Cadence Design Systems, Inc. announced results for the second quarter of 2022.
Cadence reported second quarter 2022 revenue of $858 million, compared to revenue of $728 million for the same period in 2021. On a GAAP basis, Cadence achieved operating margin of 33 percent and recognized net income of $187 million, or $0.68 per share on a diluted basis, in the second quarter of 2022, compared to operating margin of 25 percent and net income of $156 million, or $0.56 per share on a diluted basis, for the same period in 2021.
Using the non-GAAP measures defined below, operating margin for the second quarter of 2022 was 42 percent and net income was $298 million, or $1.08 per share on a diluted basis, compared to operating margin of 39 percent and net income of $238 million, or $0.86 per share on a diluted basis, for the same period in 2021.
“This quarter’s outstanding results are a testament to Cadence’s relentless focus on innovation and continued strong execution by the Cadence team,” said Anirudh Devgan, president and chief executive officer. “Our strong performance is emblematic of the megatrends of the long-term strength of semis, systems companies investing more in silicon, and the convergence of system and chip designs. We are delighted with the pivotal role our technology portfolio plays in our customers’ successes and are especially excited by the pending acquisition of OpenEye Scientific, which will accelerate our Intelligent System Design strategy and extend our computational software competency to the life sciences market.”
“We delivered another quarter of strong financial results with double-digit growth across all product categories,” said John Wall, senior vice president and chief financial officer. “I am pleased that we exceeded all key operating metrics for the quarter, allowing us to raise our full year outlook.”
CFO Commentary
Commentary on the second quarter 2022 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.
Business Outlook
For the third quarter of 2022, the company expects total revenue in the range of $860 million to $880 million. Third quarter GAAP operating margin is expected to be in the range of 26 percent to 27 percent and GAAP net income per diluted share is expected to be in the range of $0.58 to $0.62. Using the non-GAAP measures defined below, operating margin is expected to be in the range of 37 percent to 38 percent and net income per diluted share is expected to be in the range of $0.94 to $0.98.
For fiscal year 2022, the company expects total revenue in the range of $3.470 billion to $3.510 billion. On a GAAP basis, operating margin for 2022 is expected to be in the range of 29.25 percent to 30.25 percent and GAAP net income per diluted share for 2022 is expected to be in the range of $2.59 to $2.65. Using the non-GAAP measures defined below, operating margin for 2022 is expected to be in the range of 39.25 percent to 40.25 percent and net income per diluted share for 2022 is expected to be in the range of $4.06 to $4.12.
The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use this normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.
A schedule showing reconciliations of the business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, is included in this release.
Audio Webcast Scheduled
Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the second quarter 2022 financial results audio webcast today, July 25, 2022, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting July 25, 2022 at 5 p.m. (Pacific) and ending September 16, 2022 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
