CDNS CADENCE DESIGN SYSTEMS INC

Overview and Growth

In fiscal 2025, CADENCE DESIGN SYSTEMS INC recorded $5.30B of revenue, net income of $1.11B, and an operating cash inflow of $1.73B. The $5.30B revenue base provides substantial context for the company’s earnings, cash generation, and capital requirements. The top line expanded 14.1% from $4.64B in fiscal 2024, increasing the company’s operating scale. The company reported diluted EPS of $4.06, adding a shareholder-level measure to the absolute income figures considered below. The per-share result recorded a 5.5% increase from fiscal 2024 diluted EPS of $3.85. At period end, total assets were $10.15B, framing the scale of the company’s operating and financing commitments. Revenue equaled 0.52x of total assets, indicating how much reported top-line activity the company produced relative to its period-end asset base.

Profitability

Operating income was $1.49B, the earnings remaining from reported operations after the company’s recognized operating cost structure. Operating margin measured 28.2%, showing the portion of revenue preserved after the full set of operating costs. Net income came to $1.11B, completing the progression from revenue through gross and operating profitability to the final reported result. Net margin was 20.9%, meaning that this portion of revenue remained as net income after all recognized expenses. Before income taxes, the company reported $1.52B of earnings, providing a bridge between the operating result and final net income. The pretax margin was 28.7%, relating income before taxes directly to revenue. The company recognized $413.15M of income tax for the period, completing the transition from pretax income to net income. The effective relationship between income tax and positive pretax income was 27.1%, without assuming a statutory-rate comparison. Net income equaled 20.3% of period-end equity, showing the earnings generated on shareholders’ book capital. The net-income-to-assets relationship measured 10.9%, showing earnings relative to the full balance sheet.

Liquidity and Capital Structure

The company held $10.15B of assets against $4.68B of liabilities and $5.47B of equity, revealing how the asset base was financed. At period end, current assets of $4.67B compared with current liabilities of $1.64B, defining the company’s short-term resource position. At 2.86x, the current ratio shows that short-term assets were greater than short-term liabilities at period end. The company held $3.00B in cash and equivalents, a narrower liquidity measure than total current assets. The cash balance equaled 183.5% of current liabilities, showing how much near-term coverage came from cash alone. Relative to total assets, liabilities measured 46.1%, complementing the separate equity-based view of the company’s capital structure. Measured against total assets, cash and equivalents represented 29.6%, a balance-sheet composition measure rather than a liquidity forecast. The asset base changed 13.1% from $8.97B in fiscal 2024, leaving current total assets higher year over year. Against $4.67B of equity in fiscal 2024, the current book-equity balance moved 17.1% and ended higher. The reported cash balance changed 13.5% from $2.64B in fiscal 2024, ending higher year over year.

Cash Flow and Earnings Quality

Cash flow from operations was $1.73B, a reported cash inflow that can be compared directly with net income and capital spending. Against net income, operating cash flow measured 1.56x, showing the relationship between accrual earnings and operating cash. The cash-flow statement records $141.87M of capital expenditures, the investment amount considered after operating cash generation. Capital expenditures represented 8.2% of operating cash flow, leaving the remainder available as free cash flow. Free cash flow came to $1.59B, leaving a positive amount after capital expenditures. The free-cash-flow margin was 30.0%, measuring cash remaining after capital spending against revenue. Free cash flow equaled 15.6% of total assets, relating post-investment cash generation to the company’s resource base.

Based on the annual report for the fiscal year ending Dec 31, 2025. Analysis generated Oct 21, 2026.