The San Jose-based firm reported a quarterly profit of $388.1 million, or $1.42 per share, marking a significant climb from the $340.2 million recorded during the same period last year. On an adjusted basis, earnings reached $1.99 per share, comfortably beating the $1.91 consensus from analysts polled by FactSet. Revenue for the quarter rose to $1.44 billion, outperforming the $1.42 billion anticipated by the market.

Chief Executive Anirudh Devgan attributed the performance to accelerating AI-related opportunities within the semiconductor industry. As chipmakers race to develop specialized hardware for generative AI, demand for Cadence’s sophisticated engineering software has intensified. Devgan noted that the company’s expanding AI product portfolio positions it to capture sustained growth as engineering requirements become increasingly complex.

Momentum and Future Guidance

Cadence enters the new fiscal year with a record backlog, bolstered by strong fourth-quarter bookings. For the full year, the company issued a forecast for adjusted earnings between $8.05 and $8.15 per share on revenue ranging from $5.9 billion to $6 billion. These midpoints sit slightly above the $8.05 per share and $5.94 billion revenue targets previously set by analysts.

The current financial outlook does not yet account for the pending acquisition of Hexagon’s design and engineering business. Investors responded enthusiastically to the core business strength, sending shares up 9.3% to $309.67 in Wednesday trading, significantly outperforming the stock's modest 3.1% gain over the past year.