Cadence delivered strong Q4 FY2025 results, beating revenue targets and seeing record backlog of $7.8B. The call was dominated by AI-driven growth narratives: agentic AI tools (ChipStack), AI for design (Cerebrus), and design for AI (hyperscaler custom silicon). Record backlog of $7.8B entering 2026, up 14% revenue growth for FY25. Expectation of strong recurring revenue growth in 2026.
Cadence delivered strong Q4 FY2025 results, beating revenue targets and seeing record backlog of $7.8B. The call was dominated by AI-driven growth narratives: agentic AI tools (ChipStack), AI for design (Cerebrus), and design for AI (hyperscaler custom silicon). Record backlog of $7.8B entering 2026, up 14% revenue growth for FY25. Expectation of strong recurring revenue growth in 2026.
Management emphasized that AI is expanding demand for their core EDA tools rather than replacing them, with agentic AI workflows like ChipStack AI Superagent gaining endorsements from top customers and monetization starting to materialize, positioning Cadence as a leader in…
Management emphasized that AI is expanding demand for their core EDA tools rather than replacing them, with agentic AI workflows like ChipStack AI Superagent gaining endorsements from top customers and monetization starting to materialize, positioning Cadence as a leader in…
Management repeatedly stressed record backlog, broad-based strength, and competitive share gains, while providing a confident 2026 outlook.
ChipStack AI Superagent launched, with endorsements from Nvidia and Qualcomm. Priced per virtual engineer/agent, potentially creating a new revenue stream.
Management emphasized that AI is expanding demand for their core EDA tools rather than replacing them, with agentic AI workflows like ChipStack AI Superagent gaining endorsements from top customers and monetization starting to materialize, positioning Cadence as a leader in AI-driven design.
AI monetization reflected in record $7.8B backlog. Management repeatedly stressed record backlog, broad-based strength, and competitive share gains, while providing a confident 2026 outlook.
Management repeatedly stressed record backlog, broad-based strength, and competitive share gains, while providing a confident 2026 outlook.
“Seven out of the top 10 customers in 2025 were dynamic duo customers, underscoring the differentiated value provided by our hardware systems.”
“With a strong backlog entering 2026, we expect this year to be yet another record year for hardware.”
“A marquee hyperscaler embraced the cadence digital full-flow for its first full customer-owned tooling AI chip tape-out.”
“Samsung U.S. used it to tape out an SF2 design, achieving 4X productivity improvement.”
“Last week, we launched ChipStack AI Superagent, the world's first agentic AI solution for automating chip design and verifications.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 | $8.05–$8.15 | $8.10 | MAINTAINED |
| Free cash flow | FY2026 | $2B | $2B | MAINTAINED |
| Op margin | FY2026 | 44.75%–45.75% | 45.25% | MAINTAINED |
| Revenue | FY2026 | $5.9B–$6B | $5.95B | MAINTAINED |
| Revenue | FY2026 Q1 | $1.42B–$1.46B | $1.44B | MAINTAINED |
| Issued | Metric | Target | Guide | Actual | Outcome |
|---|---|---|---|---|---|
| FY2026 Q1 | EPS | FY2026 Q2 | $2.02–$2.08 | $2.11 | Met / beat |
| FY2026 Q1 | Op margin | FY2026 Q2 | 44.5%–45.5% | 28.42% | Missed |
| FY2026 Q1 | Revenue | FY2026 Q2 | $1.555B–$1.595B | $1.5845B | Met / beat |
Qualcomm has endorsed Cadence's agentic AI tool, showing adoption of new AI-driven EDA tools at a major customer.
“ChipStack has received compelling endorsements from Qualcomm, NVIDIA, Altera, and TenStoren, among others.”
… AI for design and design for AI fronts. On AI for design, our Cadence AI portfolio continues to gain traction with market-shaping customers. Last week, we launched ChipStack AI Superagent, the world's first agentic AI solution for automating chip design and verifications. is built upon our proven physically accurate product and provides up to 10x productivity improvement for various tasks, including design coding, generating test benches, and debugging. ChipStack has received compelling endorsements from Qualcomm, NVIDIA, Altera, and TenStoren, among others. Our other AI products, such as Cadence Cerebras, Verisium, and Allegro XAI are proliferating at scale. And our LLM-based design agents, powered by Jedi Data Platform, are delivering impressive results. On design for AI, the infrastructure AI phase is in full swing, with AI architectures growing in scale and complexity. Customers are increasingly standardizing on Cadence's full flows to address their performance, power, and time to market challenges. We continue to closely collaborate with market leaders on their next generation AI designs, spanning training, inference, and scaling. We deepen our longstanding partnership with …
Infineon standardizing on Cadence's PCB design tool is a notable win in the system design/PCB segment.
“Earlier in Q3, Infineon standardized on Allegro X”
… in 2025. Earlier in the year, we introduced the new Millennium M2000 AI supercomputer. featuring NVIDIA Blackwell, which is ramping nicely and with growing customer interest across multiple end markets. Our 3DIC platform has become a key enabler for the industry's transition to multi-chip architectures, which are increasingly critical for next-generation AI infrastructure, HPC, and advanced mobile applications. Adoption of our AI-driven Allegro X platform is accelerating. Earlier in Q3, Infineon standardized on Allegro X, and in Q4, STMicroelectronics decided to adopt our Allegro X solution to design printed circuit boards. Our reality data center digital twin solution continued its strong momentum. and was deployed at several leading hyperscalers and marquee AI companies. Beta CAE continues to unlock tremendous opportunities, particularly in the automotive segment. With our previously announced acquisition of Hexagon's D&E business, we'll be poised to accelerate our strategy around physical AI, including in autonomous vehicles and robotics. In closing, I'm pleased with our strong performance in 2025, and I'm excited about the strong momentum across our business. As the AI …
STMicro adopting Allegro X is a major competitive win in the PCB design market, likely displacing a competitor.
… supercomputer. featuring NVIDIA Blackwell, which is ramping nicely and with growing customer interest across multiple end markets. Our 3DIC platform has become a key enabler for the industry's transition to multi-chip architectures, which are increasingly critical for next-generation AI infrastructure, HPC, and advanced mobile applications. Adoption of our AI-driven Allegro X platform is accelerating. Earlier in Q3, Infineon standardized on Allegro X, and in Q4, STMicroelectronics decided to adopt our Allegro X solution to design printed circuit boards. Our reality data center digital twin solution continued its strong momentum. and was deployed at several leading hyperscalers and marquee AI companies. Beta CAE continues to unlock tremendous opportunities, particularly in the automotive segment. With our previously announced acquisition of Hexagon's D&E business, we'll be poised to accelerate our strategy around physical AI, including in autonomous vehicles and robotics. In closing, I'm pleased with our strong performance in 2025, and I'm excited about the strong momentum across our business. As the AI era continues to accelerate, our AI-driven EDA, SDA, and IP portfolio, …
Partnership with Intel Foundry provides an upside opportunity for Cadence if Intel's foundry business ramps WinFoundry customers.
… our broad-based portfolio uniquely positions us to enable autonomous driving and robotic companies to address multimodal silicon and system challenges. In addition, we are increasingly applying AI internally to improve efficiency across engineering, go-to-market, and operations. In 2025, We also further our partnerships with leading foundries. We expanded our collaboration with TSMC to power next-gen AI flows on TSMC's N2 and A16 technologies. We strengthened our engagement with Intel Foundry by officially joining the Intel Foundry Accelerator Design Services Alliance. Rapidus made a wide-ranging commitment to our core EDS software portfolio across digital, custom analog, and verification solutions. And Samsung Foundry expanded its collaboration with Cadence, leveraging our AI-driven design solutions and IP solutions. Now turning to product highlights for Q4. and 2025. Accelerating compute demand driven by the AI infrastructure build out and demanding next generation data center requirements continue to create significant opportunities for our core EDA portfolio. Our core EDA business delivered strong performance with revenue growing 13% in 2025. Our recurring software business …
Broadcom is a key AI customer for Cadence; the strategic collaboration indicates a strong, deeper relationship and continued design activity at Broadcom.
Strong partnership with TSMC indicates Cadence's tools are certified for cutting-edge process nodes, a key competitive moat.
… IP, and system software solutions. And we are particularly excited by the emerging physical AI opportunity and our broad-based portfolio uniquely positions us to enable autonomous driving and robotic companies to address multimodal silicon and system challenges. In addition, we are increasingly applying AI internally to improve efficiency across engineering, go-to-market, and operations. In 2025, We also further our partnerships with leading foundries. We expanded our collaboration with TSMC to power next-gen AI flows on TSMC's N2 and A16 technologies. We strengthened our engagement with Intel Foundry by officially joining the Intel Foundry Accelerator Design Services Alliance. Rapidus made a wide-ranging commitment to our core EDS software portfolio across digital, custom analog, and verification solutions. And Samsung Foundry expanded its collaboration with Cadence, leveraging our AI-driven design solutions and IP solutions. Now turning to product highlights for Q4. and 2025. Accelerating compute demand driven by the AI infrastructure build out and demanding next generation data center requirements continue to create significant opportunities for our core EDA portfolio. Our …
Samsung's adoption of Cadence's AI-driven tools indicates a key foundry partner is standardizing on Cadence for advanced nodes.
… and operations. In 2025, We also further our partnerships with leading foundries. We expanded our collaboration with TSMC to power next-gen AI flows on TSMC's N2 and A16 technologies. We strengthened our engagement with Intel Foundry by officially joining the Intel Foundry Accelerator Design Services Alliance. Rapidus made a wide-ranging commitment to our core EDS software portfolio across digital, custom analog, and verification solutions. And Samsung Foundry expanded its collaboration with Cadence, leveraging our AI-driven design solutions and IP solutions. Now turning to product highlights for Q4. and 2025. Accelerating compute demand driven by the AI infrastructure build out and demanding next generation data center requirements continue to create significant opportunities for our core EDA portfolio. Our core EDA business delivered strong performance with revenue growing 13% in 2025. Our recurring software business re-accelerated to double-digit growth in Q4, a testament to the strength and durability of our model. Our hardware business delivered another record year with over 30 new customers and substantially higher repeat demand from AI and hyperscalers. Seven out of …
The Hexagon acquisition is strategic for Cadence's physical AI strategy, bringing in automotive/robotics simulation software revenue.
… architectures, which are increasingly critical for next-generation AI infrastructure, HPC, and advanced mobile applications. Adoption of our AI-driven Allegro X platform is accelerating. Earlier in Q3, Infineon standardized on Allegro X, and in Q4, STMicroelectronics decided to adopt our Allegro X solution to design printed circuit boards. Our reality data center digital twin solution continued its strong momentum. and was deployed at several leading hyperscalers and marquee AI companies. Beta CAE continues to unlock tremendous opportunities, particularly in the automotive segment. With our previously announced acquisition of Hexagon's D&E business, we'll be poised to accelerate our strategy around physical AI, including in autonomous vehicles and robotics. In closing, I'm pleased with our strong performance in 2025, and I'm excited about the strong momentum across our business. As the AI era continues to accelerate, our AI-driven EDA, SDA, and IP portfolio, powered by new AI agents and accelerated computing, positions cadence extremely well to capture these massive opportunities. Now I will turn it over to John to provide more details on the Q4 results and our 2026 outlook.