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 22, 2024

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, 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:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	CDNS	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On April 22, 2024, Cadence Design Systems, Inc. ("Cadence") issued a press release announcing its financial results for the quarter ended March 31, 2024.

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 March 31, 2024 is attached hereto as Exhibit 99.02, and the press release and the commentary are incorporated herein by reference.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits

Exhibit No.	Description
99.01	Press Release issued by Cadence Design Systems, Inc. on April 22, 2024.
99.02	CFO Commentary on Results of Quarter Ended March 31, 2024.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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 22, 2024

CADENCE DESIGN SYSTEMS, INC.
By:	/s/ John M. Wall
	John M. Wall
	Senior Vice President and Chief Financial Officer

EX-99.01

Exhibit 99.01

Cadence Reports First Quarter 2024 Financial Results

Record First Quarter Backlog of $6.0 Billion and cRPO of $3.1 Billion

Raising 2024 Revenue Outlook

SAN JOSE, Calif. — April 22, 2024 — Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the first quarter of 2024.

First Quarter 2024 Financial Results

•Revenue of $1.009 billion, compared to revenue of $1.022 billion in Q1 2023

•GAAP operating margin of 25%, compared to 32% in Q1 2023

•Non-GAAP operating margin of 38%, compared to 42% in Q1 2023

•GAAP diluted net income per share of $0.91, compared to $0.89 in Q1 2023

•Non-GAAP diluted net income per share of $1.17, compared to $1.29 in Q1 2023

•Quarter-end backlog was $6.0 billion and current remaining performance obligations ("cRPO"), contract revenue expected to be recognized as revenue in the next 12 months, was $3.1 billion.

“Q1 was a strong start to the year for Cadence as we delivered solid Q1 results,” said Anirudh Devgan, president and chief executive officer. “I’m pleased with our record Q1 backlog that reflects our broad-based strength and product leadership. We’re thrilled with the momentum of our Cadence.AI portfolio which is providing customers with the most comprehensive and impactful chip-to-systems design capabilities and are excited about the launch of our innovative third generation Dynamic Duo hardware platforms that further expands our leadership.”

“Our strong Q1 results reflect our continued technology leadership supporting our customers and partners, and solid execution from the Cadence team,” said John Wall, senior vice president and chief financial officer. “I am pleased that we delivered record Q1 bookings and achieved record Q1 backlog of approximately $6.0 billion.”

CFO Commentary

Commentary on the first quarter of 2024 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For fiscal year 2024, the company expects:

•Revenue in the range of $4.56 billion to $4.62 billion

•GAAP operating margin in the range of 31% to 32%

•Non-GAAP operating margin in the range of 42% to 43%

•GAAP diluted net income per share in the range of $4.04 to $4.14

•Non-GAAP diluted net income per share in the range of $5.88 to $5.98

For the second quarter of 2024, the company expects:

•Revenue in the range of $1.03 billion to $1.05 billion

•GAAP operating margin in the range of 26.5% to 27.5%

•Non-GAAP operating margin in the range of 38.5% to 39.5%

•GAAP diluted net income per share in the range of $0.73 to $0.77

•Non-GAAP diluted net income per share in the range of $1.20 to $1.24

Cadence's outlook does not include the impact of its pending acquisition of BETA CAE, the company's expectations for which are largely unchanged from announcement.

The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate is subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use the current

normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.

Reconciliations of the financial highlights and business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, are included in this press release.

Business Highlights

•Built upon AI-enhanced core design engines, the company's generative AI solutions boosted by foundational LLM co-pilots, are delivering unparalleled productivity, quality of results and time to market benefits for customers. Last week, at CadenceLIVE Silicon Valley, several top tier customers shared their remarkable successes with Cadence.AI products

•Launched the company's third generation hardware accelerated verification platforms - the Palladium Z3 emulation and Protium X3 prototyping platforms delivering more than 2x the capacity and 1.5x higher performance than the previous generation

•Introduced the Cadence Reality Digital Twin Platform that virtualizes the entire data center and uses AI, high-performance computing and physics-based simulation to significantly improve data center energy efficiency by up to 30%

•Announced a collaboration with Arm to develop a chiplet-based reference design and software development platform to accelerate software-defined vehicle innovation

Audio Webcast Scheduled

Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the first quarter 2024 financial results audio webcast today, April 22, 2024, 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 22, 2024 at 5 p.m. (Pacific) and ending June 14, 2024 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.

About Cadence

Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence customers are the world’s most innovative companies, delivering extraordinary products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For 10 years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.

© 2024 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

This press release contains forward-looking statements, including Cadence's outlook on future operating results, strategic objectives, business prospects, technology and product developments, industry trends, pending transactions and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) change in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence's products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions, and rising tensions and conflicts around the world such as in the Middle East and with respect to Taiwan; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates, Cadence's upcoming debt maturities and Cadence’s ability to access capital and debt markets; (vii) Cadence's pending acquisition of BETA CAE Systems International AG, which remains subject to certain closing conditions, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (viii) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (ix) events that affect cash flow, liquidity, or reserves, or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (x) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xi) Cadence's ability to successfully meet corporate governance, environmental and social targets and strategies. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

Forward-looking statements regarding the pending BETA CAE acquisition and its impact are subject to additional risks and uncertainties including: the markets for BETA CAE’s or Cadence’s products and services may develop more slowly than expected or than they have in the past; operating results and cash flows may fluctuate more than expected; risks associated with tax liabilities or changes in applicable tax laws or interpretations to which the pending transaction or parties thereto are subject; BETA CAE or Cadence may fail to satisfy the closing conditions, including obtaining required regulatory approvals, in a timely manner or at all; uncertainties as to the availability of financing for the pending transaction upon acceptable terms on a timely basis and associated costs and expenses, including applicable interest rates; uncertainty as to the amount of shares to be issued by Cadence to acquire BETA CAE due to fluctuations in the trading prices of Cadence’s common stock; Cadence may fail to successfully acquire and integrate BETA CAE; Cadence may fail to realize the anticipated benefits of the pending acquisition; Cadence may incur unanticipated costs or other liabilities in connection with acquiring or integrating BETA CAE; Cadence may not repay debt or maintain share repurchases as anticipated, including as a result of insufficient free cash flow or use of cash for other purposes; the potential impact of the pending acquisition on relationships with third parties, including employees, customers, partners and competitors; Cadence may be unable to motivate and retain key personnel; and changes in or failure to comply with legislation or government regulations could affect the closing of the pending transaction or post-closing operations and results of operations.

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, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.

All forward-looking statements in this press release are based on management's expectations as of the date of this press release and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

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 generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP measures contained within this press release with their most directly comparable GAAP 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 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, stock-based compensation expense, acquisition and integration-related costs including retention expenses, 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 management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence’s core business operations and therefore provides supplemental information to Cadence 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 management, including forecasting and budgeting.

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

Operating Margin Reconciliation	Three Months Ended
	March 31, 2024	March 31, 2023
	(unaudited)
GAAP operating margin as a percent of total revenue	25%	32%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	9%	7%
Amortization of acquired intangibles	2%	1%
Acquisition and integration-related costs	2%	2%
Restructuring	0%	0%
Non-qualified deferred compensation expenses	0%	0%
Non-GAAP operating margin as a percent of total revenue	38%	42%

Net Income Reconciliation	Three Months Ended
	March 31, 2024		March 31, 2023
(in thousands)	(unaudited)
Net income on a GAAP basis	$	247,643	$	241,804
Stock-based compensation expense	88,129		74,288
Amortization of acquired intangibles	16,755		14,527
Acquisition and integration-related costs	22,086		15,800
Restructuring	280		—
Non-qualified deferred compensation expenses	4,588		3,150
Other income or expense related to investments and non-qualified deferred compensation plan assets*	(59,986)		(3,273)
Income tax effect of non-GAAP adjustments	(613)		5,137
Net income on a non-GAAP basis	$	318,882	$	351,433

* Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on 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
	March 31, 2024		March 31, 2023
(in thousands, except per share data)	(unaudited)
Diluted net income per share on a GAAP basis	$	0.91	$	0.89
Stock-based compensation expense	0.32		0.27
Amortization of acquired intangibles	0.06		0.05
Acquisition and integration-related costs	0.08		0.06
Restructuring	—		—
Non-qualified deferred compensation expenses	0.02		0.01
Other income or expense related to investments and non-qualified deferred compensation plan assets*	(0.22)		(0.01)
Income tax effect of non-GAAP adjustments	—		0.02
Diluted net income per share on a non-GAAP basis	$	1.17	$	1.29
Shares used in calculation of diluted net income per share	273,544		273,159

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

For more information, please contact:

Cadence Investor Relations

408-944-7100

investor_relations@cadence.com

Cadence Newsroom

408-944-7039

newsroom@cadence.com

Cadence Design Systems, Inc.

Condensed Consolidated Balance Sheets

March 31, 2024 and December 31, 2023

(In thousands)

(Unaudited)

	March 31, 2024		December 31, 2023
Current assets:
Cash and cash equivalents	$	1,012,418	$	1,008,152
Receivables, net	389,865		489,224
Inventories	185,784		181,661
Prepaid expenses and other	341,865		297,180
Total current assets	1,929,932		1,976,217
Property, plant and equipment, net	433,016		403,213
Goodwill	1,575,107		1,535,845
Acquired intangibles, net	334,644		336,843
Deferred taxes	886,576		880,001
Other assets	562,855		537,372
Total assets	$	5,722,130	$	5,669,491
Current liabilities:
Current portion of long-term debt	$	349,507	$	349,285
Accounts payable and accrued liabilities	456,608		576,558
Current portion of deferred revenue	659,628		665,024
Total current liabilities	1,465,743		1,590,867
Long-term liabilities:
Long-term portion of deferred revenue	87,003		98,931
Long-term debt	299,805		299,771
Other long-term liabilities	301,983		275,651
Total long-term liabilities	688,791		674,353
Stockholders’ equity	3,567,596		3,404,271
Total liabilities and stockholders’ equity	$	5,722,130	$	5,669,491

Cadence Design Systems, Inc.

Condensed Consolidated Income Statements

For the Three Months Ended March 31, 2024 and March 31, 2023

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	March 31, 2024		March 31, 2023
Revenue:
Product and maintenance	$	913,385	$	963,742
Services	95,718		57,948
Total revenue	1,009,103		1,021,690
Costs and expenses:
Cost of product and maintenance	75,395		100,238
Cost of services	49,802		24,234
Marketing and sales	180,589		166,666
Research and development	378,958		350,295
General and administrative	68,716		53,527
Amortization of acquired intangibles	5,407		4,267
Restructuring	280		—
Total costs and expenses	759,147		699,227
Income from operations	249,956		322,463
Interest expense	(8,692)		(9,260)
Other income, net	68,779		8,284
Income before provision for income taxes	310,043		321,487
Provision for income taxes	62,400		79,683
Net income	$	247,643	$	241,804
Net income per share - basic	$	0.92	$	0.90
Net income per share - diluted	$	0.91	$	0.89
Weighted average common shares outstanding - basic	269,606		269,501
Weighted average common shares outstanding - diluted	273,544		273,159

Cadence Design Systems, Inc.

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2024 and March 31, 2023

(In thousands)

(Unaudited)

	Three Months Ended
	March 31, 2024		March 31, 2023
Cash and cash equivalents at beginning of period	$	1,008,152	$	882,325
Cash flows from operating activities:
Net income	247,643		241,804
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	39,556		34,400
Amortization of debt discount and fees	320		311
Stock-based compensation	88,129		74,288
Gain on investments, net	(55,394)		(123)
Deferred income taxes	(1,523)		(11,640)
Provisions for losses on receivables	158		214
ROU asset amortization and change in operating lease liabilities	(917)		(1,392)
Other non-cash items	78		99
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables	102,991		(8,719)
Inventories	(10,689)		399
Prepaid expenses and other	(15,073)		56,212
Other assets	(7,535)		(42,084)
Accounts payable and accrued liabilities	(117,291)		(117,915)
Deferred revenue	(23,941)		40,650
Other long-term liabilities	6,720		897
Net cash provided by operating activities	253,232		267,401
Cash flows from investing activities:
Purchases of investments	(2,095)		(9,055)
Proceeds from the sale and maturity of investments	43,377		102
Purchases of property, plant and equipment	(49,601)		(26,719)
Cash paid in business combinations, net of cash acquired	(71,450)		—
Net cash used for investing activities	(79,769)		(35,672)
Cash flows from financing activities:
Proceeds from revolving credit facility	—		50,000
Payments on revolving credit facility	—		(120,000)
Proceeds from issuance of common stock	116,725		65,370
Stock received for payment of employee taxes on vesting of restricted stock	(151,123)		(67,712)
Payments for repurchases of common stock	(125,006)		(125,010)
Net cash used for financing activities	(159,404)		(197,352)
Effect of exchange rate changes on cash and cash equivalents	(9,793)		261
Increase in cash and cash equivalents	4,266		34,638
Cash and cash equivalents at end of period	$	1,012,418	$	916,963

Cadence Design Systems, Inc.

(Unaudited)

Revenue Mix by Geography (% of Total Revenue)

	2023										2024
GEOGRAPHY	Q1		Q2		Q3		Q4		Year		Q1
Americas	44	%	41	%	43	%	44	%	43	%	46	%
China	17	%	18	%	17	%	15	%	17	%	12	%
Other Asia	18	%	18	%	19	%	19	%	19	%	20	%
Europe, Middle East and Africa	15	%	17	%	15	%	16	%	16	%	17	%
Japan	6	%	6	%	6	%	6	%	5	%	5	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Category (% of Total Revenue)

	2023										2024
PRODUCT CATEGORY	Q1		Q2		Q3		Q4		Year		Q1
Custom IC Design and Simulation	20	%	22	%	22	%	22	%	22	%	22	%
Digital IC Design and Signoff	25	%	27	%	28	%	29	%	27	%	29	%
Functional Verification, including Emulation and Prototyping Hardware	32	%	27	%	26	%	24	%	27	%	25	%
IP	11	%	11	%	11	%	13	%	12	%	12	%
System Design and Analysis	12	%	13	%	13	%	12	%	12	%	12	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Operating Margin

As of April 22, 2024

(Unaudited)

	Three Months Ending June 30, 2024	Year Ending December 31, 2024
	Forecast	Forecast
GAAP operating margin as a percent of total revenue	26.5% - 27.5%	31% - 32%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	9%	8%
Amortization of acquired intangibles	2%	2%
Acquisition and integration-related costs	1%	1%
Non-qualified deferred compensation expenses	0%	0%
Non-GAAP operating margin as a percent of total revenue†	38.5% - 39.5%	42% - 43%

† 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.

Cadence Design Systems, Inc.

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

As of April 22, 2024

(Unaudited)

	Three Months Ending June 30, 2024	Year Ending December 31, 2024
	Forecast	Forecast
Diluted net income per share on a GAAP basis	$0.73 to $0.77	$4.04 to $4.14
Stock-based compensation expense	0.32	1.41
Amortization of acquired intangibles	0.06	0.25
Acquisition and integration-related costs	0.06	0.20
Non-qualified deferred compensation expenses	—	0.02
Other income or expense related to investments and non-qualified deferred compensation plan assets*	—	(0.22)
Income tax effect of non-GAAP adjustments	0.03	0.18
Diluted net income per share on a non-GAAP basis†	$1.20 to $1.24	$5.88 to $5.98

†
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 investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Net Income

As of April 22, 2024

(Unaudited)

	Three Months Ending June 30, 2024	Year Ending December 31, 2024
($ in millions)	Forecast	Forecast
Net income on a GAAP basis	$200 to $211	$1,105 to $1,132
Stock-based compensation expense	89	386
Amortization of acquired intangibles	17	68
Acquisition and integration-related costs	15	56
Non-qualified deferred compensation expenses	—	5
Other income or expense related to investments and non-qualified deferred compensation plan assets*	—	(60)
Income tax effect of non-GAAP adjustments	8	48
Net income on a non-GAAP basis†	$329 to $340	$1,608 to $1,635

†
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 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 2024
CADENCE DESIGN SYSTEMS, INC.
CFO COMMENTARY
Key Takeaways • Record Q1 bookings and record Q1 backlog of approximately $6.0 billion • Raising 2024 revenue outlook • The pending acquisition of BETA CAE is not included in Cadence's outlook	Q2 2024 Outlook • Revenue : $1.03 billion - $1.05 billion • GAAP operating margin: 26.5% - 27.5% • Non-GAAP operating margin: 38.5% - 39.5% • GAAP EPS: $0.73 - $0.77 • Non-GAAP EPS: $1.20 - $1.24 • Expect to use at least $125 million to repurchase Cadence shares in Q2	Q1 2024 KEY METRICS
		• Revenue $1.009 billion • GAAP operating margin 25% • Non-GAAP operating margin 38% • GAAP EPS $0.91 • Non-GAAP EPS $1.17 • Operating cash flow $253 million
FY 2024 Outlook • Revenue: $4.56 - $4.62 billion • GAAP operating margin: 31% - 32% • Non-GAAP operating margin: 42% - 43% • GAAP EPS: $4.04 - $4.14 • Non-GAAP EPS $5.88 - $5.98 • Operating cash flow: $1.35 - $1.45 billion • Expect to use approximately 50% of free cash flow to repurchase Cadence shares for the year	Financial Results Webcast
	Our Q1 2024 financial results webcast will begin April 22, 2024 at 2:00 p.m. (Pacific). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on April 22, 2024 until 5:00 p.m. (Pacific) on June 14, 2024.

April 22, 2024 Cadence Q1 2024 Financial Results 1

Cadence Design Systems, Inc.

Financial Metrics

(In Millions, except per share data)	2018		2019		2020*		2021		2022		2023*		2024E
Revenue	$	2,138	$	2,336	$	2,683	$	2,988	$	3,562	$	4,090	$4,560- $4,620
Revenue growth*	10%		9%		15%		11%		19%		15%		11% - 13%
3-year CAGR	8%		9%		11%		12%		15%		15%		~15%
3-year CAGR without 53rd week impact					11%						16%
GAAP operating expenses	$	1,742	$	1,845	$	2,037	$	2,209	$	2,488	$	2,839	~$3,154
GAAP operating expense growth	8%		6%		10%		8%		13%		14%		~11%
Non-GAAP operating expenses	$	1,491	$	1,587	$	1,739	$	1,877	$	2,125	$	2,373	~$2,639
Non-GAAP operating expense growth	6%		6%		10%		8%		13%		12%		~11%
GAAP operating margin**	19%		21%		24%		26%		30%		31%		32.5	%
Non-GAAP operating margin**	30%		32%		35%		37%		40%		42%		42.5	%
GAAP earnings per share	$	1.23	$	3.53	$	2.11	$	2.50	$	3.09	$	3.82	$4.04 - $4.14
Non-GAAP earning per share	$	1.87	$	2.20	$	2.80	$	3.29	$	4.27	$	5.15	$5.88 - $5.98
Non-GAAP EPS growth**	34%		18%		27%		18%		30%		21%		15	%
3-year Non-GAAP EPS CAGR**	20%		22%		26%		21%		25%		23%		22	%
Weighted average shares diluted outstanding	281.1		280.5		279.6		278.9		275.0		272.7		272.5 - 274.5
Cash flow from operations	605		730		905		1,101		1,242		1,349		$1,350 - $1,450
Capital expenditures	62		75		95		65		123		102		~$120

* Fiscal 2020 was a 53-week year, compared to all other years which were 52 week years. 2020 (which impacts the 3 year CAGR in 2023) included approximately $45 million revenue impact for the extra week.

** At midpoint of guidance.

Profitability Trends

(In Millions)	2018		2019		2020		2021		2022		2023		2024E*
Revenue	$	2,138	$	2,336	$	2,683	$	2,988	$	3,562	$	4,090	$	4,590
Revenue Growth	10%		9%		15%		11%		19%		15%		12%
3-Year Revenue Growth CAGR	8%		9%		11%		12%		15%		15%		15%
GAAP operating margin	19%		21%		24%		26%		30%		31%		32.5%
Non-GAAP operating margin	30.2%		32.1%		35.2%		37.2%		40.3%		42.0%		42.5%
Stock-based compensation	(7.8)%		(7.8)%		(7.4)%		(7.0)%		(7.6)%		(8.0)%		(8.4)%
Non-GAAP operating margin adjusted for stock-based compensation	22.4%		24.3%		27.8%		30.2%		32.7%		34.0%		34.1%
GAAP operating income	$	396	$	492	$	646	$	779	$	1,074	$	1,251	$	1,436
Non-GAAP operating income	$	647	$	749	$	944	$	1,111	$	1,436	$	1,717	$	1,951
Non-GAAP operating income adjusted for stock-based compensation	$	479	$	567	$	747	$	901	$	1,166	$	1,391	$	1,565

* At midpoint of guidance.

April 22, 2024 Cadence Q1 2024 Financial Results 2

Cadence Design Systems, Inc.

Second Quarter 2024 Financial Outlook

	Q2 2023		Q1 2024		Q2 2024E
Total Revenue ($ Millions)	$	977	$	1,009	$1,030 - $1,050
Q/Q Growth			(6)%		2% - 4%
Y/Y Growth			(1)%		5% - 7%
GAAP Operating Margin	31%		25%		26.5% - 27.5%
Non-GAAP Operating Margin	42%		38%		38.5% - 39.5%
GAAP EPS	$	0.81	$	0.91	$0.73 - $0.77
Non-GAAP EPS	$	1.22	$	1.17	$1.20 - $1.24

Fiscal Year 2024 Financial Outlook

			Previous	Current
	FY 2023		FY 2024E	FY 2024E
Recurring Revenue	84%		80% - 85%	80% - 85%
Total Revenue ($ Millions)	$	4,090	$4,550 - $4,610	$4,560 - $4,620
Y/Y Growth	15%		11% - 13%	11% - 13%
Revenue from Beginning Backlog	~75%		~70%	~70%
GAAP Operating Margin	30.6%		32% - 33%	31% - 32%
Non-GAAP Operating Margin	42.0%		42% - 43%	42% - 43%
GAAP Other Income & Expense ($ Millions)	$	31	$(10) - $(18)	$49 - $55
Non-GAAP Other Income & Expense ($ Millions)	$	(15)	$(10) - $(18)	$(5) - $(11)
GAAP Tax Rate	19%		~23%	~25%
Non-GAAP Tax Rate	17.5%		16.5%	16.5%
Weighted Average Diluted Shares Outstanding (Millions)	272.7		271.5 - 273.5	272.5 - 274.5
GAAP EPS	$	3.82	$4.08 - $4.18	$4.04 - $4.14
Y/Y Growth	24%		7% - 9%	6% - 8%
Non-GAAP EPS	$	5.15	$5.87 - $5.97	$5.88 - $5.98
Y/Y Growth	21%		14% - 16%	14% - 16%
Cash Flow from Operations ($ Millions)	$	1,349	$1,350 - $1,450	$1,350 - $1,450
DSO	43		~45	~45
Capital Expenditures ($ Millions)	$	102	~$120	~$120

April 22, 2024 Cadence Q1 2024 Financial Results 3

Cadence Design Systems, Inc.

First Quarter Financial Results

Backlog

(In Billions)	2020		2021		2022		2023		Q1 2024
Backlog	$	3.9	$	4.4	$	5.8	$	6.0	$	6.0

Revenue

(In Millions)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Product and Maintenance	$	964	$	923	$	966	$	982	$	913
Services	58		54		57		87		96
Total Revenue	$	1,022	$	977	$	1,023	$	1,069	$	1,009

Recurring and Up-Front Revenue

	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Revenue recognized over time	77	%	82	%	83	%	85	%	87	%
Revenue from arrangements with non-cancelable commitments	3	%	3	%	2	%	2	%	3	%
Recurring Revenue	80	%	85	%	85	%	87	%	90	%
Up-Front Revenue	20	%	15	%	15	%	13	%	10	%
Total	100	%	100	%	100	%	100	%	100	%

Trailing Twelve Months Recurring and Up-Front Revenue

	Trailing Twelve Months Ended
	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Recurring Revenue	84	%	84	%	84	%	84	%	87	%
Up-Front Revenue	16	%	16	%	16	%	16	%	13	%
Total	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Geography

(% of Total Revenue)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Americas	44	%	41	%	43	%	44	%	46	%
China	17	%	18	%	17	%	15	%	12	%
Other Asia	18	%	18	%	19	%	19	%	20	%
Europe, Middle East and Africa	15	%	17	%	15	%	16	%	17	%
Japan	6	%	6	%	6	%	6	%	5	%
Total	100	%	100	%	100	%	100	%	100	%

Revenue Mix by Product Category

(% of Total Revenue)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Custom IC Design and Simulation	20	%	22	%	22	%	22	%	22	%
Digital IC Design and Signoff	25	%	27	%	28	%	29	%	29	%
Functional Verification	32	%	27	%	26	%	24	%	25	%
IP	11	%	11	%	11	%	13	%	12	%
System Design and Analysis	12	%	13	%	13	%	12	%	12	%
Total	100	%	100	%	100	%	100	%	100	%

April 22, 2024 Cadence Q1 2024 Financial Results 4

Cadence Design Systems, Inc.

Gross Margin

	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
GAAP Gross Margin	87.8	%	90.1	%	89.3	%	90.3	%	87.6	%
Non-GAAP Gross Margin	89.1	%	91.4	%	90.6	%	91.7	%	89.1	%

Total Costs and Expenses

(In Millions)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Total GAAP Costs and Expenses	$	699	$	677	$	730	$	732	$	759
Total Non-GAAP Costs and Expenses	$	591	$	569	$	603	$	610	$	627

Operating Margin

	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
GAAP Operating Margin	31.6	%	30.7	%	28.6	%	31.5	%	24.8	%
Non-GAAP Operating Margin	42.1	%	41.8	%	41.1	%	42.9	%	37.8	%

Net Income Per Share

	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
GAAP Net Income Per Share	$	0.89	$	0.81	$	0.93	$	1.19	$	0.91
Non-GAAP Net Income Per Share	$	1.29	$	1.22	$	1.26	$	1.38	$	1.17

Total DSO

	Q1 2023	Q2 2023	Q3 2023	Q4 2023	Q1 2024
DSO	44	42	39	43	36

Balance Sheet and Cash Review

Free Cash Flow

(In Millions)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Net Cash from Operating Activities	$	267	$	414	$	396	$	272	$	253
Capital Expenditures	26		20		22		34		49
Free Cash Flow	$	241	$	394	$	374	$	238	$	204

Cash and Cash Equivalents

(In Millions)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Cash and Cash Equivalents	$	917	$	874	$	962	$	1,008	$	1,012

•Approximately 27 percent of our cash and cash equivalents were in the U.S. at quarter-end.

Share Repurchase

(In Millions)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
Share Repurchase	$	125	$	265	$	185	$	125	$	125
Number of Shares	0.668		1.178		0.811		0.488		0.425

•Q3 2023 includes 276,330 shares and $60 million equity forward contract from Q2 2023 ASR settled in Q3 2023.

Employees

	Q1 2023	Q2 2023	Q3 2023	Q4 2023	Q1 2024
Headcount	10,579	10,832	11,139	11,226	11,753

April 22, 2024 Cadence Q1 2024 Financial Results 5

Cadence Design Systems, Inc.

Forward Looking Statements

This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, strategic objectives, business prospects, technology and product developments, industry trends, pending transactions and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) change in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence's products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic, geopolitical and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions, and rising tensions and conflicts around the world such as in the Middle East and with respect to Taiwan; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates, Cadence's upcoming debt maturities and Cadence’s ability to access capital and debt markets; (vii) Cadence's pending acquisition of BETA CAE Systems International AG, which remains subject to certain closing conditions, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (viii) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (ix) events that affect cash flow, liquidity, or reserves, or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (x) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xi) Cadence's ability to successfully meet corporate governance, environmental and social targets and strategies. In addition, the timing and amount of Cadence’s repurchases of its common stock are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

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, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.

All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

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.

April 22, 2024 Cadence Q1 2024 Financial Results 6

Cadence Design Systems, Inc.

© 2024 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

April 22, 2024 Cadence Q1 2024 Financial Results 7

Cadence Design Systems, Inc.

APPENDIX I

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

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Millions)	Q1 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024
GAAP total costs and expenses	$	699	$	677	$	730	$	732	$	759
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense	(74)		(76)		(88)		(87)		(88)
Amortization of acquired intangibles	(15)		(15)		(15)		(17)		(17)
Acquisition and integration-related costs	(16)		(14)		(14)		(13)		(22)
Restructuring	—		—		(12)		1		—
Non-qualified deferred compensation (expenses) credits	(3)		(3)		2		(6)		(5)
Non-GAAP total costs and expenses*	$	591	$	569	$	603	$	610	$	627

* 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.

Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses

(In Millions)	2018		2019		2020*		2021		2022		2023		2024E
GAAP total costs and expenses	$	1,742	$	1,845	$	2,037	$	2,209	$	2,488	$	2,839	$	3,154
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense	(168)		(182)		(197)		(210)		(270)		(326)		(386)
Amortization of acquired intangibles	(53)		(53)		(64)		(67)		(60)		(62)		(68)
Acquisition and integration-related costs	(20)		(8)		(23)		(23)		(41)		(56)		(56)
Restructuring	(11)		(9)		(9)		1		—		(11)		—
Non-qualified deferred compensation (expenses) credits	1		(5)		(5)		(6)		8		(11)		(5)
Special charges**	—		(1)		—		(27)		—		—		—
Non-GAAP total costs and expenses***	$	1,491	$	1,587	$	1,739	$	1,877	$	2,125	$	2,373	$	2,639

*	Fiscal 2020 was a 53-week year.
**	2021 includes costs related to a voluntary retirement program.
***	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.

April 22, 2024 Cadence Q1 2024 Financial Results 8

Cadence Design Systems, Inc.

Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP Operating Income Adjusted for Stock-based Compensation

(In Millions)	2018		2019		2020*		2021		2022		2023		2024E
GAAP operating income	$	396	$	492	$	646	$	779	$	1,074	$	1,251	$	1,436
Reconciling items to non-GAAP operating income
Stock-based compensation expense	168		182		197		210		270		326		386
Amortization of acquired intangibles	53		53		64		67		60		62		68
Acquisition and integration-related costs	20		8		23		23		41		56		56
Restructuring	11		9		9		(1)		—		11		—
Non-qualified deferred compensation expenses (credits)	(1)		5		5		6		(8)		11		5
Special charges**	—		1		—		27		—		—		—
Non-GAAP operating income***	$	647	$	749	$	944	$	1,111	$	1,436	$	1,717	$	1,951
Stock-based compensation expense	(168)		(182)		(197)		(210)		(270)		(326)		$	(386)
Non-GAAP operating income adjusted for stock-based compensation***	$	479	$	567	$	747	$	901	$	1,166	$	1,391	$	1,565

Table may not foot due to rounding

*	Fiscal 2020 was a 53-week year.
**	2021 includes costs related to a voluntary retirement program.
***	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.

April 22, 2024 Cadence Q1 2024 Financial Results 9

Cadence Design Systems, Inc.

Reconciliation of GAAP Gross Margin as a Percent of Total Revenue to Non-GAAP Gross Margin as a Percent of Total Revenue

	Q1 2023	Q2 2023	Q3 2023	Q4 2023	Q1 2024
GAAP gross margin as a percent of total revenue	87.8%	90.1%	89.3%	90.3%	87.6%
Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense	0.3%	0.2%	0.2%	0.3%	0.3%
Amortization of acquired intangibles	1.0%	1.1%	1.1%	1.1%	1.1%
Non-qualified deferred compensation expenses (credits)	0.0%	0.0%	0.0%	0.0%	0.0%
Acquisition and integration-related costs	0.0%	0.0%	0.0%	0.0%	0.1%
Non-GAAP gross margin as a percent of total revenue*	89.1%	91.4%	90.6%	91.7%	89.1%

* 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.

April 22, 2024 Cadence Q1 2024 Financial Results 10

Cadence Design Systems, Inc.

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

	Q1 2023	Q2 2023	Q3 2023	Q4 2023	Q1 2024	Q2 2024E
GAAP operating margin as a percent of total revenue	32%	31%	29%	31%	25%	26.5% - 27.5%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense	7%	8%	9%	8%	9%	9%
Amortization of acquired intangibles	1%	2%	1%	2%	2%	2%
Acquisition and integration-related costs	2%	1%	1%	1%	2%	1%
Restructuring	0%	0%	1%	0%	0%	0%
Non-qualified deferred compensation expenses (credits)	0%	0%	0%	1%	0%	0%
Non-GAAP operating margin as a percent of total revenue*	42%	42%	41%	43%	38%	38.5% - 39.5%

* 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.

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

	2018	2019	2020	2021	2022	2023	2024E
GAAP operating margin as a percent of total revenue	19%	21%	24%	26%	30%	31%	31% - 32%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense	8%	8%	7%	7%	8%	8%	8%
Amortization of acquired intangibles	2%	2%	3%	2%	2%	2%	2%
Acquisition and integration-related costs	1%	0%	1%	1%	1%	1%	1%
Restructuring	0%	1%	0%	0%	0%	0%	0%
Non-qualified deferred compensation expenses (credits)	0%	0%	0%	0%	(1)%	0%	0%
Special charges *	0%	0%	0%	1%	0%	0%	0%
Non-GAAP operating margin as a percent of total revenue**	30%	32%	35%	37%	40%	42%	42% - 43%

*	2021 includes costs related to a voluntary retirement program.
**	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.

April 22, 2024 Cadence Q1 2024 Financial Results 11

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 2023		Q2 2023		Q3 2023		Q4 2023		Q1 2024		Q2 2024E
Diluted net income per share on a GAAP basis	$	0.89	$	0.81	$	0.93	$	1.19	$	0.91	$0.73 - $0.77
Stock-based compensation expense	0.27		0.28		0.32		0.32		0.32		0.32
Amortization of acquired intangibles	0.05		0.06		0.06		0.06		0.06		0.06
Acquisition and integration-related costs	0.06		0.05		0.05		0.04		0.08		0.06
Restructuring	—		—		0.04		—		—		—
Non-qualified deferred compensation expenses (credits)	0.01		0.01		—		0.02		0.02		—
Other income or expense related to investments and non-qualified deferred compensation plan assets**	(0.01)		(0.01)		(0.04)		(0.10)		(0.22)		—
Income tax effect of non-GAAP adjustments	0.02		0.02		(0.10)		(0.15)		—		0.03
Diluted net income per share on a non-GAAP basis*	$	1.29	$	1.22	$	1.26	$	1.38	$	1.17	$1.20 - $1.24
Shares used in calculation of diluted net income per share	273,159		272,996		272,427		272,419		273,544

*	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 investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

April 22, 2024 Cadence Q1 2024 Financial Results 12

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)	2018		2019		2020		2021		2022		2023		2024E
Diluted net income per share on a GAAP basis	$	1.23	$	3.53	$	2.11	$	2.50	$	3.09	$	3.82	$4.04 - $4.14
Stock-based compensation expense	0.60		0.65		0.71		0.75		0.98		1.19		1.41
Amortization of acquired intangibles	0.19		0.19		0.23		0.24		0.22		0.23		0.25
Acquisition and integration-related costs	0.07		0.03		0.08		0.08		0.15		0.21		0.20
Restructuring	0.04		0.03		0.03		—		—		0.04		—
Non-qualified deferred compensation expenses (credits)	(0.01)		0.02		0.02		0.02		(0.03)		0.04		0.02
Special charges**	—		—		—		0.10		—		—		—
Other income or expense related to investments and non-qualified deferred compensation plan assets***	—		(0.01)		—		(0.03)		0.05		(0.17)		(0.22)
Income tax benefit related to intercompany transfers of certain intellectual property rights	—		(2.05)		—		—		—		—		—
Income tax effect of non-GAAP adjustments	(0.25)		(0.19)		(0.38)		(0.37)		(0.19)		(0.21)		0.18
Diluted net income per share on a non-GAAP basis*	$	1.87	$	2.20	$	2.80	$	3.29	$	4.27	$	5.15	$5.88 - $5.98
Shares used in calculation of diluted net income per share	281,144		280,515		279,641		278,858		275,011		272,748		272.5 - 274.5M

*	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.
**	2021 includes costs related to a voluntary retirement program.
***	Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

April 22, 2024 Cadence Q1 2024 Financial Results 13

Cadence Design Systems, Inc.

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

(In Millions)	FY 2022		FY 2023		FY 2024E
GAAP total other income and expense	$	(28)	$	31	$49 - $55
Reconciling items to non-GAAP total income and expense
Other income or expense related to investments and non-qualified deferred compensation plan assets**	14		(46)		(60)
Non-GAAP total other income and expense*	$	(14)	$	(15)	$(5) - $(11)

*	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 investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

April 22, 2024 Cadence Q1 2024 Financial Results 14

XML

Document and Entity Information	Apr. 22, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Apr. 22, 2024
Entity Registrant Name	CADENCE DESIGN SYSTEMS, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	000-15867
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	2655 Seely Avenue,
Entity Address, City or Town	San Jose,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95134
City Area Code	(408)
Local Phone Number	943-1234
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	CDNS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000813672
Amendment Flag	false