Stock Analysis on Net

Cadence Design Systems Inc. (NASDAQ:CDNS)

Balance Sheet: Liabilities and Stockholders’ Equity 

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Cadence Design Systems Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revolving credit facility 100,000
Current portion of long-term debt 349,285
Trade accounts payable 5,555 91,194 47,113
Payroll and payroll-related accruals 335,232 294,108 294,620 254,090 219,289
Other accrued operating liabilities 291,905 191,256 215,425 163,193 130,662
Accounts payable and accrued liabilities 632,692 576,558 557,158 417,283 349,951
Current portion of deferred revenue 737,413 665,024 690,538 553,942 446,857
Current liabilities 1,370,105 1,590,867 1,347,696 971,225 796,808
Long-term portion of deferred revenue 115,168 98,931 91,524 101,148 107,064
Long-term debt, excluding current portion 2,476,183 299,771 648,078 347,588 346,793
Long-term operating lease liabilities 108,893 115,358 139,337 107,121 113,916
Other accrued liabilities 230,555 160,293 165,323 118,542 93,186
Other long-term liabilities 339,448 275,651 304,660 225,663 207,102
Long-term liabilities 2,930,799 674,353 1,044,262 674,399 660,959
Total liabilities 4,300,904 2,265,220 2,391,958 1,645,624 1,457,767
Preferred stock, $0.01 par value; none issued or outstanding
Common stock, $0.01 par value 4,181,737 3,166,964 2,765,673 2,467,701 2,217,939
Treasury stock, at cost (5,309,579) (4,604,323) (3,824,163) (2,740,003) (2,057,829)
Retained earnings 5,991,868 4,936,384 3,895,240 3,046,288 2,350,333
Accumulated other comprehensive loss (190,448) (94,754) (91,637) (33,311) (17,425)
Stockholders’ equity 4,673,578 3,404,271 2,745,113 2,740,675 2,493,018
Total liabilities and stockholders’ equity 8,974,482 5,669,491 5,137,071 4,386,299 3,950,785

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


Liabilities

Total liabilities demonstrated an overall increasing trend from 2020 to 2024, growing from approximately $1.46 billion to $4.30 billion. This substantial increase was particularly notable in the long-term debt category, which rose sharply to $2.48 billion in 2024 from less than $650 million in 2022, indicating a significant leverage increase in the latter period.

Current liabilities also showed growth, reaching a peak of about $1.59 billion in 2023 before declining to around $1.37 billion in 2024. Within current liabilities, accounts payable and accrued liabilities steadily increased each year, reflecting rising operational obligations. Trade accounts payable fluctuated, with a notable increase in 2023, followed by a sharp decline in 2024.

Deferred revenue, both current and long-term portions, grew steadily, suggesting an increasing volume of advance payments from customers. The current portion peaked at $737 million in 2024, while the long-term portion rose more modestly.

Other accrued liabilities and related long-term liabilities increased as well, showing a pattern of growing accrued expenses and obligations beyond regular accounts payable.

Stockholders’ Equity

Stockholders’ equity consistently increased over the period analyzed, rising from approximately $2.49 billion in 2020 to $4.67 billion in 2024. Key contributors to this growth included marked increases in common stock and retained earnings.

Common stock value grew substantially from approximately $2.22 billion to $4.18 billion, indicating potential capital raises or stock issuances. Retained earnings exhibited a strong upward trajectory, nearly doubling from $2.35 billion in 2020 to $5.99 billion in 2024, reflecting accumulated profits being retained in the business.

Treasury stock expanded in magnitude (more negative), rising from about -$2.06 billion in 2020 to -$5.31 billion in 2024, which may indicate significant share buyback activity over the years.

The accumulated other comprehensive loss increased in absolute terms, reaching -$190 million in 2024, indicating growing unrealized losses in other comprehensive income components.

Overall Financial Position

The total of liabilities and stockholders’ equity nearly doubled from approximately $3.95 billion in 2020 to $8.97 billion in 2024, demonstrating substantial growth in the company's balance sheet size.

The marked rise in long-term debt in 2024, alongside increasing stockholders' equity and a significant accumulation of treasury stock, suggests a complex financial strategy involving both increased leverage and capital management techniques such as share repurchases.

Growth in deferred revenue and accrual accounts indicates expanding operations and possibly a growing customer base providing advance payments or incurring more payables.