Cadence tops Q3 profit estimates, hikes forecast on AI-driven design strength
Overview
EDA software provider's Q3 revenue grew 22% yr/yr, beating analyst expectations
Adjusted EPS for Q3 beat analyst expectations
Company authorized additional $2.5 bln for share repurchases
Outlook
Cadence sees 2026 revenue between $6.387 bln and $6.417 bln
Company expects 2026 non-GAAP EPS of $8.37 to $8.43
Cadence raises 2026 revenue growth outlook to 21% year-over-year
Result Drivers
AI-DRIVEN DESIGNS - Co said strong momentum from AI-driven designs drove double-digit growth across all product categories, per CFO John Wall
MAESTRO LAUNCH - Co said launch of Maestro AI models for chip and system design contributed to improved workflow quality and efficiency
HARDWARE EXPANSION - Co said hardware segment delivered record quarter due to expansions with marquee customers and growth in hardware cloud offering
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Beat | $1.63 bln | $1.61 bln (17 Analysts) |
Q3 Adjusted EPS | Beat | $2.11 | $2.05 (16 Analysts) |
Q3 EPS | $1.05 |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 23 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
Wall Street's median 12-month price target for Cadence Design Systems, Inc. is $420.00, about 32.7% above its October 23 closing price of $316.49
The stock recently traded at 34 times the next 12-month earnings vs. a P/E of 43 three months ago
Reuters Recommended Reads
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Oct 26 - Meta eyes record $95 billion equity raise to fund AI expansion
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)