Cadence Design Systems, Inc. announced results for the first quarter of 2023.
Cadence reported first quarter 2023 revenue of $1.022 billion, compared to revenue of $902 million for the same period in 2022. On a GAAP basis, Cadence achieved operating margin of 32 percent and recognized net income of $242 million, or $0.89 per share on a diluted basis, in the first quarter of 2023, compared to operating margin of 35 percent and net income of $235 million, or $0.85 per share on a diluted basis, for the same period in 2022.
Using the non-GAAP measures defined below, operating margin for the first quarter of 2023 was 42 percent and net income was $351 million, or $1.29 per share on a diluted basis, compared to operating margin of 44 percent and net income of $324 million, or $1.17 per share on a diluted basis, for the same period in 2022.
“Cadence delivered strong results for the first quarter driven by our consistent execution and continued momentum in the core EDA and System Design & Analysis businesses,” said Anirudh Devgan, president and chief executive officer. “With the recent introductions of Virtuoso Studio and Allegro X AI, we now have an unmatched ‘chip to package to board to systems’ Generative AI portfolio underpinned by our differentiated JedAI platform and delivering unprecedented quality of results and productivity benefits.”
“I am pleased to report that we exceeded all of our key operating metrics for the quarter,” said John Wall, senior vice president and chief financial officer. “We had a good start to the year. With the increase in our outlook, we now expect revenue growth for 2023 at approximately 14%.”
CFO Commentary
Commentary on the first quarter 2023 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 second quarter of 2023, the company expects total revenue in the range of $960 million to $980 million. Second quarter GAAP operating margin is expected to be in the range of 29 percent to 30 percent and GAAP net income per diluted share is expected to be in the range of $0.73 to $0.77. Using the non-GAAP measures defined below, operating margin is expected to be in the range of 40 percent to 41 percent and net income per diluted share is expected to be in the range of $1.15 to $1.19.
For fiscal year 2023, the company expects total revenue in the range of $4.03 billion to $4.07 billion. On a GAAP basis, operating margin for 2023 is expected to be in the range of 30 percent to 31 percent and GAAP net income per diluted share for 2023 is expected to be in the range of $3.26 to $3.34. Using the non-GAAP measures defined below, operating margin for 2023 is expected to be in the range of 41 percent to 42 percent and net income per diluted share for 2023 is expected to be in the range of $4.96 to $5.04.
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 press release.
Audio Webcast Scheduled
Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the first quarter 2023 financial results audio webcast today, April 24, 2023, 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 April 24, 2023 at 5 p.m. (Pacific) and ending June 16, 2023 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
