Cadence (CDNS) Reports Earnings Tomorrow: What To Expect

Semiconductor design software provider Cadence Design Systems (NASDAQ:CDNS) will be reporting results this Monday afternoon. Here’s what to look for.

Cadence met analysts’ revenue expectations last quarter, reporting revenues of $1.24 billion, up 23.1% year on year. It was a satisfactory quarter for the company, with an impressive beat of analysts’ EBITDA estimates.

Is Cadence a buy or sell going into earnings? Read our full analysis here, it’s free.

This quarter, analysts are expecting Cadence’s revenue to grow 18% year on year to $1.25 billion, improving from the 8.6% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.56 per share.

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Cadence has missed Wall Street’s revenue estimates twice over the last two years.

Looking at Cadence’s peers in the vertical software segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Adobe delivered year-on-year revenue growth of 10.6%, beating analysts’ expectations by 1.5%, and Agilysys reported revenues up 20.7%, topping estimates by 3.1%. Adobe traded down 5.3% following the results while Agilysys was also down 4.7%.

Read our full analysis of Adobe’s results here and Agilysys’s results here.

There has been positive sentiment among investors in the vertical software segment, with share prices up 4.2% on average over the last month. Cadence is up 9.2% during the same time and is heading into earnings with an average analyst price target of $331.01 (compared to the current share price of $333.14).

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