Common-Size Income Statement
Quarterly Data
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Cadence Design Systems Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).
- Revenue Composition
- The proportion of revenue derived from product and maintenance services gradually declined from above 94% in early 2020 to near 90% by late 2024 and 2025. In contrast, services as a revenue component increased over the same period, rising from under 6% in 2020 to approximately 9-10% in the later periods. This shift indicates a gradual transition towards a higher mix of services revenue within total revenue.
- Cost Structure
- Costs related to product and maintenance as a percentage of revenue showed fluctuations but generally trended higher in later periods, reaching as much as -11.6% in early 2025, suggesting increasing product and maintenance costs relative to revenue. The cost of services similarly increased, particularly from 2023 onward, reaching around -4.9% in early 2024, after relatively stable earlier levels near -2.5% to -3%. Overall cost of revenue (sum of product and services costs) increased notably towards the end of the timeline, reaching beyond -16% in late 2024, signaling rising expense pressure relative to revenue.
- Profitability and Margins
- Gross margin remained relatively stable around high 80% to low 90%, with some fluctuation. It peaked close to 90% in 2021 and early 2022 but declined to around 83.8% by late 2024, reflecting the increased costs mentioned. Operating income as a percentage of revenue experienced variability but generally stayed in the 22% to 33% range, with a spike around early 2022 reaching above 35%, before settling near 30% in later periods. Net income mirrored similar variability, consistently strong but showing some decrease to around 12.5% in mid-2025 before recovering somewhat by the end of that year.
- Operating Expenses
- Marketing and sales expenses, as a percent of revenue, decreased notably from around -20% in 2020 to approximately -14% to -16% by 2024-2025, indicating improved cost efficiency or strategic shifts in expenditure. Research and development expenses also declined as a percentage of revenue, moving from near -39% in 2020 to roughly -30% by the end of the period, suggesting tighter R&D expense management or changes in investment. General and administrative costs fluctuated between roughly -5% and -8.5%, with some spikes but no clear long-term upward or downward trend. Amortization of acquired intangibles remained relatively minor and stable, below -1% throughout.
- Other Items
- Interest expense remained low but showed a slight upward trend from under -1% to near -2% by 2024-2025, possibly indicating increased debt levels or interest rates. Other income and expense items varied significantly, with positive spikes in 2023 and 2024, suggesting occasional gains or favorable adjustments. Provision for income taxes showed volatility, with certain quarters reflecting tax benefits or unusual items, including negative provisions (indicating tax benefits) in some periods, which impacted net income volatility.
- Noteworthy Anomalies
- There was a notable loss related to a contingent liability recorded near -10% revenue in late 2025, representing a significant non-recurring expense impacting that quarter's profitability. Restructuring expenses were generally minimal or slightly negative, with sporadic small charges or benefits recognized over the periods, not materially affecting overall results.
- Summary Insight
- The data reveals a gradual shift in revenue composition towards a higher services share, accompanied by increasing costs relative to revenue, particularly in product and services cost categories. Despite pressure on gross margins and operating costs, overall profitability remained robust. The company managed to control marketing, sales, and R&D expenses as a percentage of revenue effectively, contributing to sustained operating income. Variable income tax provisions and some one-off items introduced fluctuations in net income beyond operational performance. The trends suggest ongoing adjustments in cost management and revenue mix, with occasional non-recurring impacts influencing specific quarterly outcomes.