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Cadence Raises 2026 Forecast After AI-Driven Q2 Beat and Record Backlog

Rising demand for AI-focused chip design tools improved revenue visibility and prompted the company to lift guidance while expanding buybacks.

The logo of Cadence Design Systems is pictured outside the company's offices in San Jose, California, U.S., January 31, 2020. Picture taken January 31, 2020. REUTERS/Stephen Nellis

Overview

  • Cadence reported stronger-than-expected Q2 results on Monday with $1.584 billion in revenue and $2.11 adjusted earnings per share.
  • The company closed the quarter with a record $8.1 billion backlog and said $4.2 billion of that is expected to convert to revenue in the next 12 months.
  • Cadence raised its full-year 2026 revenue range to $6.26 billion–$6.34 billion and its adjusted EPS outlook to $8.05–$8.15, citing accelerating demand for AI tools.
  • Management highlighted AuraStack, an AI 'super agent' that automates design planning from plain-language goals, and announced multi-year collaborations with Intel and Samsung Foundry for advanced nodes.
  • Cadence repurchased $200 million of stock in the quarter, holds about $1.44 billion in cash against $2.5 billion of debt, plans to devote roughly half of 2026 free cash flow to buybacks, and noted China accounted for 15% of Q2 revenue which renews regulatory scrutiny.