CADENCE DESIGN SYSTEMS INC(CDNS)Stock Analysis
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Rank #161 of 2,879 stocksTOP 10%
Rankings refresh quarterly once 80% of peers have filed (~45 days after quarter-end). Next update: ~Aug 14, 2026.
Revenue Growth
Profitability
Balance Sheet
Earnings Quality
Free Cash Flow
Institutional Flow
Revenue Scale
Dilution Risk
CDNS Stock Analysis & AI Quality Score
AI stock analysis and institutional research for CADENCE DESIGN SYSTEMS INC (CDNS), a Technology sector company. 13F Pro's AI-powered ranking engine scores CDNS at 74.4/100 on a 32-signal composite quality model, placing it at rank #161 of 2,879 stocks — the top 10% of the AI-ranked universe. CDNS scores in the top quartile across balance sheet strength (87.3), free cash flow (83.2), profitability (80.0). Shareholder dilution risk is elevated at 18.7/100, reflecting ongoing share issuance or stock-based compensation. Based on the latest XBRL financial filings (Q1 2026), CADENCE DESIGN SYSTEMS INC reports quarterly revenue of $1.5B, net income of $335.7M, an operating margin of 29.3%. Top institutional holders of CDNS by reported 13-F value include BlackRock,, VANGUARD CAPITAL MANAGEMENT, STATE STREET, based on the most recent SEC filings. CDNS trades on the Nasdaq exchange and files with the SEC under CIK 813672. 13F Pro's AI research platform runs 10 specialized AI analysts — value, growth, momentum, macro, and activist specialists — that debate CDNS daily and publish AI-generated analysis with cited SEC sources. The platform aggregates historical XBRL financial facts, 10-Q and 10-K filings, insider Form 4 transactions, and institutional 13-F holdings for CADENCE DESIGN SYSTEMS INC directly from SEC EDGAR. CADENCE DESIGN SYSTEMS INC's 13F Pro composite quality score has ranged between 8 and 82 since 2021, currently 74.4 — a declining long-term trajectory across 56 quarterly and live scoring snapshots.
What's Driving CDNS's Business? Latest 10-Q Breakdown
✓ 23/23 datapoints verifiedAI-extracted from CADENCE DESIGN SYSTEMS INC's 10-Q filed 2026-05-01 — Q1 FY2026 (quarter ended March 31, 2026). Every figure is machine-verified against the filing text on SEC EDGAR.
Q1 revenue reached $1,474M (+19% YoY), driven by strong software and hardware demand, while Cadence completed the $2.9B Hexagon D&E acquisition to expand System Design and Analysis offerings.
Biggest Revenue Drivers
Total revenue: $1,474.2M+19% YoY
Growth from software and hardware product offerings due to existing customers' continued investment in complex designs.
Fluctuates based on timing of fulfillment of services and IP performance obligations.
Largest Expense Items
Increased salary, benefits, stock-based compensation, and facilities costs from continued investment in talent and headcount from acquisitions.
Increased salary and stock-based compensation for technical sales support, offset by lower marketing program spending.
Increased professional services for acquisition-related activities and higher stock-based compensation for senior management.
Higher hardware product costs from increased installations, plus increased amortization of intangibles from Hexagon acquisition.
Margins: Operating margin remained flat at 29% despite acquisition-related expenses and elevated intangible amortization. The company maintained expense discipline while investing in R&D and sales talent, with cost of revenue growing faster than overall revenue due to hardware product mix and acquisition intangible amortization.
Watch Items from the Filing
- Hexagon D&E acquisition integration: $2.9B purchase (including $902M in stock issuance) completed Feb 2026 with preliminary purchase accounting; measurement period extends to Feb 2027 with potential material allocation changes.
- China revenue concentration: China represented 13% of Q1 FY2026 revenue ($189M, +36% YoY), subject to ongoing U.S. export control regulations with suspension expiring Nov 2026.
- Cash deployment: Cash declined from $3.0B to $1.4B due to $2.1B acquisition spending and $425M revolving credit facility draw; $1.2B remaining share repurchase authorization.
- Recurring revenue declining slightly: Recurring revenue decreased to 77% of total from 82% YoY, driven by higher hardware and up-front SD&A revenue mix from Hexagon acquisition.
- No customer concentration material risk: No single customer represents ≥10% of revenue in Q1 FY2026 or Q1 FY2025; 79% of cash held in foreign subsidiaries exposed to FX risk.
AI-extracted and verified against SEC EDGAR filing text. Not investment advice.
Revenue
Q1 2026
$1.5B
Net Income
Q1 2026
$335.7M
Free Cash Flow
Q1 2026
$307.0M
Operating Margin
Q1 2026
29.3%
Revenue & Net Income
Earnings Per Share
Key Financials Over Time
Export Financial Table · Pro+Revenue
+14.1% YoYNet Income
+5.1% YoYOperating Income
+10.5% YoYEPS (Diluted)
+5.5% YoYTotal Assets
+13.1% YoYOp. Cash Flow
+37.1% YoY| Metric | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
|---|---|---|---|---|---|---|
| Revenue | $5.30B +14.1% | $4.64B +13.5% | $4.09B +14.8% | $3.56B +19.2% | $2.99B +11.4% | $2.68B |
| Net Income | $1.11B +5.1% | $1.06B +1.4% | $1.04B +22.6% | $849.0M +22.0% | $696.0M +17.8% | $590.6M |
| Operating Income | $1.49B +10.5% | $1.35B +8.0% | $1.25B +16.5% | $1.07B +37.8% | $779.1M +20.7% | $645.6M |
| EPS (Diluted) | $4.06 +5.5% | $3.85 +0.8% | $3.82 +23.6% | $3.09 +23.6% | $2.50 +18.5% | $2.11 |
| Total Assets | $10.15B +13.1% | $8.97B +58.3% | $5.67B +10.4% | $5.14B +17.1% | $4.39B +11.0% | $3.95B |
| Operating Cash Flow | $1.73B +37.1% | $1.26B -6.6% | $1.35B +8.6% | $1.24B +12.8% | $1.10B +21.7% | $904.9M |
AI Insight: CDNS Financial Trends
Revenue grew 39% year-over-year to $1.47B in Q1 2026, but operating cash flow declined 27% sequentially as net income and margins soften.
• Revenue grew from $1.06B in Q2 2024 to $1.47B in Q1 2026, a 39% increase over 8 quarters.
• Operating margin compressed to 29.2% in Q1 2026 from 32.1% in Q4 2025, continuing a downtrend from 33.6% peak in Q4 2024.
• Operating cash flow fell to $356M in Q1 2026 from $553M in Q4 2025, the lowest quarterly level since Q2 2024.
⚠ Equity swelled 54% from $4.26B to $6.56B over 8 quarters amid revenue growth of only 39%, signaling potential capital inefficiency.
⚠ Net income volatility: Q2 2025 profit collapsed to $160M before recovering to $388M in Q4 2025, now at $336M in Q1 2026.
AI Insight: CDNS Ratio Trends
Profitability metrics normalizing after Q4 2025 peak, with operating margin and ROIC both declining in Q1 2026.
• Operating margin averaged 29.3% in Q1 2026 vs. 33.7% in Q4 2024, reflecting post-peak normalization after exceptional Q4 performance.
• ROIC fell to 26.3% in Q1 2026 from 33.9% in Q4 2025, the lowest level since Q2 2024 despite remaining elevated historically.
• Net profit margin strengthened to 22.8% in Q1 2026 from 12.6% in Q2 2025, signaling recovery in bottom-line conversion.
⚠ Q2 2025 saw dramatic margin compression (OpMargin 19.0%, ROIC 19.3%) — monitor if cyclical or indicative of operational headwinds.
⚠ Q1 2026 ROE at 20.5%, down 7.9pp from Q4 2025 peak of 28.4%; sustaining mid-20s+ returns is critical.
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Available Research
13F Pro tracks comprehensive data for CADENCE DESIGN SYSTEMS INC including:
Top Institutional Holders of CDNS
BlackRock, Inc.
$7.1B25,452,593 shVANGUARD CAPITAL MANAGEMENT LLC
$4.9B17,813,174 shSTATE STREET CORP
$3.5B12,492,023 shFMR LLC
$2.5B9,153,206 shGEODE CAPITAL MANAGEMENT, LLC
$2.2B7,875,471 shVANGUARD PORTFOLIO MANAGEMENT LLC
$2.0B7,031,933 shJENNISON ASSOCIATES LLC
$1.6B5,761,905 shALLIANCEBERNSTEIN L.P.
$1.6B5,008,665 shWELLINGTON MANAGEMENT GROUP LLP
$1.4B4,901,229 shGOLDMAN SACHS GROUP INC
$1.1B4,025,703 sh
| Fund | Value | Shares |
|---|---|---|
| BlackRock, Inc. | $7.1B | 25,452,593 |
| VANGUARD CAPITAL MANAGEMENT LLC | $4.9B | 17,813,174 |
| STATE STREET CORP | $3.5B | 12,492,023 |
| FMR LLC | $2.5B | 9,153,206 |
| GEODE CAPITAL MANAGEMENT, LLC | $2.2B | 7,875,471 |
| VANGUARD PORTFOLIO MANAGEMENT LLC | $2.0B | 7,031,933 |
| JENNISON ASSOCIATES LLC | $1.6B | 5,761,905 |
| ALLIANCEBERNSTEIN L.P. | $1.6B | 5,008,665 |
| WELLINGTON MANAGEMENT GROUP LLP | $1.4B | 4,901,229 |
| GOLDMAN SACHS GROUP INC | $1.1B | 4,025,703 |
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Popular Research
Is CDNS a good stock to buy?
13F Pro's AI-powered analysis of CADENCE DESIGN SYSTEMS INC (CDNS) draws on SEC EDGAR-sourced fundamentals, institutional 13F holdings, and insider Form 4 transactions in the Technology sector (listed on Nasdaq). The 32-signal AI Quality Score, current rank, and full bull/bear verdict for CDNS are available on the CDNS stock profile dashboard — with the same data, AI insights, ratios, and institutional activity refreshed after every 10-K, 10-Q, 13F, and Form 4 filing.
Which hedge funds own CDNS?
Institutional investors are required to disclose their holdings quarterly via SEC Form 13F. 13F Pro aggregates these filings to show which hedge funds, mutual funds, and asset managers are buying or selling CDNS. Combined with insider transaction data from Form 4 filings and AI-powered analysis from 10 specialized research agents, 13F Pro provides a comprehensive view of CADENCE DESIGN SYSTEMS INC's investment landscape.