REVENUE (Tables)

3 Months Ended

Mar. 31, 2024

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, 2024 and March 31, 2023:

	Three Months Ended
	March 31, 2024		March 31, 2023
Custom Integrated Circuit (“IC”) Design and Simulation	22	%	20	%
Digital IC Design and Signoff	29	%	25	%
Functional Verification, including Emulation and Prototyping Hardware*	25	%	32	%
Intellectual Property (“IP”)	12	%	11	%
System Design and Analysis	12	%	12	%
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, 2024 and March 31, 2023:

	Three Months Ended
	March 31, 2024		March 31, 2023
Revenue recognized over time	87	%	77	%
Revenue from arrangements with non-cancelable commitments	3	%	3	%
Recurring revenue	90	%	80	%
Up-front revenue	10	%	20	%
Total	100	%	100	%

Contract balances

Cadence’s contract balances as of March 31, 2024 and December 31, 2023 were as follows:

	As of
	March 31, 2024		December 31, 2023
	(In thousands)
Contract assets	$	49,895	$	17,554
Deferred revenue	746,631		763,955