Key facts
- Cadence Design Systems raised its annual revenue and profit forecasts.
- The company now expects 2026 revenue between $6.26 billion and $6.34 billion.
- Annual adjusted profit is projected to be between $8.05 and $8.15 per share.
- Cadence launched an AI 'super agent' called AuraStack.
- Second-quarter revenue increased 24.2% to $1.584 billion, with adjusted profit at $2.11 per share.
Cadence Design Systems raised its annual revenue and profit forecasts on Monday, driven by strong demand for its AI-powered chip and system design software. The company's shares saw a more than 5% increase in extended trading following the announcement.
Cadence's electronic design automation (EDA) tools are crucial for designing and validating semiconductors and electronic systems. Demand for these tools has surged as chipmakers and technology firms develop more advanced systems-on-chip (SoCs) and AI accelerators. Key customers include AI chip leader Nvidia and Apple, the maker of the iPhone.
The company now projects 2026 revenue to be between $6.26 billion and $6.34 billion, an upward revision from its previous forecast of $6.13 billion to $6.23 billion. This figure surpasses the average analyst expectation of $6.21 billion. Furthermore, annual adjusted profit is now expected to range from $8.05 to $8.15 per share, an increase from the prior forecast of $7.85 to $7.95 and exceeding analyst estimates of $7.96.
Earlier in July, Cadence introduced AuraStack, an AI 'super agent' designed to allow engineers to articulate their goals in natural language. This agent then plans and executes tasks using Cadence's existing software to design and virtually test circuit layouts.
In the second quarter, Cadence reported a 24.2% increase in revenue, reaching $1.584 billion, which was largely in line with estimates. Adjusted profit for the quarter was $2.11 per share, compared to an estimate of $2.05. The company's quarter-end backlog stood at $8.1 billion, with $4.2 billion anticipated to be recognized as revenue within the next twelve months.