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Cadence Beats Q4 Targets, Shares Jump as AI Demand Drives Record Backlog and 2026 Guidance

Bookings tied to complex chip projects signal revenue visibility into 2026.

Overview

  • The chip design software maker posted adjusted EPS of $1.99 and revenue of $1.44 billion for Q4, with net income of $388.1 million, topping forecasts.
  • For the March quarter, the company projects EPS of $1.89 to $1.95; for 2026 it guides revenue of $5.9 billion to $6.0 billion and EPS of $8.05 to $8.15.
  • CFO John Wall reported a record $7.8 billion backlog from strong Q4 bookings, indicating contracted work to be delivered in future periods.
  • Results reflect robust demand for tools used to design complex AI processors, and Cadence recently introduced a virtual AI agent intended to accelerate chip development for major customers.
  • Shares rose about 9% on Wednesday trading after the report.