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Cadence Reports First Quarter 2018 Financial Results
SAN JOSE, Calif. -- Apr 23, 2018 -- Cadence Design Systems, Inc. (NASDAQ: CDNS) today reported its results under new revenue rules, ASC Topic 606, for the first time. For the first quarter of 2018, Cadence reported revenue of $517 million, GAAP net income of $73 million, or $0.26 per share on a diluted basis, and non-GAAP net income (as defined below), of $113 million, or $0.40 per share on a diluted basis.
Cadence also reported its results under the old revenue rules, ASC Topic 605, as required under the modified retrospective transition method, to allow easier comparison with prior results, all of which were reported under ASC Topic 605.
Under ASC Topic 605, for the first quarter of 2018, Cadence reported revenue of $525 million, compared to revenue of $477 million reported for the same period in 2017. On a GAAP basis, Cadence recognized net income of $84 million, or $0.30 per share on a diluted basis, in the first quarter of 2018, compared to net income of $68 million, or $0.25 per share on a diluted basis for the same period in 2017. Using the non-GAAP measure defined below, net income for the first quarter of 2018 was $123 million, or $0.44 per share on a diluted basis, as compared to non-GAAP net income of $89 million, or $0.32 per share on a diluted basis, for the same period in 2017.
“The Data-Driven Economy is being propelled by key technology waves of mobile, cloud/datacenter, edge computing, automotive, and most significantly machine learning, all driving increasing design activity,” said Lip-Bu Tan, chief executive officer. “This is driving broad-based customer demand for our innovative System Design Enablement solutions that, along with strong execution, contributed to our excellent financial performance in the first quarter.”
“We are pleased with results for all of our key operating metrics including revenue, operating margin, EPS and operating cash flow,” said John Wall, senior vice president and chief financial officer. “On the strength of first quarter business and continuing momentum, we are raising our outlook for the year.”
CFO Commentary
Commentary on the first quarter 2018 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.
Business Outlook
The outlook provided below is on an ASC Topic 606 basis, which Cadence has adopted for its fiscal year 2018 using the modified retrospective transition method. As required by the new standard, the company will report revenue under both methods for the 2018 transition year.
For the second quarter of 2018, the company expects total revenue in the range of $510 million to $520 million. Second quarter GAAP net income per diluted share is expected to be in the range of $0.20 to $0.22. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.39 to $0.41.
For 2018, the company expects total revenue in the range of $2.055 billion to $2.085 billion. On a GAAP basis, net income per diluted share for 2018 is expected to be in the range of $0.86 to $0.94. Using the non-GAAP measure defined below, net income per diluted share for 2018 is expected to be in the range of $1.57 to $1.65.
For 2018, the company is forecasting a non-GAAP income tax rate of 16 percent, down from 23 percent used in 2017, primarily resulting from the tax rate reduction.
For comparison purposes, the company expects the outlook for 2018 on the prior ASC Topic 605 basis to be as follows: revenue in the range of $2.085 billion to $2.115 billion, GAAP net income per diluted share in the range of $0.97 to $1.05 and non-GAAP net income per diluted share in the range of $1.66 to $1.74.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is included in this release.
Click here for the Q1 2018 Financial Schedules.
Audio Webcast Scheduled
Lip-Bu Tan, chief executive officer, and John Wall, senior vice president and chief financial officer, will host the first quarter 2018 financial results audio webcast today, April 23, 2018, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting April 23, 2018 at 5 p.m. (Pacific) and ending June 15, 2018 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
About Cadence
Cadence enables electronic systems and semiconductor companies to create the innovative end products that are transforming the way people live, work and play. Cadence® software, hardware and semiconductor IP are used by customers to deliver products to market faster. The company’s System Design Enablement strategy helps customers develop differentiated products-from chips to boards to systems-in mobile, consumer, cloud datacenter, automotive, aerospace, IoT, industrial and other market segments. Cadence is listed as one of Fortune Magazine's 100 Best Companies to Work For. Learn more at www.cadence.com.
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