Stock Analysis on Net
Stock Analysis on Net

Cadence Design Systems Inc. (NASDAQ:CDNS)

$24.99

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Cadence Design Systems Inc., consolidated cash flow statement

US$ in thousands

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income
Depreciation and amortization
Amortization of debt discount and fees
Stock-based compensation
(Gain) loss on investments, net
Deferred income taxes
Provisions for losses on receivables
ROU asset amortization and change in operating lease liabilities
Other non-cash items
Receivables
Inventories
Prepaid expenses and other
Other assets
Accounts payable and accrued liabilities
Deferred revenue
Other long-term liabilities
Changes in operating assets and liabilities, net of effect of acquired businesses
Adjustments to reconcile net income to net cash provided by operating activities
Net cash provided by operating activities
Purchases of investments
Proceeds from the sale and maturity of investments
Purchases of property, plant and equipment
Purchases of intangible assets
Cash paid in business combinations, net of cash acquired
Net cash used for investing activities
Proceeds from revolving credit facility
Payments on revolving credit facility
Proceeds from the issuance of debt
Payments of debt
Payments of debt issuance costs
Proceeds from issuance of common stock
Stock received for payment of employee taxes on vesting of restricted stock
Payments for repurchases of common stock
Net cash provided by (used for) financing activities
Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

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).

Net Income
Net income exhibited a continuous upward trend each year, increasing from $590.6 million in 2020 to $1.055 billion in 2024. This reflects sustained profitability growth over the five-year period.
Depreciation and Amortization
Depreciation and amortization gradually declined from 2020 through 2022, decreasing from $145.7 million to $132.1 million, before rising again to $196.9 million by 2024, indicating increasing capital expenditures or asset base in later years.
Stock-based Compensation
Stock-based compensation rose steadily year over year, from $197.3 million in 2020 to $391.2 million in 2024, highlighting an increasing emphasis on equity incentives as part of employee remuneration.
Investment Gains and Losses
The net gain or loss on investments showed volatility, with minor gains in 2020 and 2022 but significant losses of -$34.6 million and -$49.6 million in 2023 and 2024, respectively, suggesting unfavorable investment outcomes or market conditions during the later years.
Deferred Income Taxes
Deferred income taxes were negative throughout, indicating net deferred tax assets, with a marked increase in asset recognition in 2024 (-$128.7 million), following a large drop in 2022 (-$107.6 million) and some fluctuation in prior years.
Receivables and Inventories
Receivables and inventories both exhibited negative changes, particularly pronounced in 2022 and 2024, suggesting increases in outstanding customer balances and inventory levels, which could reflect expanding operations or inefficiencies in working capital management.
Operating Assets and Liabilities
Changes in operating assets and liabilities were positive in 2021 and 2022, indicating improved working capital inflows, but reversed sharply in 2023 and 2024 with significant decreases, pointing to liquidity pressures or changes in operational cash flow timing.
Net Cash from Operating Activities
Cash generated from operations increased steadily from $904.9 million in 2020 to a peak of $1.349 billion in 2023, before slightly decreasing to $1.260 billion in 2024, demonstrating strong and consistent cash flow from core business activities.
Investing Activities
Investing activities showed increasing cash outflows, especially in 2022 and 2024, driven by substantial investments in property, plant, equipment, and business combinations. Notably, 2024 investing cash outflows doubled compared to 2023, reflecting aggressive investment or acquisition strategies.
Financing Activities
Financing cash flows were negative from 2020 through 2023 due to stock repurchases and debt repayments, with the lowest outflow in 2023 (-$803.6 million). However, in 2024, there was a significant reversal, yielding positive net financing cash inflow of $1.239 billion, attributed largely to new debt issuance surpassing repayments and increased issuance of common stock.
Cash and Cash Equivalents
Cash balances grew from $928.4 million at the end of 2020 to $2.644 billion by the end of 2024, with notable fluctuations including a decline in 2022 and robust increases in 2023 and 2024, reflecting effective liquidity management despite variances in operating, investing, and financing activities.
Summary
Overall, the financial data indicate strong profit growth and robust operational cash flow generation. However, significant investments and acquisitions have increased investing cash outflows, partially offset by heightened financing inflows in 2024 through debt issuance and stock sales. Working capital management shows periods of stress particularly in 2023 and 2024, warranting attention. The company maintains strong liquidity levels, supported by strategic financing moves in the latest period.