SAN JOSE, Calif. — (BUSINESS WIRE) — April 24, 2022 — Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the first quarter of 2022.
Cadence reported first quarter 2022 revenue of $902 million, compared to revenue of $736 million for the same period in 2021. On a GAAP basis, Cadence achieved operating margin of 35 percent and recognized net income of $235 million, or $0.85 per share on a diluted basis, in the first quarter of 2022, compared to operating margin of 28 percent and net income of $187 million, or $0.67 per share on a diluted basis, for the same period in 2021.
Using the non-GAAP measures defined below, operating margin for the first quarter of 2022 was 44 percent and net income was $324 million, or $1.17 per share on a diluted basis, compared to operating margin of 38 percent and net income of $231 million, or $0.83 per share on a diluted basis, for the same period in 2021.
“Q1 was a strong start of the year for Cadence, as we delivered outstanding results driven by broad-based strength across our diverse product portfolio,” said Anirudh Devgan, president and chief executive officer. “Our Intelligent System Design strategy aligns well with the generational secular trends that are fueling robust design activity, and our innovative solutions are accelerating growth in both our core and our new systems businesses across a rapidly expanding customer base.”
“Q1 results reflect the success we have with our customers and partners, as well as the solid execution from the Cadence team. We benefited from strong demand for our technologies,” said John Wall, senior vice president and chief financial officer. “We exceeded all key operating metrics for the quarter and are raising our full year guidance.”
CFO Commentary
Commentary on the first quarter 2022 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.
Business Outlook
For the second quarter of 2022, the company expects total revenue in the range of $825 million to $845 million. Second quarter GAAP operating margin is expected to be in the range of 29 percent to 30 percent and GAAP net income per diluted share is expected to be in the range of $0.59 to $0.63. Using the non-GAAP measures defined below, operating margin is expected to be in the range of 39 percent to 40 percent and net income per diluted share is expected to be in the range of $0.95 to $0.99.
For fiscal year 2022, the company expects total revenue in the range of $3.395 billion to $3.435 billion. On a GAAP basis, operating margin is expected to be in the range of 28.5 percent to 30 percent and GAAP net income per diluted share for 2022 is expected to be in the range of $2.51 to $2.59. Using the non-GAAP measures defined below, operating margin for 2022 is expected to be in the range of 38.5 percent to 40 percent and net income per diluted share for 2022 is expected to be in the range of $3.89 to $3.97.
The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use this normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.
A schedule showing reconciliations of the business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, is included in this release.
Audio Webcast Scheduled
Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the first quarter 2022 financial results audio webcast today, April 25, 2022, 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 April 25, 2022 at 5 p.m. (Pacific) and ending June 17, 2022 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
About Cadence
Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence customers are the world’s most innovative companies, delivering extraordinary products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For eight years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.
© 2022 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
This document includes forward-looking statements which are based on current expectations and preliminary assumptions 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 highly competitive industries in which it operates; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) change in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence's products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates and Cadence’s ability to access capital and debt markets; (vii) the acquisition of other companies or technologies or the failure to successfully integrate and operate them; (viii) events that affect cash flow, liquidity, or reserves, or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (ix) the effects of any litigation, regulatory or other proceedings to which Cadence is or may become a party; and (x) the duration, severity, volatility and effects of the COVID-19 pandemic and containment measures on Cadence, its employees, and its suppliers and customers, which may also have the effect of heightening the other risks described in this paragraph. In addition, the timing and amount of Cadence's repurchase of its common stock under the authorizations will be subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.
For a detailed discussion of these and other cautionary statements related to Cadence’s business, please refer to Cadence’s filings with the U.S. Securities and Exchange Commission, which include Cadence’s most recent reports on Form 10-K and Form 10-Q, including Cadence’s future filings.
GAAP to Non-GAAP Reconciliation
Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance.
