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CDNS · Q2 2026
Archived report (Q2 2026). Latest deep dive →
The quarter in brief
An exceptionally strong quarter with revenue up 24% and GAAP net income up 129% y/y, driven by broad-based double-digit growth across Core EDA, IP (+40%) and System Design & Analysis (+37%), with margin expansion aided by the absence of last year's $128.5M DOJ/BIS contingent liability charge.
Net Income
$367M
up 129.4% y/y
Revenue
$1,584M
up 24.2% y/y
Operating Income
$450M
up 86.2% y/y
Gross Profit
$1,345M
up 24.6% y/y
All figures in $M.
| Line item | Amount and change |
|---|---|
| Core EDA | ≈$1,077 · +18% |
| Semiconductor IP | ≈$238 · +40% |
| System Design & Analysis | ≈$269 · +37% |
| Revenue | $1,584 · +24.2% |
| Cost of Revenue | $239 · +21.4% |
| Gross Profit | $1,345 · +24.6% · 84.9% margin |
| Marketing & Sales | $241 · +20.2% |
| R&D | $531 · +20.2% |
| G&A | $89 · +28.3% |
| Amort. of Intangibles* | $34 · +272.9% |
| Operating Income | $450 · +86.2% · 28.4% margin |
| Interest Expense | $35 · +21.4% |
| Other Income, net | $95 · +40.3% |
| Pre-Tax Income | $510 · +81.8% |
| Tax Provision | $143 · +18.8% |
| Net Income | $367 · +129.4% · $1.33 diluted EPS |
Verdict: an exceptionally strong quarter with revenue up 24% and GAAP net income up 129% y/y, driven by broad-based double-digit growth across Core EDA, IP (+40%) and System Design & Analysis (+37%), with margin expansion aided by the absence of last year's $128.5M DOJ/BIS contingent liability charge.
6-mo OCF $991M; H1 buybacks $400M; record backlog $8.1B; RPO next-12mo $4.2B; FY26 revenue guide raised to ~19% YoY growth, non-GAAP EPS to $8.10, OCF to $2B.
Source and notation
* marks non-cash / ≈ estimated. Source: Cadence Design Systems press release / 10-Q (SEC EDGAR).
Open as an image: CDNS, Q2 2026 (PNG) ↗ · for sharing and presentations · free to reuse, CC BY 4.0
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Chart: “CDNS Q2 2026: where the revenue went” by Who Reports Today, https://whoreportstoday.com/t/cdns/q2-2026. Licensed under CC BY 4.0.
<figure> <a href="https://whoreportstoday.com/t/cdns/q2-2026"><img src="https://whoreportstoday.com/t/cdns/q2-2026/sankey.png" alt="CDNS Q2 2026: where the revenue went" loading="lazy" style="max-width:100%;height:auto"></a> <figcaption>Source: <a href="https://whoreportstoday.com/t/cdns/q2-2026">Who Reports Today</a>, licensed under <a href="https://creativecommons.org/licenses/by/4.0/">CC BY 4.0</a></figcaption> </figure>
https://whoreportstoday.com/t/cdns/q2-2026/sankey.png
<a href="https://whoreportstoday.com/t/cdns/q2-2026">CDNS Q2 2026 earnings chart (Who Reports Today)</a>
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- Q2 2025 GAAP results included a one-time $128.5M loss related to DOJ/BIS legal settlement, which depresses last year's comparison and inflates this year's y/y net income growth (GAAP net income +129% vs. non-GAAP net income +29%).
- IP revenue grew >40% y/y on a significant Intel Star IP agreement; System Design and Analysis grew 37% y/y on PCB/advanced packaging and Hexagon D&E integration; Core EDA grew 18% y/y.
- Amortization of acquired intangibles nearly quadrupled y/y ($34.3M vs $9.2M) reflecting recent acquisitions (incl. Hexagon D&E), a growing non-cash drag on GAAP opex.
- Non-GAAP operating margin 45.5% vs GAAP 28.4% — the ~17pt gap is mostly stock-based comp (9.3%) and acquired-intangible amortization (5.0%).
- Other income, net rose to $95.1M (vs $67.8M) aided by investment/divestiture gains, boosting pre-tax income beyond core operating strength.
- Restructuring reversed a small prior accrual (-$0.4M net credit), a rounding-level item folded into gross profit's allocation to keep flows non-negative in the chart.
- Balance sheet shows a large cash outflow for a $2.1B acquisition in H1, funding the recent surge in goodwill and intangibles.
What distorts the picture in this report and what to watch beyond the headlines.
CDNS — Cadence Design Systems provides software, hardware, and IP for electronic design automation in the semiconductor and electronics industries.
The company is headquartered in San Jose, California.
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