Cadence Design Systems Gains After Q2 Results Exceed Expectations, Raised FY22 Outlook

Cadence Design Systems Gains After Q2 Results Exceed Expectations, Raised FY22 Outlook
  • Cadence Design Systems Inc CDNS reported second-quarter sales growth of 17.8% year-over-year to 857.52 million, beating the consensus of $836.89 million.
  • Adjusted EPS improved to $1.08 from $0.86 in 2Q21, above the consensus of $0.96.
  • The operating income increased by 52.6% Y/Y to $282.89 million, and the margin expanded by 753 bps to 33%.
  • The adjusted operating margin was 42% versus 39% in 2Q21.
  • CDNS' net cash provided by operating activities year-to-date was $661.15 million, compared to $588.82 million a year ago.
  • 3Q22 Outlook: Cadence expects total revenue of $860 million to $880 million, better than the consensus of $847.81 million.
  • It forecasted a GAAP operating margin of 26% to 27% and an adjusted operating margin of 37% to 38%.
  • It expects GAAP net income per diluted share of $0.58 to $0.62 and foresees an adjusted EPS of $0.94 to $0.98, vs. a consensus of $0.93.
  • FY22 Outlook: Cadence expects total revenue of $3.470 billion to $3.510 billion (prior expectation of $3.395 billion to $3.435 billion), vs. a consensus of $3.41 billion.
  • It sees a GAAP operating margin of 29.25% to 30.25% and an adjusted operating margin of 39.25% to 40.25%.
  • It expects GAAP net income per diluted share of $2.59 to $2.65 (prior expectation of $2.51 to $2.59) and an adjusted EPS of $4.06 to $4.12. (prior $3.89 to $3.97), vs. a consensus of $3.92.
  • Price Action: CDNS shares are trading higher by 4.32% at $174.90 during the post-market session on Monday.

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