Cadence Design Systems Inc. (NASDAQ:CDNS)

Current assets and adjusted current assets demonstrate a consistent upward trend over the five-year period. While the values are very close, adjusted current assets are consistently higher than reported current assets.

Overall Trend

Both current assets and adjusted current assets increased from 2021 to 2025. The most significant growth occurred between 2022 and 2024, with a substantial increase in both metrics. Growth slowed between 2024 and 2025, but remained positive.

Year-over-Year Changes

From 2021 to 2022, a slight decrease is observed in both current and adjusted current assets. However, from 2022 to 2023, both metrics show a moderate increase. The period from 2023 to 2024 exhibits the largest year-over-year change, with both values more than doubling. The increase from 2024 to 2025 is more modest, representing approximately 16% growth for both metrics.

Difference Between Metrics

The difference between current assets and adjusted current assets remains relatively stable throughout the period, fluctuating between approximately US$3,700 thousand and US$4,800 thousand. This suggests a consistent, though not dramatically large, adjustment being made to current assets.

Growth Rates

The largest percentage increase occurred between 2023 and 2024. While the absolute increase from 2024 to 2025 was substantial in dollar terms, the percentage growth was lower than the previous year, indicating a deceleration in the rate of asset accumulation.

Total assets and adjusted total assets both demonstrate a consistent upward trend over the five-year period from 2021 to 2025. However, the magnitude of growth differs between the two measures, indicating a systematic adjustment is being applied.

Overall Growth

Total assets increased from US$4,386,299 thousand in 2021 to US$10,153,148 thousand in 2025, representing a cumulative growth of approximately 131.4%. Adjusted total assets grew from US$3,626,221 thousand in 2021 to US$9,239,303 thousand in 2025, a cumulative growth of roughly 154.8%.

Growth Rate Analysis

The growth rate of adjusted total assets consistently exceeds that of total assets each year. For example, in 2022, total assets grew by 17.1% while adjusted total assets grew by 18.2%. This pattern continues through 2025, with adjusted total assets exhibiting a higher percentage increase than total assets in each period.

Adjustment Magnitude

The difference between total assets and adjusted total assets widens over time. In 2021, the adjustment reduced total assets by approximately 17.4%. By 2025, this adjustment represents a reduction of approximately 8.9%. While the percentage reduction decreases, the absolute difference in US$ thousands increases significantly, from US$760,078 thousand in 2021 to US$913,845 thousand in 2025.

The consistent application of an adjustment downwards to total assets suggests the presence of items included in the reported total assets that are being excluded for specific analytical purposes. The increasing absolute difference between the two figures indicates that these items are growing in magnitude alongside the overall asset base.

Year-over-Year Changes

The largest year-over-year increase in total assets occurred between 2023 and 2024 (58.2%), while the largest increase in adjusted total assets also occurred between 2023 and 2024 (66.8%). This suggests a particularly significant event or series of transactions impacted asset values during that period, and the adjustment applied to those assets was proportionally larger.

Further investigation into the nature of the adjustment is warranted to understand the specific assets or liabilities being excluded and the rationale behind their exclusion. This understanding is crucial for accurate financial analysis and interpretation.

Current liabilities exhibited a generally increasing trend over the five-year period, though with some fluctuation. Reported current liabilities rose from 971,225 thousand US dollars in 2021 to 1,347,696 thousand US dollars in 2022, then continued to increase to 1,590,867 thousand US dollars in 2023. A decrease was observed in 2024, with current liabilities falling to 1,370,105 thousand US dollars, before rising again to 1,635,291 thousand US dollars in 2025. Adjusted current liabilities demonstrate a different pattern, consistently lower than the reported figures and showing a more pronounced growth trajectory initially, followed by a significant decline and subsequent recovery.

Trend in Reported Current Liabilities

Reported current liabilities increased overall from 2021 to 2025, with a peak in 2023. The dip in 2024 suggests a potential reclassification of some obligations or a reduction in short-term debt. The subsequent increase in 2025 indicates a renewed accumulation of short-term obligations.

Trend in Adjusted Current Liabilities

Adjusted current liabilities increased substantially from 417,283 thousand US dollars in 2021 to 925,843 thousand US dollars in 2023, representing significant growth. A substantial decrease occurred in 2024, falling to 632,692 thousand US dollars, before recovering to 856,856 thousand US dollars in 2025. This pattern suggests the presence of items initially classified as current liabilities that were subsequently reclassified or resolved, particularly impacting the 2024 figures.

Relationship Between Reported and Adjusted Values

The difference between reported and adjusted current liabilities is considerable throughout the period. In 2021, the adjustment reduced current liabilities by approximately 57%. This percentage decreased over time, reaching approximately 60% in 2023. The adjustment in 2024 was more substantial, reducing reported liabilities by roughly 54%, and then settled at approximately 48% in 2025. This indicates that the nature and magnitude of the adjustments to current liabilities are evolving.

The fluctuations in adjusted current liabilities warrant further investigation to understand the specific items being adjusted and the reasons for their reclassification. The increasing trend in both reported and adjusted current liabilities suggests a growing reliance on short-term financing or an increase in obligations due within one year.

Total liabilities exhibited a fluctuating pattern over the five-year period. Initially, a substantial increase is observed, followed by a decrease, and then a significant rise concluding with a further increase. Adjusted total liabilities demonstrate a similar, though less pronounced, trend.

Overall Trend in Total Liabilities

Total liabilities increased from US$1,645,624 thousand in 2021 to US$2,391,958 thousand in 2022, representing a 45.3% increase. A subsequent decrease was noted in 2023, with total liabilities falling to US$2,265,220 thousand. However, 2024 saw a dramatic increase to US$4,300,904 thousand, a 90.1% rise from the prior year. This upward trend continued into 2025, with total liabilities reaching US$4,678,967 thousand, a 8.8% increase.

Overall Trend in Adjusted Total Liabilities

Adjusted total liabilities followed a comparable pattern, though with smaller magnitudes of change. They rose from US$981,359 thousand in 2021 to US$1,595,137 thousand in 2022, a 62.6% increase. A decrease to US$1,489,845 thousand was recorded in 2023. A significant increase occurred in 2024, reaching US$3,413,261 thousand, a 129.2% increase. This growth continued in 2025, with adjusted total liabilities reaching US$3,682,501 thousand, a 7.9% increase.

Relationship Between Total and Adjusted Liabilities

The difference between total liabilities and adjusted total liabilities is substantial throughout the period. In each year, adjusted total liabilities represent a smaller value than total liabilities. The gap between the two values widened considerably in 2024 and 2025, suggesting that the adjustments made to total liabilities are becoming increasingly significant. The adjustments consistently reduce the reported liability position.

Year-over-Year Percentage Changes

The largest year-over-year percentage increase in total liabilities occurred between 2023 and 2024 (90.1%). The largest percentage increase in adjusted total liabilities also occurred between 2023 and 2024 (129.2%). The smallest percentage increase in total liabilities occurred between 2024 and 2025 (8.8%), while the smallest percentage increase in adjusted total liabilities occurred during the same period (7.9%).

Stockholders’ equity and its adjusted value both demonstrate a consistent upward trend over the five-year period. However, a persistent difference exists between the reported and adjusted figures, suggesting systematic adjustments are being made to the initially stated equity position.

Overall Trend

Both stockholders’ equity and adjusted stockholders’ equity increased annually from 2021 to 2025. Stockholders’ equity grew from US$2,740,675 thousand in 2021 to US$5,474,181 thousand in 2025, representing a substantial overall increase. Adjusted stockholders’ equity followed a similar trajectory, rising from US$2,644,862 thousand to US$5,556,802 thousand over the same period.

Growth Rates

While both metrics increased, the rate of growth appears to have accelerated in later years. The increase between 2021 and 2022 was relatively modest for both measures. However, the growth from 2022 to 2023, and particularly from 2023 to 2024 and 2024 to 2025, was significantly higher, indicating a period of accelerated equity accumulation.

Adjustment Magnitude

The difference between stockholders’ equity and adjusted stockholders’ equity remained relatively stable in absolute terms, ranging between approximately US$95,000 thousand and US$117,000 thousand throughout the period. This suggests the adjustments are consistently applied and are not dependent on the overall level of equity. The consistent reduction implies a recurring non-cash expense or correction impacting reported equity.

Percentage Adjustment

The percentage adjustment (calculated as (Stockholders’ Equity - Adjusted Stockholders’ Equity) / Stockholders’ Equity) decreased slightly over time, from approximately 3.5% in 2021 to around 2.1% in 2025. This indicates that while the absolute adjustment amount remained relatively constant, its impact on the overall equity position lessened as the total equity value increased.

The consistent adjustments to stockholders’ equity warrant further investigation to understand the underlying nature of these corrections and their potential impact on the company’s financial position. The accelerating growth in equity, coupled with the ongoing adjustments, suggests a dynamic financial situation requiring continued monitoring.

Over the five-year period ending December 31, 2025, significant changes are observed in both reported and adjusted financial figures. Total reported debt exhibits a substantial increase, particularly between 2022 and 2024, while stockholders’ equity demonstrates a consistent upward trend throughout the period. The adjusted figures reveal a similar pattern, though the magnitude of change differs. A notable divergence exists between reported and adjusted values for debt and total capital, suggesting the presence of adjustments impacting the capitalization structure.

Total Debt Trend

Reported total debt increased from US$347.588 million in 2021 to US$2.480 billion in 2025. The most significant increase occurred between 2022 and 2024, rising from US$748.078 million to US$2.476 billion. Adjusted total debt follows a similar trajectory, increasing from US$479.980 million to US$2.666 billion over the same period, with a comparable surge between 2022 and 2024. The difference between reported and adjusted debt widens over time, indicating increasing adjustments are being made to the initially reported debt figures.

Stockholders’ Equity Trend

Stockholders’ equity shows a steady increase from US$2.740 billion in 2021 to US$5.474 billion in 2025. The growth appears relatively consistent year-over-year. Adjusted stockholders’ equity mirrors this trend, increasing from US$2.644 billion to US$5.556 billion. The difference between reported and adjusted equity remains relatively stable, suggesting adjustments to equity are less substantial than those applied to debt.

Total Capital Trend

Reported total capital increased substantially from US$3.088 billion in 2021 to US$7.954 billion in 2025, mirroring the trends in debt and equity. Adjusted total capital also increased, from US$3.124 billion to US$8.223 billion. The gap between reported and adjusted total capital widens over the period, correlating with the increasing difference observed in the debt figures. This suggests the adjustments primarily affect the debt component of the capital structure.

Capital Structure Adjustments

The consistent difference between reported and adjusted figures for debt and total capital indicates systematic adjustments are being applied. The magnitude of these adjustments increases over time, particularly impacting the reported debt. This could be due to various factors, including reclassification of liabilities, changes in accounting standards, or corrections of prior-period errors. Further investigation into the nature of these adjustments is warranted to understand their impact on the company’s financial position.

In summary, the financial figures demonstrate substantial growth in both reported and adjusted debt and equity. The increasing divergence between reported and adjusted values, particularly concerning debt, suggests a significant impact from adjustments to the capitalization structure. The consistent upward trend in stockholders’ equity provides a positive signal, but the increasing adjusted debt levels warrant further scrutiny.

Revenue and adjusted revenue both demonstrate a consistent upward trend over the five-year period. However, a notable difference exists between the reported revenue and the adjusted revenue figures each year.

Overall Growth

Reported revenue increased from US$2,988,244 thousand in 2021 to US$5,296,759 thousand in 2025, representing a growth of approximately 77.3%. Adjusted revenue experienced a similar growth pattern, rising from US$3,089,413 thousand in 2021 to US$5,378,610 thousand in 2025, a growth of roughly 74.0%.

Revenue Adjustments

In each year, adjusted revenue is higher than reported revenue. The difference between the two figures varies annually. In 2021, the adjustment added US$101,169 thousand to revenue. This difference increased to US$126,972 thousand in 2022, then decreased slightly to US$18,107 thousand in 2023. The adjustment increased again in 2024 to US$88,626 thousand, and further to US$81,851 thousand in 2025.

Growth Rate Comparison

While both revenue streams exhibit positive growth, the growth rate of adjusted revenue is marginally lower than that of reported revenue. This suggests that the adjustments, while increasing the overall revenue figure, are not growing at the same pace as the initially reported revenue. The difference in growth rates is relatively small, however.

The consistent positive adjustments to revenue suggest the presence of items that are initially excluded from reported revenue but are subsequently included through an adjustment process. The fluctuating magnitude of these adjustments warrants further investigation to understand the underlying causes and their potential impact on financial performance.

Net income and adjusted net income both demonstrate an overall upward trajectory between 2021 and 2025. However, the patterns of increase differ significantly between the two metrics. Net income exhibits consistent year-over-year growth throughout the period, while adjusted net income shows a more volatile pattern, including a decrease in 2024.

Net Income Trend

Net income increased from US$695,955 thousand in 2021 to US$1,108,888 thousand in 2025. The growth was relatively steady, with annual increases ranging from approximately 22% to 31%. This indicates consistent profitability improvements over the five-year period.

Adjusted Net Income Trend

Adjusted net income began at US$730,235 thousand in 2021. It increased to US$808,547 thousand in 2022, then to US$988,274 thousand in 2023. A decrease was observed in 2024, with adjusted net income falling to US$923,058 thousand. However, a substantial increase occurred in 2025, reaching US$1,453,250 thousand. This suggests that certain non-recurring items or accounting adjustments significantly impacted reported earnings, particularly in 2024 and 2025.

Relationship Between Net and Adjusted Income

In 2021, adjusted net income exceeded net income by US$34,280 thousand. This difference widened in 2022 to US$169,595 thousand and further in 2023 to US$153,000 thousand. The gap narrowed in 2024 to US$32,426 thousand, and then expanded dramatically in 2025 to US$344,362 thousand. This indicates that the magnitude of adjustments relative to reported net income has fluctuated considerably, with a particularly large positive adjustment in 2025.

The divergence between the trends of net income and adjusted net income suggests that non-GAAP adjustments play a significant role in the company’s reported financial performance. The substantial increase in adjusted net income in 2025, coupled with the decrease in 2024, warrants further investigation to understand the nature and impact of these adjustments.