Prime Highlights
- Shares rose more than 6%after the company delivered quarterly results that beat expectations, boosting investor confidence.
- CEO Anirudh Devgan highlighted accelerating demand for custom silicon, driven by AI and large language model infrastructure investments.
Key Facts
- Fourth-quarter adjusted earnings came in at $1.99 per share on $1.44 billion in revenue, exceeding analyst estimates of $1.91 per share on $1.42 billion.
- Cadence expects full-year revenue between $5.9 billion and $6 billion, placing its outlook at the top end of market forecasts.
Background
Cadence Design Systems shares rose more than 6% on Wednesday after the chip design software maker posted quarterly results that topped market expectations and pointed to strong demand from companies developing their own processors.
The San Jose-based firm reported adjusted earnings of $1.99 per share for the fourth quarter of 2025 on revenue of $1.44 billion. Both figures came in roughly 6% higher than a year earlier and exceeded analysts’ forecasts of $1.91 per share on $1.42 billion in revenue.
Chief executive Anirudh Devgan said nearly 45% of Cadence’s revenue now comes from system companies, including cloud providers and manufacturers of phones and cars. He said these firms want to design chips tailored to their own workloads so they can better align hardware and software performance.
He added that demand for custom silicon will continue to grow as companies invest heavily in artificial intelligence and large language model infrastructure. He pointed to in-house chips developed by Apple and Google as examples of the trend.
Cadence expects full-year revenue between $5.9 billion and $6 billion, placing its forecast at the top end of market estimates. The company said continued spending on AI, research and development, and chip design complexity should support future growth.
Cadence operates in a competitive electronic design automation market alongside major rivals, but rising custom chip activity among large technology companies is strengthening its pipeline and lifting investor confidence.
