Cadence Design Systems (CDNS 5.47%) stock is moving higher in Tuesday's trading following the company's first-quarter report. The tech specialist's share price was up 5.1% as of 2:15 p.m. ET.

Cadence published its Q1 results after the market closed yesterday and posted earnings that came in ahead of Wall Street's target. The company also raised its full-year performance guidance.

Cadence stock rises on Q1 profit beat

Cadence posted non-GAAP (adjusted) earnings per share of $1.57 on sales of $1.24 billion in the first quarter. The company's revenue was up roughly 23% year over year and was in line with the average analyst estimate. Meanwhile, the business beat Wall Street's earnings target by $0.07 per share and reported an adjusted operating income margin of 41.7% -- up from 37.8% in last year's quarter. Pricing increases and a negligible increase for cost of services helped power the improvement. Cadence closed out the period with $6.4 billion in remaining performance obligations, with expectations that $3.2 billion of that will be recorded as revenue within the next year.

What's next for Cadence Design Systems?

For this year, Cadence is guiding for sales between $5.15 billion and $5.23 billion. The midpoint of the guidance range was in line with Wall Street's target for sales of $5.19 billion in the period.

On the other hand, the company's adjusted earnings target was significantly better than the average analyst forecast. Management is guiding for per-share earnings for the year to be between $6.73 and $6.83 -- coming in significantly better than the average analyst estimate's call for adjusted earnings of $6.72 per share for the year. The company also guided for an adjusted operating income margin between 43.25% and 44.25% -- suggesting a significant improvement over the margin of 42.5% it posted last year.

Prior to Cadence's Q1 report, the company had guided for adjusted earnings per share between $6.65 and $6.75 this year on sales between $5.14 billion and $5.22 billion. Demand is holding strong even in the face of some macroeconomic uncertainty, and the business's better-than-expected margin performance and forward earnings outlook suggests that a sustained margin improvement may have been achieved head of schedule.