Cadence Design Systems earnings: third quarter 2026

Cadence Design Systems, which makes the software and building blocks that companies use to design chips and electronic systems, grew sales by about a fifth from a year ago in the third quarter of 2026. It raised its forecast for the year. But costs rose faster than sales, so the share of each sales dollar left as operating profit fell. On standard accounting, profit per share did not grow at all. ¹

Against what analysts expected

Nasdaq's earnings calendar gave analysts' average forecast as $1.61 of earnings per share for the quarter. The company's adjusted $2.11 sits above that, while its standard-accounting $1.05 sits below it. Whether the quarter came in above or below what analysts expected therefore depends on which measure that forecast used. ¹²

The strong points

• Sales reached $1.633 billion, up about 22% from a year ago. ¹
• The fastest-growing line was System Design and Analysis, the tools for designing and testing whole electronic systems rather than single chips, up 30%. ¹
• Its backlog of contracted work still to be delivered rose to a record $8.2 billion. ¹

The weak points

• On the company's own adjusted basis, the share of each sales dollar left as operating profit fell to 44.1% from 47.6% a year ago. ¹
• On standard accounting, earnings per share were $1.05, exactly the same as a year ago, while only the company's adjusted figure rose, to $2.11. ¹

What the company expects

• The company raised its forecast for 2026 sales growth to 21%, up from 18% to 20% before. That puts revenue at $6.387 billion to $6.417 billion (F6). ¹
• It also raised its forecast for adjusted earnings per share for 2026 to $8.37 to $8.43, up from $8.05 to $8.15. On standard accounting it expects $4.84 to $4.90. ¹

Our verdict on the quarter

A strong report. Sales grew about 22% and the company raised its forecasts for the year's sales and adjusted profit, but rising costs squeezed its margins and left standard profit per share flat, which keeps it short of very strong.

The results as published

• The results release itself
• The filing it came with (SEC)

Notes

1. Cadence Design Systems's results release, 26 October 2026: sec.gov. ↩
2. Nasdaq's earnings calendar, 26 October 2026. ↩