European Investor
28 Jul 2026, 09:14
Cadence Stock Rises 2.5% in Premarket After Record Q2 Results and Raised 2026 Outlook
Cadence Design Systems (NASDAQ: CDNS) shares gained about 2.5% in premarket trading after the electronic design automation (EDA) software provider reported record second-quarter results, raised its full-year guidance, and highlighted accelerating demand for its AI-driven design solutions.
The company reported second-quarter revenue of $1.58 billion, up from $1.28 billion a year earlier, while non-GAAP earnings per share increased to $2.11 from $1.65. Profitability also improved significantly, with non-GAAP operating margin expanding to 45.5% from 42.8% in the prior-year quarter.
Cadence also reported a record backlog of $8.1 billion, providing strong visibility into future revenue. Remaining performance obligations expected to be recognized over the next 12 months reached $4.2 billion, underscoring continued customer demand across its product portfolio.
Management raised its full-year 2026 outlook, now expecting revenue of $6.26 billion to $6.34 billion, representing approximately 19% year-over-year growth. The company also increased its non-GAAP EPS guidance to approximately $8.10 at the midpoint, lifted its non-GAAP operating margin outlook to 44.25%, and raised its operating cash flow forecast to $2 billion.
The strong results were driven by broad-based growth across the business. Core EDA revenue increased 18% year over year, IP revenue surged more than 40%, and System Design and Analysis revenue climbed 37%. Hardware also delivered another record quarter, supported by expanding deployments among hyperscalers and leading AI companies.
Management highlighted accelerating adoption of its AI-powered design platform, including strong early customer traction for its AI Super Agents portfolio. The company said it is benefiting from growing demand for AI chip development as semiconductor companies and hyperscale cloud providers increase investment in next-generation silicon.
The combination of record backlog, higher guidance, expanding margins, and continued AI-driven demand appears to be driving today's premarket gains, reinforcing investor confidence that Cadence remains one of the key beneficiaries of the ongoing AI infrastructure and semiconductor design cycle.
Cadence Design Systems (NASDAQ: CDNS) shares gained about 2.5% in premarket trading after the electronic design automation (EDA) software provider reported record second-quarter results, raised its full-year guidance, and highlighted accelerating demand for its AI-driven design solutions.
The company reported second-quarter revenue of $1.58 billion, up from $1.28 billion a year earlier, while non-GAAP earnings per share increased to $2.11 from $1.65. Profitability also improved significantly, with non-GAAP operating margin expanding to 45.5% from 42.8% in the prior-year quarter.
Cadence also reported a record backlog of $8.1 billion, providing strong visibility into future revenue. Remaining performance obligations expected to be recognized over the next 12 months reached $4.2 billion, underscoring continued customer demand across its product portfolio.
Management raised its full-year 2026 outlook, now expecting revenue of $6.26 billion to $6.34 billion, representing approximately 19% year-over-year growth. The company also increased its non-GAAP EPS guidance to approximately $8.10 at the midpoint, lifted its non-GAAP operating margin outlook to 44.25%, and raised its operating cash flow forecast to $2 billion.
The strong results were driven by broad-based growth across the business. Core EDA revenue increased 18% year over year, IP revenue surged more than 40%, and System Design and Analysis revenue climbed 37%. Hardware also delivered another record quarter, supported by expanding deployments among hyperscalers and leading AI companies.
Management highlighted accelerating adoption of its AI-powered design platform, including strong early customer traction for its AI Super Agents portfolio. The company said it is benefiting from growing demand for AI chip development as semiconductor companies and hyperscale cloud providers increase investment in next-generation silicon.
The combination of record backlog, higher guidance, expanding margins, and continued AI-driven demand appears to be driving today's premarket gains, reinforcing investor confidence that Cadence remains one of the key beneficiaries of the ongoing AI infrastructure and semiconductor design cycle.
