Accounts payable and accrued liabilities (255,486) 115,603

Deferred revenue 169,728 21,824

Other long-term liabilities 1,171 3,964

Net cash provided by operating activities 990,711 864,624

Cash flows from investing activities:

Purchases of investments (39,880) (21,596)

Proceeds from the sale and maturity of investments 162,889 1,989

Proceeds from the sale of IP and other assets

— 11,500

Purchases of property, plant and equipment (101,448) (67,146)

Purchases of intangible assets (6,975) —

Cash paid in business combinations, net of cash acquired (2,100,292) (122,146)

Net cash used for investing activities (2,085,706) (197,399)

Cash flows from financing activities:

Proceeds from revolving credit facility

600,000 —

Payments on revolving credit facility

(600,000) —

Proceeds from issuance of common stock 88,840 78,322

Stock received for payment of employee taxes on vesting of restricted stock (140,722) (94,334)

Payments for repurchases of common stock (400,006) (525,016)

Net cash used for financing activities (451,888) (541,028)

Effect of exchange rate changes on cash and cash equivalents (13,991) 52,535

Increase (decrease) in cash and cash equivalents

(1,560,874) 178,732

Cash and cash equivalents at end of period

$ 1,440,443 $ 2,822,762

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)

2025 2026

GEOGRAPHY Q1 Q2 Q3 Q4 Year Q1 Q2

Americas 48 % 49 % 43 % 47 % 47 % 45 % 43 %

China 11 % 9 % 18 % 12 % 13 % 13 % 15 %

Other Asia 19 % 19 % 18 % 20 % 19 % 20 % 20 %

Europe, Middle East and Africa 16 % 16 % 14 % 14 % 15 % 16 % 15 %

Japan 6 % 7 % 7 % 7 % 6 % 6 % 7 %

Total 100 % 100 % 100 % 100 % 100 % 100 % 100 %

Revenue Mix by Product Category (% of Total Revenue)

2025 2026

PRODUCT CATEGORY Q1 Q2 Q3 Q4 Year Q1 Q2

Core EDA

71 % 71 % 71 % 69 % 70 % 71 % 68 %

Semiconductor IP

14 % 13 % 14 % 15 % 14 % 14 % 15 %

System Design and Analysis 15 % 16 % 15 % 16 % 16 % 15 % 17 %

Total 100 % 100 % 100 % 100 % 100 % 100 % 100 %

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Operating Margin

As of July 27, 2026

(Unaudited)

Three Months Ending

September 30, 2026

Year Ending

December 31, 2026

Forecast Forecast

GAAP operating margin as a percent of total revenue 27.5% - 28.5% 27.75% - 28.75%

Reconciling items to non-GAAP operating margin as a percent of total revenue:

Stock-based compensation expense

Amortization of acquired intangibles

Acquisition and integration-related costs

Non-GAAP operating margin as a percent of total revenue† 43.5% - 44.5% 43.75% - 44.75%

† The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share

As of July 27, 2026

(Unaudited)

Three Months Ending

September 30, 2026

Year Ending

December 31, 2026

Forecast Forecast

Diluted net income per share on a GAAP basis $1.11 to $1.17 $4.76 to $4.86

Stock-based compensation expense 0.53 2.06

Amortization of acquired intangibles 0.29 1.04

Acquisition and integration-related costs 0.09 0.44

Non-qualified deferred compensation expenses — 0.03

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— (0.01)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

— (0.34)

Income tax effect of non-GAAP adjustments (0.01) 0.07

Diluted net income per share on a non-GAAP basis† $2.01 to $2.07 $8.05 to $8.15

†

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Net Income

As of July 27, 2026

(Unaudited)

Three Months Ending

September 30, 2026

Year Ending

December 31, 2026

($ in millions) Forecast Forecast

Net income on a GAAP basis $308 to $324 $1,316 to $1,344

Stock-based compensation expense 146 569

Amortization of acquired intangibles 80 289

Acquisition and integration-related costs 26 122

Non-qualified deferred compensation expenses — 9

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— (3)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

— (95)

Income tax effect of non-GAAP adjustments (2) 19

Net income on a non-GAAP basis† $558 to $574 $2,226 to $2,254

†

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

EX-99.02 — CFO COMMENTARY

EX-99.02

Filename: cfocommentary07272026ex9902.htm · Sequence: 3

Document

Exhibit 99.02

CADENCE REPORTS SECOND QUARTER

2026

CADENCE DESIGN SYSTEMS, INC.

CFO COMMENTARY

Key Takeaways

• Exceeded Q2 revenue, non-GAAP operating margin and EPS guidance

• Record backlog of ~$8.1 billion

• Raising 2026 revenue growth outlook to ~19% and non-GAAP EPS outlook to $8.10 at the midpoint

Q3 2026 Outlook

• Revenue: $1.595 billion - $1.625 billion

• GAAP operating margin: 27.5% - 28.5%

• Non-GAAP operating margin: 43.5% - 44.5%

• GAAP EPS: $1.11 - $1.17

• Non-GAAP EPS: $2.01 - $2.07

• Expect to use approximately $200 million to repurchase Cadence shares in Q3

Q2 2026 KEY METRICS

• Revenue: $1.584 billion

• GAAP operating margin: 28.4%

• Non-GAAP operating margin: 45.5%

• GAAP EPS: $1.33

• Non-GAAP EPS: $2.11

• Operating cash flow: $635 million

FY 2026 Outlook

• Revenue: $6.260 billion - $6.340 billion

• GAAP operating margin: 27.75% - 28.75%

• Non-GAAP operating margin: 43.75% - 44.75%

• GAAP EPS: $4.76 - $4.86

• Non-GAAP EPS: $8.05 - $8.15

• Operating cash flow: ~$2.0 billion

• Expect to use approximately 50% of free cash flow to repurchase Cadence shares for the year

Financial Results Webcast

Our Q2 2026 financial results webcast will begin July 27, 2026 at 2:00 p.m. (Pacific). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on July 27, 2026 until 5:00 p.m. (Pacific) on September 16, 2026.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Financial Metrics

(In Millions, except per share data) 2021 2022

2023

2024

2025

2026E

Revenue $ 2,988 $ 3,562 $ 4,090 $ 4,641 $ 5,297 $6,260- $6,340

Revenue growth 11% 19% 15% 13%

14%

18% - 20%

3-year CAGR*

12% 15% 15% 16%

14%

~15%

GAAP operating expenses $ 2,209 $ 2,488 $ 2,839 $ 3,291 $ 3,805 $4,501

GAAP operating expense growth 8% 13% 14% 16% 16% ~18%

Non-GAAP operating expenses $ 1,877 $ 2,125 $ 2,373 $ 2,667 $ 2,935 $3,512

Non-GAAP operating expense growth 8% 13% 12% 12%

10%

~20%

GAAP operating margin

26.1% 30.1% 30.6% 29.1%

28.2%

27.75% - 28.75%

Non-GAAP operating margin 37.2% 40.3% 42.0% 42.5%

44.6%

43.75% - 44.75%

Rule of 40 Metric**

48.6%

59.5%

56.8%

56.0%

58.7%

~63%

GAAP earnings per share $ 2.50 $ 3.09 $ 3.82 $ 3.85 $ 4.06 $4.76 - $4.86

Non-GAAP earning per share $ 3.29 $ 4.27 $ 5.15 $ 5.97 $ 7.14 $8.05 - $8.15

Non-GAAP EPS growth*

18% 30% 21% 16%

20%

13 %

3-year Non-GAAP EPS CAGR*

21% 25% 23% 22%

19%

16 %

Weighted average diluted shares outstanding

278.9 275.0

272.7

273.8

273.3

275.5 - 277.5

Cash flow from operations 1,101 1,242

1,349

1,261

1,729

~$2,000

Capital expenditures 65 123

102

143

142

~$240

* At midpoint of outlook.

** Rule of 40 Metric = Revenue growth % + Non-GAAP operating margin %.

Profitability Trends

(In Millions) 2021 2022

2023

2024

2025

2026E*

GAAP operating margin 26.1% 30.1% 30.6% 29.1%

28.2%

28.25%

Non-GAAP operating margin 37.2% 40.3% 42.0% 42.5%

44.6%

44.25%

Stock-based compensation

(7.0)%

(7.6)%

(8.0)%

(8.4)%

(8.6)%

(9.0)%

Non-GAAP operating margin adjusted for stock-based compensation

30.2%

32.7%

34.0%

34.1%

36.0%

35.25%

GAAP operating income $ 779 $ 1,074 $ 1,251 $ 1,351 $ 1,492 $ 1,799

Non-GAAP operating income $ 1,111 $ 1,436 $ 1,717 $ 1,974 $ 2,361 $ 2,788

Non-GAAP operating income adjusted for stock-based compensation $ 901 $ 1,166 $ 1,391 $ 1,583 $ 1,906 $ 2,219

* At midpoint of outlook.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Third Quarter 2026 Financial Outlook

Q3 2025 Q2 2026 Q3 2026E

Total Revenue ($ Millions) $ 1,339 $ 1,584 $1,595 - $1,625

Q/Q Growth 7% 1% - 3%

Y/Y Growth 24% 19% - 21%

GAAP Operating Margin 31.8% 28.4% 27.5% - 28.5%

Non-GAAP Operating Margin 47.6% 45.5% 43.5% - 44.5%

GAAP EPS $ 1.05 $ 1.33 $1.11 - $1.17

Non-GAAP EPS $ 1.93 $ 2.11 $2.01 - $2.07

Fiscal Year 2026 Financial Outlook

Previous Current

FY 2025

FY 2026E

Recurring Revenue

80%

~80%

Total Revenue ($ Millions) $ 5,297

$6,125 - $6,225

$6,260 - $6,340

Y/Y Growth

14%

16% - 18%

18% - 20%

Revenue from Beginning Backlog

~69%

~66%

~65%

GAAP Operating Margin

28.2%

27.5% - 28.5%

27.75% - 28.75%

Non-GAAP Operating Margin

44.6%

43.5% - 44.5%

43.75% - 44.75%

GAAP Other Income & Expense ($ Millions) $ 30

$(101) - $(81)

$(17) - $3

Non-GAAP Other Income & Expense ($ Millions) $ (24)

$(115) - $(95)

GAAP Tax Rate

27.1%

~26%

Non-GAAP Tax Rate 16.5% 16.5% 16.5%

Weighted Average Diluted Shares Outstanding (Millions)

273.3

275 - 277

275.5 - 277.5

GAAP EPS $ 4.06

$4.39 - $4.49

$4.76 - $4.86

Y/Y Growth

8% - 11%

17% - 20%

Non-GAAP EPS $ 7.14

$7.85 - $7.95

$8.05 - $8.15

Y/Y Growth

20%

10% - 11%

13% - 14%

Cash Flow from Operations ($ Millions) $ 1,729

$1,875 - $1,975

~$2,000

DSO

~65

Capital Expenditures ($ Millions) $ 142

~$240

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Second Quarter Financial Results

Backlog

(In Billions)

2022

2023

2024

2025

Q2 2026

Backlog $ 5.8 $ 6.0 $ 6.8 $ 7.8 $ 8.1

Revenue

(In Millions)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Product and Maintenance $ 1,170 $ 1,208 $ 1,332 $ 1,349 $ 1,431

Services 105 131 108 125 154

Total Revenue $ 1,275 $ 1,339 $ 1,440 $ 1,474 $ 1,584

Table may not foot due to rounding

Recurring and Up-Front Revenue

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Revenue Recognized Over Time

73 % 78 % 77 % 73 % 72 %

Other Recurring Revenue

5 % 4 % 2 % 4 % 6 %

Recurring Revenue

78 % 82 % 79 % 77 % 78 %

Up-Front Revenue

22 % 18 % 21 % 23 % 22 %

Total Revenue

100 % 100 % 100 % 100 % 100 %

Trailing Twelve Months Recurring and Up-Front Revenue

Trailing Twelve Months Ended

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Recurring Revenue 80 % 80 % 80 % 79 % 79 %

Up-Front Revenue 20 % 20 % 20 % 21 % 21 %

Total 100 % 100 % 100 % 100 % 100 %

Revenue Mix by Geography

(% of Total Revenue)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Americas 49 % 43 % 47 % 45 % 43 %

China 9 % 18 % 12 % 13 % 15 %

Other Asia 19 % 18 % 20 % 20 % 20 %

Europe, Middle East and Africa 16 % 14 % 14 % 16 % 15 %

Japan 7 % 7 % 7 % 6 % 7 %

Total 100 % 100 % 100 % 100 % 100 %

Revenue Mix by Product Category

(% of Total Revenue)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Core EDA

71 % 71 % 69 % 71 % 68 %

Semiconductor IP

13 % 14 % 15 % 14 % 15 %

System Design and Analysis 16 % 15 % 16 % 15 % 17 %

Total 100 % 100 % 100 % 100 % 100 %

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Gross Margin

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

GAAP Gross Margin 85.6 % 86.4 % 86.9 % 85.4 % 84.9 %

Non-GAAP Gross Margin 87.2 % 88.0 % 88.5 % 88.0 % 88.2 %

Total Costs and Expenses

(In Millions)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Total GAAP Costs and Expenses $ 1,034 $ 913 $ 977 $ 1,043 $ 1,134

Total Non-GAAP Costs and Expenses $ 729 $ 701 $ 781 $ 815 $ 863

Operating Margin

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

GAAP Operating Margin 19.0 % 31.8 % 32.2 % 29.3 % 28.4 %

Non-GAAP Operating Margin 42.8 % 47.6 % 45.8 % 44.7 % 45.5 %

Net Income Per Share

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

GAAP Net Income Per Share $ 0.59 $ 1.05 $ 1.42 $ 1.23 $ 1.33

Non-GAAP Net Income Per Share $ 1.65 $ 1.93 $ 1.99 $ 1.96 $ 2.11

Total DSO

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

DSO

67 65

Balance Sheet and Cash Review

Free Cash Flow

(In Millions)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Net Cash from Operating Activities $ 378 $ 311 $ 553 $ 356 $ 635

Capital Expenditures 44 34 41 49 53

Free Cash Flow $ 334 $ 277 $ 512 $ 307 $ 582

Cash and Cash Equivalents

(In Millions)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Cash and Cash Equivalents $ 2,823 $ 2,753 $ 3,001 $ 1,407 $ 1,440

•Approximately 16 percent of our cash and cash equivalents were in the U.S. at quarter-end.

Debt

(In Millions)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Debt (principal value)

$ 2,500 $ 2,500 $ 2,500 $ 2,925 $ 2,500

Share Repurchase

(In Millions)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Share Repurchase $ 175 $ 200 $ 200 $ 200 $ 200

Number of Shares 0.607 0.584 0.613 0.671 0.580

Employees

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

Headcount 13,152 13,693 13,800 15,110 15,445

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Forward Looking Statements

This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, financial condition, strategic objectives, business model and prospects, technology and product developments, customer adoption and demand, strategic relationships, backlog, industry trends, market growth, tax rates and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) changes in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence’s products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including export controls, tariffs, other trade restrictions and other government regulations, as well as rising tensions, armed conflicts around the world, increased energy costs and supply chain constraints; (vi) changes in tax laws, interest rate and currency exchange rate fluctuations, inflation rates, Cadence’s increased debt levels and obligations and Cadence’s ability to repay debt or access capital and debt markets in the future; (vii) legislative or regulatory requirements; (viii) Cadence’s pending acquisitions, acquisition of the Hexagon D&E business and other companies, businesses or technologies or the failure to successfully integrate and operate them; (ix) harm caused by compromises in cybersecurity and cybersecurity attacks; (x) capital expenditure requirements and events that affect cash flow, liquidity or reserves, or estimates Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (xi) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject, including Cadence’s ongoing obligations under its July 2025 settlement agreements with the U.S. Department of Justice (“DOJ”) and Bureau of Industry and Security (“BIS”), any further inquiries or adverse actions by the DOJ, BIS or other governmental authorities and any impact of the settlements on Cadence’s operations and business dealings; and (xii) Cadence’s ability to successfully meet any environmental, social and governance targets and practices. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

GAAP to Non-GAAP Reconciliation

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this CFO Commentary with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance. See our earnings press release issued today for further discussion of our non-GAAP financial measures, as well as the reconciliation provided in the Appendix to this CFO Commentary.

Cadence’s management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company’s core business operations and therefore provides supplemental information to Cadence’s management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence’s business from the same perspective as Cadence’s management, including forecasting and budgeting.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

APPENDIX I

Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Millions)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

GAAP total costs and expenses $ 1,034 $ 913 $ 977 $ 1,043 $ 1,134

Reconciling items to non-GAAP total costs and expenses

Stock-based compensation expense (118) (116) (113) (138) (147)

Amortization of acquired intangibles (24) (26) (30) (51) (80)

Acquisition and integration-related costs (26) (37) (49) (41) (33)

Restructuring — (27) (2) — —

Non-qualified deferred compensation (expenses) credits

(8) (6) (2) 3 (11)

Loss related to contingent liability*

(129) — — — —

Non-GAAP total costs and expenses**

$ 729 $ 701 $ 781 $ 815 $ 863

Table may not foot due to rounding

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Millions) 2021 2022

2023

2024

2025

2026E

GAAP total costs and expenses $ 2,209 $ 2,488 $ 2,839 $ 3,291 $ 3,805 $ 4,501

Reconciling items to non-GAAP total costs and expenses

Stock-based compensation expense (210) (270) (326) (391) (455) (569)

Amortization of acquired intangibles (67) (60) (62) (90) (105) (289)

Acquisition and integration-related costs (23) (41) (56) (96) (135) (122)

Restructuring 1 — (11) (24) (29) —

Non-qualified deferred compensation (expenses) credits (6) 8 (11) (11) (14) (9)

Special charges*

(27) — — (3) (2) —

Loss related to contingent liability**

— — — (8) (129) —

Non-GAAP total costs and expenses***

$ 1,877 $ 2,125 $ 2,373 $ 2,667 $ 2,935 $ 3,512

Table may not foot due to rounding

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP Operating Income Adjusted for Stock-based Compensation

(In Millions) 2021 2022

2023

2024

2025

2026E

GAAP operating income $ 779 $ 1,074 $ 1,251 $ 1,351 $ 1,492 $ 1,799

Reconciling items to non-GAAP operating income

Stock-based compensation expense 210 270 326 391 455 569

Amortization of acquired intangibles 67 60 62 90 105 289

Acquisition and integration-related costs 23 41 56 96 135 122

Restructuring (1) — 11 24 29 —

Non-qualified deferred compensation expenses (credits)

6 (8) 11 11 14 9

Special charges*

27 — — 3 2 —

Loss related to contingent liability**

— — — 8 129 —

Non-GAAP operating income***

$ 1,111 $ 1,436 $ 1,717 $ 1,974 $ 2,361 $ 2,788

Stock-based compensation expense (210) (270) (326) (391) (455) (569)

Non-GAAP operating income adjusted for stock-based compensation***

$ 901 $ 1,166 $ 1,391 $ 1,583 $ 1,906 $ 2,219

Table may not foot due to rounding

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Gross Margin as a Percent of Total Revenue to Non-GAAP Gross Margin as a Percent of Total Revenue

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026

GAAP gross margin as a percent of total revenue 85.6%

86.4%

86.9%

85.4% 84.9%

Reconciling items to non-GAAP gross margin as a percent of total revenue

Stock-based compensation expense

0.4%

0.3%

0.4%

Amortization of acquired intangibles

1.1%

1.2%

1.3%

2.1% 2.9%

Non-qualified deferred compensation expenses (credits)

0.0% 0.0% 0.0% 0.0%

0.0%

Acquisition and integration-related costs

0.1%

0.0%

0.1% 0.0%

Non-GAAP gross margin as a percent of total revenue*

87.2%

88.0%

88.5%

88.0% 88.2%

* The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026 Q3 2026E

GAAP operating margin as a percent of total revenue 19.0%

31.8%

32.2%

29.3% 28.4% 27.5% - 28.5%

Reconciling items to non-GAAP operating margin as a percent of total revenue

Stock-based compensation expense 9.3%

8.7%

7.9%

9.4% 9.3%

Amortization of acquired intangibles 1.8%

1.9%

2.1%

3.4% 5.0%

Acquisition and integration-related costs 2.0%

2.8%

3.4%

2.8% 2.1%

Restructuring

0.0%

2.0%

0.1%

0.0%

Non-qualified deferred compensation expenses (credits)

0.6%

0.4%

0.1%

(0.2)% 0.7% 0%

Loss related to contingent liability*

10.1%

0.0%

Non-GAAP operating margin as a percent of total revenue**

42.8%

47.6%

45.8%

44.7% 45.5% 43.5% - 44.5%

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue

2021 2022

2023

2024

2025

2026E

GAAP operating margin as a percent of total revenue 26.1% 30.1% 30.6% 29.1%

28.2%

27.75% - 28.75%

Reconciling items to non-GAAP operating margin as a percent of total revenue

Stock-based compensation expense

7.0%

7.6%

8.0%

8.4%

8.6%

Amortization of acquired intangibles

2.2%

1.7%

1.5%

2.0%

Acquisition and integration-related costs

0.8%

1.1%

1.4%

2.1%

2.5%

Restructuring

0.0%

0.3%

0.5%

0.6%

Non-qualified deferred compensation expenses (credits)

0.2%

(0.2)%

0.2%

0.3%

Special charges*

0.9%

0.0%

Loss related to contingent liability**

0.0%

0.2%

2.4%

Non-GAAP operating margin as a percent of total revenue***

37.2%

40.3%

42.0%

42.5%

44.6%

43.75% - 44.75%

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share

(In Thousands, Except Per Share Data)

Q2 2025

Q3 2025

Q4 2025

Q1 2026 Q2 2026 Q3 2026E

Diluted net income per share on a GAAP basis $ 0.59 $ 1.05 $ 1.42 $ 1.23 $ 1.33 $1.11 - $1.17

Stock-based compensation expense 0.43 0.42 0.41 0.50 0.53 0.53

Amortization of acquired intangibles 0.09 0.10 0.11 0.19 0.29 0.29

Acquisition and integration-related costs 0.09 0.14 0.18 0.15 0.12 0.09

Restructuring — 0.10 0.01 — — —

Non-qualified deferred compensation expenses (credits)

0.03 0.02 0.01 (0.01) 0.04 —

Loss related to contingent liability*

0.47 — — — — —

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— 0.07 0.04 (0.01) — —

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(0.17) 0.03 (0.18) (0.04) (0.30) —

Income tax effect of non-GAAP adjustments 0.12 — (0.01) (0.05) 0.10 (0.01)

Diluted net income per share on a non-GAAP basis**

$ 1.65 $ 1.93 $ 1.99 $ 1.96 $ 2.11 $2.01 - $2.07

Shares used in calculation of diluted net income per share 272,899 273,798 272,932 273,725 276,163

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share

(In Thousands, Except Per Share Data) 2021 2022

2023

2024

2025

2026E

Diluted net income per share on a GAAP basis $ 2.50 $ 3.09 $ 3.82 $ 3.85 $ 4.06 $4.76 - $4.86

Stock-based compensation expense 0.75 0.98 1.19 1.43 1.67 2.06

Amortization of acquired intangibles 0.24 0.22 0.23 0.33 0.38 1.04

Acquisition and integration-related costs 0.08 0.15 0.21 0.35 0.49 0.44

Restructuring — — 0.04 0.09 0.11 —

Non-qualified deferred compensation expenses (credits) 0.02 (0.03) 0.04 0.04 0.05 0.03

Special charges*

0.10 — — 0.01 0.01 —

Loss related to contingent liability**

— — — 0.03 0.47 —

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— — — — 0.11 (0.01)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(0.03) 0.05 (0.17) (0.22) (0.31) (0.34)

Income tax effect of non-GAAP adjustments (0.37) (0.19) (0.21) 0.06 0.10 0.07

Diluted net income per share on a non-GAAP basis***

$ 3.29 $ 4.27 $ 5.15 $ 5.97 $ 7.14 $8.05 - $8.15

Shares used in calculation of diluted net income per share 278,858 275,011 272,748 273,833 273,312 275.5 - 277.5M

2021 includes costs related to a voluntary retirement program.

Related to resolution of previously disclosed legal proceedings with the DOJ and BIS.

***

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

Cadence Design Systems, Inc.

Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense

(In Millions)

2024

2025

2026E

GAAP total other income and expense $ 45 $ 30 $(17) - $3

Reconciling items to non-GAAP total income and expense

Other income or expense related to foreign currency forward exchange contract and settlement associated with an acquisition

— 29 (3)

Other income or expense related to investments, divestitures and non-qualified deferred compensation plan assets

(61) (83) (95)

Non-GAAP total other income and expense*

$ (16) $ (24)

$(115) - $(95)

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

July 27, 2026 Cadence Q2 2026 Financial Results

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Document and Entity Information

Jul. 27, 2026

Cover [Abstract]

Document Type

8-K

Document Period End Date

Jul. 27, 2026

Entity Registrant Name

CADENCE DESIGN SYSTEMS, INC.

Entity Incorporation, State or Country Code

Entity File Number

000-15867

Entity Tax Identification Number

00-0000000

Entity Address, Address Line One

2655 Seely Avenue,

Entity Address, City or Town

San Jose,

Entity Address, State or Province

Entity Address, Postal Zip Code

95134

City Area Code

(408)

Local Phone Number

943-1234

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Area code of city

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No definition available.

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- Definition

Cover page.

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No definition available.

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- Definition

For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.

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No definition available.

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Period Type:

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- Definition

The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.

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No definition available.

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Name:

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- Definition

Address Line 1 such as Attn, Building Name, Street Name

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No definition available.

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Name of the City or Town

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No definition available.

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- Definition

Code for the postal or zip code

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No definition available.

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- Definition

Name of the state or province.

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No definition available.

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- Definition

A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Indicate if registrant meets the emerging growth company criteria.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.

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No definition available.

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- Definition

Two-character EDGAR code representing the state or country of incorporation.

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No definition available.

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- Definition

The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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- Definition

Local phone number for entity.

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No definition available.

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 13e

-Subsection 4c

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14d

-Subsection 2b

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- Definition

Title of a 12(b) registered security.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b

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- Definition

Name of the Exchange on which a security is registered.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection d1-1

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Name:

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Data Type:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14a

-Subsection 12

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- Definition

Trading symbol of an instrument as listed on an exchange.

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No definition available.

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Securities Act

-Number 230

-Section 425

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