On October 23, 2023, Cadence Design Systems Inc (CDNS, Financial) announced its financial results for the third quarter of 2023. The company reported a strong performance with significant year-over-year increases in both revenue and net income.
Financial Highlights
Cadence reported Q3 2023 revenue of $1.023 billion, up from $903 million in the same period in 2022. GAAP operating margin remained steady at 29 percent, while net income increased to $254 million, or $0.93 per share, compared to $186 million, or $0.68 per share, in Q3 2022.
On a non-GAAP basis, the company's operating margin for Q3 2023 was 41 percent, up from 39 percent in Q3 2022. Non-GAAP net income was $343 million, or $1.26 per share, compared to $290 million, or $1.06 per share, in the same period last year.
Management Commentary
President and CEO Anirudh Devgan expressed satisfaction with the company's Q3 performance, attributing the success to a relentless focus on innovation and customer satisfaction. He noted that generational trends such as AI, HPC, and autonomous driving continue to fuel robust design activities, and 3D-IC designs are accelerating.
“I’m pleased with our strong Q3 performance and our relentless focus on driving innovation and delighting our customers,” said Anirudh Devgan, president and chief executive officer. “Generational trends including AI, HPC, and autonomous driving continue to fuel robust design activities, and 3D-IC designs are accelerating. We are excited about the momentum of our JedAI platform based Generative AI applications that are delivering breakthrough results for our customers.”
John Wall, senior vice president and chief financial officer, also highlighted the company's strong Q3 results, attributing them to growth across the company's businesses and efficient operational execution.
“Cadence delivered yet another strong quarter of top and bottom-line results in Q3, driven by growth across our businesses,” said John Wall, senior vice president and chief financial officer. “Our team’s strong execution and operational efficiency allowed us to raise our outlook for the year.”
Outlook
For the fourth quarter of 2023, Cadence expects total revenue in the range of $1.039 billion to $1.079 billion. GAAP operating margin is expected to be approximately 31 percent, and GAAP net income per diluted share is expected to be in the range of $0.85 to $0.91. On a non-GAAP basis, operating margin is expected to be approximately 42 percent, and net income per diluted share is expected to be in the range of $1.30 to $1.36.
For the full fiscal year 2023, the company expects total revenue in the range of $4.06 billion to $4.10 billion. GAAP operating margin is expected to be in the range of 30.5 percent to 31.0 percent, and GAAP net income per diluted share is expected to be in the range of $3.48 to $3.54. On a non-GAAP basis, operating margin is expected to be in the range of 41.5 percent to 42.0 percent, and net income per diluted share is expected to be in the range of $5.07 to $5.13.
