Cadence Design Systems (CDNS) saw its stock price surge 7.86% in after-hours trading on Monday following the release of its second-quarter earnings report, which exceeded analyst expectations and prompted the company to raise its full-year guidance.

The chip design software provider reported Q2 revenue of $1.275 billion, surpassing the consensus estimate of $1.25 billion. Adjusted earnings per share (EPS) came in at $1.65, beating the expected $1.55. This represents a significant year-over-year growth of 20% in revenue and 28.91% in adjusted EPS.

Buoyed by its strong performance, Cadence raised its fiscal year 2025 outlook. The company now expects revenue between $5.21 billion and $5.27 billion, up from its previous forecast of $5.15 billion to $5.23 billion. The adjusted EPS guidance was also increased to a range of $6.85 to $6.95, compared to the earlier projection of $6.73 to $6.83.

Additionally, Cadence announced the resolution of regulatory issues with U.S. authorities regarding export law violations. The company agreed to pay over $140 million to settle the matter, which involved unauthorized sales to a Chinese customer between 2015 and 2021. Despite this one-time charge, investors seemed to focus on the strong financial results and positive outlook, as reflected in the stock's after-hours jump.