Cadence Design Systems raised its 2026 revenue-growth outlook to 21% after third-quarter revenue rose 22% year over year, as its finance chief cited demand for AI-driven designs.
Revenue reached $1.633 billion, the company said Monday. Cadence now expects full-year revenue of $6.387 billion to $6.417 billion and non-GAAP diluted earnings per share of $8.37 to $8.43. Its fourth-quarter forecast calls for revenue of $1.695 billion to $1.725 billion and non-GAAP diluted earnings per share of $2.19 to $2.25.
John Wall, Cadence's senior vice president and chief financial officer, said AI-driven design demand helped lift results across the company's product categories.
Quarter-end backlog stood at a record $8.2 billion, and recurring revenue rose 18% from a year earlier. GAAP operating margin was 26.2%, down from 31.8% a year earlier, while the non-GAAP measure slipped to 44.1% from 47.6%. GAAP diluted earnings per share held at $1.05; non-GAAP diluted earnings per share improved to $2.11 from $1.93.
CFO commentary said Cadence has lifted its 2026 revenue-growth outlook three times this year. The company has also introduced Maestro, an AI system for chip and system design that combines models and agents with Cadence's software tools. Customers can use the platform on their own infrastructure or through Cadence's cloud and secure public clouds, as EconoTimes reported in its coverage of the Maestro launch.
A Form 8-K filed with the U.S. Securities and Exchange Commission (SEC) Monday said Cadence's board approved repurchases of up to an additional $2.5 billion on Oct. 23. Cadence bought back $400 million in shares during the third quarter and described the added authorization as part of its commitment to return capital to shareholders. The filing said the timing and amount of future purchases will depend on business and market conditions, regulatory requirements, the stock price, acquisition opportunities and other factors. CFO commentary projected about $400 million in repurchases during the fourth quarter.
