Cadence Reports Second Quarter 2020 Financial Results

SAN JOSE, Calif. — July 20, 2020 — Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the second quarter of 2020.

Cadence reported second quarter 2020 revenue of $638 million, compared to revenue of $580 million reported for the same period in 2019. On a GAAP basis, Cadence achieved operating margin of 24 percent and recognized net income of $131 million, or $0.47 per share on a diluted basis, in the second quarter of 2020, compared to operating margin of 23 percent and net income of $107 million, or $0.38 per share on a diluted basis, for the same period in 2019.

Using the non-GAAP measure defined below, operating margin for the second quarter of 2020 was 35 percent and net income was $185 million, or $0.66 per share on a diluted basis, compared to operating margin of 34 percent and net income of $161 million, or $0.57 per share on a diluted basis, for the same period in 2019.

“Cadence has adapted well to the difficult environment, continuing to innovate and delight customers, while delivering outstanding results for shareholders,” said Lip-Bu Tan, chief executive officer. “While these are uncertain times, design activity remains strong and our Intelligent System Design strategy has us well positioned to take advantage of these opportunities. To ensure business continuity, we are further investing in infrastructure and collaboration platforms to maintain high levels of productivity and innovation.”

“Cadence exceeded all of its key financial metrics for the second quarter and we are raising our outlook for the year to 11% revenue growth and 33% non-GAAP operating margin,” said John Wall, senior vice president and chief financial officer. “Cadence operated from approximately 50 sites across the globe before the pandemic, and we are now operating from a distributed network of more than 8,000 homes. We are blessed to have such a strong and versatile global leadership group. I am very impressed and thankful for how our team is not only rising to the challenge but thriving in this environment.”

CFO Commentary

Commentary on the second quarter 2020 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 third quarter of 2020, the company expects total revenue in the range of $630 million to $650 million. Third 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 $0.49 to $0.51. Using the non-GAAP measure defined below, operating margin is expected to be approximately 32 percent and net income per diluted share is expected to be in the range of $0.59 to $0.61.

For 2020, the company expects total revenue in the range of $2.585 billion to $2.615 billion. On a GAAP basis, operating margin is expected to be approximately 22 percent and GAAP net income per diluted share for 2020 is expected to be in the range of $1.84 to $1.90. Using the non-GAAP measure defined below, operating margin for 2020 is expected to be approximately 33 percent and net income per diluted share for 2020 is expected to be in the range of $2.50 to $2.56.

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, and John Wall, senior vice president and chief financial officer, will host the second quarter 2020 financial results audio webcast today, July 20, 2020, 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 July 20, 2020 at 5 p.m. (Pacific) and ending September 11, 2020 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, aerospace, industrial and health. For six years in a row, Fortune Magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at cadence.com.

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