Cadence raises 2026 outlook as Q3 revenue grows 22% and backlog hits a record $8.2 billion

Cadence Design Systems raised its full-year outlook on Monday after a third quarter in which revenue grew 22% and its backlog reached a record $8.2 billion.

The chip-design software maker reported revenue of $1.633 billion for the quarter, up from $1.339 billion a year earlier, according to its earnings release filed with the SEC. Non-GAAP earnings per share rose to $2.11 from $1.93. GAAP EPS was $1.05, flat with the year-ago quarter.

"With broad-based business momentum, expanding technology leadership and a record backlog, we are raising our 2026 revenue outlook to 21% year-over-year growth," CEO Anirudh Devgan said in the release. He tied the outlook to demand for AI-driven chip and system design, including the company's new Maestro AI models and its AI Super Agents.

Margins narrowed

Profitability came in lower than a year ago. Non-GAAP operating margin was 44.1%, compared with 47.6%, and GAAP operating margin was 26.2%, compared with 31.8%.

Recurring revenue grew 18% from a year earlier. Cadence expects to recognize $4.2 billion of revenue over the next 12 months from remaining performance obligations.

More buybacks

Cadence spent $400 million on share repurchases in the quarter. Its board also authorized another $2.5 billion for the buyback program, the release said.

Full-year outlook

For 2026, Cadence now expects:

• Revenue of $6.387 billion to $6.417 billion
• Non-GAAP EPS of $8.37 to $8.43
• GAAP EPS of $4.84 to $4.90
• Non-GAAP operating margin of 44.2% to 45.2%

By the numbers

• Q3 revenue: $1.633 billion, up 22%
• Q3 non-GAAP EPS: $2.11, versus $1.93
• Q3 GAAP EPS: $1.05, unchanged
• Backlog: $8.2 billion, a record
• New buyback authorization: $2.5 billion

Sources

1. Cadence Design Systems, Inc., Form 8-K with third quarter 2026 earnings release and CFO commentary, filed Oct. 26, 2026 (accession 0000813672-26-000116)

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