Revenue (Tables)

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Disaggregation of revenue

The following table shows the percentage of revenue contributed by each of Cadence’s five product categories for the three and six months ended July 2, 2022 and July 3, 2021:

	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Custom Integrated Circuit (“IC”) Design and Simulation	23	%	23	%	22	%	23	%
Digital IC Design and Signoff	27	%	28	%	27	%	28	%
Functional Verification, including Emulation and Prototyping Hardware*	24	%	25	%	26	%	26	%
Intellectual Property (“IP”)	14	%	13	%	14	%	13	%
System Design and Analysis	12	%	11	%	11	%	10	%
Total	100	%	100	%	100	%	100	%

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* Includes immaterial amount of revenue accounted for under leasing arrangements.

The following table shows the percentage of Cadence’s revenue that is classified as recurring or up-front for the three and six months ended July 2, 2022 and July 3, 2021:

	Three Months Ended				Six Months Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Revenue recognized over time	84	%	84	%	82	%	83	%
Revenue from arrangements with non-cancelable commitments	2	%	3	%	2	%	3	%
Recurring revenue	86	%	87	%	84	%	86	%
Up-front revenue	14	%	13	%	16	%	14	%
Total	100	%	100	%	100	%	100	%

Contract balances

Cadence’s contract balances as of July 2, 2022 and January 1, 2022 were as follows:

	As of
	July 2, 2022		January 1, 2022
	(In thousands)
Contract assets	$	23,273	$	6,811
Deferred revenue	719,869		655,090