Electronic design automation software firm Cadence Design Systems (CDNS) late Monday crushed Wall Street’s targets for the third quarter and raised its profit outlook for the full year. Cadence stock jumped in extended trading.
The San Jose, Calif.-based company earned an adjusted $1.64 a share on sales of $1.22 billion in the September quarter. Analysts polled by FactSet had expected earnings of $1.44 a share on sales of $1.18 billion. On a year-over-year basis, Cadence earnings rose 30% while sales increased 19%.
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“Cadence delivered exceptional results for the third quarter of 2024, driven by broad-based strength across our portfolio, especially in IP (intellectual property), SD&A (system design and analysis), and hardware systems,” Chief Executive Anirudh Devgan said in a news release.
He added, “Customers are achieving outstanding results with Cadence.AI, and I’m excited by its accelerating proliferation as AI rapidly becomes an integral part of the design workflow.”
Cadence raised its earnings outlook for the full year, but its implied guidance for the fourth quarter was below estimates.
Cadence Stock Pops Higher
Based on the midpoint of its outlook, Cadence expects to earn an adjusted $1.81 a share on sales of $1.35 billion in the fourth quarter. Analysts had been modeling Q4 earnings of $1.98 a share on sales of $1.38 billion. In the year-earlier period, Cadence earned an adjusted $1.38 a share on sales of $1.07 billion.
“Our Q4 bookings pipeline looks exceptionally strong, and we are well positioned to deliver a strong 2024” Chief Financial Officer John Wall said in a statement.
In after-hours trading on the stock market today, Cadence stock jumped more than 5% to 266.80. During the regular session Monday, Cadence stock fell 1.8% to close at 252.77.
Cadence stock is in the IBD Long-Term Leaders Portfolio.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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