Cadence Design Systems Inc. (NASDAQ:CDNS)

Cadence Design Systems Inc., long-term (investment) activity ratios (quarterly data)

	Sep 30, 2026	Jun 30, 2026	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
Net fixed asset turnover	10.17	10.42	10.30	10.25	10.54	10.56	10.45	10.13	9.70	9.26	9.42	10.14	10.33	10.27	9.87	9.59	9.86	10.37	10.15
Total asset turnover	0.50	0.48	0.46	0.52	0.54	0.54	0.54	0.52	0.47	0.58	0.71	0.72	0.72	0.74	0.71	0.69	0.69	0.75	0.72
Equity turnover	0.89	0.85	0.84	0.97	1.00	1.02	1.02	0.99	0.95	0.98	1.14	1.20	1.26	1.31	1.25	1.30	1.27	1.25	1.14

The analysis of investment activity ratios reveals a divergence between the efficiency of fixed asset utilization and the efficiency of total asset and equity employment over the observed period.

Net Fixed Asset Turnover: The net fixed asset turnover ratio demonstrates relative stability, fluctuating within a narrow range between 9.26 and 10.56. While a slight contraction was observed between March and June 2024, the ratio recovered steadily throughout 2025, peaking at 10.56 in June 2025. This consistency indicates that the generation of revenue remains well-aligned with the company's investment in long-term physical assets.
Total Asset Turnover: A significant downward trend is evident in the total asset turnover ratio, particularly starting in the second quarter of 2024. The ratio remained stable between 0.69 and 0.75 from April 2022 through March 2024, before dropping sharply to 0.47 by September 2024. Although a moderate recovery to 0.54 occurred during 2025, the ratio declined again to a low of 0.46 by March 2026. This suggests a decrease in overall asset efficiency, implying that the growth in the total asset base has outpaced the growth in revenue.
Equity Turnover: Equity turnover followed a pattern of initial growth followed by a sustained decline. The ratio peaked at 1.31 in June 2023 but began a downward trajectory in 2024, falling below 1.00 in June 2024. This decline continued into 2026, reaching a minimum of 0.84 in March 2026. The reduction in equity turnover indicates that shareholder equity is generating progressively less revenue per unit of investment.

The contrasting behavior between net fixed asset turnover and total asset turnover suggests that the decline in overall efficiency is not driven by fixed assets, but rather by an expansion in other asset categories, such as current assets or intangible assets. The simultaneous decline in equity turnover further indicates an increasing capital cushion or retained earnings that have not yet translated into proportional revenue growth.

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Net Fixed Asset Turnover

Cadence Design Systems Inc., net fixed asset turnover calculation (quarterly data)

	Sep 30, 2026	Jun 30, 2026	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
Selected Financial Data (US$ in thousands)
Revenue	1,633,311)	1,584,451)	1,474,220)	1,440,114)	1,338,838)	1,275,441)	1,242,366)	1,355,981)	1,215,499)	1,060,681)	1,009,103)	1,068,623)	1,023,094)	976,579)	1,021,690)	899,877)	902,554)	857,521)	901,766)
Property, plant and equipment, net	603,189)	560,161)	536,903)	517,004)	494,701)	482,131)	466,322)	458,200)	448,652)	449,422)	433,016)	403,213)	379,776)	370,193)	372,956)	371,451)	348,238)	316,741)	310,690)
Long-term Activity Ratio
Net fixed asset turnover¹	10.17	10.42	10.30	10.25	10.54	10.56	10.45	10.13	9.70	9.26	9.42	10.14	10.33	10.27	9.87	9.59	9.86	10.37	10.15
Benchmarks
Net Fixed Asset Turnover, Competitors²
Accenture PLC	45.12	45.05	45.39	44.48	42.51	44.49	44.02	42.66	44.42	44.26	44.00	41.90	41.40	40.46	38.17	37.12	35.78	34.22	32.49
Adobe Inc.	13.89	13.47	13.20	12.69	12.15	11.96	11.64	11.11	10.64	10.38	10.03	9.56	9.28	9.07	9.15	9.23	9.25	9.33	9.48
AppLovin Corp.	—	61.00	53.69	44.76	39.72	38.49	29.76	29.34	24.23	23.38	20.96	18.94	29.68	24.97	24.52	35.87	40.76	46.80	44.17
Datadog Inc.	—	9.68	9.69	10.14	10.44	10.65	11.34	11.83	11.75	12.03	12.38	12.38	12.73	13.07	12.96	13.36	13.81	13.97	13.15
International Business Machines Corp.	11.56	12.05	11.92	11.45	11.18	10.78	10.94	10.95	11.15	11.14	11.10	11.25	11.39	11.12	11.34	11.35	11.75	11.31	10.50
Intuit Inc.	21.01	20.66	20.14	19.60	18.65	17.31	16.46	16.14	15.32	14.39	14.56	14.83	15.00	14.70	14.38	14.33	15.00	13.74	13.08
Microsoft Corp.	1.12	1.17	1.27	1.37	1.47	1.57	1.66	1.81	1.95	2.03	2.13	2.22	2.36	2.47	2.64	2.66	2.74	2.75	2.76
Oracle Corp.	0.77	0.90	1.11	1.32	1.74	2.08	2.33	2.46	2.75	2.87	2.89	2.93	2.93	3.21	3.60	4.37	4.86	5.16	5.37
Palantir Technologies Inc.	—	100.25	93.75	86.13	85.24	79.05	78.53	72.29	65.59	57.01	49.76	46.59	42.39	37.80	31.45	27.55	31.65	36.61	39.34
Palo Alto Networks Inc.	20.96	20.40	24.26	23.81	24.18	23.93	22.96	22.23	22.24	21.37	20.44	19.44	18.99	17.86	16.45	15.38	14.54	13.39	14.05
Salesforce Inc.	12.81	12.52	12.33	11.71	10.89	10.19	10.19	9.45	8.92	8.53	8.71	8.47	8.62	8.69	9.74	9.41	9.03	8.68	8.98
ServiceNow Inc.	7.19	6.77	6.20	5.80	5.96	6.07	6.08	6.23	6.09	6.20	6.54	6.61	7.07	6.98	6.82	6.88	7.57	7.54	7.84
Synopsys Inc.	12.56	12.14	11.83	10.13	9.20	10.88	11.11	10.88	10.66	10.68	10.57	10.48	10.31	9.68	10.01	10.51	10.17	9.68	9.43
Workday Inc.	8.15	7.99	7.63	6.82	6.46	6.25	6.11	5.88	5.79	5.50	5.31	5.17	4.88	4.60	4.55	4.58	4.37	4.12	3.87

¹ Q3 2026 Calculation
Net fixed asset turnover = (Revenue_{Q3 2026} + Revenue_{Q2 2026} + Revenue_{Q1 2026} + Revenue_{Q4 2025}) ÷ Property, plant and equipment, net
= (1,633,311 + 1,584,451 + 1,474,220 + 1,440,114) ÷ 603,189 = 10.17

² Click competitor name to see calculations.

The financial data indicates a sustained period of growth in both top-line revenue and the investment in long-term physical assets. Revenue grew from 901.8 million in April 2022 to 1.63 billion by September 2026, while net property, plant, and equipment increased from 310.7 million to 603.2 million over the same duration. Despite the significant expansion of the asset base, the net fixed asset turnover ratio remained relatively stable, suggesting a consistent relationship between capital investment and revenue generation.

Revenue and Asset Growth Correlation: A strong upward trajectory is observed in both revenue and net fixed assets. The near-doubling of net property, plant, and equipment indicates a strategic expansion of the company's infrastructure. The synchronization of these growth paths suggests that the increase in physical capacity was necessary to support the rising volume of business operations.
Net Fixed Asset Turnover Volatility: The turnover ratio experienced moderate fluctuations, operating within a range between 9.26 and 10.56. A notable decline occurred between December 2023 and June 2024, where the ratio dropped from 10.14 to 9.26. This period reflects a temporary misalignment where asset growth outpaced revenue gains, leading to a short-term decrease in asset efficiency.
Efficiency Recovery and Stabilization: Following the mid-2024 dip, the net fixed asset turnover ratio recovered, peaking at 10.56 in June 2025. From late 2024 through September 2026, the ratio stabilized between 10.17 and 10.42. This stabilization indicates that the investments made in previous quarters began yielding higher proportional returns in revenue, maintaining a high level of operational efficiency.

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Total Asset Turnover

Cadence Design Systems Inc., total asset turnover calculation (quarterly data)

	Sep 30, 2026	Jun 30, 2026	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
Selected Financial Data (US$ in thousands)
Revenue	1,633,311)	1,584,451)	1,474,220)	1,440,114)	1,338,838)	1,275,441)	1,242,366)	1,355,981)	1,215,499)	1,060,681)	1,009,103)	1,068,623)	1,023,094)	976,579)	1,021,690)	899,877)	902,554)	857,521)	901,766)
Total assets	12,224,774)	12,080,325)	12,098,354)	10,153,148)	9,599,271)	9,508,698)	9,013,486)	8,974,482)	9,167,031)	7,225,741)	5,722,130)	5,669,491)	5,431,375)	5,155,124)	5,171,619)	5,137,071)	4,968,087)	4,361,274)	4,395,067)
Long-term Activity Ratio
Total asset turnover¹	0.50	0.48	0.46	0.52	0.54	0.54	0.54	0.52	0.47	0.58	0.71	0.72	0.72	0.74	0.71	0.69	0.69	0.75	0.72
Benchmarks
Total Asset Turnover, Competitors²
Accenture PLC	1.06	1.08	1.09	1.07	1.08	1.12	1.11	1.16	1.19	1.26	1.25	1.25	1.27	1.32	1.32	1.30	1.29	1.28	1.23
Adobe Inc.	0.87	0.84	0.82	0.81	0.81	0.80	0.74	0.71	0.70	0.68	0.69	0.65	0.65	0.66	0.67	0.65	0.64	0.63	0.62
AppLovin Corp.	—	0.83	0.80	0.75	0.82	0.84	0.84	0.80	0.79	0.75	0.69	0.61	0.61	0.53	0.49	0.48	0.50	0.49	0.46
Datadog Inc.	—	0.53	0.53	0.52	0.53	0.52	0.47	0.46	0.55	0.54	0.55	0.54	0.57	0.57	0.57	0.56	0.55	0.51	0.47
International Business Machines Corp.	0.45	0.45	0.44	0.44	0.45	0.43	0.43	0.46	0.47	0.47	0.45	0.46	0.47	0.46	0.45	0.48	0.48	0.47	0.44
Intuit Inc.	0.53	0.59	0.59	0.51	0.50	0.54	0.50	0.51	0.50	0.51	0.52	0.52	0.49	0.50	0.49	0.46	0.45	0.43	0.69
Microsoft Corp.	0.46	0.46	0.46	0.46	0.48	0.49	0.49	0.48	0.49	0.48	0.49	0.51	0.55	0.56	0.56	0.54	0.56	0.54	0.53
Oracle Corp.	0.26	0.30	0.33	0.34	0.35	0.37	0.37	0.38	0.38	0.38	0.37	0.37	0.36	0.36	0.34	0.39	0.39	0.39	0.33
Palantir Technologies Inc.	—	0.53	0.51	0.50	0.48	0.47	0.46	0.45	0.46	0.48	0.49	0.49	0.51	0.51	0.54	0.55	0.55	0.53	0.50
Palo Alto Networks Inc.	0.23	0.40	0.41	0.39	0.40	0.41	0.41	0.40	0.43	0.41	0.49	0.48	0.46	0.47	0.46	0.45	0.47	0.47	0.44
Salesforce Inc.	0.42	0.40	0.39	0.37	0.41	0.40	0.37	0.35	0.37	0.36	0.34	0.32	0.33	0.31	0.30	0.28	0.29	0.27	0.34
ServiceNow Inc.	0.48	0.47	0.57	0.51	0.58	0.55	0.55	0.54	0.57	0.55	0.54	0.52	0.56	0.54	0.56	0.54	0.62	0.59	0.57
Synopsys Inc.	0.20	0.19	0.17	0.15	0.13	0.26	0.47	0.47	0.52	0.55	0.57	0.57	0.56	0.54	0.54	0.54	0.53	0.52	0.51
Workday Inc.	0.52	0.50	0.51	0.47	0.50	0.48	0.47	0.44	0.50	0.49	0.49	0.46	0.48	0.43	0.42	0.49	0.52	0.51	0.52

¹ Q3 2026 Calculation
Total asset turnover = (Revenue_{Q3 2026} + Revenue_{Q2 2026} + Revenue_{Q1 2026} + Revenue_{Q4 2025}) ÷ Total assets
= (1,633,311 + 1,584,451 + 1,474,220 + 1,440,114) ÷ 12,224,774 = 0.50

² Click competitor name to see calculations.

The analysis reveals a divergent trajectory between revenue growth and asset accumulation, resulting in a notable decline in overall asset efficiency over the observed period.

Revenue Growth Trends: Revenue demonstrates a consistent and sustained upward trajectory, increasing from approximately 901.8 million USD in April 2022 to 1.63 billion USD by September 2026. This represents a steady expansion of the top line, with a particularly pronounced acceleration observed between June 2024 and December 2024.
Total Asset Expansion: Asset growth has been aggressive and non-linear. Total assets rose from 4.4 billion USD in April 2022 to 12.2 billion USD by September 2026. A critical inflection point occurred between March 2024 and September 2024, during which total assets surged from 5.7 billion USD to approximately 9.2 billion USD, indicating a significant increase in the company's capital base.
Total Asset Turnover Performance: The total asset turnover ratio remained relatively stable, fluctuating within a narrow range of 0.69 to 0.75 from April 2022 through March 2024. A sharp contraction is observed starting in June 2024, where the ratio dropped to 0.58. Throughout the subsequent period, the ratio continued to trend lower, reaching a minimum of 0.46 in March 2026 before settling at 0.50 by September 2026.
Asset Utilization Efficiency: The observed decline in the turnover ratio is directly attributable to the pace of asset growth significantly outpacing revenue growth. The sharp drop in mid-2024 suggests a structural shift in the balance sheet—potentially driven by large-scale acquisitions or strategic investments—that has resulted in a temporary reduction in the efficiency with which assets are utilized to generate sales.

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Equity Turnover

Cadence Design Systems Inc., equity turnover calculation (quarterly data)

	Sep 30, 2026	Jun 30, 2026	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
Selected Financial Data (US$ in thousands)
Revenue	1,633,311)	1,584,451)	1,474,220)	1,440,114)	1,338,838)	1,275,441)	1,242,366)	1,355,981)	1,215,499)	1,060,681)	1,009,103)	1,068,623)	1,023,094)	976,579)	1,021,690)	899,877)	902,554)	857,521)	901,766)
Stockholders’ equity	6,875,251)	6,857,963)	6,561,463)	5,474,181)	5,199,002)	5,006,538)	4,776,257)	4,673,578)	4,563,338)	4,260,892)	3,567,596)	3,404,271)	3,113,894)	2,908,455)	2,940,876)	2,745,113)	2,708,128)	2,625,229)	2,760,183)
Long-term Activity Ratio
Equity turnover¹	0.89	0.85	0.84	0.97	1.00	1.02	1.02	0.99	0.95	0.98	1.14	1.20	1.26	1.31	1.25	1.30	1.27	1.25	1.14
Benchmarks
Equity Turnover, Competitors²
Accenture PLC	2.29	2.31	2.29	2.23	2.24	2.30	2.27	2.29	2.32	2.38	2.42	2.50	2.51	2.66	2.72	2.79	2.79	2.76	2.64
Adobe Inc.	2.21	2.19	2.14	2.04	1.97	1.97	1.68	1.52	1.44	1.38	1.29	1.18	1.20	1.24	1.27	1.25	1.20	1.19	1.17
AppLovin Corp.	—	2.16	2.61	2.57	3.52	4.27	8.36	4.32	4.57	4.85	4.77	2.61	2.77	1.90	1.53	1.48	1.55	1.53	1.40
Datadog Inc.	—	0.91	0.92	0.92	0.93	0.94	0.97	0.99	0.96	0.99	1.03	1.05	1.11	1.15	1.19	1.19	1.19	1.12	1.07
International Business Machines Corp.	1.97	2.01	2.09	2.07	2.34	2.33	2.34	2.30	2.56	2.60	2.67	2.75	2.65	2.73	2.80	2.76	3.02	3.07	3.06
Intuit Inc.	1.01	1.06	1.01	0.96	0.90	0.96	0.91	0.88	0.84	0.89	0.87	0.83	0.80	0.86	0.83	0.77	0.76	0.73	1.06
Microsoft Corp.	0.77	0.78	0.81	0.82	0.84	0.86	0.88	0.91	0.93	0.96	0.99	1.03	1.07	1.11	1.17	1.19	1.18	1.16	1.16
Oracle Corp.	1.66	2.04	2.44	2.81	3.33	4.00	4.98	6.08	9.34	13.35	21.50	46.56	—	—	—	—	—	—	—
Palantir Technologies Inc.	—	0.63	0.62	0.61	0.59	0.58	0.57	0.57	0.59	0.61	0.62	0.64	0.67	0.69	0.73	0.74	0.77	0.74	0.70
Palo Alto Networks Inc.	0.38	1.05	1.10	1.18	1.23	1.34	1.40	1.55	1.74	1.73	3.32	3.94	5.27	8.44	11.45	26.20	15.31	41.24	8.78
Salesforce Inc.	0.67	0.64	0.64	0.62	0.64	0.63	0.60	0.58	0.58	0.57	0.56	0.54	0.51	0.49	0.47	0.46	0.44	0.42	0.53
ServiceNow Inc.	1.18	1.18	1.19	1.02	1.12	1.10	1.13	1.14	1.13	1.15	1.17	1.18	1.18	1.16	1.36	1.44	1.53	1.57	1.57
Synopsys Inc.	0.30	0.28	0.26	0.25	0.23	0.63	0.65	0.68	0.79	0.85	0.90	0.95	0.93	0.91	0.92	0.92	0.88	0.86	0.84
Workday Inc.	1.04	0.98	0.97	0.93	0.95	0.94	0.93	0.90	1.05	1.07	1.09	1.11	1.10	1.11	1.13	1.13	1.16	1.21	1.31

¹ Q3 2026 Calculation
Equity turnover = (Revenue_{Q3 2026} + Revenue_{Q2 2026} + Revenue_{Q1 2026} + Revenue_{Q4 2025}) ÷ Stockholders’ equity
= (1,633,311 + 1,584,451 + 1,474,220 + 1,440,114) ÷ 6,875,251 = 0.89

² Click competitor name to see calculations.

An analysis of the financial trajectory from April 2022 through September 2026 reveals a consistent expansion in both top-line revenue and the stockholders' equity base. While both metrics show positive growth, the equity turnover ratio exhibits a distinct downward trend, indicating that the growth of equity has outpaced the growth of revenue over the observed period.

Revenue Growth Trends: Revenue demonstrates a sustained upward trajectory, increasing from 901.7 million USD in April 2022 to 1,633.3 million USD by September 2026. Growth was relatively stable through 2023, with a more pronounced acceleration appearing from December 2024 onward, culminating in the period's peak in the final quarter.
Stockholders' Equity Accumulation: The equity base experienced significant growth, rising from 2.76 billion USD in April 2022 to 6.87 billion USD by September 2026. A notable surge in equity occurred between March 2024 and June 2024, where the value increased from 3.56 billion USD to 4.26 billion USD, contributing to a shift in the overall capital structure.
Equity Turnover Performance: The equity turnover ratio peaked at 1.31 in June 2023, reflecting a period of high efficiency in utilizing equity to generate sales. Following this peak, a gradual decline is observed. The ratio dropped below the 1.0 threshold in June 2024 (0.98) and continued to fluctuate at lower levels, reaching 0.89 by September 2026. This decline signals that each unit of equity is generating less revenue than in previous years.

The divergence between the accelerating growth of stockholders' equity and the steadier growth of revenue has led to a compression of the equity turnover ratio. This pattern suggests a transition toward a more capital-heavy balance sheet, where the expansion of the equity base is not being matched by a proportional increase in revenue generation efficiency.

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