Cadence lifts 2026 revenue outlook

Cadence Design Systems raised its 2026 revenue outlook on April 27 after reporting stronger first-quarter sales from demand for artificial-intelligence chip design tools. (cadence.com) (finance.yahoo.com) The company said first-quarter revenue was $1.474 billion, up from $1.242 billion a year earlier, while non-GAAP diluted earnings per share rose to $1.96 from $1.57. (cadence.com) Cadence raised its full-year 2026 revenue forecast to $6.125 billion to $6.225 billion, up from its prior range of $5.90 billion to $6.00 billion. (cadence.com) (finance.yahoo.com) Cadence sells electronic design automation software, the tools chip companies use to draw, test and verify processors before they are manufactured. Reuters said demand has held up as Nvidia, Apple and other customers keep spending on specialized AI processors. (finance.yahoo.com) The company also reported a record backlog of $8.0 billion, with $4.0 billion of remaining performance obligations expected to turn into revenue over the next 12 months. Chief executive Anirudh Devgan said the quarter reflected “accelerating AI demand” and strong customer commitment. (cadence.com) The revenue increase did not come with a cleaner profit outlook. Reuters reported that Cadence lowered its annual profit forecast because newly acquired businesses usually take 12 to 18 months to reach the company’s target profitability profile. (finance.yahoo.com) That pressure is tied to Cadence’s Hexagon deal. Management said on the earnings call that the acquisition would dilute margins in the near term even as the company targets faster growth and said it still expects to hit the “Rule of 60” in 2026. (finance.yahoo.com) Cadence’s update adds to evidence that AI spending is still flowing into the software and hardware stack behind chip development, not just into the chips themselves. For Cadence, the next test is whether that backlog converts into revenue while margins recover from the Hexagon integration. (cadence.com) (finance.yahoo.com)