Company Announcements

Cadence Reports Fourth Quarter and Fiscal Year 2019 Financial Results

SAN JOSE, Calif.--(BUSINESS WIRE)--Feb. 12, 2020-- Cadence Design Systems, Inc. (Nasdaq: CDNS) today announced results for the fourth quarter and fiscal year 2019.

Cadence reported 2019 revenue of $2.336 billion, compared to revenue of $2.138 billion for 2018. On a GAAP basis, Cadence achieved operating margin of 21 percent and recognized net income of $989 million, or $3.53 per share on a diluted basis, in 2019, compared to operating margin of 19 percent and net income of $346 million, or $1.23 per share on a diluted basis for 2018. Revenue for the fourth quarter of 2019 totaled $600 million, compared to revenue of $570 million for the same period in 2018. Cadence achieved operating margin of 18 percent and recognized net income of $660 million, or $2.36 per share on a diluted basis, in the fourth quarter of 2019, compared to operating margin of 20 percent and net income of $98 million, or $0.35 per share on a diluted basis, for the same period in 2018. GAAP net income for the fourth quarter of 2019 and fiscal 2019 included a one-time non-cash tax benefit of $576 million related to intercompany transfers of certain intellectual property rights to Cadence's Irish subsidiary.

Using the non-GAAP measure defined below, operating margin for 2019 was 32 percent and net income was $618 million, or $2.20 per share on a diluted basis, compared to operating margin of 30 percent and net income of $526 million, or $1.87 per share on a diluted basis, for 2018. For the fourth quarter of 2019, operating margin was 31 percent and net income was $152 million, or $0.54 per share on a diluted basis, compared to operating margin of 31 percent and net income of $147 million, or $0.52 per share on a diluted basis, for the same period in 2018.

“Generational trends such as 5G, AI and hyperscale computing are driving strong design activity and our Intelligent System Design strategy has us very well positioned to maximize the resulting opportunities,” said Lip-Bu Tan, chief executive officer. “We introduced seven significant new products, including two in the System Analysis space, and coupled with strong execution, drove 9% revenue growth and 32% non-GAAP operating margin in 2019, and I look forward to driving further customer and shareholder success this year.”

“We are pleased with our performance in Q4 and for the full year,” said John Wall, senior vice president and chief financial officer. “Thanks to the efforts of the entire Cadence team, we achieved broad based strength across all of our businesses and look forward to building upon our success in 2020.”

CFO Commentary

Commentary on the fourth quarter and fiscal year 2019 financial results by John Wall, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.

Business Outlook

For the first quarter of 2020, the company expects total revenue in the range of $610 million to $620 million. First quarter GAAP operating margin is expected to be approximately 19 percent and GAAP net income per diluted share is expected to be in the range of $0.32 to $0.34. Using the non-GAAP measure defined below, operating margin is expected to be approximately 30 percent and net income per diluted share is expected to be in the range of $0.53 to $0.55.

For 2020, the company expects total revenue in the range of $2.545 billion to $2.585 billion. On a GAAP basis, operating margin is expected to be in the range of 21 percent to 22 percent and net income per diluted share for 2020 is expected to be in the range of $1.46 to $1.56. Using the non-GAAP measure defined below, operating margin for 2020 is expected to be in the range of 32 percent to 33 percent and net income per diluted share for 2020 is expected to be in the range of $2.40 to $2.50.

A schedule showing a reconciliation of the business outlook from GAAP operating margin, GAAP net income and diluted net income per share to non-GAAP operating margin and non-GAAP net income and diluted net income per share is included in this release.

Audio Webcast Scheduled

Lip-Bu Tan, chief executive officer, and John Wall, senior vice president and chief financial officer, will host the fourth quarter and fiscal year 2019 financial results audio webcast today, February 12, 2020, 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 February 12, 2020 at 5 p.m. (Pacific) and ending March 13, 2020 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's software, hardware and semiconductor IP are used by customers to deliver products to market faster. The company’s Intelligent System Design™ strategy helps customers develop differentiated products—from chips to boards to intelligent systems—in mobile, consumer, cloud, data center, 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.

© 2020 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo and the other Cadence marks found at www.cadence.com/go/trademarks are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.

The statements contained above, as well as the information in the Business Outlook section, are or include forward-looking statements based on current expectations and preliminary assumptions that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control, including, among others: (i) Cadence’s ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence’s efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for and delivery of Cadence’s products and services; (iv) change in customer demands that could result in delays in purchases or deliveries of Cadence's products and services, including those resulting from consolidation among Cadence’s customers, restructurings and other efforts to improve operational efficiency of Cadence’s customers, economic conditions, government regulations or trade restrictions; (v) economic and industry conditions and trade restrictions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates and Cadence’s ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the effects of Cadence’s efforts to improve operational efficiency in its business, including strategic, customer and supplier relationships, and its ability to retain key employees; (x) events that affect cash flow, liquidity, reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party. In addition, the timing and amount of Cadence's repurchase of its common stock under the authorizations will be subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

For a detailed discussion of these and other cautionary statements related to Cadence’s business, please refer to Cadence’s filings with the U.S. Securities and Exchange Commission, which include Cadence’s most recent reports on Form 10-K and Form 10-Q, including Cadence’s future filings.

GAAP to Non-GAAP Reconciliation

Non-GAAP financial measures should not be considered as a substitute for or superior to measures of financial performance prepared in accordance with generally accepted accounting principles, or GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with their most directly comparable GAAP financial results. Investors are also encouraged to look at the GAAP results as the best measure of financial performance.

To supplement Cadence’s financial results presented on a GAAP basis, Cadence management uses non-GAAP measures that it believes are helpful in understanding Cadence’s performance. One such measure is non-GAAP net income, which is a financial measure not calculated under GAAP. Non-GAAP net income is calculated by Cadence management by taking GAAP net income and excluding, as applicable, amortization of intangible assets, stock-based compensation expense, acquisition and integration-related costs including retention expenses, investment gains or losses, income or expenses related to Cadence’s non-qualified deferred compensation plan, restructuring, executive severance and other significant items not directly related to Cadence’s core business operations, including a one-time non-cash tax benefit related to intercompany transfers of certain intellectual property rights, and the income tax effect of non-GAAP pre-tax adjustments.

Cadence management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of Cadence’s core business operations and therefore provides supplemental information to Cadence management and investors regarding the performance of the business operations, facilitates comparisons to the historical operating results and allows the review of Cadence's business from the same perspective as Cadence management, including forecasting and budgeting.

The following tables reconcile the specific items excluded from GAAP operating margin, GAAP net income and GAAP net income per diluted share in the calculation of non-GAAP operating margin, non-GAAP net income and non-GAAP net income per diluted share for the periods shown below:

Operating Margin Reconciliation

 

Three Months Ended

 

 

December 28, 2019

 

December 29, 2018

 

 

(unaudited)

GAAP operating margin as a percent of total revenue

 

18%

 

20%

Reconciling items to non-GAAP operating margin as a percent of total revenue:

 

 

 

 

Amortization of acquired intangibles

 

2%

 

2%

Stock-based compensation expense

 

8%

 

7%

Non-qualified deferred compensation expenses (credits)

 

0%

 

0%

Restructuring and other charges

 

2%

 

2%

Acquisition and integration-related costs (credits)

 

1%

 

0%

Special charges

 

0%

 

0%

Non-GAAP operating margin as a percent of total revenue

 

31%

 

31%

Operating Margin Reconciliation

 

Years Ended

 

 

December 28, 2019

 

December 29, 2018

 

 

(unaudited)

GAAP operating margin as a percent of total revenue

 

21%

 

19%

Reconciling items to non-GAAP operating margin as a percent of total revenue:

 

 

 

 

Amortization of acquired intangibles

 

2%

 

2%

Stock-based compensation expense

 

8%

 

8%

Non-qualified deferred compensation expenses (credits)

 

0%

 

0%

Restructuring and other charges

 

1%

 

0%

Acquisition and integration-related costs

 

0%

 

1%

Special charges

 

0%

 

0%

Non-GAAP operating margin as a percent of total revenue

 

32%

 

30%

Net Income Reconciliation

 

Three Months Ended

 

 

December 28, 2019

 

December 29, 2018

 

 

(unaudited)

(in thousands)

 

 

 

 

Net income on a GAAP basis

 

$

659,675

 

 

$

98,425

 

Amortization of acquired intangibles

 

12,660

 

 

12,942

 

Stock-based compensation expense

 

46,758

 

 

42,594

 

Non-qualified deferred compensation expenses (credits)

 

1,948

 

 

(3,186

)

Restructuring and other charges

 

9,809

 

 

13,699

 

Acquisition and integration-related costs (credits)

 

3,466

 

 

(1,360

)

Special charges

 

875

 

 

 

Other income or expense related to investments and non-qualified deferred compensation plan assets*

 

(513

)

 

1,356

 

Income tax benefit related to intercompany transfers of certain intellectual property rights

 

(575,618

)

 

 

Income tax effect of non-GAAP adjustments

 

(7,500

)

 

(17,737

)

Net income on a non-GAAP basis

 

$

151,560

 

 

$

146,733

 

*

Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Net Income Reconciliation

 

Years Ended

 

 

December 28, 2019

 

December 29, 2018

 

 

(unaudited)

(in thousands)

 

 

 

 

Net income on a GAAP basis

 

$

988,979

 

 

$

345,777

 

Amortization of acquired intangibles

 

53,079

 

 

53,333

 

Stock-based compensation expense

 

181,547

 

 

167,715

 

Non-qualified deferred compensation expenses (credits)

 

5,402

 

 

(1,471

)

Restructuring and other charges

 

8,621

 

 

11,089

 

Acquisition and integration-related costs

 

8,107

 

 

19,858

 

Special charges

 

875

 

 

 

Other income or expense related to investments and non-qualified deferred compensation plan assets*

 

(1,314

)

 

(1,278

)

Income tax benefit related to intercompany transfers of certain intellectual property rights

 

(575,618

)

 

 

Income tax effect of non-GAAP adjustments

 

(52,037

)

 

(69,489

)

Net income on a non-GAAP basis

 

$

617,641

 

 

$

525,534

 

*

Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

Diluted Net Income Per Share Reconciliation

 

Three Months Ended

 

 

December 28, 2019

 

December 29, 2018

 

 

(unaudited)

(in thousands, except per share data)

 

 

 

 

Diluted net income per share on a GAAP basis

 

$

2.36

 

 

$

0.35

 

Amortization of acquired intangibles

 

0.05

 

 

0.05

 

Stock-based compensation expense

 

0.17

 

 

0.15

 

Non-qualified deferred compensation expenses (credits)

 

0.01

 

 

(0.01

)

Restructuring and other charges

 

0.03

 

 

0.05

 

Acquisition and integration-related costs (credits)

 

0.01

 

 

(0.01

)

Special charges

 

 

 

 

Other income or expense related to investments and non-qualified deferred compensation plan assets*

 

 

 

 

Income tax benefit related to intercompany transfers of certain intellectual property rights

 

(2.06

)

 

 

 

Income tax effect of non-GAAP adjustments

 

(0.03

)

 

(0.06

)

Diluted net income per share on a non-GAAP basis

 

$

0.54

 

 

$

0.52

 

Shares used in calculation of diluted net income per share — GAAP**

 

279,557

 

 

280,321

 

Shares used in calculation of diluted net income per share — non-GAAP**

 

279,557

 

 

280,321

 

*

Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

**

Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

Diluted Net Income Per Share Reconciliation

 

Years Ended

 

 

December 28, 2019

 

December 29, 2018

 

 

(unaudited)

(in thousands, except per share data)

 

 

 

 

Diluted net income per share on a GAAP basis

 

$

3.53

 

 

$

1.23

 

Amortization of acquired intangibles

 

0.19

 

 

0.19

 

Stock-based compensation expense

 

0.65

 

 

0.60

 

Non-qualified deferred compensation expenses (credits)

 

0.02

 

 

(0.01

)

Restructuring and other charges

 

0.03

 

 

0.04

 

Acquisition and integration-related costs

 

0.03

 

 

0.07

 

Special charges

 

 

 

 

Other income or expense related to investments and non-qualified deferred compensation plan assets*

 

(0.01

)

 

 

Income tax benefit related to intercompany transfers of certain intellectual property rights

 

(2.05

)

 

 

 

Income tax effect of non-GAAP adjustments

 

(0.19

)

 

(0.25

)

Diluted net income per share on a non-GAAP basis

 

$

2.20

 

 

$

1.87

 

Shares used in calculation of diluted net income per share — GAAP**

 

280,515

 

 

281,144

 

Shares used in calculation of diluted net income per share — non-GAAP**

 

280,515

 

 

281,144

 

*

Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

**

Shares used in the calculation of GAAP net income per share are expected to be the same as shares used in the calculation of non-GAAP net income per share, except when the company reports a GAAP net loss and non-GAAP net income, or GAAP net income and a non-GAAP net loss.

Cadence expects that its corporate representatives will meet privately during the quarter with investors, the media, investment analysts and others. At these meetings, Cadence may reiterate the business outlook published in this press release. At the same time, Cadence will keep this press release, including the business outlook, publicly available on its website.

Prior to the start of the Quiet Period (described below), the public may continue to rely on the business outlook contained herein as still being Cadence’s current expectations on matters covered unless Cadence publishes a notice stating otherwise.

Beginning March 13, 2020, Cadence will observe a Quiet Period during which the business outlook as provided in this press release and the most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q no longer constitute Cadence’s current expectations. During the Quiet Period, the business outlook in these documents should be considered historical, speaking as of prior to the Quiet Period only and not subject to any update by Cadence. During the Quiet Period, Cadence’s representatives will not comment on Cadence’s business outlook, financial results or expectations. The Quiet Period will extend until Cadence’s first quarter 2020 earnings release is published, which is currently scheduled for April 20, 2020.

Cadence Design Systems, Inc.
Condensed Consolidated Balance Sheets
December 28, 2019 and December 29, 2018
(In thousands)
(Unaudited)
 
December 28, 2019 December 29, 2018
 
Current assets:
Cash and cash equivalents

$

705,210

$

533,298

Receivables, net

 

304,546

 

297,082

Inventories

 

55,802

 

28,162

Prepaid expenses and other

 

103,785

 

92,550

Total current assets

 

1,169,343

 

951,092

 
Property, plant and equipment, net

 

275,855

 

252,630

Goodwill

 

661,856

 

662,272

Acquired intangibles, net

 

172,375

 

225,457

Deferred taxes

 

732,367

 

154,894

Other assets

 

345,429

 

222,309

Total assets

$

3,357,225

$

2,468,654

 
Current liabilities:
Revolving credit facility

$

-

$

100,000

Accounts payable and accrued liabilities

 

316,908

 

256,526

Current portion of deferred revenue

 

355,483

 

352,456

Total current liabilities

 

672,391

 

708,982

 
Long-term liabilities:
Long-term portion of deferred revenue

 

73,400

 

48,718

Long-term debt

 

346,019

 

345,291

Other long-term liabilities

 

162,521

 

77,262

Total long-term liabilities

 

581,940

 

471,271

 
Stockholders' equity

 

2,102,894

 

1,288,401

Total liabilities and stockholders' equity

$

3,357,225

$

2,468,654

Cadence Design Systems, Inc.
Condensed Consolidated Income Statements
For the Three Months and Years Ended December 28, 2019 and December 29, 2018
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended Years Ended
December 28, 2019 December 29, 2018 December 28, 2019 December 29, 2018
 
Revenue:
Product and maintenance

$

564,964

$

534,418

$

2,204,615

$

1,997,887

Services

 

34,591

 

35,432

 

131,704

 

140,135

 
Total revenue

 

599,555

 

569,850

 

2,336,319

 

2,138,022

 
Costs and expenses:
Cost of product and maintenance

 

53,521

 

54,748

 

189,146

 

173,011

Cost of services

 

19,807

 

21,376

 

77,211

 

85,736

Marketing and sales

 

127,267

 

112,613

 

481,673

 

439,669

Research and development

 

235,372

 

218,271

 

935,938

 

884,816

General and administrative

 

42,093

 

31,985

 

139,806

 

133,406

Amortization of acquired intangibles

 

2,787

 

3,468

 

12,128

 

14,086

Restructuring and other charges

 

9,809

 

13,699

 

8,621

 

11,089

 
Total costs and expenses

 

490,656

 

456,160

 

1,844,523

 

1,741,813

 
Income from operations

 

108,899

 

113,690

 

491,796

 

396,209

 
Interest expense

 

(4,222)

 

(4,318)

 

(18,829)

 

(23,139)

Other income (expense), net

 

748

 

(735)

 

6,001

 

3,320

 
Income before provision (benefit) for income taxes

 

105,425

 

108,637

 

478,968

 

376,390

 
Provision (benefit) for income taxes

 

(554,250)

 

10,212

 

(510,011)

 

30,613

 
Net income

$

659,675

$

98,425

$

988,979

$

345,777

 
 
Net income per share - basic

$

2.41

$

0.36

$

3.62

$

1.26

 
Net income per share - diluted

$

2.36

$

0.35

$

3.53

$

1.23

 
Weighted average common shares outstanding - basic

 

273,234

 

273,680

 

273,239

 

273,729

 
Weighted average common shares outstanding - diluted

 

279,557

 

280,321

 

280,515

 

281,144

Cadence Design Systems, Inc.
Condensed Consolidated Statements of Cash Flows
For the Years Ended December 28, 2019 and December 29, 2018
(In thousands)
(Unaudited)
 

Years Ended

December 28,

 

December 29,

2019

 

2018

 
Cash and cash equivalents at beginning of year

$ 533,298

$ 688,087

Cash flows from operating activities:
Net income

988,979

345,777

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization

122,789

118,721

Amortization of debt discount and fees

1,001

1,196

Stock-based compensation

181,547

167,715

(Gain) loss on investments, net

4,090

(2,732)

Deferred income taxes

(576,738)

(11,676)

Provisions for losses on receivables

632

5,102

ROU asset amortization and change in operating lease liabilities

562

-

Other non-cash items

428

2,607

Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables

(4,718)

(87,083)

Inventories

(33,024)

752

Prepaid expenses and other

(11,031)

(19,622)

Other assets

(8,011)

(14,606)

Accounts payable and accrued liabilities

33,915

1,553

Deferred revenue

27,498

100,696

Other long-term liabilities

1,681

(3,649)

Net cash provided by operating activities

729,600

604,751

 
Cash flows from investing activities:
Purchases of non-marketable investments

(33,717)

(115,839)

Proceeds from the sale of non-marketable investments

2,952

3,497

Purchases of property, plant and equipment

(74,605)

(61,503)

Cash paid in business combinations

(338)

-

Net cash used for investing activities

(105,708)

(173,845)

 
Cash flows from financing activities:
Proceeds from revolving credit facility

150,000

100,000

Payment on revolving credit facility

(250,000)

(85,000)

Principal payments on term loan

-

(300,000)

Proceeds from issuance of common stock

52,842

40,908

Stock received for payment of employee taxes on vesting of restricted stock

(90,580)

(69,921)

Payments for repurchases of common stock

(306,148)

(250,059)

Change in book overdraft

-

(3,867)

Net cash used for financing activities

(443,886)

(567,939)

 
Effect of exchange rate changes on cash and cash equivalents

(8,094)

(17,756)

 
Increase (decrease) in cash and cash equivalents

171,912

(154,789)

 
Cash and cash equivalents at end of year

$ 705,210

$ 533,298

Cadence Design Systems, Inc.
(Unaudited)
 
Revenue Mix by Geography (% of Total Revenue)

2018

 

2019

GEOGRAPHY

Q1

 

Q2

 

Q3

 

Q4

 

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Year

 
Americas

45%

46%

44%

44%

45%

44%

42%

44%

46%

44%

China

9%

8%

9%

13%

10%

10%

12%

10%

9%

10%

Other Asia

18%

18%

20%

18%

18%

19%

19%

21%

20%

20%

Europe, Middle East and Africa

20%

20%

19%

17%

19%

18%

20%

18%

18%

18%

Japan

8%

8%

8%

8%

8%

9%

7%

7%

7%

8%

Total

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

 
Revenue Mix by Product Group (% of Total Revenue)

2018

 

2019

PRODUCT GROUP

Q1

 

Q2

 

Q3

 

Q4

 

Year

 

Q1

 

Q2

 

Q3

 

Q4

 

Year

 
Functional Verification, including hardware for emulation and prototyping

26%

23%

22%

25%

24%

24%

22%

20%

24%

23%

Digital IC Design and Signoff

30%

30%

30%

28%

29%

30%

31%

30%

29%

30%

Custom IC Design and Simulation

26%

26%

26%

25%

26%

25%

26%

26%

25%

25%

System Interconnect and Analysis

9%

9%

9%

9%

9%

9%

10%

9%

9%

9%

IP

9%

12%

13%

13%

12%

12%

11%

15%

13%

13%

Total

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Cadence Design Systems, Inc.

Impact of Non-GAAP Adjustments on Forward Looking Operating Margin

As of February 12, 2020

(Unaudited)

 

 

 

Three Months Ending

 

Year Ending

 

 

March 28, 2020

 

January 2, 2021

 

 

Forecast

 

Forecast

 
GAAP operating margin as a percent of total revenue

~19%

 

21% - 22%

 

 

 

Reconciling items to non-GAAP operating margin as a percent of total revenue:

 

 

 

Amortization of acquired intangibles

2%

 

2%

Stock-based compensation expense

8%

 

8%

Acquisition and integration-related costs

1%

 

1%

 

 

 

Non-GAAP operating margin as a percent of total revenue†

~30%

 

32% - 33%

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Diluted Net Income Per Share
As of February 12, 2020
(Unaudited)
 

Three Months Ending

 

Year Ending

March 28, 2020

 

January 2, 2021

Forecast

 

Forecast

 

 

 

Diluted net income per share on a GAAP basis

$0.32 to $0.34

 

$1.46 to $1.56

 

 

 

Amortization of acquired intangibles

0.05

 

0.23

Stock-based compensation expense

0.17

 

0.71

Acquisition and integration-related costs

0.01

 

0.07

Other income or expense related to investments and non-qualified deferred compensation plan assets*

0.01

 

0.01

Income tax effect of non-GAAP adjustments

(0.03)

 

(0.08)

 

 

 

Diluted net income per share on a non-GAAP basis†

$0.53 to $0.55

 

$2.40 to $2.50

 
Cadence Design Systems, Inc.
Impact of Non-GAAP Adjustments on Forward Looking Net Income
As of February 12, 2020
(Unaudited)
 

Three Months Ending

 

Year Ending

March 28, 2020

 

January 2, 2021

($ in millions)

Forecast

 

Forecast

 

 

 

Net income on a GAAP basis

$91 to $97

 

$410 to $438

 

 

 

Amortization of acquired intangibles

15

 

65

Stock-based compensation expense

47

 

198

Acquisition and integration-related costs

4

 

18

Other income or expense related to investments and non-qualified deferred compensation plan assets*

2

 

4

Income tax effect of non-GAAP adjustments

(10)

 

(23)

 

 

 

Net income on a non-GAAP basis†

$149 to $155

 

$672 to $700

The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

*

Includes, as applicable, equity in losses or income from investments, write-down of investments, gains or losses on investments and gains or losses on non-qualified deferred compensation plan assets recorded in other income or expense.

 CDNS-IR

Source: Cadence Design Systems, Inc.

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