Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue from external customers by product category

The following table shows the percentage of revenue contributed by each of Cadence’s five product categories for the three months ended March 31, 2023 and April 2, 2022:

	Three Months Ended
	March 31, 2023		April 2, 2022
Custom Integrated Circuit (“IC”) Design and Simulation	20	%	22	%
Digital IC Design and Signoff	25	%	27	%
Functional Verification, including Emulation and Prototyping Hardware*	32	%	28	%
Intellectual Property (“IP”)	11	%	13	%
System Design and Analysis	12	%	10	%
Total	100	%	100	%

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

Disaggregation of revenue

The following table shows the percentage of Cadence’s revenue that is classified as recurring or up-front for the three months ended March 31, 2023 and April 2, 2022:

	Three Months Ended
	March 31, 2023		April 2, 2022
Revenue recognized over time	77	%	81	%
Revenue from arrangements with non-cancelable commitments	3	%	2	%
Recurring revenue	80	%	83	%
Up-front revenue	20	%	17	%
Total	100	%	100	%

Contract balances

Cadence’s contract balances as of March 31, 2023 and December 31, 2022 were as follows:

	As of
	March 31, 2023		December 31, 2022
	(In thousands)
Contract assets	$	17,167	$	22,766
Deferred revenue	823,761		782,062