What it does
Cadence states that it develops computational, AI-driven software, accelerated hardware and silicon IP products and solutions. Its offerings are organized into Core EDA, Semiconductor IP and System Design and Analysis. Core EDA covers semiconductor design and verification; Semiconductor IP includes silicon subsystems, software and related services; and SD&A addresses design and verification of electronic systems, including chips, packages and printed circuit boards. The company also provides cloud access, technical support, education, design and engineering services, and molecular modeling and simulation solutions and services.
Source: Cadence Design Systems, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
How it makes money
The company states that it primarily licenses software through time-based arrangements, generally lasting two to three years, while a small portion is sold under perpetual licenses. It sells or leases hardware, licenses design IP under nonexclusive agreements for specific designs, and in some IP arrangements collects royalties as customers ship products incorporating its IP. It also earns services revenue from engineering services, fixed-fee customized IP and cloud-based solutions. The product-and-maintenance and services revenue table below provides the reported revenue mix.
Source: Cadence Design Systems, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Customers and geography
The filing describes customers as semiconductor companies that design and manufacture integrated circuits, and systems companies that design and manufacture electromechanical systems containing semiconductors and other electronics. Engineering-services customers primarily include semiconductor and systems companies serving consumer, hyperscale computing, 5G communications, mobile, automotive, aerospace and defense, industrial and life-science sectors. Cadence states that it markets and supports international customers through subsidiaries, and uses a third-party distributor for certain customers in Japan. The filing describes the company as global but does not provide geographic revenue figures in this excerpt.
Source: Cadence Design Systems, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Competition
The filing states that Cadence operates in a highly competitive market with domestic and international competitors. It names Synopsys, Inc.; Ansys, Inc. (acquired by Synopsys); Siemens EDA; Keysight Technologies, Inc.; Schrödinger, Inc.; CEVA, Inc.; Altium Limited (acquired by Renesas Electronics Corporation); and Zuken, Inc. It also identifies emerging China-based players Huada Empyrean, Xpeedic Technology, X-EPIC, Primarius Technologies, Univista and Giga Design Automation. Other cited competitors include tool providers, device manufacturers with in-house EDA capabilities, technical and computational software companies, design and consulting firms, IP companies, and independent engineering-service providers.
Source: Cadence Design Systems, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov
Key risks
The filing’s risk summary and risk-factor excerpts identify the following risks:
- Operating results can vary, including because of the timing of revenue recognition for hardware, IP and certain software products.
- Acquisitions, investments and other transactions can create operating difficulties, costs and integration risks.
- IP claims and litigation could require redesigns, damages, license fees, cessation of licensing or services, or customer refunds.
- Trade restrictions, sanctions and other trade barriers can lengthen sales cycles or restrict product sales and licensing.
- Customer consolidation could affect operating results.
- Competitive products, platforms and services or aggressive pricing could reduce revenue, profitability or competitive position.
Source: Cadence Design Systems, Inc. Form 10-K for fiscal 2025, Item 1A — sec.gov
People and operations
As of December 31, 2025, Cadence had 13,800 employees. The company states that a substantial majority of its global workforce worked in engineering roles and characterizes that workforce as technical and specialized. It says it measures employee engagement through regular surveys and provides formal and on-the-job training, online learning resources and tuition reimbursement opportunities. Operationally, subcontractors manufacture, assemble and test its hardware, including PCBs, custom ICs and FPGA-based prototyping components, before delivery; software and documentation are primarily delivered electronically. The headquarters is in San Jose, California.
Source: Cadence Design Systems, Inc. Form 10-K for fiscal 2025, Item 1 — sec.gov