Is Cadence Design Systems profitable?

Yes. Cadence reported FY2025 revenue of $5.297 billion, up 14.1% YoY, with roughly 45% non-GAAP operating margin and net income of $1.11 billion, per its February 16, 2026 earnings release.

Could AI replace Cadence Design Systems?

Unlikely soon. Cadence positions agentic AI tools like ChipStack AI Super Agent and AgentStack as demand drivers, not substitutes, since frontier models lack licensed foundry PDKs; management tied AI-driven verification cycles to its Q1 2026 beat-and-raise, reported July 23, 2026.

Who is Cadence Design Systems' biggest competitor?

Synopsys is Cadence's primary rival in core EDA and now overlaps in multiphysics after closing its roughly $35 billion Ansys acquisition in 2025, prompting Cadence's own €2.7 billion Hexagon D&E deal completed February 23, 2026.

Who owns Cadence Design Systems?

Cadence is a standalone public company with no parent, trading on NASDAQ under ticker CDNS, with a market cap of approximately $91 billion as of July 20, 2026, led by CEO Anirudh Devgan from its San Jose, California headquarters.

What legal trouble has Cadence Design Systems faced?

Cadence pleaded guilty on July 28, 2025 to criminal export-control violations for illegally exporting EDA software to China's NUDT, paying over $140 million in combined DOJ and BIS penalties and accepting three years of corporate probation.

Is Cadence Design Systems stock overvalued?

Possibly. Cadence traded at a P/E of roughly 77x as of July 23, 2026, and the stock was down about 16% over a prior six-month window per a March 15, 2026 report, even though roughly 88% of covering analysts remained bullish.

Semiconductor companies · United States

Cadence Design Systems

cadence.com ↗

Cadence makes the software chipmakers use to design and verify chips.

Hard to displace

Assessed 24 July 2026 · Evidence as of 24 July 2026

Strong structural protection; the business model survives ai pressure.

On the recordSince 24 July 2026 · Checkable from July 27, 2026 · Every call on the record Checkpoint: Q2 2026 earnings report

The call

Cadence's core chip-design business sits untouched by AI so far, while its newest fight with Synopsys is playing out in multiphysics simulation, not the tools that make chips work.

Cadence sells software that helps engineers design computer chips. It is hard to replace because the code is so complex that no startup has ever rebuilt it from scratch, customers are locked in once they use it for their projects, and chip makers like TSMC trust Cadence's tools with their secret manufacturing processes. The real question is whether Cadence's rival Synopsys, which just bought the company Ansys for $35 billion, can beat Cadence in the new race to combine chip design with physics simulation and AI models of the real world. That fight is just starting, and both companies spent tens of billions to prepare for it.

Why

AI pressure: None apparent. AI is pushing more verification and simulation work through Cadence's own tools, not replacing them; Cadence ships agents like ChipStack and AgentStack itself. Could AI do the core job? Unlikely.

Bigger players: Synopsys (via Ansys acquisition). Synopsys closed its $35B Ansys deal and now competes with Cadence's Hexagon D&E unit in multiphysics and digital-twin simulation, a newer adjacency. Could a giant copy it? No, they are blocked.

What protects it. Chip designers build entire tapeout workflows around Cadence tools and foundry certifications with TSMC and Samsung, making switching costly and rare.

What would change this call

Whether a top-10 fabless firm tapes out using a non-Cadence sign-off flow certified by TSMC or Samsung. Would show Cadence's foundry-certification moat is breakable.
Synopsys-Ansys or Cadence-Hexagon D&E wins named multiphysics/digital-twin contracts through 2026. Shows which duopolist is gaining share in the new adjacency.
Cadence's China revenue share and any new export-control violation findings before mid-2028. Would show whether China restrictions are cutting into actual revenue.

Key numbers

FY2025 revenue $5.297B, up 14.1% YoY (2026-02-16)
Year-end 2025 backlog hit record $7.8B (2026-02-16)
China made up about 13% of Q1 2026 revenue (2026-07-23)

Named risks

China export-control exposure after 2025 guilty plea, ongoing 3-year probation through 2028. Severity: high
Hexagon D&E integration dilutive to EPS by ~$0.28 in 2026 before turning accretive in 2027. Severity: medium
Elevated valuation at ~77x P/E amid stock volatility, down ~16% over six months per 2026-03-15 report. Severity: medium
Synopsys-Ansys and Cadence-Hexagon rivalry in multiphysics/Physical AI segment remains dilutive and contested through 2026. Severity: medium

Rivals, as read in July 2026

Rival	Direction	Evidence
Synopsys	contesting	Closed ~$35B Ansys deal in 2025, meeting Cadence's €2.7B Hexagon D&E deal in multiphysics, completed 2026-02-23
Siemens EDA	contesting	Third major EDA vendor, ~$2.2-2.5B revenue, expanding AI features across portfolio through 2025
Univista and Chinese EDA entrants	gaining on	Chinese EDA firm founded by ex-Synopsys/Cadence staff pursuing IPO, gaining domestic traction, reported 2025-12-30

Questions people ask

Is Cadence Design Systems profitable?: Yes. Cadence reported FY2025 revenue of $5.297 billion, up 14.1% YoY, with roughly 45% non-GAAP operating margin and net income of $1.11 billion, per its February 16, 2026 earnings release.
Could AI replace Cadence Design Systems?: Unlikely soon. Cadence positions agentic AI tools like ChipStack AI Super Agent and AgentStack as demand drivers, not substitutes, since frontier models lack licensed foundry PDKs; management tied AI-driven verification cycles to its Q1 2026 beat-and-raise, reported July 23, 2026.
Who is Cadence Design Systems' biggest competitor?: Synopsys is Cadence's primary rival in core EDA and now overlaps in multiphysics after closing its roughly $35 billion Ansys acquisition in 2025, prompting Cadence's own €2.7 billion Hexagon D&E deal completed February 23, 2026.
Who owns Cadence Design Systems?: Cadence is a standalone public company with no parent, trading on NASDAQ under ticker CDNS, with a market cap of approximately $91 billion as of July 20, 2026, led by CEO Anirudh Devgan from its San Jose, California headquarters.
What legal trouble has Cadence Design Systems faced?: Cadence pleaded guilty on July 28, 2025 to criminal export-control violations for illegally exporting EDA software to China's NUDT, paying over $140 million in combined DOJ and BIS penalties and accepting three years of corporate probation.
Is Cadence Design Systems stock overvalued?: Possibly. Cadence traded at a P/E of roughly 77x as of July 23, 2026, and the stock was down about 16% over a prior six-month window per a March 15, 2026 report, even though roughly 88% of covering analysts remained bullish.

Timeline

2026-07-23Q2 2026 earnings due July 27; consensus expects $1.58B revenue, +23.6% YoY
2026-07-08Cadence raises FY2026 revenue guidance to $6.125-$6.225 billion
2026-02-23Cadence completes ~€2.7B acquisition of Hexagon's Design & Engineering business
2026-02-16Cadence reports FY2025 revenue of $5.297B, record $7.8B backlog
2025-11Cadence acquires Chipstack, an agentic-AI verification startup
2025-07-28Cadence pleads guilty to export-control violations, pays over $140M in penalties

Revision history

24 July 2026

First assessed. Hard to displace. The text above is fixed as of this date and is not edited afterwards.

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