Cadence Design Systems, Inc.

Q2 results were very strong and broadly based (good): - Revenue +$24% YoY to $1,584M; all product groups delivered double-digit YoY growth. - Operating margin: 45.5% non-GAAP (and 28.4% GAAP). - Record backlog: $8.1B (bookings strong). - EPS: GAAP $1.33, non-GAAP $2.11. - Share repurchase: $200M used to repurchase stock.

2026 outlook raised again (good, with key forecast numbers): - Updated 2026 revenue guidance: $6,260M–$6,340M, implying about 19% revenue growth at midpoint. - Operating margins: GAAP 27.75%–28.75%; non-GAAP 43.75%–44.75%. - EPS: GAAP $4.76–$4.86; non-GAAP $8.05–$8.15. - Operating cash flow: ~$2B. - Capital return expectation: plans to use ~50% of free cash flow for buybacks in 2026. - Q3 expectation: revenue $1,595M–$1,625M; GAAP op margin 27.5%–28.5%; non-GAAP 43.5%–44.5%; non-GAAP EPS $2.01–$2.07.

Agentic AI is the core demand/strategy driver, but monetization is not assumed to “step-change” (opportunity + some caution): - Management says agentic AI expands demand/tailwind by having agents invoke physically accurate engines more often and explore more design alternatives. - Announced/expanded agent products show early traction: - AuraStack: “up to 15x productivity” and “2x faster time-to-market” for PCB/advanced packaging. - ChipStack: 20+ customer engagements, deployed in production; demo claims 40x faster RTL validation (from ~5 weeks to <1 day). - ViraStack: 25+ engagements, reported 2x–10x productivity gains in analog/custom. - Management emphasized they are not modeling an immediate step-function from monetization; current guidance reflects broad-based strength across the business, not one product/customer.