Cadence earnings: guidance and next results
Cadence expects to report its next results on October 26, 2026. The key thing to watch is whether Cadence converts backlog into revenue and collects the cash implied by earnings.
What has Cadence guided for 2026?
Management’s July 27, 2026 guidance calls for 18%–20% revenue growth in 2026. It puts revenue at US$6,260,000–6,340,000 thousand. The plan includes US$2,000,000 thousand of operating cash flow and US$240,000 thousand of capital spending. Stock compensation is US$569,000 thousand.
| Period guided | Low | High | Date given | |
|---|---|---|---|---|
| Total Revenue | Year to Dec 2026 | 6,260,000 | 6,340,000 | Jul 27, 2026 |
| Revenue growth | Year to Dec 2026 | 18.0% | 20.0% | Jul 27, 2026 |
| Cash Flow from Operations | Year to Dec 2026 | 2,000,000 | 2,000,000 | Jul 27, 2026 |
| Capital Expenditures | Year to Dec 2026 | 240,000 | 240,000 | Jul 27, 2026 |
| Stock-based compensation expense | Year to Dec 2026 | 569,000 | 569,000 | Jul 27, 2026 |
What this means. The company shows both standard-accounting and adjusted profit figures, and the adjusted figures exclude selected costs, so they are not directly comparable.
Did Cadence keep its past promises?
Buybacks can offset dilution, which is the spreading of ownership across more shares, but spending money on repurchases does not guarantee that dilution disappears. Management also beat its 2025 revenue and adjusted-earnings outlook while missing its forecast under standard accounting rules. Adjusted earnings remove selected costs, including stock pay and acquisition-related items; standard accounting includes them.
What has Cadence reported in revenue and profit?
Revenue reached 1,584,451, up approximately 24.2% from June 2025. It was also up 7.5% from March 2026. Core EDA grew 18% and IP grew more than 40%. System Design and Analysis grew 37%, although Hexagon contributed to that category.
Cash from operations was 634,929, and capital spending was 59,603. Free cash flow rose, but gross margin fell from 85.6% to 84.9%, so faster sales did not improve every layer of profitability. Backlog reached $8.1 billion, including $4.2 billion of RPO revenue expected within twelve months. The quarter supports continued expansion, not a sudden doubling of recurring operating profit.
| Jun 2026 | Mar 2026 | Dec 2025 | Sep 2025 | Jun 2025 | Mar 2025 | Dec 2024 | Sep 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 1,584,451 | 1,474,220 | 1,440,114 | 1,338,838 | 1,275,441 | 1,242,366 | 1,355,981 | 1,215,499 |
| Gross margin | 84.9% | 85.4% | 86.9% | 86.4% | 85.6% | 86.5% | 83.8% | 86.6% |
| Operating income | 450,315 | 431,329 | 463,335 | 425,390 | 241,797 | 361,520 | 456,875 | 350,056 |
| Net income | 367,076 | 335,660 | 388,136 | 287,122 | 160,051 | 273,579 | 340,210 | 238,111 |
| EPS, diluted | 1.33 | 1.23 | 1.42 | 1.05 | 0.59 | 1.00 | 1.24 | 0.87 |
What this means. Our free cash flow is lower than Cadence's count because we include separately purchased intangible assets in capital spending, while Cadence leaves them out.
What should Cadence watchers look for next?
Cadence is due to report third-quarter results on October 26, 2026. Management expects quarterly revenue of $1.595 billion to $1.625 billion and non-GAAP earnings of $2.01 to $2.07 per share. The important evidence will be whether it maintains the annual outlook, converts backlog and collects the cash implied by earnings.