Cadence Design Systems, Inc. (CDNS)
Cadence Design Systems provides the essential software and hardware tools that engineers use to design the complex microchips found in everything from smartphones to AI servers.
Is Cadence Design Systems, Inc. a good stock for a UK beginner?
The honest version: There's no rating here and nothing for sale. In its favour: Extremely high profit margins typical of software businesses. Worth weighing: High valuation multiples compared to the broader market.
Is this normal for this company?
Each figure against the range this same company has produced recently. Neither end of a range is the good end.
Share price divided by the earnings actually reported over the four most recent quarters. The range is the same calculation at each of this company's last few results, so roughly the past year.
Profit as a share of sales, from the company's own quarterly statements. The range covers the 5 quarters we hold, and the figure shown is its most recent one.
How these ranges are built
Every number here is the company's own reported figure, not a comparison with other companies. The ranges come from this company's own results and its share price. Where it reports in a different currency from the one its shares trade in, the price-to-earnings range is left out rather than mixing the two.
What does Cadence Design Systems, Inc. do?
Think of Cadence as the architect's toolkit for the digital age; they create the sophisticated software that allows companies to map out and test microchips before they are ever physically manufactured. Revenue comes from subscription fees for this software plus the technical support it provides to the world's biggest tech firms. What really moves the needle here is how global demand for artificial intelligence continues to drive the need for ever-more powerful and efficient chip designs.
On our factor screen it looks strongest on growth and quality, and weakest on value.
- !Pays no dividend - the whole return rides on the share price
- ✓Growing - revenue up about 24% over the year
- ✓Very profitable - turns about 24% of sales into profit
- !High P/E of 65 - big growth is already priced in
- ✓Low debt - a sturdier balance sheet
- ✓Strong return on shareholder money (ROE 23%)
- Quality screens high
- Growth screens high
- Value screens low
- Income screens low
Does Cadence Design Systems, Inc. pay a dividend?
No - Cadence Design Systems, Inc. doesn't currently pay a dividend, so the whole return would rest on the share price. Plenty of growing companies reinvest their profits instead of paying them out - neither approach is better or worse, they're just different.
Does Cadence Design Systems, Inc. have more cash or more debt?
It holds about $1.53B in cash against about $2.65B of debt - so it has net debt of about $1.12B. Debt is not automatically a problem - it funds growth - but it has to be serviced and repaid, which matters more when profits wobble.
From the latest reported balance sheet. Cash and debt levels change, and some borrowing is normal - this is context, not a judgment.
What do Cadence Design Systems, Inc.'s numbers mean?
How has it performed?
Growth of £1,000, the worst fall, and year by year
Over about 2 years to 2026-09-11. This is the share price only; any dividends would add to it. And it's the USD return - as a UK investor your actual £ return also moves with the exchange rate. Past performance is not a guide to the future, and it could just as easily have fallen.
How much has Cadence Design Systems, Inc. actually fallen?
Over the last 2 years of daily prices, Cadence Design Systems, Inc. fell as much as −32% from a high to a later low. Falls like this are normal when you own a share.
Past falls are not a forecast - it can fall further, or recover.
How has it done year by year?
Calendar-year total return - the share price with dividends reinvested - from adjusted closing prices. The current year is only part-complete. Past returns are not a guide to the future.
A closer look at the numbers
Ownership, earnings history, where the money goes, and the outlook range
Does the share price tell you if it's cheap or expensive?
Who owns Cadence Design Systems, Inc.?
About 91% of Cadence Design Systems, Inc., or about 91 in every 100 shares, is held by big institutions such as pension and index funds. The rest, roughly 9%, is held by the public and smaller investors.
What this does and doesn't tell you
This is a recent snapshot of the share register, and it moves. We don't read anything into who owns what - a high institutional share is common for any large listed company and is not a signal about it.
Based on beta - how much the price swings versus the whole market. Bumpier isn't bad; it just means a rougher ride, which matters more the sooner you might need the money.
Prices move on results, news and the mood of the whole market - no single headline explains a day, and a quiet week is usually just noise, not a signal.
How much money does Cadence Design Systems, Inc. make?
Revenue and profit by quarter, and how much of each sale turns into profit.
Where does each £100 of Cadence Design Systems, Inc.'s sales go?
A rough split of the latest full-year figures: of every £100 of sales, about £14 covers making the product or service, £62 goes on running costs, tax and interest, and about £24 is left as profit. Margins vary a lot by industry, and one-off items can distort a single year.
When does Cadence Design Systems, Inc. report earnings, and how did recent quarters go?
Cadence Design Systems, Inc. is next scheduled to report on about 2026-10-26 - dates can move, and we don't predict results; this just tells you when to look.
‘Beat’ and ‘missed’ are against what analysts expected, not whether the business is doing well.
| Reported | Expected EPS: The earnings per share analysts expected for the quarter - the average of their forecasts. 'Beating' or 'missing' is measured against this number. | Actual EPS | vs expected |
|---|---|---|---|
| 2026-07-27 | $2.06 | $2.11 | Beat +3% |
| 2026-04-27 | $1.89 | $1.96 | Beat +4% |
| 2026-02-17 | $1.91 | $1.99 | Beat +4% |
| 2025-10-27 | $1.79 | $1.93 | Beat +8% |
| 2025-07-28 | $1.56 | $1.65 | Beat +6% |
| 2025-04-28 | $1.50 | $1.57 | Beat +5% |
Across the last 6 quarters here, Cadence Design Systems, Inc. came in ahead of what analysts expected 6 times. One quarter is noise, not a trend.
See who else reports over the next two weeks →
Where these figures come from
Each quarter a company reports its results against a consensus of analyst forecasts. The figures here are reported versus expected earnings per share from published results; the expectation is that analyst consensus, not our view. Report dates are estimates and can move.
What are the scenarios for Cadence Design Systems, Inc.?
An illustrative range for the year ahead — not a prediction or a price target.
What are the pros, cons and common questions?
The case each way, and the questions people ask
Cadence becomes the industry standard for all next-generation computing architectures.
A major shift in how chips are designed that renders current software less relevant.
What are the pros and cons of Cadence Design Systems, Inc.?
A balance check, not a score or verdict.
- Extremely high profit margins typical of software businesses
- Essential role in the global semiconductor supply chain
- Strong recurring revenue from subscription models
- High valuation multiples compared to the broader market
- No dividend payments for those seeking regular income
- Heavy reliance on the cyclical: A business whose sales and profits rise and fall with the wider economy - booming in good times, sinking in downturns. Miners, carmakers and banks are classic examples. semiconductor industry
- Potential for a slowdown in global tech capital expenditure
- Intellectual property theft or security breaches
- Rapid technological shifts that could disrupt existing software tools
The write-up's own warning lights — if these start happening, the case above changes.
- A sustained decline in semiconductor industry research and development spending
- The emergence of a dominant, lower-cost open-source alternative for chip design
Common questions about Cadence Design Systems, Inc.
Does Cadence Design Systems, Inc. pay a dividend?
No - Cadence Design Systems, Inc. does not currently pay a dividend, so the return would rest on the share price. Many growing companies reinvest profits instead of paying them out.
When does Cadence Design Systems, Inc. report earnings next?
Cadence Design Systems, Inc. is next scheduled to report results on about 2026-10-26. Report dates are estimates and can move; this is a diary note for when to look, not a forecast of the outcome.
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This plain-English summary was auto-generated on 2026-08-02 from public data and checked for an education-only, no-advice tone (the figures above carry their own, usually fresher, 'as of' date). It's information, never a recommendation.