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 December 17, 2021, 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 fourth quarter 2021 earnings release is published, which is currently scheduled for February 22, 2022.
| Cadence Design Systems, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| October 2, 2021 and January 2, 2021 | ||||||
| (In thousands) | ||||||
| (Unaudited) | ||||||
| October 2, 2021 | January 2, 2021 | |||||
| Current assets: | ||||||
| Cash and cash equivalents | $ |
1,013,819 |
$ |
928,432 |
||
| Receivables, net |
|
327,191 |
|
338,487 |
||
| Inventories |
|
101,575 |
|
75,956 |
||
| Prepaid expenses and other |
|
100,428 |
|
135,712 |
||
| Total current assets |
|
1,543,013 |
|
1,478,587 |
||
| Property, plant and equipment, net |
|
303,313 |
|
311,125 |
||
| Goodwill |
|
925,949 |
|
782,087 |
||
| Acquired intangibles, net |
|
247,628 |
|
210,590 |
||
| Deferred taxes |
|
766,036 |
|
732,290 |
||
| Other assets |
|
427,936 |
|
436,106 |
||
| Total assets | $ |
4,213,875 |
$ |
3,950,785 |
||
| Current liabilities: | ||||||
| Accounts payable and accrued liabilities | $ |
363,835 |
$ |
349,951 |
||
| Current portion of deferred revenue |
|
543,361 |
|
446,857 |
||
| Total current liabilities |
|
907,196 |
|
796,808 |
||
| Long-term liabilities: | ||||||
| Long-term portion of deferred revenue |
|
95,991 |
|
107,064 |
||
| Long-term debt |
|
347,385 |
|
346,793 |
||
| Other long-term liabilities |
|
232,041 |
|
207,102 |
||
| Total long-term liabilities |
|
675,417 |
|
660,959 |
||
| Stockholders' equity |
|
2,631,262 |
|
2,493,018 |
||
| Total liabilities and stockholders' equity | $ |
4,213,875 |
$ |
3,950,785 |
||
| Cadence Design Systems, Inc. | ||||||||||||||||
| Condensed Consolidated Income Statements | ||||||||||||||||
| For the Three and Nine Months Ended October 2, 2021 and September 26, 2020 | ||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| October 2, 2021 |
September 26, 2020 |
October 2, 2021 |
September 26, 2020 |
|||||||||||||
| Revenue: | ||||||||||||||||
| Product and maintenance | $ |
706,160 |
|
$ |
630,329 |
|
$ |
2,093,098 |
|
$ |
1,813,384 |
|
||||
| Services |
|
44,735 |
|
|
36,278 |
|
|
122,110 |
|
|
109,598 |
|
||||
| Total revenue |
|
750,895 |
|
|
666,607 |
|
|
2,215,208 |
|
|
1,922,982 |
|
||||
| Costs and expenses: | ||||||||||||||||
| Cost of product and maintenance |
|
54,185 |
|
|
64,800 |
|
|
174,933 |
|
|
175,915 |
|
||||
| Cost of services |
|
22,402 |
|
|
17,484 |
|
|
62,380 |
|
|
56,047 |
|
||||
| Marketing and sales |
|
143,401 |
|
|
123,738 |
|
|
412,194 |
|
|
369,958 |
|
||||
| Research and development |
|
289,105 |
|
|
250,934 |
|
|
845,324 |
|
|
743,423 |
|
||||
| General and administrative |
|
42,990 |
|
|
35,928 |
|
|
123,275 |
|
|
105,161 |
|
||||
| Amortization of acquired intangibles |
|
5,000 |
|
|
4,438 |
|
|
14,661 |
|
|
13,234 |
|
||||
| Restructuring and other charges (credits) |
|
(222 |
) |
|
13 |
|
|
(968 |
) |
|
(1,329 |
) |
||||
| Total costs and expenses |
|
556,861 |
|
|
497,335 |
|
|
1,631,799 |
|
|
1,462,409 |
|
||||
| Income from operations |
|
194,034 |
|
|
169,272 |
|
|
583,409 |
|
|
460,573 |
|
||||
| Interest expense |
|
(4,196 |
) |
|
(5,325 |
) |
|
(12,729 |
) |
|
(15,876 |
) |
||||
| Other income (expense), net |
|
(1,143 |
) |
|
1,766 |
|
|
3,701 |
|
|
1,862 |
|
||||
| Income before provision for income taxes |
|
188,695 |
|
|
165,713 |
|
|
574,381 |
|
|
446,559 |
|
||||
| Provision for income taxes |
|
12,388 |
|
|
4,083 |
|
|
55,005 |
|
|
29,653 |
|
||||
| Net income | $ |
176,307 |
|
$ |
161,630 |
|
$ |
519,376 |
|
$ |
416,906 |
|
||||
| Net income per share - basic | $ |
0.65 |
|
$ |
0.59 |
|
$ |
1.90 |
|
$ |
1.52 |
|
||||
| Net income per share - diluted | $ |
0.63 |
|
$ |
0.58 |
|
$ |
1.86 |
|
$ |
1.49 |
|
||||
| Weighted average common shares outstanding - basic |
|
273,194 |
|
|
273,996 |
|
|
273,636 |
|
|
273,633 |
|
||||
| Weighted average common shares outstanding - diluted |
|
278,311 |
|
|
280,024 |
|
|
279,046 |
|
|
279,455 |
|
||||
| Cadence Design Systems, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| For the Nine Months Ended October 2, 2021 and September 26, 2020 | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended | ||||||||
| October 2, | September 26, | |||||||
| 2021 |
2020 |
|||||||
| Cash and cash equivalents at beginning of period | $ |
928,432 |
|
$ |
705,210 |
|
||
| Cash flows from operating activities: | ||||||||
| Net income |
|
519,376 |
|
|
416,906 |
|
||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization |
|
106,962 |
|
|
107,019 |
|
||
| Amortization of debt discount and fees |
|
952 |
|
|
770 |
|
||
| Stock-based compensation |
|
155,860 |
|
|
138,723 |
|
||
| (Gain) loss on investments, net |
|
(330 |
) |
|
5,118 |
|
||
| Deferred income taxes |
|
(34,566 |
) |
|
(18,966 |
) |
||
| Provisions for losses on receivables |
|
234 |
|
|
1,087 |
|
||
| ROU asset amortization and change in operating lease liabilities |
|
(2,917 |
) |
|
2,064 |
|
||
| Other non-cash items |
|
146 |
|
|
410 |
|
||
| Changes in operating assets and liabilities, net of effect of acquired businesses: | ||||||||
| Receivables |
|
15,132 |
|
|
9,945 |
|
||
| Inventories |
|
(25,608 |
) |
|
6,376 |
|
||
| Prepaid expenses and other |
|
36,632 |
|
|
22,769 |
|
||
| Other assets |
|
8,127 |
|
|
(21,287 |
) |
||
| Accounts payable and accrued liabilities |
|
10,501 |
|
|
(30,455 |
) |
||
| Deferred revenue |
|
84,183 |
|
|
124,491 |
|
||
| Other long-term liabilities |
|
10,417 |
|
|
4,430 |
|
||
| Net cash provided by operating activities |
|
885,101 |
|
|
769,400 |
|
||
| Cash flows from investing activities: | ||||||||
| Proceeds from the sale of non-marketable investments |
|
128 |
|
|
- |
|
||
| Purchases of property, plant and equipment |
|
(49,977 |
) |
|
(63,745 |
) |
||
| Cash paid in business combinations, net of cash acquired |
|
(220,026 |
) |
|
(197,562 |
) |
||
| Net cash used for investing activities |
|
(269,875 |
) |
|
(261,307 |
) |
||
| Cash flows from financing activities: | ||||||||
| Proceeds from revolving credit facility |
|
- |
|
|
350,000 |
|
||
| Payment of debt issuance costs |
|
(1,285 |
) |
|
- |
|
||
| Proceeds from issuance of common stock |
|
83,632 |
|
|
71,451 |
|
||
| Stock received for payment of employee taxes on vesting of restricted stock |
|
(108,185 |
) |
|
(85,515 |
) |
||
| Payments for repurchases of common stock |
|
(502,301 |
) |
|
(250,047 |
) |
||
| Net cash provided by (used for) financing activities |
|
(528,139 |
) |
|
85,889 |
|
||
| Effect of exchange rate changes on cash and cash equivalents |
|
(1,700 |
) |
|
7,372 |
|
||
| Increase in cash and cash equivalents |
|
85,387 |
|
|
601,354 |
|
||
| Cash and cash equivalents at end of period | $ |
1,013,819 |
|
$ |
1,306,564 |
|
||
| Cadence Design Systems, Inc. | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Revenue Mix by Geography (% of Total Revenue) | ||||||||||||||||||||||||
| 2020 |
2021 |
|||||||||||||||||||||||
| GEOGRAPHY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | ||||||||||||||||
| Americas | 43 |
% |
44 |
% |
42 |
% |
41 |
% |
42 |
% |
46 |
% |
44 |
% |
46 |
% |
||||||||
| China | 13 |
% |
12 |
% |
17 |
% |
17 |
% |
15 |
% |
12 |
% |
14 |
% |
13 |
% |
||||||||
| Other Asia | 18 |
% |
19 |
% |
19 |
% |
18 |
% |
18 |
% |
18 |
% |
19 |
% |
18 |
% |
||||||||
| Europe, Middle East and Africa |
19 |
% |
18 |
% |
16 |
% |
17 |
% |
18 |
% |
18 |
% |
17 |
% |
17 |
% |
||||||||
| Japan | 7 |
% | 7 |
% | 6 |
% | 7 |
% | 7 |
% | 6 |
% | 6 |
% | 6 |
% | ||||||||
| Total | 100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
||||||||
| Revenue Mix by Product Category (% of Total Revenue) | ||||||||||||||||||||||||
| 2020 |
2021 |
|||||||||||||||||||||||
| PRODUCT CATEGORY | Q1 | Q2 | Q3 | Q4 | Year | Q1 | Q2 | Q3 | ||||||||||||||||
| Custom IC Design and Simulation | 25 |
% |
24 |
% |
24 |
% |
26 |
% |
25 |
% |
23 |
% |
23 |
% |
23 |
% |
||||||||
| Digital IC Design and Signoff | 29 |
% |
28 |
% |
27 |
% |
31 |
% |
29 |
% |
27 |
% |
28 |
% |
29 |
% |
||||||||
| Functional Verification, including Emulation and Prototyping Hardware | 23 |
% |
24 |
% |
23 |
% |
19 |
% |
22 |
% |
26 |
% |
25 |
% |
23 |
% |
||||||||
| IP | 14 |
% |
14 |
% |
15 |
% |
13 |
% |
14 |
% |
14 |
% |
13 |
% |
14 |
% |
||||||||
| System Design and Analysis | 9 |
% |
10 |
% |
11 |
% |
11 |
% |
10 |
% |
10 |
% |
11 |
% |
11 |
% |
||||||||
| Total | 100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
100 |
% |
||||||||
| Cadence Design Systems, Inc. | ||||
| Impact of Non-GAAP Adjustments on Forward Looking Operating Margin | ||||
| As of October 25, 2021 | ||||
| (Unaudited) | ||||
| Three Months Ending | Year Ending | |||
| January 1, 2022 | January 1, 2022 | |||
| Forecast | Forecast | |||
| GAAP operating margin as a percent of total revenue | ~24% | ~26% | ||
| Reconciling items to non-GAAP operating margin as a percent of total revenue: | ||||
| Stock-based compensation expense | 8% |
7% |
||
| Amortization of acquired intangibles | 2% |
2% |
||
| Acquisition and integration-related costs | 1% |
1% |
||
| Restructuring and other credits | 0% |
0% |
||
| Non-qualified deferred compensation expenses | 0% |
0% |
||
| Special charges* | 0% |
1% |
||
| Non-GAAP operating margin as a percent of total revenue�nbsp; | ~35% | ~37% | ||
| �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. | |
| * Comprised of costs related to a voluntary retirement program in the second quarter of 2021. | |
| Cadence Design Systems, Inc. | ||||
| Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share | ||||
| As of October 25, 2021 | ||||
| (Unaudited) | ||||
| Three Months Ending | Year Ending | |||
| January 1, 2022 | January 1, 2022 | |||
| Forecast | Forecast | |||
| Diluted net income per share on a GAAP basis | $0.49 to $0.53 | $2.36 to $2.40 | ||
| Stock-based compensation expense | 0.21 |
0.77 |
||
| Amortization of acquired intangibles | 0.06 |
0.24 |
||
| Acquisition and integration-related costs | 0.02 |
0.08 |
||
| Restructuring and other credits | - |
- |
||
| Non-qualified deferred compensation expenses | - |
0.01 |
||
| Special charges* | - |
0.10 |
||
| Other income or expense related to investments and non-qualified deferred compensation plan assets** | - |
(0.02) |
||
| Income tax effect of non-GAAP adjustments | (0.02) |
(0.30) |
||
| Diluted net income per share on a non-GAAP basis�nbsp; | $0.76 to $0.80 | $3.24 to $3.28 | ||
| Cadence Design Systems, Inc. | ||||
| Impact of Non-GAAP Adjustments on Forward Looking Net Income | ||||
| As of October 25, 2021 | ||||
| (Unaudited) | ||||
| Three Months Ending | Year Ending | |||
| January 1, 2022 | January 1, 2022 | |||
| ($ in millions) | Forecast | Forecast | ||
| Net income on a GAAP basis | $137 to $149 | $657 to $669 | ||
| Stock-based compensation expense | 58 |
214 |
||
| Amortization of acquired intangibles | 17 |
67 |
||
| Acquisition and integration-related costs | 6 |
22 |
||
| Restructuring and other credits | - |
(1) |
||
| Non-qualified deferred compensation expenses | - |
4 |
||
| Special charges* | - |
27 |
||
| Other income or expense related to investments and non-qualified deferred compensation plan assets** | - |
(4) |
||
| Income tax effect of non-GAAP adjustments | (7) |
(84) |
||
| Net income on a non-GAAP basis�nbsp; | $211 to $223 | $902 to $914 | ||
| �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. | |
| * Comprised of costs related to a voluntary retirement program in the second quarter of 2021. | |
| ** 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. |
