Cadence Design Systems jumps after Q4 earnings, 2026 profit outlook, and sales backlog exceed estimates

Cadence Design Systems jumped in after-hours trading on Tuesday and built on that advance on Wednesday morning after posting better-than-expected Q4 earnings, a big pipeline of future business, and a solid profit outlook for 2026.

For Q4, the electronic design automation company reported:

• Sales of $1.44 billion (estimate: $1.42 billion).

• Adjusted earnings per share of $1.99 (estimate: $1.91).

• Remaining performance obligations (RPO) of $7.8 billion (estimate: $7.25 billion).

Management said that 2026 adjusted earnings per share would range between $8.05 and $8.15, above the consensus call for $8.03.

“Historically, Cadence tends to start the year with conservative guidance and subsequently raises forecasts as the year progresses,” writes JPMorgan analyst Harlan Sur.

In recent weeks, investors have worried that Cadence’s software business, which is used by chip designers, could suffer competitive pressure from AI tools. At the very least, that RPO figure says there’s billions of dollars standing between Cadence and any more disrupted future.

“Highlight of the quarter, in our view, is the expansion of collaboration with multiple hyperscalers and one hyperscaler taping out the first chip under COT [customer owned tooling], which we believe is the next big story for EDA as AI infrastructure buildout continues,” writes Needham analyst Charles Shi.