Cadence Design Systems Reports 20% Revenue Growth to $1.275 Billion in Q2 2025

Cadence Design Systems, Inc. reported significant financial results for the second quarter of 2025, with total revenue reaching $1.275 billion, a 20% increase from $1.061 billion in the same period last year. For the first half of 2025, revenue totaled $2.518 billion, up 22% from $2.070 billion in the first half of 2024. The growth was primarily driven by a 22% increase in product and maintenance revenue, which amounted to $1.171 billion for the quarter, and a 5% rise in services revenue, totaling $105 million. However, net income for the quarter decreased to $160 million, or $0.59 per diluted share, compared to $230 million, or $0.84 per diluted share, in the prior year, largely due to a $128.5 million loss related to a contingent liability.

The company’s balance sheet as of June 30, 2025, showed total assets of $9.509 billion, an increase from $8.974 billion at the end of 2024. Current assets rose to $4.223 billion, driven by higher cash and cash equivalents, which increased to $2.823 billion from $2.644 billion. Total liabilities also increased to $4.502 billion, up from $4.300 billion, reflecting higher accounts payable and accrued liabilities. Stockholders' equity rose to $5.007 billion, bolstered by retained earnings of $6.425 billion, which increased from $5.992 billion at the end of 2024.

Strategically, Cadence completed the acquisition of VLAB Works on May 29, 2025, for $122.1 million, aimed at enhancing its Intelligent System Design strategy. This acquisition is expected to strengthen Cadence's capabilities in system verification and software validation. The company also reported a significant increase in stock-based compensation expenses, which rose to $118.3 million for the quarter, reflecting ongoing investments in talent acquisition and retention.

Operationally, Cadence's customer base remains diverse, with no single customer accounting for more than 10% of total revenue. The company reported a total of $6.4 billion in contracted but unsatisfied performance obligations as of June 30, 2025, indicating a strong pipeline for future revenue. Geographic revenue distribution showed growth across all regions, with the U.S. contributing $591 million, up 17% year-over-year, while revenue from China decreased slightly due to temporary export license requirements.

Looking ahead, Cadence anticipates continued growth driven by its expanding product offerings and market demand. The company is closely monitoring macroeconomic conditions, including trade regulations and foreign currency fluctuations, which could impact its operations. The recent enactment of the One Big Beautiful Bill Act is expected to materially decrease Cadence's U.S. federal tax payments for the remainder of fiscal 2025, further enhancing its financial outlook.