Cadence(CDNS) - 2025 Q1 - Quarterly Results

Financial Performance - Q1 2025 revenue reached $1.242 billion, with a GAAP operating margin of 29.1$5.150 billion and $5.230 billion, with a GAAP EPS forecast of$4.21 to $4.31[5] - The company reported a backlog of$6.4 billion in Q1 2025, indicating strong future revenue potential[12] - Recurring revenue for Q1 2025 accounted for 80% of total revenue, reflecting a stable revenue model[14] - The company expects to maintain a revenue growth rate of 11% to 13% for FY 2025[6] - Core EDA revenue accounted for 71% of total revenue in Q1 2025, down from 76% in Q1 2024, while Semiconductor IP and System Design and Analysis increased to 14% and 15% respectively[17] Operating Margins - The GAAP operating margin for FY 2025 is projected to be between 30.25% and 31.25%[11] - GAAP Operating Margin for Q1 2025 was 29.1%, a decrease from 33.7% in Q4 2024, while Non-GAAP Operating Margin was 41.7%, down from 46.0% in Q4 2024[20] - GAAP gross margin for Q1 2025 was 86.5%, with a non-GAAP gross margin of 88.4%[41] - The company anticipates a non-GAAP operating margin of 43.25% to 44.25% by 2025[48] Earnings Per Share - Non-GAAP EPS for Q1 2025 was $1.57, with a forecast of$1.55 to $1.61 for Q2 2025[10] - Diluted net income per share on a GAAP basis for Q1 2025 was$1.00, with a non-GAAP basis projected at $1.57 to$1.61[51] - Diluted net income per share on a GAAP basis for 2023 was $3.82, with a projected range of$4.21 - $4.31 for 2025[55] - Non-GAAP diluted net income per share for 2023 was$5.15, with a projected range of $6.73 -$6.83 for 2025[55] Cash Flow and Expenses - The operating cash flow for Q1 2025 was $487 million, with an expected annual cash flow from operations of$1.6 billion to $1.7 billion[4][11] - Free Cash Flow for Q1 2025 was$464 million, an increase from $404 million in Q4 2024[22] - Total GAAP Costs and Expenses for Q1 2025 were$881 million, a decrease from $899 million in Q4 2024, while Non-GAAP Costs and Expenses were$724 million, down from $733 million in Q4 2024[19] Stock Repurchase and Shareholder Returns - The company repurchased$350 million of its stock in Q1 2025 and plans to use approximately $175 million for share repurchases in Q2 2025[4] - The company repurchased$350 million worth of shares in Q1 2025, bringing the total number of shares repurchased to 1.361 million[25] Future Projections - GAAP operating income for 2023 was $1,251 million, projected to reach$1,621 million by 2025[38] - Non-GAAP operating income for 2023 was $1,717 million, expected to grow to$2,271 million by 2025[38] - Stock-based compensation expense for 2023 was $326 million, expected to increase to$466 million by 2025[38] - Amortization of acquired intangibles for 2023 was $62 million, projected to rise to$98 million by 2025[38] - Acquisition and integration-related costs for 2023 were $56 million, with an estimate of$86 million for 2025[38] Geographic Revenue Distribution - The revenue mix by geography shows that the Americas contributed 48% of total revenue in Q1 2025[16] Other Financial Metrics - Days Sales Outstanding (DSO) improved to 44 days in Q1 2025, down from 48 days in Q4 2024[22] - Cash and Cash Equivalents totaled $2,778 million in Q1 2025, with approximately 67$2.5 billion of Senior Notes at a weighted average interest rate of 4.44%[24] - Total other income and expense on a GAAP basis for FY 2023 was $31 million, projected to increase to$45 million in FY 2024[59] - Non-GAAP total other income and expense for FY 2023 was $(15) million, with projections of$(40) - $(54) million for FY 2025[59] Special Charges and Legal Liabilities - Special charges in 2024 are expected to include costs related to adjustments to estimated legal liabilities and executive severance[57]