Industry Summary Articles

Cadence reported 2019 revenue of $2.336 billion, compared to revenue of $2.138 billion for 2018. On a GAAP basis, Cadence achieved operating margin of 21 percent and recognized net income of $989 million, or $3.53 per share on a diluted basis, in 2019, compared to operating margin of 19 percent and net income of $346 million, or $1.23 per share on a diluted basis for 2018.

Revenue for the fourth quarter of 2019 totaled $600 million, compared to revenue of $570 million for the same period in 2018.

Cadence achieved operating margin of 18 percent and recognized net income of $660 million, or $2.36 per share on a diluted basis, in the fourth quarter of 2019, compared to operating margin of 20 percent and net income of $98 million, or $0.35 per share on a diluted basis, for the same period in 2018. GAAP net income for the fourth quarter of 2019 and fiscal 2019 included a one-time non-cash tax benefit of $576 million related to intercompany transfers of certain intellectual property rights to Cadence's Irish subsidiary.

Using the non-GAAP measure defined below, operating margin for 2019 was 32 percent and net income was $618 million, or $2.20 per share on a diluted basis, compared to operating margin of 30 percent and net income of $526 million, or $1.87 per share on a diluted basis, for 2018. For the fourth quarter of 2019, operating margin was 31 percent and net income was $152 million, or $0.54 per share on a diluted basis, compared to operating margin of 31 percent and net income of $147 million, or $0.52 per share on a diluted basis, for the same period in 2018.

“Generational trends such as 5G, AI and hyperscale computing are driving strong design activity and our Intelligent System Design strategy has us very well positioned to maximize the resulting opportunities,” said Lip-Bu Tan, chief executive officer. “We introduced seven significant new products, including two in the System Analysis space, and coupled with strong execution, drove 9% revenue growth and 32% non-GAAP operating margin in 2019, and I look forward to driving further customer and shareholder success this year.”

“We are pleased with our performance in Q4 and for the full year,” said John Wall, senior vice president and chief financial officer. “Thanks to the efforts of the entire Cadence team, we achieved broad based strength across all of our businesses and look forward to building upon our success in 2020.”

Business Outlook

For the first quarter of 2020, the company expects total revenue in the range of $610 million to $620 million. First quarter GAAP operating margin is expected to be approximately 19 percent and GAAP net income per diluted share is expected to be in the range of $0.32 to $0.34. Using the non-GAAP measure defined below, operating margin is expected to be approximately 30 percent and net income per diluted share is expected to be in the range of $0.53 to $0.55.

For 2020, the company expects total revenue in the range of $2.545 billion to $2.585 billion. On a GAAP basis, operating margin is expected to be in the range of 21 percent to 22 percent and net income per diluted share for 2020 is expected to be in the range of $1.46 to $1.56. Using the non-GAAP measure defined below, operating margin for 2020 is expected to be in the range of 32 percent to 33 percent and net income per diluted share for 2020 is expected to be in the range of $2.40 to $2.50.

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