Revenue (Tables)

9 Months Ended

Oct. 01, 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 nine months ended October 1, 2022 and October 2, 2021:

	Three Months Ended				Nine Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Custom Integrated Circuit (“IC”) Design and Simulation	22	%	23	%	22	%	23	%
Digital IC Design and Signoff	29	%	29	%	28	%	28	%
Functional Verification, including Emulation and Prototyping Hardware*	25	%	23	%	26	%	25	%
Intellectual Property (“IP”)	12	%	14	%	13	%	13	%
System Design and Analysis	12	%	11	%	11	%	11	%
Total	100	%	100	%	100	%	100	%

_____________

* 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 nine months ended October 1, 2022 and October 2, 2021:

	Three Months Ended				Nine Months Ended
	October 1, 2022		October 2, 2021		October 1, 2022		October 2, 2021
Revenue recognized over time	81	%	86	%	82	%	84	%
Revenue from arrangements with non-cancelable commitments	3	%	3	%	2	%	3	%
Recurring revenue	84	%	89	%	84	%	87	%
Up-front revenue	16	%	11	%	16	%	13	%
Total	100	%	100	%	100	%	100	%

Contract balances

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

	As of
	October 1, 2022		January 1, 2022
	(In thousands)
Contract assets	$	38,442	$	6,811
Deferred revenue	754,473		655,090