April 24, 2026

Cadence Design to Release Q1 Earnings: Here's What to Expect

Cadence Design Systems, Inc. CDNS will release results for the first quarter of 2026 on April 27.

The Zacks Consensus Estimate for first-quarter earnings is $1.91 per share, up by 1 cent in the past seven days. The consensus mark implies a 21.7% increase from the year-ago actual. The Zacks Consensus Estimate for revenues is pegged at $1.44 billion, indicating a nearly 16% uptick from the year-ago actual.

Management expects revenues to be $1.42-$1.46 billion for the first quarter. The company reported sales of $1.24 billion in the year-ago quarter. Non-GAAP EPS is anticipated to be between $1.89 and $1.95. The company reported an EPS of $1.57 in the year-ago quarter. Non-GAAP operating margin is estimated to be between 44% and 45% in the first quarter.

Cadence has an impressive earnings surprise history. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 5.76%.

Price Performance

Image Source: Zacks Investment Research

CDNS stock has gained 6.1% in the past year against the Computer-Software industry’s decline of 13.8%. The S&P 500 composite and the Zacks Computer and Technology sector have risen 3.2% and 5.4%, respectively, in the same time frame.

Factors Shaping CDNS’ Q1 Results

Ongoing uncertainty prevailing over global macroeconomic conditions, especially U.S.-China tech tensions, along with stiff competition in the EDA space and inflation, remains a concern ahead of the first-quarter earnings. China contributed to 13% revenues in 2025, with management expecting 12% to 13% range in 2026.

Nonetheless, AI has been driving a major transformation in semiconductor and system design and Cadence is deeply integrated into this shift. Design activity across several verticals, especially data centers, drones, robotics and automotive, has been robust, due to AI, hyperscale computing and 5G. The focus on Generative AI, Agentic AI and Physical AI has been leading to an exponential increase in computing demand and semiconductor innovation.

Strong spending by customers on AI initiatives have been creating a favorable demand environment for Cadence. The company’s broad portfolio — spanning EDA, IP, 3D-IC, PCB and system analysis solutions — positions it well to capitalize on opportunities emerging from the AI supercycle. Cadence.AI’s portfolio is powered by autonomous silicon agents and built the JedAI platform using NVIDIA accelerated compute capacity.

The launch of ChipStack AI Super Agent (February 2026), the industry’s first agentic AI workflow purpose-built for front-end silicon design and verification, bodes well. Cadence acquired Chipstack, which provides agentic AI solutions for chip verification, in November 2025.

Cadence Design Systems, Inc. Price and EPS Surprise

Cadence Design Systems, Inc. price-eps-surprise | Cadence Design Systems, Inc. Quote

Cadence’s ratable software model, strong backlog and high mix of recurring revenues are other positives. At the end of 2025, Cadence had a backlog of $7.8 billion and current-remaining performance obligations of $3.8 billion. More importantly, CDNS highlighted that nearly 67% of revenues for 2026 are already covered by the beginning backlog. This provides a strong foundation for the first quarter and reduces near-term uncertainty. The recurring revenue mix is expected to remain at nearly 80% in 2026, similar to 2025 levels, thereby reinforcing stability.

The company has been collaborating with several tech giants, including Qualcomm and NVIDIA NVDA, on their next-generation AI designs across both training and inference. Expanding partnerships with its foundry partners, like Samsung, Taiwan Semiconductor Manufacturing, Intel and Arm Holdings, bodes well.

Recently, Cadence partnered with Google to integrate its ChipStack AI Super Agent with Gemini, creating a cloud-native, agent-driven platform for advanced semiconductor design and verification.

The company also expanded its partnership with NVIDIA to integrate CUDA-X, AI physics and Omniverse with Cadence AgentStack, Physical AI Stack and AI factory digital twins. This will enable up to 100x faster engineering simulations across semiconductors, AI factories and physical AI systems. Before that, CDNS integrated its chip and system design tools with NVIDIA’s accelerated computing to power agentic AI solutions that automate design, debugging and complex workflows using physics-driven engines.

Taking a Look at Segments

Core electronic design automation (“EDA”) business (which constitutes Custom IC, Digital IC and Functional Verification businesses) is likely to have gained from demand for the new hardware systems, especially among AI, automotive and high-performance computing clients. Cadence had a strong backlog and expects 2026 to be a record year for the hardware business. Uptake of solutions such as Cerebrus AI Studio, Virtuoso Studio and Spectre is likely to have cushioned the segment’s performance.

The System Design and Analysis division is likely to have gained from the increasing demand for BETA CAE solutions, Millennium M2000 AI Supercomputer, 3D-IC platform, Allegro X and Reality data center digital twin solution.

In February 2026, the company acquired the Design & Engineering division of Hexagon AB, including its MSC Software business. The buyout is expected to aid in accelerating footprint expansion in SDA and gain access to newer opportunities across automotive, aerospace, industrial and physical AI.

Increasing demand for solutions (PCIe, UCIe, SerDes, DDR and HBM) in AI, HPC, automotive, foundry ecosystem buildout and chiplet use cases is likely to have cushioned the performance of the IP business division. It has been witnessing increasing demand for memory IP solutions, including LPDDR6 memory IP.

Earnings Whispers for CDNS

Our proven model does not predict an earnings beat for Cadence this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

CDNS currently has a Zacks Rank #4 (Sell) and an Earnings ESP of +1.31%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Sandisk Corporation SNDK currently has an Earnings ESP of +2.59% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sandisk is scheduled to report quarterly earnings on April 30. The Zacks Consensus Estimate for SNDK’s to-be-reported quarter’s earnings and revenues is pegged at $13.92 per share and $4.55 billion, respectively. Shares of SNDK have skyrocketed 2,932.1% in the past year.

Monolithic Power Systems MPWR has an Earnings ESP of +0.78% and a Zacks Rank #2 at present. MPWR is scheduled to report quarterly figures on April 30.

The Zacks Consensus Estimate for MPWR’s to-be-reported quarter’s earnings and revenues is pegged at $4.89 per share and $781.1 million, respectively. Shares of MPWR are up 162.1% in the past year.

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