At a glance
Cadence Design Systems Inc is worth $90.41B, about 81 times its fiscal 2025 earnings. Revenue grew 14.1% to $5.30B in fiscal 2025, with 20.9% kept as profit; over 5 years it has grown 14.6% a year. It pays no dividend; it spent $3.84B buying back its shares over FY2021–FY2025. The stock returned −2.7% over the past year with dividends reinvested and +13.4% a year over five years, against +11.5% and +11.7% for the S&P 500. At its worst it fell 32.1% in the 2020 crash (S&P 500: 33.7%) and 26.3% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 1 month and 5 months after the lows.
The business in plain English
Cadence Design Systems sells the software, specialized hardware and silicon intellectual property (IP) that engineers use to design and test computer chips before they are built. Silicon IP means pre-designed chip building blocks that customers license so they don't have to create them from scratch. Its customers are semiconductor companies that design and make chips. They also include systems companies that build products packed with electronics, in fields such as cars, aerospace and defense, data centers, medical devices and mobile phones.
Cadence groups its products into three categories. Core EDA, short for electronic design automation, covers tools for designing and testing chips. They include Virtuoso, which Cadence describes as the industry standard for analog and custom chips; Innovus, for large digital chips; and Palladium emulation hardware, which speeds up testing of processors and AI chips. Semiconductor IP offers pre-built chip subsystems. System Design and Analysis covers circuit boards, chip packaging and complete electronic systems.
Customers license software, purchase hardware and pay for maintenance and services. In fiscal 2025, which ended December 31, 2025, revenue was $5.30 billion. Products and maintenance made up 91% and technology services 9%. By region, the United States supplied 43.6%, other parts of Asia 19%, Europe, the Middle East and Africa 14.9%, China 12.8% and Japan 6.5%.
Price history
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CDNS -2.7% over the year to Nov 2, 2026, total return with dividends reinvested.
How it makes money
By product or service
| Product and maintenance | $4.82B | 91% |
| Technology Service | $475.2M | 9% |
By geography
| United States | $2.31B | 43.6% |
| Other Asia | $1.01B | 19% |
| EMEA | $790.6M | 14.9% |
| China | $680.0M | 12.8% |
| JAPAN | $341.7M | 6.5% |
| Other America | $168.3M | 3.2% |
Latest results
- In Q3 FY2026 (ended Sep 30, 2026), revenue was $1.63B, up 22% from a year earlier, and net income was $289.7M (+0.9%).
- For fiscal 2025, revenue was $5.30B (+14.1% year over year; +14.6% a year from FY2020 to FY2025) with a 20.9% net margin.
Financial health check
| Revenue growth a year (FY2020–FY2025) | +14.6% good |
|---|---|
| Operating margin | 28.2% good |
| Free cash flow margin | 30% good |
| Return on equity (FY2025) | 20.3% good |
| Return on assets (FY2025) | 10.9% good |
| Net cash (cash minus debt) | $-886.2M watch |
| Fiscal year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2020 | $2.68B | $590.6M | $810.1M |
| FY2021 | $2.99B | $696.0M | $1.04B |
| FY2022 | $3.56B | $849.0M | $1.12B |
| FY2023 | $4.09B | $1.04B | $1.25B |
| FY2024 | $4.64B | $1.06B | $1.12B |
| FY2025 | $5.30B | $1.11B | $1.59B |
Valuation snapshot
| Market value | $90.41B |
|---|---|
| P/E ratio | 81.2 |
| Dividend yield | None |
Rank among 1514 US companies
Market value at each year end
Cadence Design Systems’s market value went from $7.23B at the end of 2016 to $90.41B on Nov 2, 2026, about 12.5 times as much; since the end of 2025 it is up 6%.
Show as a table
| Year end | Market value | Change |
|---|---|---|
| Nov 2, 2026 | $90.41B | +6.3% |
| 2025 | $85.08B | +3.3% |
| 2024 | $82.41B | +11.2% |
| 2023 | $74.10B | +68.2% |
| 2022 | $44.07B | -14.7% |
| 2021 | $51.65B | +35.7% |
| 2020 | $38.05B | +95.5% |
| 2019 | $19.46B | +58.6% |
| 2018 | $12.27B | +3.9% |
| 2017 | $11.81B | +63.3% |
| 2016 | $7.23B |
Price behavior
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | |
|---|---|---|---|---|---|
| CDNS price data to Nov 2, 2026 | +5.4% | -2.7% | +10.5% | +13.4% | +29.5% |
Show as a table
| Year | Price data |
|---|---|
| 2026 (to date) | +5.4% |
| 2025 | +4.0% |
| 2024 | +10.3% |
| 2023 | +69.5% |
| 2022 | -13.8% |
| 2021 | +36.6% |
| 2020 | +96.7% |
| 2019 | +59.5% |
| 2018 | +4.0% |
| 2017 | +65.8% |
| 2016 | +21.2% |
| 2015 | +9.7% |
| 2014 | +35.3% |
| 2013 | +3.8% |
| 2012 | +29.9% |
| 2011 | +25.9% |
| 2010 | +37.9% |
| 2009 | +63.7% |
| 2008 | -78.5% |
| 2007 | -5.0% |
| 2006 | +5.8% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Lost 83.6% over that stretch · deepest drop along the way 88.2%, back to its old high 82.4 months after the low |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 30.2% over that stretch · deepest drop along the way 32.1%, back to its old high 1.2 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 19.2% over that stretch · deepest drop along the way 26.3%, back to its old high 5.3 months after the low |
Insider activity
Form 4 filings from 2025-10-29 to 2026-10-29 (25 read): 0 open-market purchases and 51 sales ($9.8M), 51 of them under pre-arranged 10b5-1 trading plans.
| Date | Insider | Type | Value |
|---|---|---|---|
| Aug 21, 2026 | Chin-Chi Teng Sr. Vice President | sell (plan) | $1.5M |
| Jun 15, 2026 | Paul Cunningham Sr. Vice President | sell (plan) | $782K |
| Jul 15, 2026 | Paul Cunningham Sr. Vice President | sell (plan) | $767K |
| Jul 22, 2026 | Chin-Chi Teng Sr. Vice President | sell (plan) | $667K |
| Oct 15, 2026 | Paul Cunningham Sr. Vice President | sell (plan) | $648K |
Who owns it
Large shareholders (13G filings)
| BlackRock, Inc. | 8% | Mar 31, 2025 |
| Vanguard Capital Management | 7.43% | Mar 31, 2026 |
ETFs with the most weight in CDNS
| SMHX VanEck Fabless Semiconductor ETF | 5.48% |
| USSE Segall Bryant & Hamill Select Equity ETF | 4.06% |
| IQM Franklin Intelligent Machines ETF | 3.71% |
| SMH VanEck Semiconductor ETF | 3.52% |
| FFOG Franklin Focused Growth ETF FOCUSED GROWTH ETF | 3.37% |
| CLOD Themes Cloud Computing ETF | 3.29% |
| SHOC Strive U.S. Semiconductor ETF | 3.17% |
| BCUS Bancreek U.S. Large Cap ETF | 3.17% |
What could go wrong
- Tied to the chip and electronics industries. Cadence's growth depends mainly on semiconductor and electronics companies. If they cut design spending, or if mergers leave fewer customers, demand for its software, hardware and services could fall.
- Export controls and exposure to China. Government export and import controls limit which products Cadence can ship, and to whom, and can expose it to legal liability. China supplied 12.8% of fiscal 2025 revenue, so tighter trade rules or tariffs could hurt sales.
- Lumpy results from hardware and IP sales. The timing of revenue from hardware, chip IP and some software varies, and sales cycles are long. Results can swing from quarter to quarter, which can move the share price sharply.
- AI bets may fall short. Cadence is betting on demand for AI chips and is building AI features into its tools. If these opportunities fall short or its AI causes problems, it could face financial and reputational harm.
- Strong rivals and fast-changing technology. Competition is substantial and chip technology moves fast. If Cadence falls behind new technology or customer needs, its tools could become outdated, and its heavy research spending may not pay off.
- Acquisitions and more debt than cash. Cadence keeps acquiring companies, which can prove hard to integrate, fail to deliver or dilute shareholders. As of September 30, 2026, debt of $2.48 billion exceeded cash and investments of $1.60 billion.
Recent events
- Quarterly results released; Other company announcement
- Quarterly results released
- Executive or board change; Shareholder vote results
- Quarterly results released
- Unregistered sale of shares
- Quarterly results released
- Executive or board change
For income and retirement investors
Cadence paid no dividends from fiscal 2021 through 2025, so it offers no regular cash income. Returns come only from the share price, and an investor who needs income would have to raise cash by selling shares. Instead, Cadence spent $3.84 billion over those five years on buybacks, meaning purchases of its own stock. Even so, the share count fell only about 1%, to 274.4 million as of September 30, 2026, from 277.1 million in October 2021.
The stock has fallen hard in downturns. It lost 88.2% in the 2008 financial crisis and needed about 82 months from its low, until October 2015, to regain its peak. It fell 32.1% in the 2020 COVID crash but recovered in about a month. It dropped 26.3% in the 2022 bear market and recovered in about five months. In the year to October 28, 2026, its deepest drop was 34.2%. A single stock like Cadence carries more risk than a diversified fund.
Questions investors ask
How does Cadence Design Systems make money?
Cadence makes money by licensing chip design software, selling specialized hardware and licensing pre-designed chip building blocks. It also earns money from maintenance and services. Its customers are chipmakers and electronics companies. In fiscal 2025, revenue was $5.30 billion: 91% from products and maintenance and 9% from technology services. Key products include Virtuoso for analog and custom chips, Innovus for digital chips and Palladium emulation systems that speed up testing of large processors and AI chips.
Does Cadence pay a dividend?
No. Cadence paid no dividends from fiscal 2021 through 2025. Instead, it returns cash by repurchasing its own shares. It spent $3.84 billion on these buybacks over those five years, including $925 million in fiscal 2025. For income investors, that means no regular payments. Any return comes from the share price, and turning the investment into spending money means selling shares.
Is Cadence profitable?
Yes. In fiscal 2025, Cadence earned net income of $1.11 billion on revenue of $5.30 billion, keeping about 21 cents of profit from each dollar of sales. Free cash flow, the cash left after running the business and investing in equipment, was $1.59 billion. Profit grew more slowly than sales, though: revenue rose 14.1% while net income rose 5.1%. In the quarter ended September 30, 2026, revenue rose 22% from a year earlier, but net income rose only 0.9%.
What is Cadence's P/E ratio?
As of October 28, 2026, Cadence's price-to-earnings (P/E) ratio was 84.3, based on fiscal 2025 earnings of $4.06 per share. That means investors were paying about $84 for each $1 of yearly profit. Its market value was about $94.0 billion. A ratio that high reflects high expectations for future growth, so results that disappoint could weigh heavily on the stock.
How has Cadence stock performed over the long term?
It has risen sharply over 10 years, with deep drops along the way. As of October 28, 2026, the share price had gained 29.7% a year over 10 years, or 1,249% in total. Over five years it gained 15.2% a year. The one-year gain was just 0.3%. The stock fell 88.2% in the 2008 financial crisis. At its worst point in the year to October 28, 2026, it was down 34.2%. Past returns do not predict future results.