Revenue (Tables)

12 Months Ended

Dec. 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 fiscal 2023, 2022 and 2021:

	2023		2022		2021
Custom IC Design and Simulation	22	%	22	%	23	%
Digital IC Design and Signoff	27	%	28	%	29	%
Functional Verification, including Emulation and Prototyping Hardware*	27	%	26	%	24	%
IP	12	%	12	%	13	%
System Design and Analysis	12	%	12	%	11	%
Total	100	%	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 fiscal 2023, 2022 and 2021:

	2023		2022		2021
Revenue recognized over time	81	%	83	%	85	%
Revenue from arrangements with non-cancelable commitments	3	%	2	%	3	%
Recurring revenue	84	%	85	%	88	%
Up-front revenue	16	%	15	%	12	%
Total	100	%	100	%	100	%

Contract assets and deferred revenue

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

	As of
	December 31, 2023		December 31, 2022
	(In thousands)
Contract assets	$	17,554	$	22,766
Deferred revenue	763,955		782,062