Detailed financial statements for Cadence Design Systems, Inc. (CDNS): income statement, balance sheet and cash-flow summary. Track margins, debt, liquidity and profitability trends year over year: ten fiscal years free and up to 20 with Premium.
Cadence Design Systems, Inc. operates globally, delivering a comprehensive suite of solutions that includes software, specialized hardware, professional services, and pre-designed integrated circuit (IC) building blocks. The company's robust functional verification offerings feature dedicated emulation and prototyping hardware.
Analysis Summary
Cadence Design Systems, Inc. reported revenue of $5.30B in the most recent fiscal year, growing at a 5-year CAGR of 14.6%. Net income reached $1.11B, with a 13.4% 5-year CAGR.
Trailing-twelve-month margins: gross margin 85.7%, operating margin 28.9%, net margin 22.5%. Free cash flow grew at 14.4% CAGR over 5 years.
At $327.89 (closing price, October 30, 2026), CDNS trades at a P/E of 65.19 and an ROE of 21.43%. Market capitalisation stands at $90.0B, placing it among large-cap names.
Balance sheet quality for CDNS: debt-to-equity ratio of 0.41, current ratio of 1.36 over the last 12 months, net cash position of $521.2M at the end of the last fiscal year. A debt-to-equity below 1.0 typically signals conservative capital structure, while a current ratio above 1.5 indicates comfortable short-term liquidity.
Cash flow quality is strong: free cash flow of $1.59B represents 143% conversion of reported net income. High conversion (above 90%) suggests earnings translate cleanly into cash; lower conversion may indicate working capital tightness or accounting timing differences.
Income Statement (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $1.82B | $1.94B | $2.14B | $2.34B | $2.68B | $2.99B | $3.56B | $4.09B | $4.64B | $5.30B |
| Cost of Revenue | $256.5M | $237.4M | $258.7M | $266.4M | $305.5M | $307.0M | $371.6M | $435.0M | $647.5M | $722.2M |
| Gross Profit | $1.56B | $1.71B | $1.88B | $2.07B | $2.38B | $2.68B | $3.19B | $3.65B | $3.99B | $4.57B |
| Research & Development | $735.3M | $804.2M | $884.8M | $935.9M | $1.03B | $1.13B | $1.25B | $1.44B | $1.55B | $1.77B |
| Selling, General & Admin | $520.3M | $553.3M | $573.1M | $621.5M | $670.9M | $749.3M | $846.3M | $932.7M | $1.03B | $1.12B |
| Operating Expenses | $1.27B | $1.37B | $1.48B | $1.57B | $1.73B | $1.90B | $2.12B | $2.40B | $2.64B | $2.92B |
| Operating Income | $244.9M | $324.0M | $396.2M | $491.8M | $645.6M | $779.1M | $1.07B | $1.25B | $1.35B | $1.65B |
| EBITDA | $406.5M | $448.9M | $526.0M | $621.1M | $803.6M | $916.1M | $1.20B | $1.46B | $1.67B | $1.87B |
| Interest Expense | $23.7M | $25.7M | $23.1M | $18.8M | $20.7M | $17.0M | $22.9M | $36.2M | $76.0M | $116.5M |
| Pre-tax Income | $237.2M | $315.0M | $376.4M | $479.0M | $632.7M | $768.4M | $1.05B | $1.28B | $1.40B | $1.52B |
| Income Tax | $34.1M | $110.9M | $30.6M | -$510.0M | $42.1M | $72.5M | $196.4M | $240.8M | $340.3M | $413.2M |
| Net Income | $203.1M | $204.1M | $345.8M | $989.0M | $590.6M | $696.0M | $849.0M | $1.04B | $1.06B | $1.11B |
| EPS | $0.71 | $0.75 | $1.26 | $3.62 | $2.16 | $2.54 | $3.13 | $3.86 | $3.89 | $4.09 |
| EPS (Diluted) | $0.70 | $0.73 | $1.23 | $3.53 | $2.11 | $2.50 | $3.09 | $3.82 | $3.85 | $4.06 |
| Shares Outstanding (Diluted) | 291.3 M | 280.2 M | 281.1 M | 280.5 M | 279.6 M | 278.9 M | 275.0 M | 272.7 M | 273.8 M | 273.3 M |
Income Statement (Quarterly)
| Year | 2025-Q4 | 2026-Q1 | 2026-Q2 | 2026-Q3 |
|---|---|---|---|---|
| Revenue | $1.44B | $1.47B | $1.58B | $1.63B |
| Gross Profit | $1.25B | $1.26B | $1.35B | $1.40B |
| Operating Income | $465.2M | $431.3M | $450.0M | $428.7M |
| EBITDA | $591.3M | $544.1M | $663.7M | $557.3M |
| Net Income | $388.1M | $335.7M | $367.1M | $289.7M |
| EPS | $1.43 | $1.23 | $1.34 | $1.06 |
| EPS (Diluted) | $1.42 | $1.23 | $1.33 | $1.05 |
Balance Sheet (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Cash & Equivalents | $465.2M | $688.1M | $533.3M | $705.2M | $928.4M | $1.09B | $882.3M | $1.01B | $2.64B | $3.00B |
| Short-term Investments | $3.1M | $4.5M | 0 | 0 | 0 | 0 | $4.5M | $130.4M | $140.6M | 0 |
| Receivables | $157.2M | $190.4M | $297.1M | $304.5M | $348.2M | $344.4M | $486.7M | $506.8M | $680.5M | $944.9M |
| Inventory | $39.5M | $33.2M | $28.2M | $55.8M | $76.0M | $115.7M | $128.0M | $181.7M | $257.7M | $303.5M |
| Total Current Assets | $702.0M | $980.0M | $951.1M | $1.17B | $1.48B | $1.72B | $1.71B | $1.98B | $4.02B | $4.67B |
| Property, Plant & Equipment | $238.6M | $251.3M | $252.6M | $376.2M | $444.5M | $436.0M | $541.8M | $554.0M | $604.4M | $517.0M |
| Goodwill | $572.8M | $666.0M | $662.3M | $661.9M | $782.1M | $928.4M | $1.37B | $1.54B | $2.38B | $2.75B |
| Intangible Assets | $258.8M | $278.8M | $225.5M | $172.4M | $210.6M | $233.3M | $354.6M | $336.8M | $594.7M | $718.2M |
| Total Assets | $2.10B | $2.42B | $2.47B | $3.36B | $3.95B | $4.39B | $5.14B | $5.67B | $8.97B | $10.15B |
| Accounts Payable | $4.4M | $4.8M | $5.5M | 0 | 0 | 0 | $47.1M | $91.2M | $5.6M | $856.9M |
| Short-term Debt | $50.0M | $85.0M | $100.0M | 0 | 0 | 0 | $100.0M | $349.3M | 0 | 0 |
| Total Current Liabilities | $585.6M | $642.4M | $709.0M | $672.4M | $796.8M | $971.2M | $1.35B | $1.59B | $1.37B | $1.64B |
| Long-term Debt | $643.5M | $644.4M | $345.3M | $346.0M | $346.8M | $347.6M | $648.1M | $299.8M | $2.48B | $2.48B |
| Total Liabilities | $1.36B | $1.43B | $1.18B | $1.25B | $1.46B | $1.65B | $2.39B | $2.27B | $4.30B | $4.68B |
| Retained Earnings | $136.9M | $341.0M | $772.7M | $1.76B | $2.35B | $3.05B | $3.90B | $4.94B | $5.99B | $7.10B |
| Total Equity | $741.8M | $989.2M | $1.29B | $2.10B | $2.49B | $2.74B | $2.75B | $3.40B | $4.67B | $5.47B |
| Total Debt | $693.5M | $729.4M | $445.3M | $430.8M | $460.7M | $454.7M | $887.4M | $764.4M | $2.59B | $2.48B |
| Net Debt | $225.2M | $36.8M | -$88.0M | -$274.4M | -$467.7M | -$634.2M | $600,000 | -$374.1M | -$199.6M | -$521.2M |
| Working Capital | $116.5M | $337.6M | $242.1M | $497.0M | $681.8M | $744.5M | $359.1M | $385.4M | $2.65B | $3.03B |
Balance Sheet (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Cash & Equivalents | $2.75B | $3.00B | $1.41B | $1.44B |
| Total Assets | $9.60B | $10.15B | $12.10B | $12.08B |
| Total Liabilities | $4.40B | $4.68B | $5.54B | $5.22B |
| Total Equity | $5.20B | $5.47B | $6.56B | $6.86B |
| Total Debt | $2.48B | $2.48B | $3.08B | $2.48B |
Cash Flow (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Income | $203.1M | $204.1M | $345.8M | $989.0M | $590.6M | $696.0M | $849.0M | $1.04B | $1.06B | $1.11B |
| Depreciation & Amortization | $119.6M | $115.5M | $118.7M | $123.4M | $150.1M | $130.7M | $135.4M | $145.3M | $195.0M | $233.8M |
| Stock-based Compensation | $109.2M | $130.0M | $167.7M | $181.5M | $197.3M | $210.1M | $270.4M | $325.6M | $391.2M | $455.2M |
| Change in Working Capital | $18.4M | -$51.3M | -$22.0M | $6.3M | -$15.4M | $105.8M | $87.5M | -$98.8M | -$209.0M | -$73.3M |
| Operating Cash Flow | $444.9M | $470.7M | $604.8M | $729.6M | $904.9M | $1.10B | $1.24B | $1.35B | $1.26B | $1.73B |
| Capital Expenditure | -$53.7M | -$57.9M | -$61.5M | -$74.6M | -$94.8M | -$66.9M | -$124.2M | -$102.5M | -$142.5M | -$141.9M |
| Acquisitions | -$41.6M | -$143.2M | 0 | -$338,000 | -$197.6M | -$226.2M | -$613.8M | -$198.4M | -$737.6M | -$429.5M |
| Stock Repurchased | -$960.3M | -$157.2M | -$320.0M | -$396.7M | -$490.1M | -$730.3M | -$1.16B | -$700.1M | -$787.8M | -$925.0M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Free Cash Flow | $391.2M | $412.8M | $543.2M | $655.0M | $810.1M | $1.03B | $1.12B | $1.25B | $1.12B | $1.59B |
Cash Flow (Quarterly)
| Year | 2025-Q3 | 2025-Q4 | 2026-Q1 | 2026-Q2 |
|---|---|---|---|---|
| Operating Cash Flow | $310.7M | $553.5M | $355.8M | $634.9M |
| Capital Expenditure | -$33.7M | -$41.0M | -$48.8M | -$52.6M |
| Free Cash Flow | $277.0M | $512.5M | $307.0M | $582.3M |
| Dividends Paid | 0 | 0 | 0 | 0 |
| Stock-based Compensation | $116.1M | $113.2M | $138.2M | $146.9M |
Growth & Margins (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue Growth (YoY) | +7.0% | +10.0% | +9.3% | +14.8% | +11.4% | +19.2% | +14.8% | +13.5% | +14.1% | |
| Net Income Growth (YoY) | +0.5% | +69.4% | +186.0% | -40.3% | +17.8% | +22.0% | +22.6% | +1.4% | +5.1% | |
| EPS Growth (YoY) | +5.6% | +68.0% | +187.3% | -40.3% | +17.6% | +23.2% | +23.3% | +0.8% | +5.1% | |
| Shares Change (YoY) | -3.8% | +0.3% | -0.2% | -0.3% | -0.3% | -1.4% | -0.8% | +0.4% | -0.2% | |
| FCF Growth (YoY) | +5.5% | +31.6% | +20.6% | +23.7% | +27.6% | +8.1% | +11.5% | -10.3% | +41.9% | |
| Gross Margin | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% | 89.7% | 89.6% | 89.4% | 86.0% | 86.4% |
| Operating Margin | 13.5% | 16.7% | 18.5% | 21.1% | 24.1% | 26.1% | 30.1% | 30.6% | 29.1% | 31.1% |
| EBITDA Margin | 22.4% | 23.1% | 24.6% | 26.6% | 30.0% | 30.7% | 33.8% | 35.8% | 35.9% | 35.4% |
| Net Margin | 11.2% | 10.5% | 16.2% | 42.3% | 22.0% | 23.3% | 23.8% | 25.5% | 22.7% | 20.9% |
| FCF Margin | 21.5% | 21.2% | 25.4% | 28.0% | 30.2% | 34.6% | 31.4% | 30.5% | 24.1% | 30.0% |
| Effective Tax Rate | 14.4% | 35.2% | 8.1% | -106.5% | 6.7% | 9.4% | 18.8% | 18.8% | 24.4% | 27.1% |
Per-Share Data (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| FCF Per Share | $1.34 | $1.47 | $1.93 | $2.33 | $2.90 | $3.71 | $4.06 | $4.57 | $4.08 | $5.81 |
| Dividends Per Share | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Shares Outstanding (Basic) | 284.5 M | 272.1 M | 273.7 M | 273.2 M | 273.7 M | 273.5 M | 271.2 M | 269.4 M | 271.2 M | 271.3 M |
What to look at in Technology companies
- Revenue growth 3y (>=15%/year) — Validates sustained traction, not a one-off.
- Gross margin (Sub-sector dependent) — SaaS >=70%, Internet >=55%, Semis >=45%, Hardware >=35%.
- FCF / Revenue (>=20%) — Real cash generated. Many tech firms dress up non-GAAP earnings.
- ROIC (>=15%) — Capital reinvested efficiency — Buffett's first metric.
- SBC / Revenue (<10% healthy) — Stock-based compensation. Silent dilution: >20% destroys value.
- Net Debt / EBITDA (<=2x (1.5x SaaS)) — Resilience in downturns and rate hikes.
Profitability
| Return on Equity | 21.43% |
| Return on Invested Capital | 12.80% |
| Return on Assets | 11.29% |
| Gross Margin | 85.68% |
| Operating Margin | 28.95% |
| Net Margin | 22.51% |
Financial Health
| Debt / Equity | 0.41 |
| Current Ratio | 1.36 |
| Piotroski F-Score | 6 |
| Altman Z-Score | 13.27 |
Key Ratios (10y)
| Year | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| P/E | 35.52 | 55.76 | 34.51 | 19.16 | 63.16 | 73.37 | 51.32 | 70.56 | 77.24 | 76.43 |
| P/B | 9.67 | 11.50 | 9.24 | 9.01 | 14.98 | 18.60 | 15.87 | 21.55 | 17.44 | 15.49 |
| P/S | 3.95 | 5.86 | 5.57 | 8.11 | 13.92 | 17.06 | 12.23 | 17.94 | 17.56 | 16.01 |
| Gross Margin | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% | 89.7% | 89.6% | 89.4% | 86.0% | 86.4% |
| Operating Margin | 13.5% | 16.7% | 18.5% | 21.1% | 24.1% | 26.1% | 30.1% | 30.6% | 29.1% | 31.1% |
| Net Margin | 11.2% | 10.5% | 16.2% | 42.3% | 22.0% | 23.3% | 23.8% | 25.5% | 22.7% | 20.9% |
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