Cadence Design Systems Posts Strong Q4 Earnings, Beats Expectations

Software maker reports $1.99 EPS, exceeding consensus estimate by $0.09

Published on Feb. 20, 2026

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Cadence Design Systems (NASDAQ:CDNS), a leading provider of electronic design automation software and services, reported its fourth-quarter financial results on Tuesday. The company posted earnings per share of $1.99, surpassing the consensus estimate of $1.90 by $0.09. Cadence's revenue grew 6.2% year-over-year, and the company saw strong cash flow generation and capital return to shareholders during the fiscal year.

Why it matters

Cadence's better-than-expected earnings and robust financial performance signal the company's continued strength in the EDA market. The company's investments in AI-driven design tools and its expanding hardware and IP businesses have helped drive growth, positioning Cadence well for the future. However, the company's guidance also highlighted some caution around China and hardware visibility, which could impact future results.

The details

Cadence reported $1.99 EPS for the quarter, beating the consensus estimate of $1.90 by $0.09. The company's revenue was up 6.2% year-over-year, and it saw a return on equity of 30.13% and a net margin of 20.35%. Cadence also updated its guidance for the first quarter of 2026, forecasting EPS in the range of $1.89 to $1.95, and its full-year 2026 EPS guidance of $8.05 to $8.15, well above analyst expectations.

  • Cadence reported its Q4 2025 earnings results on Tuesday, February 18, 2026.

The players

Cadence Design Systems

An American electronic design automation software and engineering services company that provides tools, software and IP to help designers and engineers develop electronic products.

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What’s next

Cadence's strong performance and forward guidance suggest the company is well-positioned for continued growth, but investors will be watching for any potential headwinds related to China and hardware visibility as mentioned in the guidance.

The takeaway

Cadence Design Systems' robust Q4 earnings, fueled by growth in its AI-driven design tools and hardware/IP businesses, demonstrate the company's ability to innovate and capitalize on industry trends. The strong financial results and forward guidance reinforce Cadence's standing as a leader in the electronic design automation space.