Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence’s current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning June 14, 2019, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute Cadence’s current expectations. During the Quiet Period, the business outlook in these documents should be considered historical, speaking as of prior to the Quiet Period only and not subject to any update by Cadence. During the Quiet Period, Cadence’s representatives will not comment on Cadence’s business outlook, financial results or expectations. The Quiet Period will extend until Cadence’s second quarter 2019 earnings release is published, which is currently scheduled for July 22, 2019.

Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
March 30, 2019 and December 29, 2018
(In thousands)
(Unaudited)
		March 30, 2019			December 29, 2018
Current assets:
Cash and cash equivalents		$	538,898		$	533,298
Receivables, net of allowances of $3,566 and $3,936, respectively			264,767			297,082
Inventories			37,480			28,162
Prepaid expenses and other			76,802			92,550
Total current assets			917,947			951,092
Property, plant and equipment, net of accumulated depreciation of $712,996 and $698,493, respectively			253,392			252,630
Goodwill			662,871			662,272
Acquired intangibles, net of accumulated amortization of $324,393 and $333,687, respectively			212,298			225,457
Long-term receivables			3,241			5,972
Other assets			496,562			371,231
Total assets		$	2,546,311		$	2,468,654
Current liabilities:
Revolving credit facility		$	50,000		$	100,000
Accounts payable and accrued liabilities			235,688			256,526
Current portion of deferred revenue			345,751			352,456
Total current liabilities			631,439			708,982
Long-term liabilities:
Long-term portion of deferred revenue			51,312			48,718
Long-term debt			345,470			345,291
Other long-term liabilities			152,253			77,262
Total long-term liabilities			549,035			471,271
Stockholders' equity			1,365,837			1,288,401
Total liabilities and stockholders' equity		$	2,546,311		$	2,468,654

Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three Months Ended March 30, 2019 and March 31, 2018
(In thousands, except per share amounts)
(Unaudited)
		Three Months Ended
		March 30, 2019			March 31, 2018
Revenue:
Product and maintenance		$ 543,518			$ 480,609
Services		33,224			36,704
Total revenue		576,742			517,313
Costs and expenses:
Cost of product and maintenance		50,522			41,730
Cost of services		20,063			21,479
Marketing and sales		116,830			109,148
Research and development		228,210			224,185
General and administrative		30,102			33,299
Amortization of acquired intangibles		3,308			3,630
Restructuring and other credits		(689	)		(1,991	)
Total costs and expenses		448,346			431,480
Income from operations		128,396			85,833
Interest expense		(5,391	)		(6,975	)
Other income (expense), net		5,241			(689	)
Income before provision for income taxes		128,246			78,169
Provision for income taxes		7,691			5,284
Net income		$ 120,555			$ 72,885
Net income per share - basic		$ 0.44			$ 0.27
Net income per share - diluted		$ 0.43			$ 0.26
Weighted average common shares outstanding - basic		273,066			273,773
Weighted average common shares outstanding - diluted		280,615			281,651

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 30, 2019 and March 31, 2018
(In thousands)
(Unaudited)
		Three Months Ended
		March 30,				March 31,
		2019				2018
Cash and cash equivalents at beginning of period		$	533,298			$	688,087
Cash flows from operating activities:
Net income			120,555				72,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			29,740				29,389
Amortization of debt discount and fees			247				292
Stock-based compensation			42,253				37,901
Gain on investments, net			(2,646	)			(996	)
Deferred income taxes			(4,966	)			1,363
Provisions for losses (recoveries) on receivables			(183	)			666
Other non-cash items			122				(170	)
Changes in operating assets and liabilities:
Receivables			35,681				(10,988	)
Inventories			(10,618	)			2,105
Prepaid expenses and other			15,618				8,392
Other assets			10,729				8,025
Accounts payable and accrued liabilities			(43,954	)			(46,956	)
Deferred revenue			(4,451	)			59,854
Other long-term liabilities			(2,713	)			(4,115	)
Net cash provided by operating activities			185,414				157,647
Cash flows from investing activities:
Purchases of non-marketable investments			(33,664	)			-
Proceeds from the sale of non-marketable investments			2,952				-
Purchases of property, plant and equipment			(15,275	)			(13,128	)
Net cash used for investing activities			(45,987	)			(13,128	)
Cash flows from financing activities:
Proceeds from revolving credit facility			50,000				-
Payment on revolving credit facility			(100,000	)			(40,000	)
Proceeds from issuance of common stock			29,858				23,339
Stock received for payment of employee taxes on vesting of restricted stock			(32,822	)			(26,515	)
Payments for repurchases of common stock			(81,114	)			(50,013	)
Change in book overdraft			-				(3,867	)
Net cash used for financing activities			(134,078	)			(97,056	)
Effect of exchange rate changes on cash and cash equivalents			251				11,418
Increase in cash and cash equivalents			5,600				58,881
Cash and cash equivalents at end of period		$	538,898			$	746,968

Cadence Design Systems, Inc.
(Unaudited)
Revenue Mix by Geography (% of Total Revenue)
		2018										2019
GEOGRAPHY		Q1		Q2		Q3		Q4		Year		Q1
Americas		45%		46%		44%		44%		45%		44%
China		9%		8%		9%		13%		10%		10%
Other Asia		18%		18%		20%		18%		18%		19%
Europe, Middle East and Africa		20%		20%		19%		17%		19%		18%
Japan		8%		8%		8%		8%		8%		9%
Total		100%		100%		100%		100%		100%		100%
Revenue Mix by Product Group (% of Total Revenue)
		2018										2019
PRODUCT GROUP		Q1		Q2		Q3		Q4		Year		Q1
Functional Verification, including Emulation and Prototyping Hardware		26%		23%		22%		25%		24%		24%
Digital IC Design and Signoff		30%		30%		30%		28%		29%		30%
Custom IC Design and Simulation		26%		26%		26%		25%		26%		25%
System Interconnect and Analysis		9%		9%		9%		9%		9%		9%
IP		9%		12%		13%		13%		12%		12%
Total		100%		100%		100%		100%		100%		100%

Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Operating Margin
As of April 22, 2019
(Unaudited)
		Three Months Ending		Year Ending
		June 29, 2019		December 28, 2019
		Forecast		Forecast
GAAP operating margin as a percent of total revenue		21% - 22%		~21%
Reconciling items to non-GAAP operating margin as a percent of total revenue:
Amortization of acquired intangibles		2%		2%
Stock-based compensation expense		8%		8%
Non-qualified deferred compensation expenses		0%		0%
Restructuring and other charges (credits)		0%		0%
Acquisition and integration-related costs		0%		0%
Non-GAAP operating margin as a percent of total revenue�nbsp;		31% - 32%		~31%

�nbsp;

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
As of April 22, 2019
(Unaudited)
		Three Months Ending		Year Ending
		June 29, 2019		December 28, 2019
		Forecast		Forecast
Diluted net income per share on a GAAP basis		$0.34 to $0.36		$1.39 to $1.47
Amortization of acquired intangibles		0.05		0.19
Stock-based compensation expense		0.16		0.65
Non-qualified deferred compensation expenses		-		0.01
Restructuring and other charges (credits)		-		-
Acquisition and integration-related costs		0.01		0.02
Other income or expense related to investments and non-qualified deferred compensation plan assets*		-		(0.02)
Income tax effect of non-GAAP adjustments		(0.04)		(0.20)
Diluted net income per share on a non-GAAP basis�nbsp;		$0.52 to $0.54		$2.04 to $2.12
Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Net Income
As of April 22, 2019
(Unaudited)
		Three Months Ending		Year Ending
		June 29, 2019		December 28, 2019
($ in millions)		Forecast		Forecast
Net income on a GAAP basis		$96 to $102		$390 to $412
Amortization of acquired intangibles		14		53
Stock-based compensation expense		44		182
Non-qualified deferred compensation expenses		-		3
Restructuring and other charges (credits)		-		(1)
Acquisition and integration-related costs		2		6
Other income or expense related to investments and non-qualified deferred compensation plan assets*		-		(5)
Income tax effect of non-GAAP adjustments		(11)		(56)
Net income on a non-GAAP basis�nbsp;		$145 to $151		$572 to $594

	�nbsp;		The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.
	*		Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

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