SAN JOSE, Calif. — (BUSINESS WIRE) — February 12, 2023 — Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the fourth quarter and fiscal year 2022.
Cadence reported 2022 revenue of $3.562 billion, compared to revenue of $2.988 billion for 2021. On a GAAP basis, Cadence achieved operating margin of 30 percent and recognized net income of $849 million, or $3.09 per share on a diluted basis, in 2022, compared to operating margin of 26 percent and net income of $696 million, or $2.50 per share on a diluted basis for 2021. Revenue for the fourth quarter of 2022 totaled $900 million, compared to revenue of $773 million for the same period in 2021. Cadence achieved operating margin of 23 percent and recognized net income of $240 million, or $0.88 per share on a diluted basis, in the fourth quarter of 2022, compared to operating margin of 25 percent and net income of $177 million, or $0.63 per share on a diluted basis, for the same period in 2021.
Using the non-GAAP measures defined below, operating margin for 2022 was 40 percent and net income was $1.173 billion, or $4.27 per share on a diluted basis, compared to operating margin of 37 percent and net income of $918 million, or $3.29 per share on a diluted basis, for the same period in 2021. For the fourth quarter of 2022, operating margin was 36 percent and net income was $262 million, or $0.96 per share on a diluted basis, compared to operating margin of 36 percent and net income of $227 million, or $0.82 per share on a diluted basis, for the same period in 2021.
“Cadence delivered record results for 2022 driven by our innovative solutions and strong execution to our Intelligent System Design™ strategy,” said Anirudh Devgan, president and chief executive officer. “I remain confident in the long-term secular mega-trends that continue to fuel robust design activity across semi and system companies. As we start off 2023, I’m excited about our momentum and look forward to driving further innovation and customer success.”
“We delivered another year of strong financial results,” said John Wall, senior vice president and chief financial officer. “I am pleased that we exceeded all key operating metrics for 2022, and look forward to building on that strength in 2023.”
CFO Commentary
Commentary on the fourth quarter and fiscal year 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 first quarter of 2023, the company expects total revenue in the range of $1.00 billion to $1.02 billion. First quarter GAAP operating margin is expected to be in the range of 31 percent to 32 percent and GAAP net income per diluted share is expected to be in the range of $0.84 to $0.88. Using the non-GAAP measures defined below, operating margin is expected to be in the range of 41 percent to 42 percent and net income per diluted share is expected to be in the range of $1.23 to $1.27.
For fiscal year 2023, the company expects total revenue in the range of $4.00 billion to $4.06 billion. On a GAAP basis, operating margin for 2023 is expected to be in the range of 30.5 percent to 32.0 percent and GAAP net income per diluted share for 2023 is expected to be in the range of $3.24 to $3.34. Using the non-GAAP measures defined below, operating margin for 2023 is expected to be in the range of 40.5 percent to 42.0 percent and net income per diluted share for 2023 is expected to be in the range of $4.90 to $5.00.
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 press release.
Audio Webcast Scheduled
Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the fourth quarter and fiscal year 2022 financial results audio webcast today, February 13, 2023, 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 February 13, 2023 at 5 p.m. (Pacific) and ending March 17, 2023 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.
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This press release contains forward-looking statements, including Cadence's outlook on future operating results, strategic objectives, business prospects, technology and product developments, industry trends and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, 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, geopolitical 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, businesses 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 or to which Cadence or its products, services or properties are subject; 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 repurchases of its common stock are 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, including its most recent reports on Form 10-K and Form 10-Q and future filings.
