Cadence Reports First Quarter 2021 Financial Results

Rhea-AI Summary

Cadence Design Systems (Nasdaq: CDNS) reported first quarter 2021 revenue of $736 million, up from $618 million a year ago. The company achieved a GAAP operating margin of 28% and net income of $187 million, or $0.67 per share, compared to $124 million and $0.44 per share in Q1 2020. Non-GAAP metrics show an operating margin of 38% and net income of $231 million, or $0.83 per share. Cadence raised its 2021 revenue outlook to between $2.88 billion and $2.93 billion, with guided net income per share projected at $2.99 to $3.07.

Positive

• Revenue increased by 19% year-over-year.
• GAAP operating margin improved to 28% from 23% in the prior year.
• Raised full-year revenue guidance to $2.88 billion - $2.93 billion.

Negative

• GAAP operating margin is expected to decline to 22% in Q2.

Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the first quarter of 2021.

Cadence reported first quarter 2021 revenue of $736 million, compared to revenue of $618 million for the same period in 2020. On a GAAP basis, Cadence achieved operating margin of 28 percent and recognized net income of $187 million, or $0.67 per share on a diluted basis, in the first quarter of 2021, compared to operating margin of 23 percent and net income of $124 million, or $0.44 per share on a diluted basis for the same period in 2020.

Using the non-GAAP measure defined below, operating margin for the first quarter of 2021 was 38 percent and net income was $231 million, or $0.83 per share on a diluted basis, compared to operating margin of 32 percent and net income of $166 million, or $0.60 per share on a diluted basis, for the same period in 2020.

“Cadence delivered excellent financial results for the first quarter driven by strong execution and ongoing momentum in our core business and accelerating growth in our systems businesses,” said Lip-Bu Tan, chief executive officer. “Innovation is foundational to our Intelligent System Design strategy and since the start of 2021 we introduced several exciting new products, including the Palladium Z2 emulation platform, Protium X2 prototyping platform and next-generation Sigrity X for systems analysis. We broadened our systems analysis portfolio with the successful completion of the NUMECA and Pointwise acquisitions, enabling us to provide more capabilities and value to our customers while increasing our TAM.”

“I am pleased to report that we exceeded all of our key operating metrics for the quarter,” said John Wall, senior vice president and chief financial officer. “We are raising our outlook for revenue, non-GAAP operating margin and non-GAAP earnings for the year while we continue to invest in our expanding multiphysics platform.”

CFO Commentary

Commentary on the first quarter 2021 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For the second quarter of 2021, the company expects total revenue in the range of $705 million to $725 million. Second quarter GAAP operating margin is expected to be approximately 22 percent and GAAP net income per diluted share is expected to be in the range of $0.44 to $0.48. Using the non-GAAP measure defined below, operating margin is expected to be approximately 36 percent and net income per diluted share is expected to be in the range of $0.74 to $0.78.

For 2021, the company expects total revenue in the range of $2.88 billion to $2.93 billion. On a GAAP basis, operating margin is expected to be in the range of 23 percent to 24 percent and GAAP net income per diluted share for 2021 is expected to be in the range of $2.01 to $2.09. Using the non-GAAP measure defined below, operating margin for 2021 is expected to be in the range of 35 percent to 36 percent and net income per diluted share for 2021 is expected to be in the range of $2.99 to $3.07.

Our fiscal years are 52- or 53-week periods ending on the Saturday closest to December 31. Fiscal 2021 will be a 52-week fiscal year. Fiscal 2020 was a 53-week fiscal year, with an additional week in our fourth quarter of 2020.

A schedule showing a reconciliation of the business outlook from GAAP operating margin, GAAP net income and diluted net income per share to non-GAAP operating margin and non-GAAP net income and diluted net income per share is included in this release.

Audio Webcast Scheduled

Lip-Bu Tan, chief executive officer, Anirudh Devgan, president and John Wall, senior vice president and chief financial officer, will host the first quarter 2021 financial results audio webcast today, April 26, 2021, 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 26, 2021 at 5 p.m. (Pacific) and ending June 18, 2021 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 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 electronic products from chips to boards to systems for the most dynamic market applications, including consumer, hyperscale computing, 5G communications, automotive, mobile, aerospace, industrial and healthcare. For seven years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at { "@context": "https://schema.org", "@type": "FAQPage", "name": "Cadence Reports First Quarter 2021 Financial Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were Cadence's earnings for Q1 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Cadence reported earnings of $0.67 per share, with a net income of $187 million for Q1 2021." } }, { "@type": "Question", "name": "What is Cadence's revenue guidance for 2021?", "acceptedAnswer": { "@type": "Answer", "text": "Cadence expects total revenue in the range of $2.88 billion to $2.93 billion for 2021." } }, { "@type": "Question", "name": "How did Cadence perform compared to Q1 2020?", "acceptedAnswer": { "@type": "Answer", "text": "Cadence's revenue increased from $618 million in Q1 2020 to $736 million in Q1 2021." } }, { "@type": "Question", "name": "What is the projected operating margin for Q2 2021?", "acceptedAnswer": { "@type": "Answer", "text": "The projected GAAP operating margin for Q2 2021 is approximately 22%." } } ] }

FAQ

What were Cadence's earnings for Q1 2021?

Cadence reported earnings of $0.67 per share, with a net income of $187 million for Q1 2021.

What is Cadence's revenue guidance for 2021?

Cadence expects total revenue in the range of $2.88 billion to $2.93 billion for 2021.

How did Cadence perform compared to Q1 2020?

Cadence's revenue increased from $618 million in Q1 2020 to $736 million in Q1 2021.

What is the projected operating margin for Q2 2021?

The projected GAAP operating margin for Q2 2021 is approximately 22%.