Here are a few brief analogies for Cadence Design Systems (CDNS):

• Autodesk for microchip design. (Cadence provides the essential software tools for designing integrated circuits, much like Autodesk provides CAD software for architects and mechanical engineers.)
• Adobe for semiconductor engineers. (Cadence offers powerful, specialized software tools for creating chips and electronic systems, similar to how Adobe provides professional creative software for designers.)

Cadence Design Systems (CDNS) offers a range of major products primarily in the Electronic Design Automation (EDA) and IP fields:

• Digital IC Design Software: A comprehensive suite of software tools for the complete design, implementation, and optimization of digital integrated circuits (ICs).
• Custom/Analog IC Design Software (Virtuoso Platform): Industry-standard software solutions for the design and verification of analog, mixed-signal, RF, and custom digital ICs.
• IC Verification Software & Hardware: Includes powerful simulation and formal verification software, alongside high-performance hardware emulation and prototyping systems, to ensure design correctness.
• System Design & Analysis Software (Allegro Platform): Software tools for designing printed circuit boards (PCBs) and advanced IC packages, coupled with multi-physics analysis capabilities for electronic systems.
• Intellectual Property (IP): A portfolio of pre-verified, reusable silicon building blocks, including configurable processor cores (Tensilica), memory controllers, interface PHYs, and verification IP for standard protocols.

Cadence Design Systems (CDNS) sells its Electronic Design Automation (EDA) software, hardware, and IP primarily to other companies in the semiconductor and electronics industries.

Its major customers are typically leading semiconductor companies and large system companies that design their own custom silicon. While Cadence does not publicly disclose a list of its top customers by name (unless a single customer accounts for 10% or more of revenue, which is rare for EDA companies), based on industry knowledge and the types of companies that extensively utilize EDA tools, its major customers include companies like:

• NVIDIA (NVDA)
• Qualcomm (QCOM)
• Broadcom (AVGO)
• Intel (INTC)
• AMD (AMD)
• Apple (AAPL)
• TSMC (TSM)

These companies represent a broad range of Cadence's customer base, including fabless semiconductor companies, integrated device manufacturers (IDMs), system companies with in-house chip design capabilities, and leading foundries.

• Arm Holdings plc (ARM)
• Amazon.com, Inc. (AMZN)
• Microsoft Corporation (MSFT)
• Alphabet Inc. (GOOGL)

Anirudh Devgan President and Chief Executive Officer

Anirudh Devgan became President and Chief Executive Officer of Cadence Design Systems in December 2021, having previously been appointed President in November 2017. He joined Cadence in 2012 and held several senior leadership roles. Prior to Cadence, Dr. Devgan spent 12 years at IBM in various research and management positions and served as Corporate Vice President and a member of the executive staff at Magma Design Automation. He holds a Bachelor of Technology degree in electrical engineering from the Indian Institute of Technology, Delhi, and earned his Master’s and Ph.D. in Electrical and Computer Engineering from Carnegie Mellon University.

John Wall Senior Vice President and Chief Financial Officer

John Wall was appointed Senior Vice President and Chief Financial Officer of Cadence Design Systems in October 2017, having been with the company since 1997. Within Cadence, he has held numerous finance leadership roles, including Corporate Vice President & Corporate Controller and Vice President of Finance & Operations. Before joining Cadence, Mr. Wall worked as a Financial Controller at Venture Fleet Services, a London-based firm. He was instrumental in establishing Cadence’s Dublin office and in the development and implementation of the company's international tax structure.

Lip-Bu Tan Executive Chairman (Former CEO)

Lip-Bu Tan served as the Chief Executive Officer of Cadence Design Systems from 2009 to 2021, and subsequently as Executive Chairman until 2023. Under his leadership, Cadence more than doubled its revenue and generated significant returns for shareholders. He is also the founder and Chairman of Walden International, a venture capital firm established in 1987, and a Founding Managing Partner of Walden Catalyst Ventures and Celesta Capital. Mr. Tan has a track record of advising, funding, and incubating technology startups, some of which were later acquired by major tech companies, such as Nuvia (acquired by Qualcomm), Mellanox (acquired by Nvidia), Annapurna Labs (acquired by Amazon), and Inphi (acquired by Marvell). He is slated to become the CEO of Intel in March 2025.

Paul Cunningham Senior Vice President and General Manager, System & Verification Group

Paul Cunningham has served as Senior Vice President and General Manager of the System & Verification Group since March 2021, and has been running the division since 2018. He joined Cadence in 2011 through the acquisition of Azuro, a startup he co-founded and served as CEO. Azuro specialized in concurrent physical optimization and useful skew clock tree synthesis technologies. Dr. Cunningham holds a Master's Degree and a Ph.D. in Computer Science from the University of Cambridge in the UK.

Nimish Modi Senior Vice President and General Manager, Strategy and New Ventures

Nimish Modi is the Senior Vice President and General Manager of Strategy and New Ventures at Cadence Design Systems. In this role, he is responsible for driving strategic initiatives and exploring new business opportunities. His extensive career includes significant roles at Intel Corporation and various leadership positions at Cadence since 2006.

1. Intense Competition: Cadence operates in a highly competitive Electronic Design Automation (EDA) market, facing significant rivalry from established players like Synopsys, Inc. and Siemens EDA. The risk lies in potential loss of market share, pricing pressure, and the necessity for continuous innovation to keep pace with or surpass competitors' technological advancements and offerings.
2. Geopolitical Tensions and Export Control Regulations: Geopolitical tensions, particularly concerning US-China tech relations and export control regulations, pose a significant risk to Cadence's business. These factors could impact the company's growth in key markets like China, affecting revenue, supply chain, and ability to compete globally.
3. Dependence on the Semiconductor Industry Cyclicality: Cadence Design Systems' business relies heavily on the semiconductor industry, which is inherently subject to cyclical demand and broader economic fluctuations. Economic downturns or slowdowns in the semiconductor market could lead to reduced customer research and development (R&D) budgets and decreased demand for Cadence's software, hardware, and IP products.

Cadence Design Systems (CDNS) operates in several significant addressable markets for its main products and services, primarily in the global electronic design automation (EDA) software and intellectual property (IP) sectors, as well as system design and verification.

• Electronic Design Automation (EDA) Software: The global electronic design automation (EDA) tools market was valued at approximately USD 15.33 billion in 2024 and is projected to grow to USD 34.58 billion by 2033, exhibiting a Compound Annual Growth Rate (CAGR) of 9.46% during the forecast period (2025-2033). Other estimates place the global EDA market at USD 14.66 billion in 2023, expected to reach USD 32.75 billion by 2032 (CAGR of 9.35%). North America holds a significant share of the EDA market (32% of revenue share in 2023), while the Asia-Pacific region is the most significant shareholder and is expected to grow at a CAGR of 10.61% during the forecast period.
• Semiconductor Intellectual Property (IP): The global semiconductor IP market was valued at USD 6.94 billion in 2024 and is projected to reach USD 17.06 billion by 2034, growing at a CAGR of 8.87% from 2025 to 2034. Another report indicates the market was valued at USD 7.5 billion in 2024 and is poised to reach USD 11.2 billion by 2029, growing at a CAGR of 8.5%. The Asia-Pacific region dominated the semiconductor IP market with a 53% share in 2024.
• Design and Verification IP Services: The global market for Design and Verification IP Service was valued at US$2.532 billion in 2023 and is projected to reach US$4.748 billion by 2030, growing at a CAGR of 9.3% during the forecast period.
• Hardware-Assisted Verification: The global hardware-assisted verification market is estimated to be valued at USD 760.4 million in 2025 and is projected to reach USD 3,076.4 million by 2035, registering a CAGR of 15.0% over the forecast period.
• Computational Fluid Dynamics (CFD): Cadence expanded into the Computational Fluid Dynamics (CFD) market, which was identified as a $2 billion market opportunity at the time of its acquisition of NUMECA International in 2021.

Cadence Design Systems (CDNS) is expected to experience future revenue growth over the next 2-3 years driven by several key factors:

1. Acceleration of AI-driven Design Activity and the AI Supercycle: The persistent growth and expansion in AI applications present significant opportunities for Cadence, particularly with the AI supercycle accelerating advancements in hyperscale computing, autonomous driving, and 5G. Cadence's comprehensive Electronic Design Automation (EDA) and IP portfolio, including its AI-powered products and platforms like JedAI, are well-positioned to capture this demand.
2. Strong Demand for Hardware Platforms: The company continues to see robust demand for its emulation and prototyping systems, which are considered a strong growth area. This hardware demand is driven by the increasing complexity of chip designs, especially those related to AI and high-performance computing (HPC), and has been described as "almost an annual subscription" for large customers.
3. Product Innovation and Strategic Partnerships: Cadence consistently emphasizes its culture of innovation, with the launch of new products such as the industry's first auto router for die-to-die and die-to-substrate connectivity. Furthermore, fortified partnerships with key industry players like Arm, TSMC, and NVIDIA are crucial for developing next-generation AI technologies and advanced computing solutions, contributing to new design wins and expanded market reach.
4. Expansion Across Key End Markets: Cadence is benefiting from broad-based demand across various end markets. This includes continued expansion in sectors such as automotive, hyperscale computing, 5G communications, and aerospace and defense, where digital transformation and the adoption of advanced design solutions are accelerating.
5. Record and Growing Backlog: Cadence has reported a record backlog, exceeding $7 billion as of Q3 2025. This substantial backlog provides strong revenue visibility and indicates sustained customer demand, with a significant portion attributed to multi-year recurring arrangements. The growing backlog underpins future revenue and reflects strong business momentum.

Capital Allocation Decisions for Cadence Design Systems (CDNS) (Last 3-5 Years)

Share Repurchases

• Cadence's board of directors authorized an additional $1.5 billion for its stock repurchase program on May 8, 2025.
• The company utilized $700 million of its cash to buy back shares in 2023 and $550.026 million in 2024.
• Cadence plans to use at least 50% of its free cash flow for share repurchases, with approximately $800 million earmarked for 2025 from a projected $1.6 billion free cash flow.

Share Issuance

• Cadence recognized $391.22 million in stock-based compensation in 2024, which contributes to the difference between GAAP and non-GAAP earnings.
• Stock-based compensation amounted to $325.61 million in 2023 and $270.44 million in 2022.

Outbound Investments

• In September 2025, Cadence announced its intention to acquire the design and engineering business of Hexagon AB for approximately $3.16 billion (€2.7 billion) in a stock-and-cash deal.
• The company acquired BETA CAE Systems for $1.24 billion in June 2024, focusing on multiphysics system simulations.
• Cadence acquired OpenEye Scientific Software for $500 million in September 2022 to enhance its computational molecular design capabilities.

Capital Expenditures

• Capital expenditures averaged $105.6 million annually from fiscal years ending January 2021 to 2024.
• Cadence's capital expenditures peaked at $142.5 million in 2024 and are projected to be approximately $150 million for 2025.
• Net capital expenditures are expected to remain modest, reflecting the company's capital structure.