CDNS

It has been about a month since the last earnings report for PTC Inc. (PTC). Shares have added about 16.6% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is PTC Inc. due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts. PTC reported third-quarter fiscal 2026 non-GAAP earnings of $1.58 per share, a 4% decline year over year. It missed the Zacks Consensus Estimate of $1.60. Management had estimated non-GAAP EPS in the range of $1.24-$1.78. Revenues totaled $600 million, a 7% decline year over year (8% at constant currency or cc). The top line also missed the consensus estimate by 2.9%. Management projected revenues in the $580-$640 million range. According to management, historical financials were not restated after the Kepware and ThingWorx divestiture, as the sale did not qualify as discontinued operations. Consequently, fiscal 2026 includes their contribution only until March 13, 2026, the date of the divestiture, while fiscal 2025 reflects a full year, affecting year-over-year comparisons for revenue, EPS and cash flow. Quarterly revenue was below the guidance midpoint solely due to the shorter duration of a single large contract expansion, while deal durations across the broader business remained stable. Nonetheless, its Intelligent Product Lifecycle vision integrates AI across its major product portfolio, including Computer-Aided Design (CAD), Product Lifecycle Management (PLM), Application Lifecycle Management (ALM) and Service Lifecycle Management (SLM). PTC aims to build an intelligence layer across these platforms, allowing organizations to leverage trusted engineering and operational data more effectively. This strategy positions the company well as manufacturers increasingly seek AI-driven automation, predictive analytics and digital engineering capabilities. Recurring revenues of $576 million dipped 6% year over year. Perpetual licenses decreased 91% to $691,000. Professional services revenues were $23.3 million, up 3.3% year over year. License revenues were $205.8 million, down 18.2% from the year-ago quarter figure. Support and cloud services revenues of $370.9 million edged up 0.3% year over year. In the fiscal third quarter, PLM revenues (59% of net sales) were $357 million, slipping 12% year over year. CAD revenues (41%) were $243 million, up 1%. Annualized recurring revenues (ARR) were $2.4 billion, up 7% year over year. At cc, ARR was $2.5 billion, up 9.1%. PTC generated $60 million in net new ARR in the fiscal third quarter, led by solid demand across its go-to-market initiatives and encouraging early traction for its AI offerings. Backed by this momentum, PTC raised the midpoint of its full-year ARR growth guidance to 9.25%. PTC raised and narrowed its full-year ARR guidance, with the midpoint implying $214 million in net new ARR, reflecting strong go-to-market execution and improved pipeline visibility. The company expects a significant acceleration in the fiscal fourth quarter, supported by healthy demand generation and the conversion of deferred ARR, with net new ARR (excluding Kepware and ThingWorx) projected at $79-$92 million. In the fiscal third quarter, PLM and CAD ARR were $1,426 million and $986 million, rising 8% and 6% year over year, respectively. Total operating expenses came in at $324 million, almost on par with the prior-year quarter. Operating income on a non-GAAP basis was $248.5 million, down from $285.2 million in the prior-year quarter. Operating margin on a non-GAAP basis crashed 290 bps year over year to 41%. As of June 30, 2026, cash and cash equivalents were $351.5 million compared with $439 million as of March 31, 2026. Total debt, net of deferred issuance costs, was $1.4 billion as of June 30, 2026, compared with $1.2 billion as of March 31, 2026. Cash provided by operating activities was $261 million compared with the prior-year quarter figure of $244 million. The free cash flow was $249 million compared with $242 million reported in the year-ago quarter. PTC accelerated share repurchases in the fiscal third quarter, reflecting management's view that the stock was undervalued. After completing a $375 million accelerated share repurchase program and an additional $525 million of open-market buybacks, the company now expects to repurchase about $1.625 billion of shares in fiscal 2026. This is expected to reduce fully diluted shares outstanding from roughly 121 million to 116 million, supporting EPS growth and signaling confidence in PTC's long-term outlook. For the fourth quarter of fiscal 2026, PTC estimates revenues in the $630-$690 million band. Non-GAAP EPS is projected in the range of $1.63 to $2.21. Cash from operations is expected to be around $29 million. Free cash flow is forecasted to be roughly $15 million, with the year-over-year decline primarily reflecting capital gains tax outflows from the Kepware and ThingWorx sale. Driven by an encouraging fiscal fourth quarter outlook, PTC lifted the midpoint of its fiscal 2026 revenue and non-GAAP EPS guidance to $2.69-$2.75 billion and $7.87-$8.42, respectively. The prior view was $2.58 billion to $2.82 billion and between $6.65 and $8.90 per share. For fiscal 2026, PTC reiterated cash from operations projections to be around $880 million, indicating a rise of about 1% on a year-over-year basis. The free cash flow is still forecasted to be roughly $850 million, suggesting about a 1% fall. It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 12.8% due to these changes. Currently, PTC Inc. has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors. Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, PTC Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. PTC Inc. belongs to the Zacks Computer - Software industry. Another stock from the same industry, Cadence Design Systems (CDNS), has gained 4.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Cadence reported revenues of $1.58 billion in the last reported quarter, representing a year-over-year change of +24.2%. EPS of $2.11 for the same period compares with $1.65 a year ago. For the current quarter, Cadence is expected to post earnings of $2.04 per share, indicating a change of +5.7% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. Cadence has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PTC Inc. (PTC) : Free Stock Analysis Report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Cadence Design Systems (CDNS). Shares have lost about 3.7% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Cadence due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Cadence Design Systems, Inc. before we dive into how investors and analysts have reacted as of late. Cadence delivered strong second-quarter 2026 results, driven by broad-based demand for its AI-oriented portfolio amid robust design activity and new system architectures across hyperscaler infrastructure and physical AI. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year and topped management’s guided range of $2.02 to $2.08. Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion. All the product groups witnessed double-digit growth. On the earnings call, the company cited agentic AI as a durable tailwind. Cadence expects agentic tools to drive higher EDA consumption and usage across its platform as customers run more simulations, verification and implementation cycles, thereby expanding the addressable market. Management highlighted “strong early traction” for its AI Super-Agent portfolio.A standout metric was a record backlog of $8.1 billion, driven by strong bookings. Strong quarterly performance and accelerating AI demand led to a raise in its 2026 revenue outlook.Cadence raised its full-year 2026 revenue outlook to a band of $6.26-$6.34 billion, compared with the earlier guided range of $6.125-$6.225 billion. Non-GAAP EPS for 2026 is now expected to be between $8.05 and $8.15, compared with the earlier guided range of $7.85 to $7.95. Product & Maintenance revenues (90.3% of total revenues) of $1.431 billion rose 22.3% year over year. Services revenues (9.7%) of $154 million jumped 46.7% year over year. Recurring revenues comprised 78% of total revenues, while the remainder was upfront revenues. The Americas contributed 43% of revenues, while China accounted for 15%, Other Asia 20%, Europe, Middle East and Africa 15% and Japan 7%, pointing to diversified demand across geographies.Product-wise, Core EDA, Intellectual Property (“IP”) and Systems Design & Analysis accounted for 68%, 15% and 17% of total revenues, respectively.The System Design & Analysis business, up 37% in the second quarter, is gaining from higher demand for Allegro X AI, 3D-IC and BETA CAE solutions. Management noted that the integration of Hexagon's D&E business was “progressing well” with some deals closed with key clients in the quarter.Core EDA business, which includes Custom IC, Digital IC and Functional Verification, experienced 18% year-over-year growth. The demand for new hardware systems continued to gain traction, driven by AI/HPC customers. Apart from hardware, demand for digital full-flow solutions was steady, with expanded adoption of the Tempus and Certus sign-off tools. It added 12 new logos in the reported quarter as well as expanded business with several AI clients. The IP business was up 40% year over year in the second quarter. The company is witnessing higher demand for its Star IP portfolio across AI and HPC applications, including HBM, PCIe, UCIe and LPDDR6. Non-GAAP gross margin expanded 100 basis points (bps) to 88.2%. Total non-GAAP costs and expenses increased 18.4% year over year to $863 million.However, non-GAAP operating margin expanded 270 bps on a year-over-year basis to 45.5%. As of June 30, 2026, Cash and cash equivalents stood at $1.44 billion compared with $1.407 billion as of March 31, 2026. Long-term debt was $2.482 billion, compared with $2.481 billion as of March 31, 2026. Cadence generated an operating cash flow of $635 million in the reported quarter compared with the prior quarter’s $356 million. Free cash flow was $582 million compared with $307 million in the previous quarter.The company repurchased its shares worth $200 million in the second quarter. Non-GAAP operating margin for 2026 is now forecasted to be in the band of 43.75% to 44.75%, compared with the range of 43.5% to 44.5% guided earlier. Also, operating cash flow is expected to be $2 billion compared with $1.875 billion to $1.975 billion projected earlier. The company expects to utilize at least 50% of its free cash flow to repurchase shares in 2026.For the third quarter of 2026, revenues are estimated to be $1.595-$1.625 billion. The company reported sales of $1.55 billion in the year-ago quarter. Non-GAAP EPS is anticipated to be between $2.01 and $2.07 compared with $1.92 reported in the year-ago quarter. Non-GAAP operating margin is estimated to be between 43.5% and 44.5% in the third quarter. It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 6.85% due to these changes. At this time, Cadence has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of F on the value side, putting it in the lowest quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cadence has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Cadence belongs to the Zacks Computer - Software industry. Another stock from the same industry, Pegasystems (PEGA), has gained 15.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Pegasystems reported revenues of $420.72 million in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $0.35 for the same period compares with $0.28 a year ago. Pegasystems is expected to post earnings of $0.48 per share for the current quarter, representing a year-over-year change of +60%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. Pegasystems has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report Pegasystems Inc. (PEGA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Arm Holdings ARM appears positioned to deliver another strong quarter, but its elevated valuation leaves little room for execution missteps. The Zacks Consensus Estimate for the company’s fiscal second-quarter revenues is $1.37 billion, indicating 21% year-over-year growth. Royalty revenues could accelerate sequentially as artificial intelligence, data-center and smartphone demand support wider adoption of Arm-based technology. Licensing revenues may also benefit from new agreements and customers adopting more advanced architectures. Image Source: Zacks Investment Research The consensus mark for fiscal second-quarter adjusted earnings stands at 48 cents per share, indicating 23% year-over-year growth. Stronger-than-expected revenues could provide operating leverage and lift adjusted earnings. Full-year earnings could consequently approach $2.20 per share, up 24% year over year. With gross margin exceeding 98% in the fiscal first quarter, operating expenses will remain a crucial determinant of profitability. Research and development investments are likely to rise sharply, while selling, general and administrative costs should also increase. Image Source: Zacks Investment Research ARM’s financial position remains another notable strength. The company exited the previous quarter with approximately $3.06 billion in cash and no debt. Free cash flow could reach the mid-$1 billion range this year, although that would still represent a yield of only about 0.5% at the current valuation. Synopsys SNPS trades at roughly 24 times forward earnings, while Cadence Design Systems CDNS commands about 35 times. Although Arm Holdings’ profitability can justify a premium to Synopsys, its multiple of more than 93 times earnings appears excessive. Cadence Design Systems also benefits from durable semiconductor-design demand, yet remains substantially cheaper. Compared with Synopsys and Cadence Design Systems, ARM’s valuation assumes exceptionally favorable growth for years while making the stock vulnerable to a sharp correction and offering investors an inadequate margin of safety. ARM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ARM Holdings PLC Sponsored ADR (ARM) : Free Stock Analysis Report Synopsys, Inc. (SNPS) : Free Stock Analysis Report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Cadence Design Systems (NASDAQ:CDNS) and its peers. The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies. The 6 design software stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 2.9% above. Luckily, design software stocks have performed well with share prices up 17.9% on average since the latest earnings results. Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ:CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors. Cadence Design Systems reported revenues of $1.58 billion, up 24.2% year on year. This print exceeded analysts’ expectations by 0.5%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ billings estimates and EPS guidance for next quarter exceeding analysts’ expectations. “Cadence delivered an outstanding Q2 driven by broad-based strength and the accelerating demand for our AI-driven solutions across both Design for AI and AI for Design fronts,” said Anirudh Devgan, president and chief executive officer. Cadence Design Systems achieved the fastest revenue growth among its peers. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 3.7% since reporting and currently trades at $325.99. We think Cadence Design Systems is a good business, but is it a buy today? Read our full report here, it’s free. Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE:U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms. Unity reported revenues of $546.5 million, up 23.9% year on year, outperforming analysts’ expectations by 6.1%. The business had a stunning quarter with a solid beat of analysts’ billings estimates and EBITDA guidance for next quarter exceeding analysts’ expectations. Unity scored the biggest analyst estimate beat in the group. The market seems happy with the results as the stock is up 28.4% since reporting. It currently trades at $45.55. Is now the time to buy Unity? Access our full analysis of the earnings results here, it’s free. Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ:PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM. PTC reported revenues of $600 million, down 6.8% year on year, falling short of analysts’ expectations by 1.3%. It was a slower quarter as it posted a significant miss of analysts’ billings estimates and a miss of analysts’ annual recurring revenue estimates. PTC delivered the slowest revenue growth and weakest full-year guidance update among its peers. Interestingly, the stock is up 15.9% since the results and currently trades at $153.50. Read our full analysis of PTC’s results here. With a mission to build software for the people that build the world, Procore Technologies (NYSE:PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device. Procore Technologies reported revenues of $375.2 million, up 15.8% year on year. This result surpassed analysts’ expectations by 2.6%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ billings estimates and an impressive beat of analysts’ adjusted operating income estimates. Procore Technologies had the weakest guidance update of the whole group. The stock is up 23.4% since reporting and currently trades at $61.88. Read our full, actionable report on Procore Technologies here, it’s free. Known for its iconic "D" logo that appears before countless movies and TV shows, Dolby Laboratories (NYSE:DLB) designs and licenses audio and video technologies that enhance entertainment experiences in movies, TV shows, music, and other media. Dolby Laboratories reported revenues of $305 million, down 3.3% year on year. This print lagged analysts’ expectations by 2%. Taking a step back, it was a mixed quarter as it also produced revenue guidance for next quarter exceeding analysts’ expectations but EPS guidance for next quarter meeting analysts’ expectations. Dolby Laboratories delivered the highest guidance raise but had the weakest performance against analyst estimates in the group. The stock is up 20.4% since reporting and currently trades at $62.34. Read our full, actionable report on Dolby Laboratories here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Cadence Design Systems’ Q2 results reflected heightened demand for its artificial intelligence-powered electronic design automation solutions, with management crediting broad-based customer adoption as a primary driver. CEO Anirudh Devgan emphasized the company’s progress in agentic AI, which enables more autonomous and efficient chip and system design workflows. The quarter’s strong performance was further supported by robust engagement across advanced packaging, hardware platforms, and a substantial increase in recurring software revenue, signaling that customers are accelerating investments in both traditional and AI-centric design initiatives. Is now the time to buy CDNS? Find out in our full research report (it’s free). Revenue: $1.58 billion vs analyst estimates of $1.58 billion (24.2% year-on-year growth, 0.5% beat) Adjusted EPS: $2.11 vs analyst estimates of $2.06 (2.7% beat) The company lifted its revenue guidance for the full year to $6.3 billion at the midpoint from $6.18 billion, a 2% increase Management raised its full-year Adjusted EPS guidance to $8.10 at the midpoint, a 2.5% increase Operating Margin: 28.4%, up from 19% in the same quarter last year Billings: $1.73 billion at quarter end, up 31.5% year on year Market Capitalization: $93.64 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Joe Quatrochi (Wells Fargo) asked about the quantifiable impact of agentic AI on Cadence’s total addressable market. CEO Anirudh Devgan explained that agentic AI is creating a new opportunity at the top layer of their product stack, with broad customer interest, but did not provide a specific market size estimate. Joe Vruwink (Baird) questioned whether open-source AI agents could drive higher Cadence software usage and potential differentiation versus custom orchestration. Devgan responded that agentic AI increases demand for EDA tools, and Cadence’s differentiation lies in its integrated three-layer framework. Vivek Arya (Bank of America Securities) sought clarity on the sustainability and drivers of IP segment growth. CFO John Wall stated that the majority of growth is organic, powered by AI, HPC, and advanced packaging trends, and emphasized strong customer engagement and competitive wins. Jim Schneider (Goldman Sachs) asked how agentic AI add-ons are influencing software revenue and guidance. Devgan noted that while it is too early to project next year’s numbers, the current environment, competitive position, and TAM expansion are already reflected in improved results and outlook. Lee Simpson (Morgan Stanley) inquired about Cadence’s competitive positioning in digital implementation and verification at the leading edge. Devgan emphasized that recent collaborations with Intel and Samsung have improved Cadence’s standing, and that depth of engagement is increasing across all major customers. In coming quarters, the StockStory team will closely watch (1) the pace of agentic AI adoption and expansion of recurring software revenue, (2) progress on strategic collaborations with Intel, Samsung, and TSMC for advanced nodes and packaging, and (3) successful integration and scaling of Hexagon’s design and engineering business. Sustained momentum in hardware demand and new customer wins across system design will also be key milestones for tracking execution. Cadence Design Systems currently trades at $339.53, in line with $338.61 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Cadence Design Systems CDNS, a well-known player in the electronic design automation (“EDA”) space, recently reported strong second-quarter 2026 results with a record backlog that underscores sustained demand for its solutions. Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion. All the product groups witnessed double-digit growth. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year. Cadence Design Systems, Inc. revenue-quarterly | Cadence Design Systems, Inc. Quote One of the standout factors of this quarter was Cadence’s expanding backlog, which stood at $8.1 billion at the quarter-end. Backlog growth was supported by strong bookings momentum, rising significantly in the first half, highlighting the strength of underlying demand trends. The Zacks Consensus Estimate for order backlog stood at $7.68 billion. AI is driving a major transformation in semiconductor and system design. Cadence is deeply integrated into this shift. Design activity across several verticals, especially data centers and automotive, has been robust due to AI, hyperscale computing and 5G. The focus on Generative AI, Agentic AI and Physical AI has been driving an exponential increase in computing demand and semiconductor innovation. Customers have been significantly increasing their R&D budgets in AI-driven automation. On the recent earnings call, Cadence added that it is witnessing momentum on both “AI for Design” and “Design for AI” fronts. The company cited agentic AI as a durable tailwind. Cadence expects agentic tools to drive higher EDA consumption and usage across its platform as customers run more simulations, verification and implementation cycles, thereby expanding the addressable market. Management highlighted “strong early traction” for its AI Super-Agent portfolio. Cadence Design Systems, Inc. price-consensus-eps-surprise-chart | Cadence Design Systems, Inc. Quote Cadence’s hardware business also contributed to backlog growth. The demand for new hardware systems continued to gain traction, driven by AI/HPC customers. Apart from hardware, demand for digital full-flow solutions was steady, with expanded adoption of the Tempus and Certus sign-off tools within the Core EDA segment. It added 12 new logos in the reported quarter and expanded business with several AI clients. Deepening its strategic partnerships with Samsung, Intel, TSMC and OpenAI, among others bodes well. Overall, Cadence’s record backlog underscores strong demand visibility and reinforces confidence in its growth trajectory. With AI acting as a key catalyst and customer engagements deepening across segments, the company appears well-positioned to sustain momentum. Cadence raised its full-year 2026 revenue outlook to a band of $6.26-$6.34 billion, compared with the earlier guided range of $6.125-$6.225 billion. The Zacks Consensus Estimate is currently pinned at $6.29 billion. Non-GAAP EPS for 2026 is now expected to be between $8.05 and $8.15, compared with the earlier guided range of $7.85 to $7.95. The Zacks Consensus Estimate is currently pinned at $8.03 per share. CDNS carries a Zacks Rank #2 (Buy). Image Source: Zacks Investment Research In the past year, shares have lost 8.7% compared with Computer-Software industry’s decline of 31.6% Some better-ranked stocks worth consideration are Keysight Technologies, Inc KEYS, Synopsys SNPS and Commvault Systems CVLT. All stocks carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for KEYS’ fiscal 2026 EPS is pegged at $10.17, unchanged in the past 30 days. Keysight’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 9.46%. Shares of Keysight have gained 81% in the past year. The Zacks Consensus Estimate for SNPS’ fiscal 2026 EPS is pegged at $14.75, unchanged in the past 30 days. Synopsys’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing once, with the average surprise being 0.88%. Shares of Synopsys have lost 41% in the past year.The Zacks Consensus Estimate for CVLT’s fiscal 2027 EPS is pegged at $5.24, up two cents in the past 30 days. Commvault’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, while missing once, with the average surprise of 13.49%. Shares of Commvault have declined 36.6% in the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report Synopsys, Inc. (SNPS) : Free Stock Analysis Report CommVault Systems, Inc. (CVLT) : Free Stock Analysis Report Keysight Technologies Inc. (KEYS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Cohu, Inc.? Here are five stocks we like better. Cohu’s Q2 revenue rose 38% year over year to $149 million, exceeding the guidance midpoint, while non-GAAP gross margin reached 45.5% and EPS was $0.26. Management forecast Q3 revenue of approximately $170 million and raised its full-year 2026 growth outlook to about 35%, or roughly $610 million–$615 million. High-performance computing demand accelerated sharply: computing orders increased 150% year over year, and Cohu raised its 2026 HPC revenue estimate to $100 million–$110 million. The company’s HPC customer pipeline expanded to approximately $850 million, led by Eclipse handler opportunities. Cohu is expanding manufacturing capacity in Malaysia and through suppliers, targeting a 50% increase in HPC handler output over the next six months and more than double the output by mid-2027. Automotive remains the weakest major market, with utilization not expected to reach 80% until late Q1 or Q2 2027. These 3 Stocks Have Soared in 2026—Can They Keep Climbing? Cohu (NASDAQ:COHU) reported second-quarter 2026 revenue of $149 million, up 38% from a year earlier and above the midpoint of its guidance, as demand for high-performance computing equipment and a recovery in several core semiconductor markets supported results. President and CEO Luis Müller said recurring revenue, primarily from consumables, represented approximately 53% of quarterly sales. The company cited customer adoption of its thermal test handlers for AI processors, high-volume manufacturing inspection products, automated test platforms for power and connectivity devices, and software analytics offerings. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now There’s A Buying Opportunity Opening Up With Cadence Design “Cohu is benefiting from durable demand drivers in AI infrastructure and edge computing,” Müller said, pointing to customer investments aimed at managing higher power levels, improving production yield and increasing factory productivity. Müller said estimated semiconductor test utilization rose sequentially to 80% at the end of the second quarter, a level that has historically marked a turning point for capital spending among the company’s integrated device manufacturer customers. Computing and industrial utilization were in the low 80% range, while automotive and mobile utilization was in the high 70% range. → 3 Value ETFs to Consider as Growth Stocks Lag Behind MarketBeat Week in Review – 7/17 - 7/21 Computing accounted for 46% of total system orders in the quarter, with orders rising 150% year over year, driven by growth in Eclipse handlers for high-performance computing applications. Industrial orders increased 87% from a year earlier, consumer orders rose 29%, mobile was essentially flat, and automotive orders fell 24%. The automotive market continues to lag other end markets in the current recovery cycle. Müller said he does not expect automotive utilization to reach 80% until late in the first quarter or the second quarter of 2027. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? CFO Jeff Jones said Cohu expects its third-quarter revenue increase to be split roughly evenly between high-performance computing and the company’s core business, with each contributing about $10 million of growth sequentially. Cohu raised its estimate for fiscal 2026 high-performance computing revenue to $100 million to $110 million, from its prior range of $80 million to $100 million. Müller said the increase is entirely tied to the Eclipse handler business rather than Neon inspection systems for high-bandwidth memory. The company now estimates its annual high-performance computing customer pipeline at approximately $850 million, including: About $190 million of qualified annual opportunity across four customers, consisting of three high-performance computing customers and one HBM customer. Approximately $250 million of active qualification opportunities across five customers. Roughly $445 million of early-stage engagement across 10 additional customers. Müller said qualified customer opportunities range from roughly $30 million to $60 million annually per customer. One customer in the qualification group could receive official qualification within about a month, while another may complete its process around the middle of the first quarter of 2027, based on systems expected to ship in late August and an estimated six-month qualification process. To support expected demand, Cohu is expanding internal manufacturing in Malaysia and working with suppliers to increase capacity. The company expects to increase output for HPC handlers by about 50% over the six months following the second quarter and to more than double output by around mid-2027. Müller said the company could potentially triple output by the end of 2027 if market demand supports that expansion. Cohu also received a $26 million order early in the third quarter from a single customer for Eclipse systems, with much of that order expected to ship in the fourth quarter. The company said Eclipse lead times remain about 13 to 14 weeks to the first system shipment after receipt of an order, although larger orders are shipped across multiple weeks. In inspection and metrology, Cohu shipped additional final inspection systems for HBM3, HBM4 and HBM4E devices to a U.S.-based integrated device manufacturer, with a strong forecast for the second half of 2026. The company also qualified its Neon platform at a Taiwan-based outsourced semiconductor assembly and test provider and introduced a shortwave infrared vision sensor designed to detect inner cracks in complex silicon devices. The company said its software analytics business recorded its first $1 million revenue quarter, while orders increased 140% year over year. Cohu is expanding a predictive-maintenance deployment with a high-performance computing chipmaker that Müller said is expected to become its largest software deployment with a single customer. Cohu also continued work on an on-site AI appliance that runs AI models and autonomous agents inside a customer’s network, addressing semiconductor manufacturers’ data sovereignty requirements. Interface solutions accounted for about 19% of consolidated second-quarter revenue. Cohu booked $500,000 of interface solutions for optical engine testing and is pursuing additional opportunities tied to co-packaged optical devices. The company plans to ship a handler-based qualification unit for optical-engine test by the end of 2026. On a non-GAAP basis, second-quarter gross margin was 45.5%, above guidance due primarily to favorable product mix. Operating expenses were $52.7 million, net interest income after interest expense and foreign-currency losses was approximately $1.7 million, and non-GAAP earnings per share were $0.26. Adjusted EBITDA margin was 12%. Cash and investments increased approximately $9 million during the quarter to $498 million, while cash from operations was $10 million. Total debt was $304 million, including $288 million related to the company’s fourth-quarter 2025 convertible debt offering. Cohu did not repurchase shares during the quarter. For the third quarter, Cohu forecast revenue of approximately $170 million, plus or minus $7 million, representing growth of 14% sequentially and 35% year over year. The company expects third-quarter gross margin of approximately 45% and operating expenses of about $54 million. Cohu also raised its full-year 2026 revenue outlook to approximately 35% growth from the prior year, implying annual revenue of roughly $610 million to $615 million, according to management’s discussion. Jones said fourth-quarter revenue would need to be approximately flat with the third quarter to reach that range. The company said rising demand has contributed to longer lead times and higher costs for certain semiconductors and specialty components, particularly memory. Cohu has made advance purchases where possible and has begun discussions with customers about passing along some higher costs. Management said its guidance incorporates current supply-chain risks and constraints. Cohu, Inc is a global provider of semiconductor test and inspection solutions, offering a broad portfolio of products designed to support chip manufacturers, outsourced semiconductor assembly and test (OSAT) providers, and electronics original equipment manufacturers (OEMs). The company's product lineup includes automatic test handlers, wafer probers, test sockets, thermal subassembly systems and burn-in boards, all engineered to optimize throughput, accuracy and reliability in semiconductor production and final test. Founded in 1947 and headquartered in Poway, California, Cohu has grown through both organic development and targeted acquisitions to become a recognized leader in test handling and interconnect technologies. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cohu Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Cadence Design Systems CDNS delivered a strong second-quarter 2026 results, driven by broad-based demand for its AI-oriented portfolio amid robust design activity and new system architectures across hyperscaler infrastructure and physical AI. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year and topped management’s guided range of $2.02 to $2.08. Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion. All the product groups witnessed double-digit growth. On the earnings call, the company cited agentic AI as a durable tailwind. Cadence expects agentic tools to drive higher EDA consumption and usage across its platform as customers run more simulations, verification and implementation cycles, thereby expanding the addressable market. Management highlighted “strong early traction” for its AI Super-Agent portfolio.A standout metric was a record backlog of $8.1 billion, driven by strong bookings. Image Source: Zacks Investment Research Strong quarterly performance and accelerating AI demand led to a raise in its 2026 revenue outlook.Cadence raised its full-year 2026 revenue outlook to a band of $6.26-$6.34 billion, compared with the earlier guided range of $6.125-$6.225 billion. The Zacks Consensus Estimate is currently $6.2 billion.Non-GAAP EPS for 2026 is now expected to be between $8.05 and $8.15, compared with the earlier guided range of $7.85 to $7.95. The Zacks Consensus Estimate is currently pinned at $7.94 per share. CDNS stock was up 2.9% in the post-market trading yesterday and is up 3.4% in the pre-market trading today. The stock has lost 7.5% compared with the Computer - Software industry’s 30.6% decline in the past year. Product & Maintenance revenues (90.3% of total revenues) of $1.431 billion rose 22.3% year over year. Services revenues (9.7%) of $154 million jumped 46.7% year over year. Recurring revenues comprised 78% of total revenues, while the remainder was upfront revenues. The Americas contributed 43% of revenues, while China accounted for 15%, Other Asia 20%, Europe, Middle East and Africa 15% and Japan 7%, pointing to diversified demand across geographies.Product-wise, Core EDA, Intellectual Property (“IP”) and Systems Design & Analysis accounted for 68%, 15% and 17% of total revenues, respectively.The System Design & Analysis business, up 37% in the second quarter, is gaining from higher demand for Allegro X AI, 3D-IC and BETA CAE solutions. Management noted that the integration of Hexagon's D&E business was “progressing well” with some deals closed with key clients in the quarter. Cadence Design Systems, Inc. price-consensus-eps-surprise-chart | Cadence Design Systems, Inc. Quote Core EDA business, which includes Custom IC, Digital IC and Functional Verification, experienced 18% year-over-year growth. The demand for new hardware systems continued to gain traction, driven by AI/HPC customers. Apart from hardware, demand for digital full-flow solutions was steady, with expanded adoption of the Tempus and Certus sign-off tools. It added 12 new logos in the reported quarter as well as expanded business with several AI clients. The IP business was up 40% year over year in the second quarter. The company is witnessing higher demand for its Star IP portfolio across AI and HPC applications, including HBM, PCIe, UCIe and LPDDR6. Non-GAAP gross margin expanded 100 basis points (bps) to 88.2%. Total non-GAAP costs and expenses increased 18.4% year over year to $863 million.However, non-GAAP operating margin expanded 270 bps on a year-over-year basis to 45.5%. As of June 30, 2026, CDNS had cash and cash equivalents of $1.44 billion compared with $1.407 billion as of March 31, 2026. Long-term debt was $2.482 billion, compared with $2.481 billion as of March 31, 2026. Cadence generated an operating cash flow of $635 million in the reported quarter compared with the prior quarter’s $356 million. Free cash flow was $582 million compared with $307 million in the previous quarter.The company repurchased its shares worth $200 million in the second quarter. Non-GAAP operating margin for 2026 is now forecasted to be in the band of 43.75% to 44.75%, compared with the range of 43.5% to 44.5% guided earlier. Also, operating cash flow is expected to be $2 billion compared with $1.875 billion to $1.975 billion projected earlier. CDNS expects to utilize at least 50% of its free cash flow to repurchase shares in 2026.For the third quarter of 2026, revenues are estimated to be $1.595-$1.625 billion. The company reported sales of $1.55 billion in the year-ago quarter. Non-GAAP EPS is anticipated to be between $2.01 and $2.07. CDNS reported an EPS of $1.92 in the year-ago quarter. Non-GAAP operating margin is estimated to be between 43.5% and 44.5% in the third quarter. Cadence currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. SAP SE SAP reported second-quarter 2026 non-IFRS EPS of €1.59 ($1.85), which increased 6% from the year-ago quarter. The Zacks Consensus Estimate was $2. Despite macroeconomic uncertainty, SAP reported total revenues on a non-IFRS basis of €9.9 billion ($11.5 billion), which increased 9% year over year (up 11% at constant currency or cc). The Zacks Consensus Estimate was pinned at $11.4 billion.Shares of SAP have declined 40.5% in the past year. Pegasystems PEGA reported second-quarter fiscal 2026 revenues of $420.7 million, up 9.4% year over year, but missed the consensus mark by 1.8%. Pega Cloud momentum was a bright spot, with Pega Cloud annual contract value rising 22% year over year. Pega Cloud revenues jumped 28% year over year to $213.9 million and accounted for 51% of quarterly revenues.Shares of PEGA have declined 52.7% in the past year.Progress Software Corporation PRGS reported second-quarter fiscal 2026 results wherein revenues came in at $253 million, up 7% year over year and 6% on a constant currency (cc) basis. ARR of $868 million inched up 2% year over year on a cc basis. PRGS reported a 16% year-over-year increase in non-GAAP earnings per share, which stood at $1.62. Shares of PRGS have lost 21.9% in the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report SAP SE (SAP) : Free Stock Analysis Report Progress Software Corporation (PRGS) : Free Stock Analysis Report Pegasystems Inc. (PEGA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cadence Design Systems, Inc. CDNS used its second-quarter 2026 earnings call to frame agentic AI as both a new product opportunity and a driver of heavier use of its established design engines. Management also raised the full-year outlook, citing strength across core EDA, IP, hardware and System Design and Analysis rather than reliance on one product or customer. John Wall, senior vice president and chief financial officer, said Cadence now expects 2026 revenues of $6.26 billion to $6.34 billion. The midpoint implies 19% growth. Non-GAAP operating margin is projected at 43.75% to 44.75%, while non-GAAP earnings are expected at $8.05 to $8.15 per share. Operating cash flow is targeted at about $2 billion. For the third quarter, management guided to revenues of $1.595 billion to $1.625 billion and non-GAAP earnings of $2.01 to $2.07 per share. The outlook assumes export-control regulations remain substantially similar through year-end. Anirudh Devgan, president and chief executive officer, described Cadence’s “Three-Layer Cake” as compute and data, physically accurate design engines, and AI agents that orchestrate workflows. He argued that agents expand the design alternatives explored and repeatedly invoke Cadence tools. That creates monetization through agent licenses and greater use of underlying software. Wall said customer activity is advancing through evaluations, pilots and early deployments. He cautioned that guidance does not assume a sudden step-up in agentic AI revenues. Devgan said ChipStack has more than 20 customer engagements and is in production across multiple chip designs. ViraStack has more than 25 engagements, with disclosed productivity gains ranging from twofold to tenfold. AuraStack extends the portfolio into PCB and advanced packaging, while InnoStack targets advanced-node system-on-chip design. Some public customer examples have shown improvements as high as 40 times. A Mizuho analyst pressed management on adoption speed. Devgan called early add-on activity encouraging but emphasized that the products have been in the market for only about six months. Core EDA revenues increased 18% year over year, IP grew more than 40%, and System Design and Analysis advanced 37%. Hardware posted another record quarter and added 12 new customers. Wall said demand remains strongest among AI and high-performance computing customers, with supply capacity limiting deliveries. Second-quarter revenues came in at $1,584.5 million, which beat the Zacks Consensus Estimate of $1,576.2 million. Non-GAAP earnings of $2.11 per share also topped the $2.05 consensus mark. Cadence Design Systems, Inc. price-consensus-eps-surprise-chart | Cadence Design Systems, Inc. Quote Devgan highlighted a multiyear Intel engagement spanning the 14A process, design-technology co-optimization, EDA and IP. He said the agreement is incremental to existing Intel business, with most benefits expected beyond 2026. Management also pointed to stronger relationships with Samsung and continued collaboration with TSMC. Devgan said Cadence’s prior relative weakness at Intel and Samsung has improved, particularly in digital implementation, verification and signoff. In response to a Deutsche Bank analyst, Wall said second-half margins include targeted spending on Intel opportunities and Hexagon integration. He characterized that spending as investment rather than deterioration in the operating model. A Needham analyst asked whether powerful language models could bypass commercial EDA tools and generate designs directly for fabrication. Devgan rejected that scenario, arguing that physically accurate tools and verified engineering data remain essential. He said customer choice is more apt to expand at the language-model layer than replace core simulation engines. A Baird analyst also asked about open-source agents. Devgan said customers may build their own orchestration, but mission-critical work still depends on differentiated knowledge graphs, deep tool access and specialized hardware. Management’s tone was confident but measured. Devgan emphasized stronger design activity, share gains and agentic AI as separate supports for growth. Wall said recurring revenues rose about 24%, including roughly four percentage points from Hexagon, while add-on demand remained strong in a comparatively light renewal year. CDNS carries a Zacks Rank #3 (Hold), with a Value Score of F, Growth and Momentum Scores of C and a VGM Score of D. That combination indicates a neutral earnings-revision signal alongside weaker style characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Style Scores complement the Rank, with A and B grades viewed more favorably than lower grades. The Zacks Rank can change as analysts revise estimates following the reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Cadence Design Systems, Inc.? Here are five stocks we like better. Strong Q2 performance: Revenue rose 24% year over year to $1.584 billion, beating guidance, while record backlog reached $8.1 billion. Growth was broad-based, with particularly strong demand for AI and high-performance computing design tools. Full-year outlook raised: Cadence now expects 2026 revenue of $6.26 billion to $6.34 billion, representing approximately 19% growth, alongside non-GAAP EPS of $8.05 to $8.15. The forecast assumes export-control rules remain broadly unchanged. AI and hardware demand drive expansion: The company said agentic AI tools are increasing customer productivity and could expand its addressable market, while hardware remains supply-constrained due to strong demand from hyperscalers and semiconductor companies. New and expanded collaborations with Intel and Samsung are expected to contribute over multiple years. Shares Fall, Targets Rise—Markets and Analysts Diverge on Synopsys Cadence Design Systems (NASDAQ:CDNS) reported second-quarter 2026 results that exceeded its guidance, supported by demand for AI-driven design tools and broad-based growth across its businesses. The company raised its full-year outlook, citing accelerating design activity, record backlog and continued customer investment in AI and high-performance computing. Revenue for the second quarter rose 24% year over year to $1.584 billion. Cadence reported GAAP operating margin of 28.4% and non-GAAP operating margin of 45.5%. GAAP earnings per share were $1.33, while non-GAAP EPS was $2.11. → MarketBeat Week in Review – 07/20- 07/24 3 Companies Quietly Essential to Data Center and AI Operations Cadence ended the quarter with a record backlog of $8.1 billion. Operating cash flow was $635 million, and the company repurchased $200 million of its shares during the quarter. Cash totaled $1.44 billion, while debt outstanding had a principal value of $2.5 billion. Chief Executive Officer Anirudh Devgan said the company’s results reflected growing demand for solutions used in both “design for AI” and “AI for design.” He said Cadence now expects 19% revenue growth for 2026, with higher profitability as the company becomes more strategically involved in customer design programs. → Volatility Is Back and These 3 Market Tollbooths Are Best Positioned to Profit Beyond NVIDIA: Picks-and-Shovels AI Plays with Strong Momentum For the full year, Cadence expects: Revenue of $6.26 billion to $6.34 billion. GAAP operating margin of 27.75% to 28.75%. Non-GAAP operating margin of 43.75% to 44.75%. GAAP EPS of $4.76 to $4.86. Non-GAAP EPS of $8.05 to $8.15. Operating cash flow of approximately $2 billion. At the midpoint of its outlook, Cadence expects revenue growth of 19%, non-GAAP operating margin of 44.25% and non-GAAP EPS of $8.10. The forecast assumes that existing export-control regulations remain substantially similar through the remainder of the year, according to Chief Financial Officer John Wall. → 2 Stocks Built to Thrive If Inflation Refuses to Fade For the third quarter, Cadence forecast revenue of $1.595 billion to $1.625 billion and non-GAAP EPS of $2.01 to $2.07. Devgan emphasized Cadence’s approach to agentic AI, which combines computing and data, physics-based design and simulation tools, and AI agents that orchestrate engineering workflows. He said autonomous agents can expand the number of design alternatives explored and invoke Cadence’s underlying tools more frequently, creating a potential long-term expansion of the company’s addressable market. “Agentic AI is a demand accelerator for Cadence,” Devgan said during prepared remarks. Cadence introduced AuraStack AI Super Agent for printed circuit board and advanced packaging design, which the company said can provide up to 15 times higher productivity and reduce time to market by up to half. Its ChipStack AI Super Agent has more than 20 customer engagements and is deployed in production across multiple chip designs, Devgan said. Cadence also cited customer results of more than 40 times faster RTL validation in one advanced-node design, reducing a typical five-week verification cycle to less than a day. ViraStack, the company’s agentic AI offering for analog and custom design, has more than 25 customer engagements and has produced productivity improvements ranging from two times to 10 times in customer use cases, according to Devgan. He said InnoStack is also gaining adoption for advanced-node system-on-chip design, including a collaboration with Rapidus targeting up to two times faster design turnaround. Wall said the company is seeing more customer evaluations, pilots and early deployments. However, he said Cadence is not assuming a “sudden step function” from agentic AI in its guidance, even as it expects monetization through both new workflow products and increased usage of core design engines. Cadence said every product group posted double-digit year-over-year growth in the quarter. The intellectual property business grew more than 40%, fueled by demand in AI and HPC applications for PCIe, UCIe, HBM and LPDDR6 IP. Devgan said most of that growth was organic and attributed the performance to stronger IP quality, a focus on leading-node and AI-related IP, and a broader set of foundry relationships. The company also announced a multi-year collaboration with Intel centered on enabling its 14A process technology. The arrangement includes design IP, agentic AI-based electronic design automation tools, and design-technology co-optimization work for HPC and mobile designs. Devgan described the agreement as incremental to Cadence’s existing Intel business, with some benefit this year and most of the contribution expected over multiple years. Cadence expanded its collaboration with Samsung Foundry on two-nanometer and 3D IC technologies as well. Devgan said the company’s relationships with Intel and Samsung have improved after Cadence had historically been stronger in the TSMC ecosystem. Core EDA revenue grew 18% year over year, led by adoption of AI tools and expanded use of digital implementation and sign-off products. The company also reported a significant competitive analog-design win for its Spectre platform and several production wins for its Spectre FX FastSPICE simulator. Cadence’s hardware business delivered another record quarter, driven by demand for Palladium Z3 and Protium X3 systems. Wall said demand remains particularly strong among AI and HPC customers, including hyperscalers and semiconductor companies, and that hardware remains supply-constrained rather than demand-constrained. “We’re building the systems as quickly as we can to deliver against the backlog,” Wall said. He added that Cadence expects 2026 to be another record year for hardware. System design and analysis revenue increased 37% year over year. Cadence said adoption of its advanced packaging and PCB tools is increasing as AI system complexity grows. The company also cited customer interest in combining electrical, computational fluid dynamics and structural simulation capabilities, including applications related to physical AI. Wall said the integration of Hexagon’s design and engineering business is progressing as expected and contributed to systems design and analysis growth. He noted that Cadence expects targeted investments in the second half, including integration work and investments tied to opportunities such as Intel, to modestly reduce second-half margins compared with the first half. He characterized the spending as deliberate investment rather than deterioration in the company’s underlying business model. Recurring revenue grew about 24% year over year in the second quarter, Wall said, supported by core EDA growth, renewals, market-share gains and add-on business. Hexagon contributed roughly four percentage points to recurring revenue growth, he said. Cadence continues to expect its full-year revenue mix to be approximately 80% recurring and 20% upfront. Cadence Design Systems, Inc (NASDAQ: CDNS) is a global provider of electronic design automation (EDA) software, hardware and intellectual property used to design and verify advanced semiconductor chips, systems-on-chip (SoCs), printed circuit boards (PCBs) and packaging. Headquartered in San Jose, California and founded in 1988, Cadence serves semiconductor companies, original equipment manufacturers and system designers across the globe, helping customers accelerate design cycles and manage the complexity of modern integrated systems. The company's offerings span software tools for digital, custom/analog and mixed-signal design, verification and signoff, as well as solutions for system-level modeling, thermal and signal integrity analysis, and PCB and package design. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cadence Design Systems Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Cadence Design Systems (CDNS) came out with quarterly earnings of $2.11 per share, beating the Zacks Consensus Estimate of $2.05 per share. This compares to earnings of $1.65 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +2.93%. A quarter ago, it was expected that this maker of hardware and software products for validating chip designs would post earnings of $1.88 per share when it actually produced earnings of $1.96, delivering a surprise of +4.26%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Cadence, which belongs to the Zacks Computer - Software industry, posted revenues of $1.58 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.52%. This compares to year-ago revenues of $1.28 billion. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Cadence shares have added about 4.4% since the beginning of the year versus the S&P 500's gain of 8.3%. While Cadence has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Cadence was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.92 on $1.55 billion in revenues for the coming quarter and $7.94 on $6.2 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Software is currently in the bottom 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Smith Micro Software, Inc. (SMSI), another stock in the same industry, has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.10 per share in its upcoming report, which represents a year-over-year change of +85.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Smith Micro Software, Inc.'s revenues are expected to be $4.8 million, up 8.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report Smith Micro Software, Inc. (SMSI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research