Cadence raises annual forecasts as demand booms for AI chip design

• Demand has risen sharply for Cadence's software as chipmakers and technology companies develop increasingly sophisticated systems-on-chip (SoCs) and AI accelerators.
• Its customers include AI-chip leader Nvidia and iPhone-maker Apple.
• Cadence now expects 2026 revenue to be between $6.26 billion and $6.34 billion, up from its prior projection of $6.13 billion to $6.23 billion.
• On average, analysts were expecting annual revenue of $6.21 billion, according to data compiled by LSEG.
• Annual adjusted profit is expected to be between $8.05 and $8.15 per share, up from its previous forecast of $7.85 to $7.95 and above estimates of $7.96.
• Earlier in the month, Cadence launched an AI "super agent" called AuraStack that lets engineers describe their goals in plain language and then plans and carries out the work using the company's existing software tools to lay out and virtually test circuit designs.
• Cadence's second-quarter revenue rose 24.2% to $1.584 billion, largely in line with estimates. Adjusted profit came in at $2.11 per share, compared with estimates of $2.05.
• Quarter-end backlog stood at $8.1 billion, with $4.2 billion expected to be recognized as revenue within the next 12 months.

July 27 (Reuters) - Cadence Design Systems raised its annual revenue and profit forecasts on Monday, banking on robust demand for its AI-powered chip and system design software.

Shares of the company rose more than 5% in extended trading.

The company's electronic design automation (EDA) tools are used to design and validate semiconductors and electronic systems.