Cadence Design Systems, Inc. (Nasdaq: CDNS) has reported its financial results for the fourth quarter and fiscal year 2023, showing a strong performance and significant growth. The company’s total revenue for fiscal year 2023 increased by 15% year over year, reaching $4.090 billion compared to $3.562 billion in 2022.
In the fourth quarter of 2023, Cadence recorded a revenue of $1.069 billion, a notable increase from the $900 million in Q4 2022. The GAAP operating margin also saw a substantial improvement, reaching 31% compared to 23% in the same quarter of the previous year. Additionally, the non-GAAP operating margin rose to 43% from 36% in Q4 2022. The company’s GAAP diluted net income per share for Q4 2023 was $1.19, up from $0.88 in Q4 2022, while the non-GAAP diluted net income per share increased to $1.38 from $0.96 in the same period.
Commenting on the financial results, Anirudh Devgan, president and chief executive officer of Cadence, expressed excitement about the company’s performance in 2023. He attributed the success to the innovative solutions and the effective execution of the Intelligent System Design strategy. Devgan also highlighted the promising opportunities in AI and 3D-IC, expressing confidence in continuing to drive business momentum through technology leadership.
John Wall, senior vice president and chief financial officer, echoed Devgan’s sentiments, emphasizing the strong finish to the year with growth across all businesses. Wall also noted the record year-end backlog of $6.0 billion and current remaining performance obligations (cRPO) of $3.2 billion, indicating a robust foundation for the company’s future growth.
Looking ahead, Cadence provided its business outlook for fiscal year 2024, expecting revenue in the range of $4.55 billion to $4.61 billion. The company also anticipates GAAP and non-GAAP operating margins in the range of 32% to 33% and 42% to 43% respectively. Furthermore, the projected GAAP and non-GAAP diluted net income per share for fiscal year 2024 are in the ranges of $4.08 to $4.18 and $5.87 to $5.97.
For the first quarter of 2024, Cadence forecasts revenue in the range of $990 million to $1.01 billion, with GAAP and non-GAAP operating margins expected to be between 24.5% to 25.5% and 36.5% to 37.5% respectively. The company also projects GAAP and non-GAAP diluted net income per share in the range of $0.74 to $0.78.
Overall, Cadence’s strong financial performance in 2023 and optimistic outlook for 2024 reflect its continued growth and strategic positioning in the market.
