Cadence Design Systems Inc (NASDAQ:CDNS) shares are climbing on Monday. The stock is seeing increased attention ahead of the company's first‑quarter earnings release after the bell.
- Cadence Design Systems stock is moving in positive territory. What’s driving CDNS shares up?
What To Expect From CDNS Today
Wall Street is looking for $1.81 in EPS on $1.45 billion in revenue for the first quarter. The buying ahead of the release suggests traders expect Cadence to outperform those numbers, leaning on the company's strong finish to 2025 and upbeat guidance for fiscal 2026.
Cadence's fourth‑quarter results showed the company entering the new fiscal year with solid momentum. Revenue grew to $1.44 billion, up from $1.356 billion a year earlier. Non‑GAAP EPS rose to $1.99, and margins remained strong, with a 45.8% non‑GAAP operating margin, essentially unchanged from the prior year.
Cadence ended the year with a $7.8 billion backlog, the largest in its history. Of that, $3.8 billion was expected to convert into revenue over the next 12 months. A backlog of that size can give investors confidence heading into earnings because it reduces the risk of a revenue miss and provides a clearer line of sight into future growth.
Management highlighted that 2025 closed with more than 14% revenue growth and 20% non‑GAAP EPS growth, driven by strong demand for Cadence's expanding suite of AI‑enabled design tools.
Fiscal 2026 Outlook Was Already Ahead Of Expectations
Cadence guided for $5.9 billion to $6.0 billion in revenue for fiscal 2026 and $8.05 to $8.15 in non‑GAAP EPS. Operating margins are expected to expand again, reaching 44.75% to 45.75%.
Double‑digit revenue growth paired with margin expansion gives Cadence meaningful earnings leverage, which is another reason traders are optimistic heading into the first-quarter report.
CDNS Shares Are Rising Monday
CDNS Price Action: Cadence shares were up 0.88% at $335.81 at the time of publication on Monday, according to Benzinga Pro.
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