SAN JOSE, Calif. — (BUSINESS WIRE) — February 21, 2022 — Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the fourth quarter and fiscal year 2021.
Cadence reported 2021 revenue of $2.988 billion, compared to revenue of $2.683 billion for 2020. On a GAAP basis, Cadence achieved operating margin of 26 percent and recognized net income of $696 million, or $2.50 per share on a diluted basis, in 2021, compared to operating margin of 24 percent and net income of $591 million, or $2.11 per share on a diluted basis, for 2020. Revenue for the fourth quarter of 2021 totaled $773 million, compared to revenue of $760 million for the same period in 2020. Cadence achieved operating margin of 25 percent and recognized net income of $177 million, or $0.63 per share on a diluted basis, in the fourth quarter of 2021, compared to operating margin of 24 percent and net income of $174 million, or $0.62 per share on a diluted basis, for the same period in 2020.
Using the non-GAAP measures defined below, operating margin for 2021 was 37 percent and net income was $918 million, or $3.29 per share on a diluted basis, compared to operating margin of 35 percent and net income of $782 million, or $2.80 per share on a diluted basis, for 2020. For the fourth quarter of 2021, operating margin was 36 percent and net income was $227 million, or $0.82 per share on a diluted basis, compared to operating margin of 37 percent and net income of $234 million, or $0.83 per share on a diluted basis, for the same period in 2020.
“Cadence delivered exceptional business results for 2021, driven by our highly innovative solutions and outstanding execution by the Cadence team,” said Anirudh Devgan, president and chief executive officer. “We accelerated our Intelligent System Design strategy, introducing over a dozen significant innovative products and making key strategic acquisitions. With generational industry trends continuing to drive robust design activity at both semiconductor and system companies, I excitedly look forward to Cadence driving further customer and shareholder success this year.”
“2021 was another year of continuous improvement at Cadence. Steady growth in our three year revenue growth CAGR continues to drive operating margin expansion, and the quality of those improvements in earnings are showing up in our operating cash, which hit $1.1 billion for the year,” said John Wall, senior vice president and chief financial officer. “I am pleased that we can build on 2021 with a strong outlook for 2022.”
CFO Commentary
Commentary on the fourth quarter and fiscal year 2021 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.
Business Outlook
For the first quarter of 2022, the company expects total revenue in the range of $850 million to $870 million. First quarter GAAP operating margin is expected to be in the range of 30 percent to 31 percent and GAAP net income per diluted share is expected to be in the range of $0.70 to $0.74. Using the non-GAAP measures defined below, operating margin is expected to be in the range of 40 percent to 41 percent and net income per diluted share is expected to be in the range of $1.00 to $1.04.
For fiscal year 2022, the company expects total revenue in the range of $3.32 billion to $3.38 billion. On a GAAP basis, operating margin is expected to be in the range of 27.5 percent to 29 percent and GAAP net income per diluted share for 2022 is expected to be in the range of $2.46 to $2.56. Using the non-GAAP measures defined below, operating margin for 2022 is expected to be in the range of 37.5 percent to 39 percent and net income per diluted share for 2022 is expected to be in the range of $3.70 to $3.80.
The company utilizes a long-term projected non-GAAP tax rate, which reflects currently available information, as well as other factors and assumptions. The non-GAAP tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in the company’s geographic earnings mix, or other changes to the company’s strategy or business operations. The company expects to use this normalized non-GAAP tax rate through fiscal 2025 but will re-evaluate this rate periodically for significant items that may materially affect its projections.
A schedule showing reconciliations of the business outlook from GAAP operating margin, GAAP net income and GAAP diluted net income per share to non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per share, respectively, is included in this release.
Audio Webcast Scheduled
Anirudh Devgan, president and chief executive officer, and John Wall, senior vice president and chief financial officer, will host the fourth quarter and fiscal year 2021 financial results audio webcast today, February 22, 2022, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting February 22, 2022 at 5 p.m. (Pacific) and ending March 18, 2022 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
About Cadence
Cadence is a pivotal leader in electronic systems design, building upon more than 30 years of computational software expertise. The company applies its underlying Intelligent System Design strategy to deliver software, hardware and IP that turn design concepts into reality. Cadence customers are the world’s most innovative companies, delivering extraordinary products from chips to boards to complete systems for the most dynamic market applications, including hyperscale computing, 5G communications, automotive, mobile, aerospace, consumer, industrial and healthcare. For seven years in a row, Fortune magazine has named Cadence one of the 100 Best Companies to Work For. Learn more at www.cadence.com.
© 2022 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
This document includes forward-looking statements which are based on current expectations and preliminary assumptions that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) change in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence's products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates and Cadence’s ability to access capital and debt markets; (vii) the acquisition of other companies or technologies or the failure to successfully integrate and operate them; (viii) events that affect cash flow, liquidity, or reserves, or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (ix) the effects of any litigation, regulatory or other proceedings to which Cadence is or may become a party; and (x) the duration, severity, volatility and effects of the COVID-19 pandemic and containment measures on Cadence, its employees, and its suppliers and customers, which may also have the effect of heightening the other risks described in this paragraph. In addition, the timing and amount of Cadence's repurchase of its common stock under the authorizations will be subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.
