Cadence reported third quarter 2016 revenue of $446 million, compared to revenue of $434 million reported for the same period in 2015. On a GAAP basis, Cadence recognized net income of $65 million, or $0.23 per share on a diluted basis, in the third quarter of 2016, compared to net income of $78 million, or $0.25 per share on a diluted basis, for the same period in 2015.
Using the non-GAAP measure defined below, net income in the third quarter of 2016 was $85 million, or $0.30 per share on a diluted basis, as compared to net income of $89 million, or $0.28 per share on a diluted basis, for the same period in 2015.
"We continued to make progress on our System Design Enablement strategy in the third quarter, which resulted in solid financial results," said Lip-Bu Tan, president and chief executive officer. "Our digital and signoff solutions maintained their momentum with market-shaping customers; five new systems customers, including a major aerospace company, adopted our Palladium® Z1 emulation platform; and we increased our expansion into automotive functional safety verification."
"Our results for the third quarter reflect our relentless focus on innovation and execution," said Geoff Ribar, senior vice president and chief financial officer. "We believe that we are well-positioned for the rest of the year as we continue to execute on our strategic priorities and return capital to shareholders. In the third quarter, we repurchased 9.6 million shares of stock, and we have now repurchased 42.5 million shares for $960 million under the current $1.2 billion program, representing approximately 15 percent of shares outstanding as of July 4, 2015."
CFO Commentary
Commentary on the third quarter 2016 financial results by Geoff Ribar, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.
Business Outlook
For the fourth quarter of 2016, the company expects total revenue in the range of $463 million to $473 million. Fourth quarter GAAP net income per diluted share is expected to be in the range of $0.18 to $0.20. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.32 to $0.34.
For 2016, the company expects total revenue in the range of $1.810 billion to $1.820 billion. On a GAAP basis, net income per diluted share for 2016 is expected to be in the range of $0.74 to $0.76. Using the non-GAAP measure defined below, net income per diluted share for 2016 is expected to be in the range of $1.19 to $1.21.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is included in this release.
Audio Webcast Scheduled
Lip-Bu Tan, president and chief executive officer, and Geoff Ribar, senior vice president and chief financial officer, will host a third quarter 2016 financial results audio webcast today, October 24, 2016, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting October 24, 2016 at 5 p.m. (Pacific) and ending December 16, 2016 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
About Cadence
Cadence enables global electronic design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence® software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.
Cadence, the Cadence logo and Palladium are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
The statements contained above regarding Cadence's third quarter 2016 financial results, as well as the information in the Business Outlook section, are or include forward-looking statements based on current expectations or beliefs and preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control, including, among others: (i) Cadence's ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence's efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence's products; (iv) change in customer demands, including those resulting from consolidation among Cadence's customers and the possibility that the restructurings and other efforts to improve operational efficiency of Cadence's customers could result in delays in purchases of Cadence's products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence's ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the effects of Cadence's efforts to improve operational efficiency in its business, including strategic, customer and supplier relationships, and its ability to retain key employees; (x) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party.
