TLDR
- Cadence reported Q2 adjusted EPS of $2.11, beating the $2.05 estimate
- Revenue grew 24% year over year to $1.58 billion
- The company ended Q2 with a record backlog of $8.1 billion
- Full-year adjusted EPS guidance raised to $8.05–$8.15, up from $7.85–$7.95
- CDNS stock was up 3.25% in premarket trading Tuesday
Cadence Design Systems (CDNS) stock climbed 3.25% in premarket trading Tuesday, hitting $349.60, after the company posted a strong second quarter that topped Wall Street expectations on both earnings and revenue.
Cadence Design Systems, Inc., CDNS
Adjusted EPS came in at $2.11, above the consensus estimate of $2.05. Revenue grew 24% year over year to $1.584 billion, just edging past analyst forecasts of $1.577 billion.
The quarter was driven by what Cadence described as accelerating demand across both “design for AI” and “AI for design” — two distinct but related tailwinds the company has been leaning into.
CADENCE $CDNS Q2’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $1.58B (Est. $1.58B) 🟡; +24% YoY
🔹 Adj. EPS: $2.11 (Est. $2.06) 🟢; +28% YoY
🔹 Backlog: $8.1B; record backlog
🔹 Non-GAAP Operating Margin: 45.5%; +270 bps YoYRaises FY26 Guide:
🔹 Revenue: $6.26B-$6.34B (Est. $6.22B) 🟢…— Wall St Engine (@wallstengine) July 27, 2026
Cadence ended Q2 with a record backlog of $8.1 billion. That number speaks to strong forward demand and gives the company a solid runway heading into the back half of 2026.
GAAP operating margin came in at 28.4%. Non-GAAP operating margin reached 45.5%. Operating cash flow for the quarter totaled $635 million.
The company had $1.44 billion in cash on hand at quarter end, against $2.5 billion in debt. It repurchased $200 million of stock during the quarter and said it plans to direct around 50% of 2026 free cash flow to buybacks.
AI Drives Growth Across Every Segment
All major product segments posted double-digit year-over-year growth.
The IP business was the standout, growing more than 40%. Demand for AI and high-performance computing technologies — including PCIe, UCIe, HBM and LPDDR6 — drove the increase.
Core EDA revenue rose 18% from a year ago, supported by wider use of AI-powered design tools. Cadence flagged broader adoption of its Tempus and Certus signoff platforms among hyperscalers, semiconductor companies and AI chip developers.
System Design and Analysis revenue jumped 37% year over year. Cadence credited rising demand for advanced packaging and PCB solutions as AI system complexity increases.
The company also announced a multi-year collaboration with Intel supporting its 14A process technology. It strengthened its partnership with Samsung Foundry for 2nm and 3D IC work in AI, HPC and mobile applications.
China Revenue Back in the Picture
China made up 15% of total revenue in Q2 — the highest share since Q3 last year.
That’s a notable data point. Cadence pleaded guilty last July and agreed to pay a $140 million fine for unlawfully exporting its technology to a Chinese military university. U.S.-China tech trade remains closely watched, so the uptick in China revenue will draw attention.
Cadence raised its Q3 adjusted EPS guidance to $2.01–$2.07, ahead of the $1.94 analyst estimate.
For the full year, the company now expects revenue of $6.26 billion to $6.34 billion, up from prior guidance of $6.13 billion to $6.23 billion. Full-year adjusted EPS guidance was lifted to $8.05–$8.15, from $7.85–$7.95. Analysts had been modeling $7.96.
Arch-rival Synopsys rose 1% in Tuesday’s premarket. Synopsys is due to report earnings in late August.
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