Synopsis
Cadence Design Systems anticipates strong revenue growth. The company expects higher earnings for fiscal 2026. This optimism stems from increased investment in specialized artificial intelligence processors. Demand for Cadence's chip design tools is surging. This is driven by complex system-on-chip and AI accelerator designs.Listen to this article in summarized format
Shares of the San Jose, California-based company rose more than 1% in extended trading.
Demand for Cadence's electronic design automation (EDA) software and hardware has surged as chipmakers and tech giants like Google and Amazon design increasingly complex systems-on-a-chip (SoCs) and AI accelerators.
Cadence is one of the dominant players in the EDA industry, providing the essential software and hardware used to design and verify semiconductors and electronic systems. Its customers include leading AI-chip manufacturer Nvidia and Apple, among others.
The company now expects fiscal 2026 revenue between $6.13 billion and $6.23 billion, compared with its prior projection of $5.9 billion to $6 billion.
Annual adjusted profit per share, however, is forecast between $7.85 and $7.95, below the company's earlier projection of $8.05 to $8.15 per share, impacted by Cadence's 2.7 billion euro acquisition of Hexagon AB's design and engineering business.
Cadence is partnering with Nvidia to integrate its physics engines, which predict how real-world materials interact, with AI models designed to train robots inside computer simulations.
Earlier this year, the company introduced an agent that handles the early phases of designing a chip, in which the processor's circuit is designed in a language that looks like computer code.
Cadence reported first-quarter revenue of $1.47 billion, beating analysts' estimates of $1.45 billion, according to data compiled by LSEG.
Quarterly adjusted profit of $1.96 per share came in above estimates of $1.90 per shares
