Cadence Design Systems, the San Jose company whose software engineers use to design chips, reported third-quarter results after the market closed Monday, Oct. 26. Revenue was $1.633 billion, up 22% from $1.339 billion a year earlier. Non-GAAP earnings were $2.11 a share.

Both numbers beat Wall Street. Investing.com put the consensus at $2.04 a share on $1.61 billion in revenue; CNBC's LSEG survey had $2.05 a share. Shares rose 2% after hours Monday, and CNBC reported that Cadence shares rose 8% in Tuesday's session.

The quarter in numbers

  • Revenue: $1.633 billion, up 22%
  • Non-GAAP EPS: $2.11; GAAP EPS: $1.05
  • Record backlog: $8.2 billion, with $4.2 billion expected to be recognized over the next 12 months
  • Recurring revenue: up 18%
  • Core EDA revenue up 20%, IP revenue up 24%, System Design and Analysis up 30%
  • Buybacks: $400 million in the quarter, plus a new $2.5 billion authorization

Raised outlook

Cadence now expects 2026 revenue of $6.387 billion to $6.417 billion, which works out to about 21% growth at the midpoint. It expects non-GAAP EPS of $8.37 to $8.43. Investing.com said the midpoint of that EPS range, $8.40, is above the $8.15 consensus.

"Cadence delivered an outstanding third quarter. With broad-based business momentum, expanding technology leadership and a record backlog, we are raising our 2026 revenue outlook to 21% year-over-year growth," CEO Anirudh Devgan said. The company also pointed to Maestro, its new family of AI models for chip and system design, and said its AI Super Agents are in more than 100 customer engagements.

Before the report, we laid out what analysts were watching in our Cadence earnings preview.