cdns-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________

FORM 10-Q

_____________________________________

(Mark One)


			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 000-15867

_____________________________________

CADENCE DESIGN SYSTEMS, INC.

(Exact Name of Registrant as Specified in Its Charter)

_____________________________________

Delaware

00-0000000

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

2655 Seely Avenue, Building 5,

San Jose,

California

95134

(Address of Principal Executive Offices)

(Zip Code)

(408) 943-1234

Registrant’s Telephone Number, including Area Code

_____________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

CDNS

Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Smaller Reporting Company

☐

Non-accelerated Filer

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On March 31, 2023, approximately 272,684,000 shares of the registrant’s common stock, $0.01 par value, were outstanding.

CADENCE DESIGN SYSTEMS, INC.

INDEX


		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	1

	Condensed Consolidated Income Statements for the three months ended March 31, 2023 and April 2, 2022	2

	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2023 and April 2, 2022	3

	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2023 and April 2, 2022	4

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and April 2, 2022	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	29

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	31

Item 4.	Mine Safety Disclosures	31

Item 5.	Other Information	31

Item 6.	Exhibits	32

	Signatures	33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CADENCE DESIGN SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)


	As of
	March 31, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	916,963	$	882,325
Receivables, net	488,237		486,710
Inventories	127,566		128,005
Prepaid expenses and other	165,778		209,727
Total current assets	1,698,544		1,706,767
Property, plant and equipment, net	372,956		371,451
Goodwill	1,377,625		1,374,268
Acquired intangibles, net	341,738		354,617
Deferred taxes	864,750		853,691
Other assets	516,006		476,277
Total assets	$	5,171,619	$	5,137,071
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Revolving credit facility	$	30,000	$	100,000
Accounts payable and accrued liabilities	430,135		557,158
Current portion of deferred revenue	721,246		690,538
Total current liabilities	1,181,381		1,347,696
Long-term liabilities:
Long-term portion of deferred revenue	102,515		91,524
Long-term debt	648,301		648,078
Other long-term liabilities	298,546		304,660
Total long-term liabilities	1,049,362		1,044,262
Commitments and contingencies (Note 11)
Stockholders’ equity:
Common stock and capital in excess of par value	2,878,749		2,765,673
Treasury stock, at cost	(3,987,528)		(3,824,163)
Retained earnings	4,137,044		3,895,240
Accumulated other comprehensive loss	(87,389)		(91,637)
Total stockholders’ equity	2,940,876		2,745,113
Total liabilities and stockholders’ equity	$	5,171,619	$	5,137,071

See notes to condensed consolidated financial statements.

CADENCE DESIGN SYSTEMS, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended
		March 31, 2023		April 2, 2022
Revenue:
Product and maintenance		$	963,742	$	846,244
Services		57,948		55,522
Total revenue		1,021,690		901,766
Costs and expenses:
Cost of product and maintenance		100,238		72,795
Cost of services		24,234		25,048
Marketing and sales		166,666		140,186
Research and development		350,295		290,895
General and administrative		53,527		48,937
Amortization of acquired intangibles		4,267		4,964
Restructuring		—		12
Total costs and expenses		699,227		582,837
Income from operations		322,463		318,929
Interest expense		(9,260)		(4,108)
Other income (expense), net		8,284		(4,900)
Income before provision for income taxes		321,487		309,921
Provision for income taxes		79,683		74,586
Net income		$	241,804	$	235,335
Net income per share – basic		$	0.90	$	0.86
Net income per share – diluted		$	0.89	$	0.85
Weighted average common shares outstanding – basic		269,501		272,431
Weighted average common shares outstanding – diluted		273,159		276,918

See notes to condensed consolidated financial statements.

CADENCE DESIGN SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Three Months Ended
		March 31, 2023		April 2, 2022
Net income		$	241,804	$	235,335
Other comprehensive income (loss), net of tax effects:
Foreign currency translation adjustments		3,955		(14,774)
Changes in defined benefit plan liabilities		263		166
Unrealized gain on investments		30		—
Total other comprehensive income (loss), net of tax effects		4,248		(14,608)
Comprehensive income		$	246,052

SEC Form 10-Q filed by Cadence Design Systems Inc.