$CDNS (-0.23%) | Cadence Design Systems Q3'24 Earnings Highlights:

🔹 Adjusted EPS: $1.64 (Est. $1.44) 🟢; UP +30% YoY

🔹 Revenue: $1.215B (Est. $1.18B) 🟢; UP +19% YoY

FY24 Guidance: 

🔹 Revenue: $4.61B-$4.65B (Est. $4.63B) 🟡

🔹 Non-GAAP EPS: $5.87-$5.93 (Est. $5.89) 🟡

Q3 Segments Revenue: 

🔹 Product & Maintenance: $1.10B; UP +14% YoY

🔹 Services: $115.1M; more than doubled from $57.3M YoY

Operational Metrics: 

🔹 Adj Operating Margin: 45% (Est. 41.5%) 🟢; Improved from 41% YoY

🔹 Adj Net Income: $450.2M (Est. $397.5M) 🟢; UP +31% YoY

🔹 Backlog: $5.6B

🔹 Current Remaining Performance Obligations (cRPO): $2.9B

Business Highlights: 

🔸 Strong growth across portfolio, driven by IP, SD&A, and hardware systems

🔸 System Design & Analysis business achieved +47% YoY revenue growth

🔸 IP business showed +59% YoY growth, with a major partner signing a deal for AI product roadmap development

🔸 Functional Verification revenue grew +22% YoY, reflecting strong demand for AI and automotive systems

CEO Anirudh Devgan's Commentary: 

🔸 "Cadence delivered exceptional Q3 results, driven by the strength of our portfolio, particularly in IP, SD&A, and hardware systems. AI is becoming integral to the design workflow, and http://Cadence.AI is accelerating adoption."

CFO John Wall's Commentary: 🔸 "We saw 19% revenue growth YoY, with recurring revenue growth returning to low teens. China revenue improved and contributed 13% to total Q3 revenue. Our Q4 bookings pipeline looks strong, positioning us for a solid FY24."

Strategic Focus: 

🔸 http://Cadence.AI portfolio enhanced by GenAI agents, AI-driven optimization, and the JedAI big data analytics platform

🔸 Expansion in the multi-physics portfolio to support AI and hyperscale customers

🔸 Strengthening partnerships to support growth across automotive and cloud markets

Outlook: 

🔸 Strong second half expected, supported by a robust Q4 bookings pipeline