Cadence Reports Strong Q4 and Full-Year 2024 Financial Results: Record Revenue and Growth Across Key Segments
Cadence Design Systems, Inc. (Nasdaq: CDNS) has announced its financial results for the fourth quarter and fiscal year 2024, showcasing impressive growth and operational efficiency. With a 13.5% year-over-year revenue increase and record-breaking performance across multiple business segments, Cadence is solidifying its position as a leader in the electronic design automation (EDA) industry. The company’s strategic focus on AI-driven innovation and expanding into new markets like life sciences continues to drive momentum.
Fourth Quarter 2024 Financial Highlights
Cadence delivered exceptional results in Q4 2024, with key metrics reflecting robust growth:
- Revenue: $1.356 billion, up from $1.069 billion in Q4 2023.
- GAAP Operating Margin: Increased to 33.7%, compared to 31.5% in Q4 2023.
- Non-GAAP Operating Margin: Improved to 46.0%, up from 42.9% in Q4 2023.
- GAAP Diluted Net Income Per Share: $1.24, compared to $1.19 in Q4 2023.
- Non-GAAP Diluted Net Income Per Share: $1.88, a significant jump from $1.38 in Q4 2023.
These figures underscore Cadence’s ability to scale operations while maintaining profitability, driven by strong demand for its AI-powered tools and solutions.
Fiscal Year 2024 Financial Performance
For the full fiscal year 2024, Cadence achieved remarkable milestones:
- Revenue: $4.641 billion, an increase from $4.090 billion in 2023.
- GAAP Operating Margin: Slightly decreased to 29.1%, compared to 30.6% in 2023, reflecting strategic investments.
- Non-GAAP Operating Margin: Improved to 42.5%, up from 42.0% in 2023.
- GAAP Diluted Net Income Per Share: $3.85, slightly higher than $3.82 in 2023.
- Non-GAAP Diluted Net Income Per Share: $5.97, up from $5.15 in 2023.
Additionally, Cadence reported a record year-end backlog of $6.8 billion and current remaining performance obligations (cRPO) of $3.4 billion, indicating strong future revenue visibility.
Leadership Commentary
Anirudh Devgan, President and CEO of Cadence, highlighted the company’s achievements:
“Cadence delivered exceptional results in the fourth quarter, capping off a strong 2024 with 13.5% revenue growth and a 42.5% non-GAAP operating margin for the year. Our momentum continues to build as we exited 2024 with record bookings and backlog. Cadence is very well-positioned to benefit from the various phases of AI, including the current AI infrastructure buildout, applying AI to our own products, and expanding into new markets such as life sciences.”
John Wall, Senior Vice President and CFO, added:
“We had a strong finish to 2024, driven by broad-based strength across all our businesses. I’m pleased with our record year-end backlog of $6.8 billion and cRPO of $3.4 billion, and I look forward to building on that strength in 2025.”
Business Outlook for 2025
Cadence has provided a positive outlook for fiscal year 2025, projecting continued growth:
- Revenue: Expected to range between $5.14 billion and $5.22 billion.
- GAAP Operating Margin: Anticipated between 30.25% and 31.25%.
- Non-GAAP Operating Margin: Forecasted between 43.25% and 44.25%.
- GAAP Diluted Net Income Per Share: Projected between $4.19 and $4.29.
- Non-GAAP Diluted Net Income Per Share: Estimated between $6.65 and $6.75.
The company remains committed to leveraging its long-term projected non-GAAP tax rate, which reflects current global tax dynamics and geographic earnings mix. This approach ensures transparency and adaptability in a rapidly evolving economic landscape.
Key Business Highlights in 2024
Cadence’s success in 2024 was driven by innovation and expansion across multiple product portfolios:
- AI-Driven Solutions:
The Cadence.ai portfolio gained significant traction, with products like Cerebrus, Verisium SimAI, and Allegro X AI scaling rapidly. Early engagements with LLM-based Design Agents powered by the JedAI data platform are showing promising results. - System Design & Analysis:
This segment grew over 40% in 2024, fueled by Cadence’s multi-physics analysis platform and AI-driven optimization. Aerospace & Defense and Automotive industries were key contributors to this growth. - IP Business Growth:
Cadence’s IP business surged 28% year-over-year in Q4, driven by high-performance computing (HPC) protocols like HBM, DDR, PCIe, and UCIe. Significant expansions and competitive displacements at top-tier customers underscored this success. - Core EDA Portfolio:
Comprising digital, custom/analog, and verification solutions, Core EDA grew 15% year-over-year in Q4, reflecting sustained demand. - Hardware Business:
The Palladium Z3 and Protium X3 platforms delivered another record year, with Q4 marking the best quarter ever.
Why Cadence’s Performance Matters
In an era where AI, semiconductor innovation, and advanced system design are reshaping industries, Cadence’s leadership is more critical than ever. The company’s ability to deliver cutting-edge AI-driven tools, coupled with its strong financial performance, positions it as a key enabler of next-generation technologies. From accelerating AI infrastructure development to expanding into new verticals like life sciences, Cadence is not just keeping pace—it’s setting the pace.
