Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence’s current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning June 17, 2022, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute Cadence’s current expectations. During the Quiet Period, the business outlook in these documents should be considered historical, speaking as of prior to the Quiet Period only and not subject to any update by Cadence. During the Quiet Period, Cadence’s representatives will not comment on Cadence’s business outlook, financial results or expectations. The Quiet Period will extend until Cadence’s second quarter 2022 earnings release is published, which is currently scheduled for July 25, 2022.

Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
April 2, 2022 and January 1, 2022
(In thousands)
(Unaudited)
		April 2, 2022			January 1, 2022
Current assets:
Cash and cash equivalents		$	1,134,752		$	1,088,940
Receivables, net			361,789			337,596
Inventories			110,213			115,721
Prepaid expenses and other			128,143			173,512
Total current assets			1,734,897			1,715,769
Property, plant and equipment, net			310,690			305,911
Goodwill			923,719			928,358
Acquired intangibles, net			219,110			233,265
Deferred taxes			787,111			763,770
Other assets			419,540			439,226
Total assets		$	4,395,067		$	4,386,299
Current liabilities:
Accounts payable and accrued liabilities		$	360,547		$	417,283
Current portion of deferred revenue			600,279			553,942
Total current liabilities			960,826			971,225
Long-term liabilities:
Long-term portion of deferred revenue			106,838			101,148
Long-term debt			347,792			347,588
Other long-term liabilities			219,428			225,663
Total long-term liabilities			674,058			674,399
Stockholders' equity			2,760,183			2,740,675
Total liabilities and stockholders' equity		$	4,395,067		$	4,386,299

Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three Months Ended April 2, 2022 and April 3, 2021
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended
		April 2, 2022				April 3, 2021
Revenue:
Product and maintenance		$	846,244			$	699,054
Services			55,522				36,974
Total revenue			901,766				736,028
Costs and expenses:
Cost of product and maintenance			72,795				64,906
Cost of services			25,048				19,061
Marketing and sales			140,186				132,826
Research and development			290,895				270,992
General and administrative			48,937				39,952
Amortization of acquired intangibles			4,964				4,631
Restructuring			12				(277	)
Total costs and expenses			582,837				532,091
Income from operations			318,929				203,937
Interest expense			(4,108	)			(4,217	)
Other income (expense), net			(4,900	)			2,701
Income before provision for income taxes			309,921				202,421
Provision for income taxes			74,586				15,252
Net income		$	235,335			$	187,169
Net income per share - basic		$	0.86			$	0.68
Net income per share - diluted		$	0.85			$	0.67
Weighted average common shares outstanding - basic			272,431				274,021
Weighted average common shares outstanding - diluted			276,918				280,140

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended April 2, 2022 and April 3, 2021
(In thousands)
(Unaudited)
		Three Months Ended
		April 2,				April 3,
			2022				2021
Cash and cash equivalents at beginning of period		$	1,088,940			$	928,432
Cash flows from operating activities:
Net income			235,335				187,169
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			34,825				36,218
Amortization of debt discount and fees			268				264
Stock-based compensation			59,469				52,596
(Gain) loss on investments, net			2,038				(1,433	)
Deferred income taxes			(24,920	)			2,710
Provisions for losses (recoveries) on receivables			(344	)			77
ROU asset amortization and change in operating lease liabilities			926				(2,136	)
Other non-cash items			88				302
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables			(28,426	)			(45,927	)
Inventories			4,580				(669	)
Prepaid expenses and other			44,419				(3,014	)
Other assets			11,588				6,260
Accounts payable and accrued liabilities			(58,203	)			(80,769	)
Deferred revenue			56,225				59,166
Other long-term liabilities			(1,260	)			(2,372	)
Net cash provided by operating activities			336,608				208,442
Cash flows from investing activities:
Purchases of non-marketable investments			(1,000	)			-
Purchases of property, plant and equipment			(18,130	)			(16,968	)
Purchases of intangible assets			(750	)			-
Cash paid in business combinations, net of cash acquired			-				(189,262	)
Net cash used for investing activities			(19,880	)			(206,230	)
Cash flows from financing activities:
Proceeds from issuance of common stock			45,673				46,384
Stock received for payment of employee taxes on vesting of restricted stock			(56,343	)			(56,385	)
Payments for repurchases of common stock			(250,016	)			(172,267	)
Net cash used for financing activities			(260,686	)			(182,268	)
Effect of exchange rate changes on cash and cash equivalents			(10,230	)			(5,395	)
Increase (decrease) in cash and cash equivalents			45,812				(185,451	)
Cash and cash equivalents at end of period		$	1,134,752			$	742,981

Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
			2021											2022
GEOGRAPHY			Q1		Q2		Q3		Q4		Year			Q1
Americas			46%		44%		46%		43%		45%			47%
China			12%		14%		13%		12%		13%			16%
Other Asia			18%		19%		18%		21%		19%			18%
Europe, Middle East and Africa			18%		17%		17%		18%		17%			14%
Japan			6%		6%		6%		6%		6%			5%
Total			100%		100%		100%		100%		100%			100%
Revenue Mix by Product Category (% of Total Revenue)
			2021											2022
PRODUCT CATEGORY			Q1		Q2		Q3		Q4		Year			Q1
Custom IC Design and Simulation			23%		23%		23%		24%		23%			22%
Digital IC Design and Signoff			27%		28%		29%		29%		29%			27%
Functional Verification, including Emulation and Prototyping Hardware			26%		25%		23%		21%		24%			28%
IP			14%		13%		14%		14%		13%			13%
System Design and Analysis			10%		11%		11%		12%		11%			10%
Total			100%		100%		100%		100%		100%			100%

Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Operating Margin
As of April 25, 2022
(Unaudited)
	Three Months Ending		Year Ending
	July 2, 2022		December 31, 2022
	Forecast		Forecast
GAAP operating margin as a percent of total revenue	29% - 30%		28.5% - 30%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Stock-based compensation expense	8%		8%
Amortization of acquired intangibles	2%		2%
Acquisition and integration-related costs	0%		0%
Non-qualified deferred compensation credits	0%		0%
Non-GAAP operating margin as a percent of total revenue�nbsp;	39% - 40%		38.5% - 40%

�nbsp;

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
As of April 25, 2022
(Unaudited)
		Three Months Ending		Year Ending
		July 2, 2022		December 31, 2022
		Forecast		Forecast
Diluted net income per share on a GAAP basis		$0.59 to $0.63		$2.51 to $2.59
	Stock-based compensation expense	0.23		0.98
	Amortization of acquired intangibles	0.05		0.19
	Acquisition and integration-related costs	0.01		0.03
	Non-qualified deferred compensation credits	-		(0.01)
	Other income or expense related to investments and non-qualified deferred compensation plan assets*	-		0.02
	Income tax effect of non-GAAP adjustments	0.07		0.17
Diluted net income per share on a non-GAAP basis�nbsp;		$0.95 to $0.99		$3.89 to $3.97
Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Net Income
As of April 25, 2022
(Unaudited)
		Three Months Ending		Year Ending
		July 2, 2022		December 31, 2022
($ in millions)		Forecast		Forecast
Net income on a GAAP basis		$164 to $175		$697 to $719
	Stock-based compensation expense	64		272
	Amortization of acquired intangibles	15		52
	Acquisition and integration-related costs	1		8
	Non-qualified deferred compensation credits	-		(3)
	Other income or expense related to investments and non-qualified deferred compensation plan assets*	-		5
	Income tax effect of non-GAAP adjustments	19		49
Net income on a non-GAAP basis�nbsp;		$263 to $274		$1,080 to $1,102

�nbsp;	The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
*	Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

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