Cadence Design Systems Inc (NASDAQ:CDNS) stock rose 0.056% (As on July 23, 11:16:05 AM UTC-4, Source: Google Finance) after the company forecast third-quarter revenue and profit below Wall Street estimates, indicating stiff competition from rival Synopsys. Cadence delivered strong results for the second quarter of 2024, with robust demand for the cutting-edge technologies from AI, hyperscale, and automotive customers. The company has expanded its collaboration with several leading foundry partners, including Samsung and TSMC, enhancing its technological capabilities. Quarter-end backlog was $6.0 billion and current remaining performance obligations (“cRPO”), contract revenue expected to be recognized as revenue in the next 12 months, was $3.1 billion.
Moreover, IP business continued its strong momentum with AI, 3D-IC and HPC applications fueling demand for our IP titles at the most advanced nodes. Major long-term development partner broadly deployed Palladium Z3 to deliver to its next generation AI product roadmap, further solidifying Cadence’s leadership in verification. the company has closed BETA CAE acquisition and it now offers a comprehensive multiphysics platform covering electromagnetics, electrothermal, CFD and structural analysis solutions. In Q2, the long-term development partner, NVIDIA, broadly deployed Palladium Z3 to deliver to its next generation AI product roadmap, further solidifying Cadence’s leadership in the industry. Additionally, the company continues embedding AI in the EDA, SDA, and digital biology solutions.
CDNS in the second quarter of FY 24 has reported the adjusted earnings per share of $1.28, beating the analysts’ estimates for the adjusted earnings per share of $1.23, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue of $1.06 billion in the second quarter of FY 24, beating the analysts’ estimates for revenue by 1.17%.
Cadence forecast third-quarter revenue between $1.165 billion and $1.195 billion, the mid-point of which is below analysts’ average estimate of $1.20 billion, according to LSEG data. It forecast adjusted earnings per share between $1.39 and $1.49 for the third quarter, below estimates of $1.60. and Non-GAAP operating margin to be in the range of 41.7% to 43.3%.
For fiscal 2024, the company updated its revenue outlook to $4.60 billion – $4.66 billion, slightly higher than previous projections of $4.56 billion to $4.62 billion. However, the annual EPS forecast was trimmed to $5.77 – $5.97 from an earlier $5.88 – $5.98, Operating cash flow to be in the range of $1.0 billion to $1.2 billion and Non-GAAP operating margin to be in the range of 40.7% to 42.3%.