AI Takeaway
Cadence Design Systems delivered strong FY2025 results with revenue growing 14.1% to $5.30B and operating cash flow surging 37.1% to $1.73B, though net income growth moderated to 5.1% amid higher costs.
Revenue
$5.3B
++14.12% YoY
EPS (Basic)
$4.09
++5.14% YoY
Operating Income
$1.49B
++10.46% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Cadence grew total revenue 14.1% year-over-year from $4.64B to $5.30B in FY2025, reflecting sustained demand for electronic design automation tools and semiconductor IP as chip complexity continues to rise across AI, data center, and mobile end markets.
Source: Source: 10-K Financial Data, Income Statement
Operating margin declined modestly from 29.1% to 28.2% year-over-year, suggesting that revenue growth was partially offset by rising operating expenses, including R&D investments and headcount-related costs necessary to support product innovation.
Source: Source: 10-K Financial Data, Income Statement
Operating cash flow jumped 37.1% to $1.73B in FY2025 versus $1.26B in the prior year, significantly outpacing net income growth of 5.1%, indicating improved working capital management and strong cash conversion from the business.
Source: Source: 10-K Financial Data, Cash Flow Statement
2 more insights available
Upgrade to unlockCadence's revenue is heavily dependent on semiconductor companies and fabless chip designers. A slowdown in semiconductor capital spending or consolidation among key customers could disproportionately impact Cadence's revenue growth and renewal rates for its subscription-based EDA tools.
Source: Source: 10-K Financial Data, Revenue Trends
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.99 versus the $1.95 analyst consensus — a +2.0% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $5.3B | $4.64B | +14.12% |
Operating Income | $1.49B | $1.35B | +10.46% |
Net Income | $1.11B | $1.06B | +5.06% |
EPS (Basic) | $4.09 | $3.89 | +5.14% |
EPS (Diluted) | $4.06 | $3.85 | +5.45% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $10.15B | $8.97B | +13.13% |
Current Assets | $4.67B | $4.02B | +16.27% |
Current Liabilities | $1.64B | $1.37B | +19.36% |
Stockholders' Equity | $5.47B | $4.67B | +17.13% |
Cash & Equivalents | $3B | $2.64B | +13.51% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.73B | $1.26B | +37.14% |
Investing Cash Flow | $-460.52M | $-837.12M | +44.99% |
Financing Cash Flow | $-948.98M | $1.24B | -176.58% |
Share Buybacks | $925.03M | $550.03M | +68.18% |
D&A | $227.83M | $196.94M | +15.69% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 28.2% | 29.1% | -0.93% |
Net Margin | 20.9% | — | — |
ROE | 20.3% | — | — |
ROA | 10.9% | — | — |
Current Ratio | $2.856 | — | — |
Other companies in Application Software
Cadence Design Systems grew revenue 14.1% year-over-year to $5.30B in FY2025, up from $4.64B in the prior year. This growth reflects continued strong demand for EDA software and semiconductor IP, particularly from customers designing chips for AI and data center applications.
The key highlights from Cadence's FY2025 results include 14.1% revenue growth to $5.30B, a 37.1% surge in operating cash flow to $1.73B, and $925M in share buybacks — a 68.2% increase from the prior year. However, net income growth was more modest at 5.1% to $1.11B, and operating margin compressed slightly from 29.1% to 28.2%, suggesting rising cost pressures.
Based on the financial data, key risks for Cadence in FY2025 include exposure to U.S. export controls limiting sales to certain foreign markets (particularly China), potential operating margin compression from rising R&D and personnel costs, and customer concentration risk within the semiconductor industry. The dramatic reversal in financing cash flow from +$1.24B to -$949M also signals a shift in capital allocation strategy that could reduce future financial flexibility.
Yes, Cadence is highly profitable in FY2025, reporting net income of $1.11B on revenue of $5.30B, translating to a net margin of approximately 20.9%. The company also generated $1.73B in operating cash flow, significantly exceeding net income, which reflects strong cash conversion from its software licensing business.
Cadence's financial health in FY2025 is strong: the company holds $3.00B in cash, has a current ratio of 2.86 indicating ample liquidity, and stockholders' equity grew 17.1% to $5.47B. ROE of 20.3% and ROA of 10.9% further demonstrate efficient use of capital, while the $925M in share buybacks reflects management's confidence in the business outlook.