Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence’s current expectations on matters covered unless Cadence publishes a notice stating otherwise.
Beginning June 17, 2022, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute Cadence’s current expectations. During the Quiet Period, the business outlook in these documents should be considered historical, speaking as of prior to the Quiet Period only and not subject to any update by Cadence. During the Quiet Period, Cadence’s representatives will not comment on Cadence’s business outlook, financial results or expectations. The Quiet Period will extend until Cadence’s second quarter 2022 earnings release is published, which is currently scheduled for July 25, 2022.
Cadence Design Systems, Inc. | ||||||
Condensed Consolidated Balance Sheets | ||||||
April 2, 2022 and January 1, 2022 | ||||||
(In thousands) | ||||||
(Unaudited) | ||||||
April 2, 2022 |
January 1, 2022 |
|||||
Current assets: | ||||||
Cash and cash equivalents | $ |
1,134,752 |
$ |
1,088,940 |
||
Receivables, net |
|
361,789 |
|
337,596 |
||
Inventories |
|
110,213 |
|
115,721 |
||
Prepaid expenses and other |
|
128,143 |
|
173,512 |
||
Total current assets |
|
1,734,897 |
|
1,715,769 |
||
Property, plant and equipment, net |
|
310,690 |
|
305,911 |
||
Goodwill |
|
923,719 |
|
928,358 |
||
Acquired intangibles, net |
|
219,110 |
|
233,265 |
||
Deferred taxes |
|
787,111 |
|
763,770 |
||
Other assets |
|
419,540 |
|
439,226 |
||
Total assets | $ |
4,395,067 |
$ |
4,386,299 |
||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | $ |
360,547 |
$ |
417,283 |
||
Current portion of deferred revenue |
|
600,279 |
|
553,942 |
||
Total current liabilities |
|
960,826 |
|
971,225 |
||
Long-term liabilities: | ||||||
Long-term portion of deferred revenue |
|
106,838 |
|
101,148 |
||
Long-term debt |
|
347,792 |
|
347,588 |
||
Other long-term liabilities |
|
219,428 |
|
225,663 |
||
Total long-term liabilities |
|
674,058 |
|
674,399 |
||
Stockholders' equity |
|
2,760,183 |
|
2,740,675 |
||
Total liabilities and stockholders' equity | $ |
4,395,067 |
$ |
4,386,299 |
Cadence Design Systems, Inc. | ||||||||
Condensed Consolidated Income Statements | ||||||||
For the Three Months Ended April 2, 2022 and April 3, 2021 | ||||||||
(In thousands, except per share amounts) | ||||||||
(Unaudited) | ||||||||
Three Months Ended |
||||||||
April 2, 2022 |
April 3, 2021 |
|||||||
Revenue: | ||||||||
Product and maintenance | $ |
846,244 |
|
$ |
699,054 |
|
||
Services |
|
55,522 |
|
|
36,974 |
|
||
Total revenue |
|
901,766 |
|
|
736,028 |
|
||
Costs and expenses: | ||||||||
Cost of product and maintenance |
|
72,795 |
|
|
64,906 |
|
||
Cost of services |
|
25,048 |
|
|
19,061 |
|
||
Marketing and sales |
|
140,186 |
|
|
132,826 |
|
||
Research and development |
|
290,895 |
|
|
270,992 |
|
||
General and administrative |
|
48,937 |
|
|
39,952 |
|
||
Amortization of acquired intangibles |
|
4,964 |
|
|
4,631 |
|
||
Restructuring |
|
12 |
|
|
(277 |
) |
||
Total costs and expenses |
|
582,837 |
|
|
532,091 |
|
||
Income from operations |
|
318,929 |
|
|
203,937 |
|
||
Interest expense |
|
(4,108 |
) |
|
(4,217 |
) |
||
Other income (expense), net |
|
(4,900 |
) |
|
2,701 |
|
||
Income before provision for income taxes |
|
309,921 |
|
|
202,421 |
|
||
Provision for income taxes |
|
74,586 |
|
|
15,252 |
|
||
Net income | $ |
235,335 |
|
$ |
187,169 |
|
||
Net income per share - basic | $ |
0.86 |
|
$ |
0.68 |
|
||
Net income per share - diluted | $ |
0.85 |
|
$ |
0.67 |
|
||
Weighted average common shares outstanding - basic |
|
272,431 |
|
|
274,021 |
|
||
Weighted average common shares outstanding - diluted |
|
276,918 |
|
|
280,140 |
|
Cadence Design Systems, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
For the Three Months Ended April 2, 2022 and April 3, 2021 | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended |
||||||||
April 2, |
April 3, |
|||||||
|
2022 |
|
|
2021 |
|
|||
Cash and cash equivalents at beginning of period | $ |
1,088,940 |
|
$ |
928,432 |
|
||
Cash flows from operating activities: | ||||||||
Net income |
|
235,335 |
|
|
187,169 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization |
|
34,825 |
|
|
36,218 |
|
||
Amortization of debt discount and fees |
|
268 |
|
|
264 |
|
||
Stock-based compensation |
|
59,469 |
|
|
52,596 |
|
||
(Gain) loss on investments, net |
|
2,038 |
|
|
(1,433 |
) |
||
Deferred income taxes |
|
(24,920 |
) |
|
2,710 |
|
||
Provisions for losses (recoveries) on receivables |
|
(344 |
) |
|
77 |
|
||
ROU asset amortization and change in operating lease liabilities |
|
926 |
|
|
(2,136 |
) |
||
Other non-cash items |
|
88 |
|
|
302 |
|
||
Changes in operating assets and liabilities, net of effect of acquired businesses: | ||||||||
Receivables |
|
(28,426 |
) |
|
(45,927 |
) |
||
Inventories |
|
4,580 |
|
|
(669 |
) |
||
Prepaid expenses and other |
|
44,419 |
|
|
(3,014 |
) |
||
Other assets |
|
11,588 |
|
|
6,260 |
|
||
Accounts payable and accrued liabilities |
|
(58,203 |
) |
|
(80,769 |
) |
||
Deferred revenue |
|
56,225 |
|
|
59,166 |
|
||
Other long-term liabilities |
|
(1,260 |
) |
|
(2,372 |
) |
||
Net cash provided by operating activities |
|
336,608 |
|
|
208,442 |
|
||
Cash flows from investing activities: | ||||||||
Purchases of non-marketable investments |
|
(1,000 |
) |
|
- |
|
||
Purchases of property, plant and equipment |
|
(18,130 |
) |
|
(16,968 |
) |
||
Purchases of intangible assets |
|
(750 |
) |
|
- |
|
||
Cash paid in business combinations, net of cash acquired |
|
- |
|
|
(189,262 |
) |
||
Net cash used for investing activities |
|
(19,880 |
) |
|
(206,230 |
) |
||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock |
|
45,673 |
|
|
46,384 |
|
||
Stock received for payment of employee taxes on vesting of restricted stock |
|
(56,343 |
) |
|
(56,385 |
) |
||
Payments for repurchases of common stock |
|
(250,016 |
) |
|
(172,267 |
) |
||
Net cash used for financing activities |
|
(260,686 |
) |
|
(182,268 |
) |
||
Effect of exchange rate changes on cash and cash equivalents |
|
(10,230 |
) |
|
(5,395 |
) |
||
Increase (decrease) in cash and cash equivalents |
|
45,812 |
|
|
(185,451 |
) |
||
Cash and cash equivalents at end of period | $ |
1,134,752 |
|
$ |
742,981 |
|
Cadence Design Systems, Inc. | ||||||||||||||
(Unaudited) | ||||||||||||||
Revenue Mix by Geography (% of Total Revenue) | ||||||||||||||
2021 |
|
2022 |
||||||||||||
GEOGRAPHY | Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Year |
|
Q1 |
|||
Americas | 46% |
44% |
46% |
43% |
45% |
47% |
||||||||
China | 12% |
14% |
13% |
12% |
13% |
16% |
||||||||
Other Asia | 18% |
19% |
18% |
21% |
19% |
18% |
||||||||
Europe, Middle East and Africa | 18% |
17% |
17% |
18% |
17% |
14% |
||||||||
Japan | 6% |
6% |
6% |
6% |
6% |
5% |
||||||||
Total | 100% |
100% |
100% |
100% |
100% |
100% |
||||||||
Revenue Mix by Product Category (% of Total Revenue) | ||||||||||||||
2021 |
|
|
2022 |
|||||||||||
PRODUCT CATEGORY | Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Year |
|
|
Q1 |
||
Custom IC Design and Simulation | 23% |
23% |
23% |
24% |
23% |
22% |
||||||||
Digital IC Design and Signoff | 27% |
28% |
29% |
29% |
29% |
27% |
||||||||
Functional Verification, including Emulation and Prototyping Hardware | 26% |
25% |
23% |
21% |
24% |
28% |
||||||||
IP | 14% |
13% |
14% |
14% |
13% |
13% |
||||||||
System Design and Analysis | 10% |
11% |
11% |
12% |
11% |
10% |
||||||||
Total | 100% |
100% |
100% |
100% |
100% |
100% |
Cadence Design Systems, Inc. | |||
Impact of Non-GAAP Adjustments on Forward Looking Operating Margin | |||
As of April 25, 2022 | |||
(Unaudited) | |||
Three Months Ending |
|
Year Ending |
|
July 2, 2022 |
|
December 31, 2022 |
|
Forecast |
|
Forecast |
|
|
|
|
|
GAAP operating margin as a percent of total revenue | 29% - 30% |
|
28.5% - 30% |
|
|
|
|
Reconciling items to non-GAAP operating margin as a percent of total revenue: |
|
|
|
Stock-based compensation expense | 8% |
|
8% |
Amortization of acquired intangibles | 2% |
|
2% |
Acquisition and integration-related costs | 0% |
|
0% |
Non-qualified deferred compensation credits | 0% |
|
0% |
|
|
|
|
Non-GAAP operating margin as a percent of total revenue�nbsp; | 39% - 40% |
|
38.5% - 40% |
�nbsp; |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
Cadence Design Systems, Inc. | ||||
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share | ||||
As of April 25, 2022 | ||||
(Unaudited) | ||||
Three Months Ending |
|
Year Ending |
||
July 2, 2022 |
|
December 31, 2022 |
||
Forecast |
|
Forecast |
||
|
|
|
||
Diluted net income per share on a GAAP basis | $0.59 to $0.63 |
|
$2.51 to $2.59 |
|
|
|
|
||
Stock-based compensation expense | 0.23 |
|
0.98 |
|
Amortization of acquired intangibles | 0.05 |
|
0.19 |
|
Acquisition and integration-related costs | 0.01 |
|
0.03 |
|
Non-qualified deferred compensation credits | - |
|
(0.01) |
|
Other income or expense related to investments and non-qualified deferred compensation plan assets* | - |
|
0.02 |
|
Income tax effect of non-GAAP adjustments | 0.07 |
|
0.17 |
|
|
|
|
||
Diluted net income per share on a non-GAAP basis�nbsp; | $0.95 to $0.99 |
|
$3.89 to $3.97 |
|
Cadence Design Systems, Inc. | ||||
Impact of Non-GAAP Adjustments on Forward Looking Net Income | ||||
As of April 25, 2022 | ||||
(Unaudited) | ||||
Three Months Ending |
|
Year Ending |
||
July 2, 2022 |
|
December 31, 2022 |
||
($ in millions) | Forecast |
|
Forecast |
|
|
|
|
||
Net income on a GAAP basis | $164 to $175 |
|
$697 to $719 |
|
|
|
|
||
Stock-based compensation expense | 64 |
|
272 |
|
Amortization of acquired intangibles | 15 |
|
52 |
|
Acquisition and integration-related costs | 1 |
|
8 |
|
Non-qualified deferred compensation credits | - |
|
(3) |
|
Other income or expense related to investments and non-qualified deferred compensation plan assets* | - |
|
5 |
|
Income tax effect of non-GAAP adjustments | 19 |
|
49 |
|
|
|
|
||
Net income on a non-GAAP basis�nbsp; | $263 to $274 |
|
$1,080 to $1,102 |
�nbsp; |
The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. |
|
|
* |
Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense. |