Cadence Design Systems announced Monday that it is raising its annual revenue and profit outlooks, pointing to surging demand for its artificial intelligence-powered software used in chip and electronic system design.
The company’s stock jumped more than 5% in after-hours trading following the news.
Cadence develops what are known as electronic design automation tools — software that engineers use to design and test semiconductors and electronic systems before they are built.
Demand for those tools has climbed sharply as chipmakers and technology companies work to build increasingly complex systems-on-chip and AI accelerators. Among Cadence’s customers are AI-chip leader Nvidia and iPhone-maker Apple.
For full-year 2026, Cadence now expects revenue to fall between $6.26 billion and $6.34 billion. That’s a notable increase from its previous forecast of $6.13 billion to $6.23 billion, and above the analyst consensus estimate of $6.21 billion compiled by LSEG.
The company also raised its adjusted earnings outlook to between $8.05 and $8.15 per share, up from the prior range of $7.85 to $7.95. That also exceeds analyst estimates of $7.96 per share.
Earlier this month, Cadence introduced an AI tool called AuraStack, which the company describes as a “super agent.” The tool allows engineers to describe their design goals in plain language, after which the system plans and executes the work using Cadence’s existing software to lay out and virtually test circuit designs.
For the second quarter, Cadence reported revenue of $1.584 billion — a 24.2% increase year over year — largely matching analyst expectations. Adjusted earnings came in at $2.11 per share, topping estimates of $2.05.
The company’s order backlog at the end of the quarter stood at $8.1 billion, with $4.2 billion of that expected to be recognized as revenue over the next 12 months.
