"I'm pleased to report that Cadence delivered excellent results for the fourth quarter, closing an outstanding 2025 with 14% revenue growth and 45% operating margin for the year. We finished 2025 with a record backlog of $7.8 billion, well ahead of plan, reflecting broad-based portfolio strength and increasing contributions from our AI solutions."

CEO · Anirudh Devgan

"Last week, we launched ChipStack AI Super Agent, the world's first agentic AI solution for automating chip design and verification. It's built upon our proven, physically accurate product and provides up to 10x productivity improvement for various tasks, including design coding, generating test benches, and debugging. ChipStack has received compelling endorsements from Qualcomm, NVIDIA, Altera, and Tenstorrent, among others."

CEO · Anirudh Devgan

"So what we are saying instead is that, and you can see that in our results, we can see this in our discussion with customers, is that as we move to these agentic flows, it uses more of our software to get the job done rather than the other way around. Overall, to answer your question, we have seen absolutely no discussion with customers of reducing the usage. On the contrary, you know, all these AI tools are increasing the usage of our tools."

CEO · Anirudh Devgan

"Broad proliferation of Cadence Cerebrus continues, and adoption of our Cadence Cerebrus AI Studio is accelerating. Recently, Samsung US used it to tape out a SF2 design, achieving 4x productivity improvement. In custom and analog, our Spectre circuit simulator saw significant growth at leading AI and memory companies."

CEO · Anirudh Devgan

"We finished the year with very strong momentum on backlog, and we saw that strength right across the board, across all lines of business. And just a key transparency metric, you'll see in the CFO commentary that around 67% of 2026 revenue is coming from beginning backlog, and that gives us strong visibility into the multi-year recurring base."

CFO · John Wall

"Our IP business saw strong momentum, with revenue growing nearly 25% in 2025, reflecting both the strength of our expanding IP portfolio and the critical role our star IP solutions play in the AI, HPC, and automotive verticals. We are seeing particularly strong adoption of our industry-leading memory IP solutions, including our groundbreaking LPDDR6 memory IP, which is enabling customers to achieve the memory performance and efficiency required for next generation AI workloads."

CEO · Anirudh Devgan

"The way we go to market with agentic AI will be different because this is a new tool category of something that EDA never automated. We will price it as like a virtual engineer or agent. So that would be, you know, extra business, and our customers are willing to spend on that because it is a, it is productivity improvement for them."

CEO · Anirudh Devgan

"And, and I've said before, like, what we are seeing at our customers, you know, they want to use more AI, and, and I think they will all, they will invest more in R&D. I think they will also hire more engineers, but as a percentage of spend, the more spend will go to automation and compute because the other thing which is unique to our end market is that the workload is exponential. If the chip goes from 100 billion now to 1 trillion in a few years, they need to do a lot more work, and then some of the work will be done by AI agents, you know, calling our base tool."

CEO · Anirudh Devgan

"I think, if you have a look at what we achieved in 2025, we achieved incremental margin of 59%, I think. And I think that points to the fact that there's no near-term ceiling on operating leverage for the company. Now, generally, you know, we're more prudent with our guide at the start of the year, and we try to build from there. But, so I think if you, if you compare the... The right compare for the 51% that's in the current guide is probably against what we would guide for incremental margin at the start of each year."

CFO · John Wall