Stock Analysis on Net
Stock Analysis on Net

Cadence Design Systems Inc. (NASDAQ:CDNS)

Common-Size Income Statement 
Quarterly Data

Cadence Design Systems Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Mar 31, 2026 Dec 31, 2025 Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Oct 1, 2022 Jul 2, 2022 Apr 2, 2022 Dec 31, 2021 Oct 2, 2021 Jul 3, 2021 Apr 3, 2021
Product and maintenance 91.50 92.53 90.21 91.77 89.41 91.39 90.53 90.55 90.51 91.89 94.40 94.49 94.33 94.00 93.71 93.56 93.84 93.12 94.04 94.45 94.98
Services 8.50 7.47 9.79 8.23 10.59 8.61 9.47 9.45 9.49 8.11 5.60 5.51 5.67 6.00 6.29 6.44 6.16 6.88 5.96 5.55 5.02
Revenue 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of product and maintenance -10.40 -10.00 -8.87 -10.92 -9.39 -11.60 -9.02 -8.90 -7.47 -6.69 -8.39 -7.60 -9.81 -7.75 -6.91 -8.01 -8.07 -6.17 -7.22 -7.67 -8.82
Cost of services -4.15 -3.11 -4.74 -3.52 -4.06 -4.63 -4.40 -4.23 -4.94 -3.05 -2.32 -2.32 -2.37 -2.65 -2.80 -2.79 -2.78 -2.84 -2.98 -2.87 -2.59
Cost of revenue -14.55% -13.11% -13.61% -14.44% -13.45% -16.22% -13.41% -13.13% -12.41% -9.74% -10.71% -9.92% -12.18% -10.39% -9.71% -10.81% -10.85% -9.02% -10.20% -10.54% -11.41%
Gross margin 85.45% 86.89% 86.39% 85.56% 86.55% 83.78% 86.59% 86.87% 87.59% 90.26% 89.29% 90.08% 87.82% 89.61% 90.29% 89.19% 89.15% 90.98% 89.80% 89.46% 88.59%
Marketing and sales -14.35 -14.36 -14.38 -15.73 -16.32 -14.78 -15.61 -17.60 -17.90 -16.88 -17.22 -17.11 -16.31 -19.09 -16.94 -16.24 -15.55 -19.15 -19.10 -18.67 -18.05
Research and development -34.49 -32.26 -31.60 -34.66 -35.34 -28.91 -33.51 -34.95 -37.55 -34.38 -36.13 -36.29 -34.29 -38.94 -35.86 -33.42 -32.26 -37.38 -38.50 -39.16 -36.82
General and administrative -5.98 -7.17 -5.83 -5.41 -5.08 -5.18 -5.89 -5.98 -6.81 -7.09 -5.72 -5.59 -5.24 -7.56 -8.16 -6.00 -5.43 -8.50 -5.73 -5.54 -5.43
Amortization of acquired intangibles -1.37 -0.80 -0.76 -0.72 -0.72 -0.68 -0.75 -0.63 -0.54 -0.47 -0.45 -0.44 -0.42 -0.55 -0.44 -0.54 -0.55 -0.64 -0.67 -0.69 -0.63
Loss related to contingent liability 0.00 0.00 0.00 -10.08 0.00 -0.61 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Restructuring 0.00 -0.13 -2.05 0.00 0.01 0.08 -2.02 0.00 -0.03 0.05 -1.13 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.03 0.06 0.04
Income from operations 29.26% 32.17% 31.77% 18.96% 29.10% 33.69% 28.80% 27.71% 24.77% 31.49% 28.63% 30.65% 31.56% 23.46% 28.89% 32.99% 35.37% 25.31% 25.84% 25.46% 27.71%
Interest expense -2.14 -2.04 -2.17 -2.27 -2.34 -2.21 -2.02 -1.22 -0.86 -0.84 -0.89 -0.91 -0.91 -1.01 -0.61 -0.50 -0.46 -0.55 -0.56 -0.59 -0.57
Other income (expense), net 1.93 4.10 -0.27 5.31 1.87 0.71 0.65 3.28 6.82 3.23 1.57 0.82 0.81 0.94 -0.33 -0.70 -0.54 0.34 -0.15 0.29 0.37
Income before provision for income taxes 29.04% 34.23% 29.34% 22.00% 28.63% 32.20% 27.43% 29.76% 30.72% 33.88% 29.32% 30.56% 31.47% 23.39% 27.95% 31.79% 34.37% 25.10% 25.13% 25.16% 27.50%
Provision for income taxes -6.27 -7.28 -7.89 -9.45 -6.61 -7.11 -7.84 -8.13 -6.18 -3.57 -4.46 -7.92 -7.80 3.32 -7.31 -10.00 -8.27 -2.26 -1.65 -3.76 -2.07
Net income 22.77% 26.95% 21.45% 12.55% 22.02% 25.09% 19.59% 21.64% 24.54% 30.31% 24.86% 22.64% 23.67% 26.71% 20.64% 21.80% 26.10% 22.84% 23.48% 21.41% 25.43%

Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 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).

The company maintains a high-margin business model characterized by strong operational profitability, although a gradual compression in gross margins and shifts in revenue composition are observable over the analyzed period. Net income consistently remains positive, typically fluctuating between 20% and 30% of revenue, despite periodic volatility induced by non-recurring items.

Revenue Mix and Gross Profitability
A gradual shift in the revenue stream is evident, as Product and Maintenance revenue declined from a peak of 94.98% in April 2021 to approximately 91.50% by March 2026. This trend is mirrored by a corresponding increase in Services revenue, which rose from approximately 5% in 2021 to peak at 10.59% in March 2025. Gross margins, while remaining robust, exhibit a slight downward trajectory, moving from a high of 90.98% in December 2021 to 85.45% by March 2026, driven by an increase in the cost of revenue from roughly 11% to over 14%.
Operating Expense Trends
Research and Development (R&D) represents the most significant operational expenditure, consistently ranging between 28% and 39% of revenue. A moderate reduction in R&D intensity is noted in the latter part of the period, reaching a low of 28.91% in December 2024. Marketing and Sales expenses have remained relatively stable, generally fluctuating between 14% and 19%. General and Administrative costs have stayed constrained, typically residing between 5% and 8% of revenue.
Operational Efficiency and Non-Recurring Items
Income from operations has shown volatility, peaking at 35.37% in April 2022 and dipping to 18.96% in June 2025. This specific decline in June 2025 is directly attributable to a significant loss related to a contingent liability amounting to 10.08% of revenue. Additionally, restructuring charges have appeared sporadically, with notable impacts in September 2023 and September 2025, though these typically represent small fractions of total revenue.
Financial Costs and Bottom-Line Performance
Interest expenses have trended upward, increasing from approximately 0.5% of revenue in 2021 to over 2% by 2026. Other income (expense) has become more volatile and impactful, providing significant positive contributions in early 2024 and mid-2025. Despite these fluctuations and the rise in interest costs, net income has remained resilient, ending the period at 22.77% in March 2026, closely aligning with the historical average of the previous five years.

AI Ask an analyst for more