Abstract

Cadence Design Systems is scheduled to report on February 17, 2026 Post Market; this preview distills consensus expectations for revenue, margins, net profit, and adjusted EPS, highlights segment dynamics, and synthesizes prevailing institutional views heading into the release.

Market Forecast

Based on consolidated forecasts derived from the company’s prior report, Cadence Design Systems’ current quarter revenue is expected to be 1.42 billion USD, up 5.79% year over year, with adjusted EPS of 1.91, up 5.13% year over year, and EBIT of 0.64 billion USD, up 4.12% year over year. Forecasts for gross profit margin and net profit margin are not provided; last quarter’s gross profit margin was 86.39% and net profit margin was 21.45%.

The main business in product and maintenance is projected to retain momentum, supported by license renewals, ongoing deployments, and a consistent maintenance base. The most promising contributor in the near term remains product and maintenance with last quarter revenue of 1.21 billion USD, reflecting the core cash-generation engine underpinning quarterly performance.

Last Quarter Review

Cadence Design Systems reported revenue of 1.34 billion USD in the previous quarter, with a gross profit margin of 86.39%, GAAP net profit attributable to the parent company of 0.29 billion USD, a net profit margin of 21.45%, and adjusted EPS of 1.93, up 17.68% year over year. Net profit accelerated on a quarter-on-quarter basis by 79.39%, reflecting favorable mix and operating leverage along with timing of larger deals.

Main business highlights showed product and maintenance revenue at 1.21 billion USD and services revenue at 0.13 billion USD; the company’s total revenue grew 10.15% year over year, indicating healthy demand alongside solid maintenance renewals and services activity.

Current Quarter Outlook

Core Software and Maintenance

Product and maintenance constitute the core performance driver this quarter, anchored by subscription and time-based licenses that generate predictable maintenance streams. The forecasted revenue trajectory of 1.42 billion USD and adjusted EPS of 1.91 embeds a mix of ongoing renewals and incremental licenses attached to newer design flows, which typically help sustain high gross margins. The company’s ability to convert larger enterprise agreements and broaden license scope across existing accounts will be closely watched, as deal timing can influence quarterly pacing even when the annual pipeline remains intact.

Within this core, upsell potential often comes from expanding tool coverage across more projects and nodes, cross-selling additional engines into broader design flows, and progressively upgrading configurations to higher performance tiers. These activities can lift average selling prices and deepen wallet share within accounts, thereby reinforcing gross margin resilience. The cadence of releases and feature enhancements, along with integration across front-end, verification, and physical implementation flows, has historically supported maintenance retention and upgrade cycles, providing resilience against one-off timing noise. As such, quarterly delivery will hinge on how effectively the organization lands incremental license expansions while keeping renewal rates stable, all within the quarter’s limited selling window.

Services and Solution Expansion

Services contribute a complementary revenue stream and are tied to implementation assistance, customization support, and solution deployments across complex projects. The most recent quarter showed services revenue at 0.13 billion USD, which indicates steady engagement levels with customers who seek guidance on methodology, flow optimization, and project execution. While services typically carry lower margins than software licenses, they can accelerate the adoption of new capabilities and facilitate customer success, indirectly supporting broader license growth over multi-quarter horizons.

The services pipeline for this quarter is likely to be influenced by the timing and complexity of engagements, which depend on customer project milestones. Strong delivery on larger service engagements can enhance customer satisfaction, potentially leading to broader license adoption and longer-term maintenance commitments. The balance between services and product revenue is important for the quarter’s mix, but the absolute services contribution is unlikely to overshadow the software base; instead, it adds incremental visibility and stabilizes relationships around multi-year rollouts. A supportive services backdrop aids the translation of license intent into active use across teams, establishing foundations for follow-on expansions and strengthening quarterly execution consistency.

Stock Price Drivers and Operating Levers

Stock performance around the release will be sensitive to revenue, adjusted EPS, and EBIT outcomes relative to forecast benchmarks of 1.42 billion USD, 1.91, and 0.64 billion USD, respectively. Investors will compare delivered margins to last quarter’s elevated gross profit margin of 86.39% and net profit margin of 21.45% to gauge mix quality and operational discipline. Because deal timing can cause swings in quarterly reported numbers, clarity on backlog conversion, renewal cadence, and the dispersion of larger agreements will be instrumental for reading through near-term volatility.

Operating expenses and efficiency actions will also be scrutinized, given their leverage on adjusted EPS when license momentum is stable. Visibility into share count dynamics and tax rate assumptions may affect per-share outcomes against the 1.91 forecast, especially in a tight consensus range. Commentary on the quarterly pacing of deployments and the durability of high-value licenses will influence short-term sentiment, as the market weighs whether current momentum can translate into subsequent quarters without significant fluctuations. Any indications about the stability of maintenance streams and the depth of pipeline for expansions will matter for the forward view, providing context for the EBIT growth path of 4.12% year over year embedded in estimates.

Analyst Opinions

Bullish opinions outnumber bearish views among recent institutional commentary within the allowed window, with notable reiterations of positive ratings. On February 02, 2026, Wolfe Research maintained an Outperform rating while adjusting its price target to 340 USD, signaling constructive stance on execution and earnings power alongside a recalibration of valuation given recent market dynamics. On January 15, 2026, BNP Paribas Exane maintained an Outperform rating and adjusted its price target to 380 USD, reflecting confidence in near-term delivery and incremental license growth underpinning revenue and adjusted EPS trajectories.

Across these recent notes, the prevailing theme emphasizes healthy fundamentals supported by a durable software base and a framework that can sustain high margins in the near term. The average rating indicated in aggregated surveys during this period is skewed toward overweight, and mean price targets cited around the mid- to high-300 USD range underscore a constructive medium-term outlook. The majority perspective suggests that current quarter forecasts for revenue at 1.42 billion USD and adjusted EPS at 1.91 appear achievable, with the principal watch items centered on deal timing and margin mix. Analysts highlight that resilient maintenance streams and incremental expansions should help bridge quarter-to-quarter variance, leaving the balance of expectations favorable heading into February 17, 2026 Post Market. The aggregate bullish stance rests on confidence in pipeline conversion, operational discipline supporting adjusted EPS, and continued visibility on high-value license activity, making the majority view supportive of near-term performance relative to consensus benchmarks.