Cadence Design Systems Inc (NASDAQ:CDNS) stock fell 5.42% (As on April 25, 11:31:43 AM UTC-4, Source: Google Finance) after the company reported better than expected results for the first quarter of FY 23 driven by consistent execution and continued momentum in the core EDA and System Design and Analysis businesses, but issued weak guidance.  The operating margin for the first quarter of 2023 was 42 percent and net income was $351 million, compared to operating margin of 44 percent and net income of $324 million, for the same period in 2022. With the recent introductions of Virtuoso Studio and Allegro X AI, the company now have an unmatched ‘chip to package to board to systems’Generative AI portfolio underpinned by the differentiated JedAI platform and delivering unprecedented quality of results and productivity benefits.

Moreover, the company has significantly expanded the collaboration with a marquee aerospace & defense systems company, that included the proliferation of the digital full flow, custom, verification products as well as the RF and system analysis solutions. And Cadence expanded its collaboration with TSMC and Microsoft, as the company leveraged the Pegasus Verification System and Cloudburst platform to accelerate giga-scale physical verification in the cloud.

CDNS in the first quarter of FY 23 has reported the adjusted earnings per share of $1.29, beating the analysts’ estimates for the adjusted earnings per share of $1.25, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $1.02 billion in the first quarter of FY 23, beating the analysts’ estimates for revenue by 1.59%. The System Design & Analysis business, which is driving the expansion beyond EDA, continued its strong momentum in Q1, delivering 27% year over year revenue growth.

Cadence Design Systems sees second-quarter revenue in a range of $960 million to $980 million versus estimates of $1.01 billion. The company expected earnings to be between $1.15 and $1.19 per share versus estimates of $1.25 per share. Q2 2023 operating margin is expected to be in the range of 40 percent to 41 percent.

Cadence sees full-year revenue in a range of $4.03 billion to $4.07 billion versus estimates of $4.04 billion. The company anticipates full-year earnings in a range of $4.96 to $5.04 per share versus estimates of $4.98 per share. The operating margin for 2023 is expected to be in the range of 41 percent to 42 percent.