Fundamental analysis · SEC EDGAR · TTM through 30/09/2026
CDNS · Nasdaq · Technology
Fundamental quality
86
out of 100
Cadence Design Systems Inc fits the profile of a quality compounder: it pairs high return on capital (ROE 20.1%) with wide margins (net margin 22.5%) and a business that keeps growing (15.5% a year). On fundamental quality it scores 86 out of 100, profiling it as a company with solid fundamentals. Its weakest area is its growth (revenue +15.5%/yr). Whether it's cheap or expensive depends on the current price, which you can compute in the tool.
Cadence Design Systems is, alongside Synopsys, one of the two giants of chip-design software (EDA). Its tools and IP are indispensable for creating any modern semiconductor, and it charges by subscription under multi-year contracts.
EPS growth: 16.3% · Revenue growth: 15.5%
Net margin: 22.5% · ROE: 20.1% · ROIC: 16.8%
Net debt/EBITDA: 0.48x · FCF: 28.8%
Source: SEC EDGAR · TTM through 30/09/2026
The score combines growth, profitability and financial strength. Here its financial strength weighs in its favor, while its growth drags it down the most.
Percentile against the other 99 Technology companies in our coverage: how far it beats them on each metric (100 = best in sector).
Computed from the daily dataset scores. A high percentile places the company among the best in its sector on that metric; it is not a buy recommendation.
Key concepts
What do these metrics mean? Fundamental analysis · What is the P/E · What is EPS · What is ROE · Net & gross margin · Free cash flow
| Year | Revenue | Net income | Free cash flow | Net debt |
|---|---|---|---|---|
| 2021 | 2,683 | 591 | 810 | -582 |
| 2022 | 2,988 | 696 | 1,036 | -741 |
| 2022 | 3,562 | 849 | 1,119 | -234 |
| 2023 | 4,090 | 1,041 | 1,247 | -708 |
| 2024 | 4,641 | 1,055 | 1,118 | -168 |
| 2025 | 5,297 | 1,109 | 1,587 | -521 |
Between 2021 and 2025, revenue went from $2,683M to $5,297M (+97%) and net income went from $591M to $1,109M (+88%).
Annual figures in millions of U.S. dollars ($M) per SEC filings. Net debt is total debt minus cash.
Latest results
Figures for the nine months ended September 30, 2026, versus the nine months ended September 30, 2025 (SEC filings):
Compared with the previous close (March 31, 2026), this is what moved in its accounts:
Automatic comparison between the two most recent periods filed with the SEC. One quarter doesn't make a trend: read it alongside the historical evolution above.
This company doesn't pay a dividend: it reinvests all its earnings back into the business.
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Is Cadence Design Systems Inc cheap or expensive?
That depends on the current price. Look it up, enter it in the tool and get the full valuation verdict (P/E against its sector).
Compute the valuation →Is Cadence Design Systems Inc a good company to invest in?
In terms of business quality, Cadence Design Systems Inc scores 86 out of 100 in our analysis, placing it as a company of high fundamental quality. That said, this isn't a recommendation: whether it's a good investment also depends on its current price and your goals.
Is Cadence Design Systems Inc a profitable company?
Very. Cadence Design Systems Inc shows a net margin of 22.5% and an ROE of 20.1%, typical of a highly profitable business.
Does Cadence Design Systems Inc have a lot of debt?
Not particularly. Its net debt is 0.48 times its EBITDA, a low level.
Is Cadence Design Systems Inc growing?
Its revenue has grown 15.5% annualized in recent years and its earnings per share 16.3%, and without interruption since 2021.
Does Cadence Design Systems Inc generate cash?
Yes. It converts about 28.8% of its revenue into free cash flow, and has done so positively year after year.
The thresholds are general and the system doesn't judge qualitative factors. See the full methodology and use this analysis as a first filter, never as a final decision.
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Who's behind the methodology and model · how the score is computed
Data: see Cadence Design Systems Inc's filings on EDGAR
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