Cadence Design Systems late Tuesday beat Wall Street's targets for the fourth quarter but came up short with its guidance for 2025. CDNS stock fell in extended trading.
The electronic design automation software firm earned an adjusted $1.88 a share on sales of $1.36 billion in the December quarter. Analysts polled by FactSet had expected earnings of $1.82 a share on sales of $1.35 billion. On a year-over-year basis, Cadence earnings rose 36.2% while sales climbed 26.8%.
For the current year, Cadence expects to earn an adjusted $6.70 a share on sales of $5.18 billion. That's based on the midpoint of its outlook. Analysts had been modeling earnings of $6.80 a share on sales of $5.23 billion in 2025. Last year, Cadence earned an adjusted $5.97 a share, up 15.9%, on sales of $4.64 billion, up 13.5%.
The outlook from Cadence would translate to year-over-year growth in 2025 of 12.2% in earnings and 11.6% in revenue.
"Our momentum continues to build as we exited 2024 with record bookings and record backlog," Chief Executive Anirudh Devgan said in a news release. "Cadence is very well positioned to benefit from the various phases of AI, including the current AI infrastructure build-out, applying AI to our own products, and expanding into new markets such as life sciences."
In after-hours trading on the stock market today, CDNS stock dropped more than 4% to 286.00. During the regular session Tuesday, CDNS stock rose 1.8% to close at 300.43.
CDNS stock is in a loose cup-with-handle base with a buy point of 326.19, according to IBD MarketSurge charts.
CDNS stock is in the IBD Long-Term Leaders Portfolio.
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