8-K

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): April 25, 2016

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, Building 5 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:

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

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

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

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

Item 2.02. Results of Operations and Financial Condition.

On April 25, 2016, Cadence Design Systems, Inc. ("Cadence") issued a press release announcing its financial results for the quarter ended April 2, 2016.

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 April 2, 2016 is attached hereto as Exhibit 99.02, and the press release and the commentary are incorporated herein by reference.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On April 25, 2016, Cadence announced that Geoffrey G. Ribar, Senior Vice President and Chief Financial Officer of Cadence, has decided to retire from Cadence effective March 31, 2017. A copy of the press release is attached hereto as Exhibit 99.03 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.01	Press Release issued by Cadence Design Systems, Inc. on April 25, 2016.
99.02	CFO Commentary on Results of Quarter Ended April 2, 2016.
99.03	Press Release issued by Cadence Design Systems, Inc. on April 25, 2016.

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: April 25, 2016

CADENCE DESIGN SYSTEMS, INC.
By:	/s/ Geoffrey G. Ribar
	Geoffrey G. Ribar
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.01	Press Release issued by Cadence Design Systems, Inc. on April 25, 2016.
99.02	CFO Commentary on Results of the Quarter Ended April 2, 2016.
99.03	Press Release issued by Cadence Design Systems, Inc. on April 25, 2016.

EX-99.01

Exhibit 99.01

Cadence Reports First Quarter 2016 Financial Results

SAN JOSE, Calif. — April 25, 2016 — Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced results for the first quarter 2016.

Cadence reported first quarter 2016 revenue of $448 million, compared to revenue of $411 million reported for the same period in 2015. On a GAAP basis, Cadence recognized net income of $51 million, or $0.17 per share on a diluted basis, in the first quarter of 2016, compared to net income of $36 million, or $0.12 per share on a diluted basis, for the same period in 2015.

Using the non-GAAP measure defined below, net income in the first quarter of 2016 was $86 million, or $0.28 per share on a diluted basis, as compared to net income of $72 million, or $0.23 per share on a diluted basis, for the same period in 2015.

“In the first quarter of 2016, we continued to innovate and execute to drive growth and deliver results for our customers. With customers enthusiastically embracing our Palladium^® Z1 Enterprise Emulation Platform, Cadence achieved its best quarter ever for hardware revenue. Additionally, the release of the next-generation Virtuoso^® platform sets a new standard for analog and mixed-signal design for broad applications including automotive and IoT,” said Lip-Bu Tan, president and chief executive officer. “Our recently announced pending acquisition of Rocketick Technologies will further strengthen our System Design Enablement strategy by delivering ultra-high-performance simulation to accelerate the development of complete end-product systems.”

“Strong execution at all levels of the company enabled Cadence to produce solid financial results in an environment that remains challenging,” said Geoff Ribar, senior vice president and chief financial officer. “During Q1, we repurchased 11.6 million shares for $240 million, reducing shares outstanding to 301 million at quarter-end.”

CFO Commentary

Commentary on the first quarter 2016 financial results by Geoff Ribar, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For the second quarter of 2016, the company expects total revenue in the range of $445 million to $455 million. Second quarter GAAP net income per diluted share is expected to be in the range of $0.17 to $0.19. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.27 to $0.29.

For 2016, the company expects total revenue in the range of $1.790 billion to $1.840 billion. On a GAAP basis, net income per diluted share for 2016 is expected to be in the range of $0.71 to $0.81. Using the non-GAAP measure defined below, net income per diluted share for 2016 is expected to be in the range of $1.15 to $1.25.

A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is included in this release.

Audio Webcast Scheduled

Lip-Bu Tan, president and chief executive officer, and Geoff Ribar, senior vice president and chief financial officer, will host a first quarter 2016 financial results audio webcast today, April 25, 2016, 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 April 25, 2016 at 5 p.m. (Pacific) and ending June 17, 2016 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

About Cadence

Cadence enables global electronic design innovation and plays an essential role in the creation of today’s integrated circuits and electronics. Customers use Cadence^® software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.

Cadence, the Cadence logo, Palladium and Virtuoso are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

The statements contained above regarding Cadence’s first quarter 2016 financial results, as well as the information in the Business Outlook section and the statements by Lip-Bu Tan and Geoff Ribar, are or include forward-looking statements based on current expectations or beliefs and preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, including, among others: (i) Cadence’s ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence’s efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence’s products; (iv) change in customer demands, including those resulting from consolidation among Cadence’s customers and the possibility that the restructurings and other efforts to improve operational efficiency of Cadence’s customers could result in delays in purchases of Cadence’s products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence’s ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the effects of Cadence’s efforts to improve operational efficiency in its business, including strategic, customer and supplier relationships, and its ability to retain key employees; (x) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party.

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

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 press release 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.

To supplement Cadence’s financial results presented on a generally accepted accounting principles, or 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 and debt discount related to convertible notes, stock-based compensation expense, acquisition and integration-related costs including retention expenses, special charges, investment gains or losses, income or expenses related to Cadence’s non-qualified deferred compensation plan, restructuring 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’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.

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

Net Income Reconciliation	Three Months Ended
	April 2, 2016			April 4, 2015
	(unaudited)
(in thousands)
Net income on a GAAP basis	$	50,562		$	36,259
Amortization of acquired intangibles	16,443			16,404
Stock-based compensation expense	24,632			21,861
Non-qualified deferred compensation expenses (credits)	(83		)	527
Restructuring and other charges	14,586			4,359
Acquisition and integration-related costs	804			3,750
Amortization of debt discount on convertible notes	—			5,026
Other income or expense related to investments and non-qualified deferred compensation plan assets*	(2,617		)	(1,263		)
Income tax effect of non-GAAP adjustments	(18,698		)	(15,331		)
Net income on a non-GAAP basis	$	85,629		$	71,592

* Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Diluted Net Income per Share Reconciliation	Three Months Ended
	April 2, 2016			April 4, 2015
	(unaudited)
(in thousands, except per share data)
Diluted net income per share on a GAAP basis	$	0.17		$	0.12
Amortization of acquired intangibles	0.05			0.05
Stock-based compensation expense	0.08			0.07
Non-qualified deferred compensation expenses (credits)	—			—
Restructuring and other charges	0.05			0.01
Acquisition and integration-related costs	—			0.01
Amortization of debt discount on convertible notes	—			0.02
Other income or expense related to investments and non-qualified deferred compensation plan assets*	(0.01		)	—
Income tax effect of non-GAAP adjustments	(0.06		)	(0.05		)
Diluted net income per share on a non-GAAP basis	$	0.28		$	0.23
Shares used in calculation of diluted net income per share — GAAP**	303,434			311,847
Shares used in calculation of diluted net income per share — non-GAAP**	303,434			311,847

* Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

** Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence’s current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning June 17, 2016, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute the company’s current expectations. During the Quiet Period, the business outlook in these documents should be considered historical, speaking as of prior to the Quiet Period only and not subject to any update by the company. During the Quiet Period, Cadence’s representatives will not comment on Cadence’s business outlook, financial results or expectations. The Quiet Period will extend until the day when Cadence’s second quarter 2016 earnings release is published, which is currently scheduled for July 25, 2016.

For more information, please contact:

Investors and Shareholders

Alan Lindstrom

Cadence Design Systems, Inc.

408-944-7100

investor_relations@cadence.com

Media and Industry Analysts

Craig Cochran

Cadence Design Systems, Inc.

408-944-7039

newsroom@cadence.com

Cadence Design Systems, Inc.

Condensed Consolidated Balance Sheets

April 2, 2016 and January 2, 2016

(In thousands)

(Unaudited)

	April 2, 2016		January 2, 2016
			(As Adjusted)*
Current assets:
Cash and cash equivalents	$	810,400	$	616,686
Short-term investments	96,317		94,498
Receivables, net	147,533		164,848
Inventories	56,634		56,762
Prepaid expenses and other	41,360		31,441
Total current assets	1,152,244		964,235
Property, plant and equipment, net of accumulated depreciation of $592,978 and $581,345, respectively	231,180		228,599
Goodwill	551,897		551,772
Acquired intangibles, net of accumulated amortization of $224,474 and $216,589, respectively	283,825		296,482
Long-term receivables	11,365		4,498
Other assets	308,513		299,929
Total assets	$	2,539,024	$	2,345,515
Current liabilities:
Revolving credit facility	$	50,000	$	—
Accounts payable and accrued liabilities	195,216		238,022
Current portion of deferred revenue	322,684		298,285
Total current liabilities	567,900		536,307
Long-term liabilities:
Long-term portion of deferred revenue	38,447		30,209
Long-term debt	642,862		343,288
Other long-term liabilities	55,763		59,596
Total long-term liabilities	737,072		433,093
Stockholders’ equity	1,234,052		1,376,115
Total liabilities and stockholders’ equity	$	2,539,024	$	2,345,515

* Adjusted for the retrospective adoption of ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs," during the three months ended April 2, 2016.

Cadence Design Systems, Inc.

Condensed Consolidated Income Statements

For the Three Months Ended April 2, 2016 and April 4, 2015

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	April 2, 2016			April 4, 2015
Revenue:
Product and maintenance	$	411,744		$	383,637
Services	36,118			27,729
Total revenue	447,862			411,366
Costs and expenses:
Cost of product and maintenance	44,181			42,059
Cost of services	17,873			18,526
Marketing and sales	99,200			100,268
Research and development	179,906			162,996
General and administrative	28,300			27,642
Amortization of acquired intangibles	5,780			6,231
Restructuring and other charges	14,586			4,359
Total costs and expenses	389,826			362,081
Income from operations	58,036			49,285
Interest expense	(5,357		)	(11,754		)
Other income, net	4,763			4,781
Income before provision for income taxes	57,442			42,312
Provision for income taxes	6,880			6,053
Net income	$	50,562		$	36,259
Net income per share - basic	$	0.17		$	0.13
Net income per share - diluted	$	0.17		$	0.12
Weighted average common shares outstanding - basic	296,615			284,523
Weighted average common shares outstanding - diluted	303,434			311,847

Cadence Design Systems, Inc.

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended April 2, 2016 and April 4, 2015

(In thousands)

(Unaudited)

	Three Months Ended
	April 2, 2016			April 4, 2015
Cash and cash equivalents at beginning of period	$	616,686		$	932,161
Cash flows from operating activities:
Net income	50,562			36,259
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	31,231			29,433
Amortization of debt discount and fees	255			5,945
Stock-based compensation	24,632			21,861
Gain on investments, net	(2,617		)	(1,270		)
Deferred income taxes	1,623			1,864
Other non-cash items	209			929
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables	11,618			(12,450		)
Inventories	(3,714		)	1,682
Prepaid expenses and other	(10,132		)	(10,004		)
Other assets	(3,595		)	3,627
Accounts payable and accrued liabilities	(42,557		)	(44,754		)
Deferred revenue	30,710			16,812
Other long-term liabilities	(5,034		)	(3,246		)
Net cash provided by operating activities	83,191			46,688
Cash flows from investing activities:
Purchases of available-for-sale securities	(20,525		)	(33,161		)
Proceeds from the sale of available-for-sale securities	1,000			20,551
Proceeds from the maturity of available-for-sale securities	19,000			10,350
Proceeds from the sale of long-term investments	2,583			1,364
Purchases of property, plant and equipment	(12,116		)	(7,520		)
Cash paid in business combinations and asset acquisitions, net of cash acquired	(3,853		)	—
Net cash used for investing activities	(13,911		)	(8,416		)
Cash flows from financing activities:
Proceeds from term loan	300,000			—
Proceeds from revolving credit facility	50,000			—
Payment of convertible notes	—			(53,862		)
Payment of convertible notes embedded conversion derivative liability	—			(77,139		)
Proceeds from convertible notes hedges	—			77,139
Payment of debt issuance costs	(542		)	—
Excess tax benefits from stock-based compensation	—			6,482
Proceeds from issuance of common stock	24,200			24,609
Stock received for payment of employee taxes on vesting of restricted stock	(15,225		)	(14,114		)
Payments for repurchases of common stock	(240,000		)	(36,797		)
Net cash provided by (used for) financing activities	118,433			(73,682		)
Effect of exchange rate changes on cash and cash equivalents	6,001			(9,015		)
Increase (decrease) in cash and cash equivalents	193,714			(44,425		)
Cash and cash equivalents at end of period	$	810,400		$	887,736

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)

	2015										2016
GEOGRAPHY	Q1		Q2		Q3		Q4		Year		Q1
Americas	47	%	48	%	48	%	48	%	47	%	49	%
Asia	24	%	23	%	25	%	25	%	24	%	22	%
Europe, Middle East and Africa	19	%	20	%	18	%	17	%	19	%	19	%
Japan	10	%	9	%	9	%	10	%	10	%	10	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Group (% of Total Revenue)

	2015										2016
PRODUCT GROUP	Q1		Q2		Q3		Q4		Year		Q1
Functional Verification, including Emulation Hardware	23	%	21	%	23	%	25	%	23	%	26	%
Digital IC Design and Signoff	28	%	29	%	28	%	28	%	28	%	30	%
Custom IC Design	27	%	27	%	26	%	25	%	26	%	25	%
System Interconnect and Analysis	11	%	11	%	10	%	10	%	11	%	9	%
IP	11	%	12	%	13	%	12	%	12	%	10	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Cadence Design Systems, Inc.

As of April 25, 2016

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

(Unaudited)

	Three Months Ending July 2, 2016	Year Ending December 31, 2016
	Forecast	Forecast
Diluted net income per share on a GAAP basis	$0.17 to $0.19	$0.71 to $0.81
Amortization of acquired intangibles	0.05	0.21
Stock-based compensation expense	0.09	0.37
Restructuring and other charges	—	0.05
Acquisition and integration-related costs	—	0.02
Other income or expense related to investments and non-qualified deferred compensation plan assets*	—	(0.01)
Income tax effect of non-GAAP adjustments	(0.04)	(0.20)
Diluted net income per share on a non-GAAP basis†	$0.27 to $0.29	$1.15 to $1.25

Cadence Design Systems, Inc.

As of April 25, 2016

Impact of Non-GAAP Adjustments on Forward Looking Net Income

(Unaudited)

	Three Months Ending July 2, 2016	Year Ending December 31, 2016
($ in millions)	Forecast	Forecast
Net income on a GAAP basis	$49 to $55	$205 to $234
Amortization of acquired intangibles	15	61
Stock-based compensation expense	25	109
Restructuring and other charges	—	15
Acquisition and integration-related costs	1	4
Other income or expense related to investments and non-qualified deferred compensation plan assets*	—	(3)
Income tax effect of non-GAAP adjustments	(11)	(57)
Net income on a non-GAAP basis†	$79 to $85	$334 to $363

† 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.

* Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on sale of investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

EX-99.02

Exhibit 99.02

CADENCE REPORTS FIRST QUARTER 2016
CADENCE DESIGN SYSTEMS, INC.
CFO COMMENTARY
April 25, 2016 Q1 2016 Key Takeaways • Good financial results with revenue and profitability meeting or exceeding expectations. • Strong reception for Palladium® Z1 contributed to record hardware revenue. • Released next-generation Virtuoso® Platform with 10X performance improvements across platform. • Repurchased 11.6 million shares of stock for $240 million, a little less than 4% of shares outstanding. FY 2016 Outlook • Revenue: $1.79 - $1.84 billion. • GAAP operating margin: approximately 16%. • Non-GAAP operating margin: approximately 26%. • GAAP EPS: $0.71 - $0.81. • Non-GAAP EPS $1.15 - $1.25. • Operating cash flow: $380 - $420 million.	Q2 2016 Outlook • Revenue : $445 - $455 million. • GAAP operating margin: approximately15%. • Non-GAAP operating margin: approximately 25%. • GAAP EPS: $0.17 - $0.19. • Non-GAAP EPS: $0.27 - $0.29. Financial Results Webcast Our Q1 2016 financial results webcast will begin April 25, 2016 at 2:00 p.m. (Pacific) / 5:00 p.m. (Eastern). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on April 25, 2016 until 5:00 p.m. (Pacific) / 8:00 p.m. (Eastern) on June 17, 2016.	Q1 2016 KEY METRICS
		• Revenue $448 million, +9% y/y. • GAAP operating margin 13%. • Non-GAAP operating margin 26%. • GAAP EPS $0.17. • Non-GAAP EPS $0.28, cents, +22% y/y. • Operating cash flow $83 million. • Cash and short-term Investments $907 million. • Long-term debt $700 million. • DSO 32 days, down 3 days.

April 25, 2016 Cadence Q1 2016 Financial Results 1

Cadence Design Systems, Inc.

Fiscal Year 2016 Financial Outlook

		Previous	Current
	FY 2015A	FY 2016E	FY 2016E
Total Bookings ($ Billion)	$1.902	$2.000 - $2.100	$2.000 - $2.100
Y/Y Growth	7%	5% - 10%	5% - 10%
Average Contract Life (Years)	2.58	2.4 - 2.6	2.4 - 2.6
Recurring Revenue	>90%	>90%	>90%
Total Revenue ($ Billion)	$1.702	$1.790 - $1.840	$1.790 - $1.840
Y/Y Growth	8%	5% - 8%	5% - 8%
Revenue from Beginning Backlog	~70%	~70%	~70%
GAAP Operating Margin	16.8%	~17%	~16%
Non-GAAP Operating Margin	26.7%	~26%	~26%
Non-GAAP Other Income & Exp ($ Million)	$(12.3)	($27) - ($18)	($24) - ($15)
Non-GAAP Tax Rate	23%	23%	23%
Weighted Average Diluted Shares Outstanding (Million)*	312.3	280 - 295	283 - 297
GAAP EPS	$0.81	$0.72 - $0.82	$0.71 - $0.81
Non-GAAP EPS	$1.09	$1.15 - $1.25	$1.15 - $1.25
Y/Y Growth	16%	6% - 15%	6% - 15%
Cash Flow from Operations ($ Million)	$378.2	$380 - $420	$380 - $420
DSO	35	30 - 35	30 - 35
Capital Expenditures ($ Million)	$44.8	~$50	~$50

* Weighted average diluted shares outstanding increased due to impact of higher than expected stock price.

Second Quarter 2016 Financial Outlook

			Current
	Q2 2015A	Q1 2016A	Q2 2016E
Total Revenue ($ Million)	$415.9	$447.9	$445 - $455
Q/Q Growth	1%	2%	(1%) - 2%
Y/Y Growth	10%	9%	7% - 9%
GAAP Operating Margin	18%	13%	~15%
Non-GAAP Operating Margin	28%	26%	~25%
GAAP EPS	$0.19	$0.17	$0.17 - $0.19
Non-GAAP EPS	$0.27	$0.28	$0.27 - $0.29
Q/Q Growth	(17%)	(10%)	(4%) - 4%
Y/Y Growth	29%	22%	0% - 7%

April 25, 2016 Cadence Q1 2016 Financial Results 2

Cadence Design Systems, Inc.

First Quarter Financial Results

Revenue

(In Thousands)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Product & Maintenance	$383,637	$384,951	$396,867	$413,489	$411,744
Services	27,729	30,932	36,896	27,590	36,118
Total Revenue	$411,366	$415,883	$433,763	$441,079	$447,862
Y/Y Growth	9%	10%	8%	4%	9%

Revenue Mix by Geography

(% of Total Revenue)	Q1 2015		Q2 2015		Q3 2015		Q4 2015		Q1 2016
Americas	47	%	48	%	48	%	48	%	49	%
Asia	24	%	23	%	25	%	25	%	22	%
Europe, Middle East and Africa	19	%	20	%	18	%	17	%	19	%
Japan	10	%	9	%	9	%	10	%	10	%
Total	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Group

(% of Total Revenue)	Q1 2015		Q2 2015		Q3 2015		Q4 2015		Q1 2016
Functional Verification	23	%	21	%	23	%	25	%	26	%
Digital IC Design and Signoff	28	%	29	%	28	%	28	%	30	%
Custom IC Design	27	%	27	%	26	%	25	%	25	%
System Interconnect and Analysis	11	%	11	%	10	%	10	%	9	%
IP	11	%	12	%	13	%	12	%	10	%
Total	100	%	100	%	100	%	100	%	100	%

Contract Duration

(Years)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Weighted Average Contract Life	2.5	2.4	2.4	2.8	2.7

• Q4 2015 and Q1 2016 both reflect customer mix which varies by quarter. Continue to expect 2.4 - 2.6 years for 2016.

Total Costs and Expenses

(In Thousands)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Total GAAP Costs & Expenses	$362,081	$339,479	$355,862	$359,239	$389,826
Y/Y Growth	8%	(1)%	3%	3%	8%
Total Non-GAAP Costs & Expenses	$315,180	$300,332	$316,208	$315,319	$333,444
Y/Y Growth	7%	4%	9%	4%	6%

April 25, 2016 Cadence Q1 2016 Financial Results 3

Cadence Design Systems, Inc.

Operating Margin

	Q1 2015		Q2 2015		Q3 2015		Q4 2015		Q1 2016
GAAP Operating Margin	12.0	%	18.4	%	18.0	%	18.6	%	13.0	%
Non-GAAP Operating Margin	23.4	%	27.8	%	27.1	%	28.5	%	25.5	%

• Non-GAAP operating margin exceeded expectations primarily due to timing of revenue and expenses. Outlook for the year remained at approximately 26%.

Earnings Per Share

	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
GAAP Net Income Per Share	$0.12	$0.19	$0.25	$0.26	$0.17
Y/Y Growth	9%	138%	108%	24%	42%
Non-GAAP Net Income Per Share	$0.23	$0.27	$0.28	$0.31	$0.28
Y/Y Growth	15%	29%	8%	15%	22%

Total DSO

	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
DSO	30	29	28	35	32

• Our DSO target for 2016 is 30 - 35 days.

Balance Sheet and Cash Review

Cash Flow from Operating Activities

(In Thousands)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Net Cash from Operating Activities	$46,688	$121,754	$86,907	$122,851	$83,191

Capital Expenditures

(In Thousands)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Capital Expenditures	$7,520	$16,547	$10,026	$10,715	$12,116

• Capital expenditures for 2016 are expected to be approximately $50 million.

Cash and Short-Term Investments

(In Thousands)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Cash and Short-Term Investments	$980,376	$744,411	$711,195	$711,184	$906,717

• Approximately 45 percent of our cash and short-term investments were in the U.S. at quarter-end.

April 25, 2016 Cadence Q1 2016 Financial Results 4

Cadence Design Systems, Inc.

Stock Repurchase

(In Thousands, Except Share Price)	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Share Repurchase	$36,797	$56,279	$120,059	$120,054	$240,000
Number of Shares	2,001	2,887	5,856	5,510	11,556
Average Share Price	$18.39	$19.49	$20.50	$21.79	$20.77

• Approximately $720 million remains on the current $1.2 billion repurchase program.

Employees

	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016
Headcount	6,260	6,405	6,567	6,664	6,786

• Headcount increased by 122 positions from Q4 to Q1 primarily due to hiring in R&D, partially offset by reductions across the company resulting from Q1 restructuring.

April 25, 2016 Cadence Q1 2016 Financial Results 5

Cadence Design Systems, Inc.

Forward Looking Statements

The statements in this CFO Commentary contain forward-looking statements based on current expectations or beliefs and preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, including, among others: (i) Cadence’s ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence’s efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence’s products; (iv) change in customer demands, including those resulting from consolidation among Cadence’s customers and the possibility that the restructurings and other efforts to improve operational efficiency of Cadence’s customers could result in delays in purchases of Cadence’s products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence’s ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the effects of Cadence’s efforts to improve operational efficiency in its business, including strategic, customer and supplier relationships, and its ability to retain key employees; (x) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party.

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

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.

Cadence, the Cadence logo, Palladium and Virtuoso are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

April 25, 2016 Cadence Q1 2016 Financial Results 6

Cadence Design Systems, Inc.

APPENDIX

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

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Thousands)	Q1 2015		Q2 2015		Q3 2015		Q4 2015		Q1 2016
GAAP total costs and expenses	$362,081		$339,479		$355,862		$359,239		$389,826
Reconciling items to non-GAAP total costs & expenses
Amortization of acquired intangibles	(16,404	)	(16,224	)	(15,794	)	(15,826	)	(16,443	)
Stock-based compensation expense	(21,861	)	(21,703	)	(24,117	)	(24,660	)	(24,632	)
Non-qualified deferred compensation (expenses) credits	(527	)	(37	)	1,508		(575	)	83
Restructuring and other (charges) credits	(4,359	)	498		(303	)	(347	)	(14,586	)
Acquisition and integration-related costs	(3,750	)	(1,681	)	(948	)	(1,596	)	(804	)
Special charges *	—		—		—		(916	)	—
Non-GAAP total costs and expenses†	$315,180		$300,332		$316,208		$315,319		$333,444

† 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.

* Comprised of executive severance costs.

April 25, 2016 Cadence Q1 2016 Financial Results 7

Cadence Design Systems, Inc.

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

	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016	Forecast Q2 2016
GAAP operating margin as percent of total revenue	12%	18%	18%	19%	13%	15%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Amortization of acquired intangibles	4%	4%	4%	4%	4%	4%
Stock-based compensation expense	5%	5%	5%	6%	6%	6%
Non-qualified deferred compensation expenses (credits)	0%	0%	0%	0%	0%	0%
Restructuring and other charges (credits)	1%	0%	0%	0%	3%	0%
Acquisition and integration-related costs	1%	1%	0%	0%	0%	0%
Special charges *	0%	0%	0%	0%	0%	0%
Non-GAAP operating margin as percent of total revenue†	23%	28%	27%	29%	26%	25%

† 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.

* Comprised of executive severance costs.

	2014	2015	Forecast 2016
GAAP operating margin as percent of total revenue	13%	17%	16%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Amortization of acquired intangibles	4%	4%	3%
Stock-based compensation expense	5%	5%	6%
Non-qualified deferred compensation expenses (credits)	0%	0%	0%
Restructuring and other charges (credits)	0%	0%	1%
Acquisition and integration-related costs	2%	1%	0%
Special charges *	1%	0%	0%
Non-GAAP operating margin as percent of total revenue†	25%	27%	26%

† 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.

* Comprised of costs related to a voluntary retirement program and executive severance costs.

April 25, 2016 Cadence Q1 2016 Financial Results 8

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)	Q1 2015		Q2 2015		Q3 2015		Q4 2015		Q1 2016		Forecast Q2 2016
Diluted net income per share on a GAAP basis	$0.12		$0.19		$0.25		$0.26		$0.17		$0.17 - $0.19
Amortization of acquired intangibles	0.05		0.05		0.05		0.05		0.05		0.05
Stock-based compensation expense	0.07		0.07		0.08		0.08		0.08		0.09
Non-qualified deferred compensation expenses (credits)	—		—		(0.01	)	—		—		—
Restructuring and other charges (credits)	0.01		—		—		—		0.05		—
Acquisition and integration-related costs	0.01		—		—		0.01		—		—
Special charges *	—		—		—		—		—		—
Amortization of debt discount on convertible notes	0.02		0.01		—		—		—		—
Other income or expense related to investments and non-qualified deferred compensation plan assets **	—		—		—		—		(0.01	)	—
Income tax effect of non-GAAP adjustments	(0.05	)	(0.05	)	(0.09	)	(0.09	)	(0.06	)	(0.04	)
Diluted net income per share on a non-GAAP basis †	$0.23		$0.27		$0.28		$0.31		$0.28		$0.27 - $0.29
Shares used in calculation of diluted net income per share - GAAP ***	311,847		313,665		313,186		310,512		303,434
Shares used in calculation of diluted net income per share - non-GAAP ***	311,847		313,665		313,186		310,512		303,434

† 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.

* Comprised of executive severance costs.

** Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

*** Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

April 25, 2016 Cadence Q1 2016 Financial Results 9

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)	2012		2013		2014		2015		Forecast 2016
Diluted net income per share on a GAAP basis	$1.57		$0.56		$0.52		$0.81		$0.71 - $0.81
Amortization of acquired intangibles	0.10		0.15		0.20		0.21		0.21
Stock-based compensation expense	0.17		0.23		0.27		0.30		0.37
Non-qualified deferred compensation expenses (credits)	0.02		0.01		0.01		—		—
Restructuring and other charges (credits)	—		0.06		0.03		0.01		0.05
Acquisition and integration-related costs	0.03		0.11		0.08		0.03		0.02
Special charges *	—		—		0.04		—		—
Amortization of debt discount on convertible notes	0.07		0.08		0.06		0.02		—
Other income or expense related to investments and non-qualified deferred compensation plan assets **	(0.02	)	(0.02	)	(0.01	)	(0.01	)	(0.01	)
Income tax benefit due to a release of an uncertain tax position	—		(0.11	)	—		—		—
Income tax benefit of valuation allowance release	(0.78	)	—		—		—		—
Income tax benefit of State of California settlement	(0.13	)	—		—		—		—
Acquisition-related income tax benefit	(0.05	)	—		—		—		—
Income tax effect of non-GAAP adjustments	(0.21	)	(0.21	)	(0.26	)	(0.28	)	(0.20	)
Diluted net income per share on a non-GAAP basis †	$0.77		$0.86		$0.94		$1.09		$1.15 - $1.25
Shares used in calculation of diluted net income per share - GAAP ***	280,667		294,564		306,775		312,302
Shares used in calculation of diluted net income per share - non-GAAP ***	280,667		294,564		306,775		312,302

† 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.

* Comprised of costs related to a voluntary retirement program and executive severance costs.

** Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

*** Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

April 25, 2016 Cadence Q1 2016 Financial Results 10

Cadence Design Systems, Inc.

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

		Previous	Current
(In Millions)	FY 2015A	FY 2016E	FY 2016E
GAAP total other income and expense	$(17.8)	$(25) - $(16)	$(21) - $(12)
Reconciling items to non-GAAP total income and expense
Other income or expense related to investments and non-qualified deferred compensation plan assets*	(2.0)	(2)	(3)
Amortization of debt discount on convertible notes	(7.5)	—	—
Non-GAAP total other income and expense†	$(12.3)	$(27) - $(18)	$(24) - $(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.

* Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

April 25, 2016 Cadence Q1 2016 Financial Results 11

EX-99.03

Exhibit 99.03

Cadence Chief Financial Officer Geoff Ribar to Retire in March 2017

SAN JOSE, Calif. — April 25, 2016 — Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced that, Geoff Ribar, senior vice president and chief financial officer, who joined the company in 2010, has decided to retire from Cadence effective March 31, 2017.

Cadence has initiated a comprehensive search to identify the company’s next chief financial officer. Mr. Ribar is working with Cadence president and chief executive officer Lip-Bu Tan in the search process. Once the new chief financial officer is appointed, Mr. Ribar will work collaboratively on the transfer of responsibilities and remain actively involved with Cadence through his retirement date. After retiring next year, Mr. Ribar looks forward to remaining active in the technology and semiconductor industries through board memberships and other professional activities.

Lip-Bu Tan, president and CEO, said, “Geoff has been a tremendous partner to me and the company over the past five and a half years. As an integral member of the leadership team, he has driven us forward and made long-lasting contributions to the company. During Geoff’s tenure, we have consistently met or exceeded our financial objectives, improved both our operating margin and cash flow, strengthened the balance sheet, and optimized our return of capital. Geoff has done an outstanding job of executing on the strategy and management philosophy that the Board and I have put in place, and has built a strong finance team. Geoff’s departure is bittersweet for all of us, and I congratulate him on a successful career as a CFO and wish him well in the next chapter of his professional life.”

“It has been an honor to serve as CFO of Cadence and I’m extremely grateful for the support of my colleagues and the talented extended team,” said Mr. Ribar. “I also want to thank Lip-Bu for his leadership and trust. I am fully committed to ensuring a smooth transition and maintaining our excellent momentum throughout this transition process.”

About Cadence

Cadence enables global electronic design innovation and plays an essential role in the creation of today’s integrated circuits and electronics. Customers use Cadence^® software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.

Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc.All other trademarks are the property of their respective owners.

The statements contained above include forward-looking statements based on current expectations or beliefs and preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control. For a detailed discussion of these and other cautionary statements related to Cadence’s business, please

refer to Cadence’s filings with the U.S. Securities and Exchange Commission, which include Cadence’s most recent reports on Form 10-K and Form 10-Q, including Cadence’s future filings.

For more information, please contact:

Investor relations

Alan Lindstrom

Cadence Design Systems, Inc.

408-944-7100

investor_relations@cadence.com

Media relations

Craig Cochran

Cadence Design Systems, Inc.

408-944-7039

newsroom@cadence.com