Cadence Q4 Revenue Jumps 6% to $1.44B; 2026 Guidance at $5.95B
Q4 revenue grew 6% to $1.44 billion and adjusted EPS rose 6% to $1.99, topping estimates; operating margin expanded 310 basis points and free cash flow jumped 42%. 2026 guidance calls for $5.95 billion revenue and $8.10 EPS, backed by a record $7.8 billion backlog and surging AI tool demand.
1. Q4 Financial Highlights
Cadence reported Q4 revenue of $1.44 billion, a 6% year-over-year increase, and adjusted EPS of $1.99, also up 6%, both exceeding consensus. Operating margin expanded by 310 basis points and free cash flow jumped 42%, underscoring robust profitability improvements.
2. 2026 Guidance and Backlog
For 2026, Cadence forecasts revenue of $5.95 billion and adjusted EPS of $8.10, largely supported by a record $7.8 billion backlog. Approximately two-thirds of projected revenue is already secured in backlog, with nearly half extending beyond 2026, providing multi-year visibility.
3. AI Product Adoption and Impact
Demand for Cadence’s AI-enabled design tools accelerated sharply, with customers deploying ChipStack AI Super Agent and Cerebrus to boost productivity up to 12%. The firm’s AI solutions aim to enhance power-performance-area optimization and automate chip design workflows, strengthening its value proposition in the EDA market.