Global electronic design automation firm Cadence Design (CDNS.US) announced its financial results for the fourth quarter and full year of fiscal 2025 after the market close on February 17, 2026, Eastern Time. Driven by the artificial intelligence (AI)-fueled chip design wave, the company's performance comprehensively exceeded market expectations. Fourth-quarter revenue reached $1.44 billion, a 6.2% year-over-year increase, slightly surpassing the analyst consensus of $1.42 billion. In terms of profitability, the company's Non-GAAP earnings per share (EPS) reached $1.99, outperforming the market expectation of $1.91 and demonstrating strong business resilience.
For the full 2025 fiscal year, Cadence delivered a solid growth performance. Total annual revenue reached $5.297 billion, a significant increase of over 14% compared to $4.641 billion in fiscal 2024. Non-GAAP EPS also rose from $5.97 the previous year to $7.14, representing an approximate 20% year-over-year increase.
Notably, the company's backlog climbed to a record $7.8 billion at the end of the fourth quarter. This not only reflects robust market demand for electronic design automation (EDA) tools and IP business but also lays a solid foundation for earnings certainty in 2026.
Regarding growth drivers, AI, high-performance computing (HPC), and automotive electronics have become the core engines for the company's expansion. Its Intellectual Property (IP) business recorded strong growth of nearly 25% in fiscal 2025, primarily driven by demand for advanced physical IP from AI chip accelerators and large-scale data centers.
The company's Chief Executive Officer, Anirudh Devgan, highlighted that AI-driven design flows introduced by the company, such as the ChipStack AI Super Agent, are significantly enhancing customer productivity. This helps Cadence maintain a leading position in market share competition against rivals like Synopsys.
Looking ahead, Cadence management expressed optimism for fiscal 2026 performance and provided guidance exceeding market expectations. The company anticipates fiscal 2026 revenue to be in the range of $5.9 billion to $6.0 billion. The Non-GAAP operating margin is expected to remain high, projected between 44.75% and 45.75%.
Furthermore, based on strong cash flow performance, the company plans to use approximately 50% of its free cash flow for share repurchases in 2026, aiming to consistently return value to shareholders and demonstrate confidence in long-term development.