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Published: 2022-02-22 16:06:00 ET
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EX-99.02 3 cfocommentary02222022ex9902.htm CFO COMMENTARY Document
Exhibit 99.02
image0a22a.jpg

CADENCE REPORTS FOURTH QUARTER
AND FISCAL YEAR 2021
CADENCE DESIGN SYSTEMS, INC.
CFO COMMENTARY
Key Takeaways
• Achieved revenue growth of 11% and non-GAAP operating margin of 37% in 2021.
• Operating cash flow for 2021 was $1.1 billion.
• FY 2022 outlook projects revenue growth of approximately 12% and non-GAAP operating margin of 38.25%.
Q1 2022 Outlook
• Revenue : $850 - $870 million.
• GAAP operating margin: 30% - 31%.
• Non-GAAP operating margin: 40% - 41%.
• GAAP EPS: $0.70 - $0.74
• Non-GAAP EPS: $1.00 - $1.04
• Expect to repurchase approximately $250 million of Cadence shares in Q1.
Q4 2021 KEY METRICS
• Revenue $773 million
• GAAP operating margin 25%
• Non-GAAP operating margin 36%
• GAAP EPS $0.63
• Non-GAAP EPS $0.82
• Operating cash flow $216 million

FY 2022 Outlook
• Revenue: $3.32 - $3.38 billion.
• GAAP operating margin: 27.5% - 29%.
• Non-GAAP operating margin: 37.5% - 39%.
• GAAP EPS: $2.46 - $2.56
• Non-GAAP EPS $3.70 - $3.80
• Operating cash flow: $1.15 - $1.25 billion.
• Expect to use at least 50% of free cash flow to repurchase Cadence shares for the year.
Financial Results Webcast
FY 2021 KEY METRICS
Our Q4 2021 financial results webcast will begin February 22, 2022 at 2:00 p.m. (Pacific). The webcast may be accessed at www.cadence.com/cadence/investor_relations. An archive of the webcast will be available on February 22, 2022 until 5:00 p.m. (Pacific) on March 18, 2022.
• Revenue $2.988 billion
• GAAP operating margin 26%
• Non-GAAP operating margin 37%
• GAAP EPS $2.50
• Non-GAAP EPS $3.29
• Operating cash flow $1.101 billion

February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
1

Cadence Design Systems, Inc.
Financial Metrics
(In Millions, except per share data)20162017*201820192020*20212022E
Revenue$1,816 $1,943 $2,138 $2,336 $2,683 $2,988 $3,320- $3,380
Revenue growth*7%7%10%9%15%11%11% - 13%
3-year CAGR8%7%8%9%11%12%~13%
3-year CAGR without 53rd week impact8%11%
GAAP operating expenses$1,571 $1,619 $1,742 $1,845 $2,037 $2,209 ~$2,397
Non-GAAP operating expenses$1,348 $1,409 $1,491 $1,587 $1,739 $1,877 ~$2,069
Non-GAAP operating expense growth5%6%6%10%8%~10%
GAAP operating margin13%17%19%21%24%26%
Implied GAAP operating margin**28.25%
Non-GAAP operating margin26%28%30%32%35%37%
Implied Non-GAAP operating margin**38.25%
GAAP earnings per share$0.70 $0.73 $1.23 $3.53 $2.11 $2.50 $2.46 - $2.56
Non-GAAP earning per share$1.21 $1.40 $1.87 $2.20 $2.80 $3.29 $3.70 - $3.80
Weighted average shares diluted outstanding291.3280.2281.1280.5279.6278.9277 - 279
Cash flow from operations4454716057309051,101$1,150 - $1,250
Capital expenditures545862759565~$125
* Fiscal 2014 and 2020 were 53-week years, compared to all other years which are 52 week years. 2020 included approximately $45 million revenue impact for the extra week. 2014 revenue (which impacts the 3 year CAGR in 2017) included approximately $27 million revenue impact for the extra week.
** At midpoint of guidance.
Profitability Trends
(In Millions)2016201720182019202020212022E
Revenue$1,816 $1,943 $2,138 $2,336 $2,683 $2,988 $3,350 
Revenue Growth 7%7%10%9%15%11%~12%
3-Year Revenue Growth CAGR 8%7%8%9%11%12%~13%
Non-GAAP operating margin26%28%30%32%35%37%37.5% - 39%
Stock-based compensation(6)%(7)%(8)%(8)%(7)%(7)%~(8)%
Non-GAAP operating margin adjusted for stock-based compensation20%21%22%24%28%30%29.5% - 31%
Non-GAAP operating income $469 $534 $647 $749 $944 $1,111 $1,281 
Non-GAAP operating income adjusted for stock-based compensation$360 $404 $479 $567 $747 $901 $1,013 


February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
First Quarter 2022 Financial Outlook
Q1 2021Q4 2021Q1 2022E
Total Revenue ($ Millions)$736 $773 $850 - $870
   Q/Q Growth3%10% - 13%
   Y/Y Growth2%15% - 18%
GAAP Operating Margin28%25%30% - 31%
Non-GAAP Operating Margin38%36%40% - 41%
GAAP EPS$0.67 $0.63 $0.70 - $0.74
Non-GAAP EPS$0.83 $0.82 $1.00 - $1.04
   Q/Q Growth3%22% -27%
   Y/Y Growth(1)%20% -25%

Fiscal Year 2022 Financial Outlook
FY 2021FY 2022E
Recurring Revenue85% - 90%85% - 90%
Total Revenue ($ Millions)$2,988 $3,320 - $3,380
   Y/Y Growth*11%11% - 13%
Revenue from Beginning Backlog~70%~75%
GAAP Operating Margin26.1%27.5% - 29%
Non-GAAP Operating Margin37.2%37.5% - 39%
GAAP Other Income & Expense ($ Millions)$(11)$(15) - $(23)
Non-GAAP Other Income & Expense ($ Millions)$(17)$(15) - $(23)
GAAP Tax Rate9%
~25%
Non-GAAP Tax Rate16%17.5%
Weighted Average Diluted Shares Outstanding (Millions)278.9277 - 279
GAAP EPS$2.50 $2.46 - $2.56
Non-GAAP EPS$3.29 $3.70 - $3.80
   Y/Y Growth18%12% - 16%
Cash Flow from Operations ($ Millions)$1,101 $1,150 - $1,250
DSO40~45
Capital Expenditures ($ Millions)$65 ~$125


February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Fourth Quarter and Fiscal Year Financial Results
Backlog
(In Billions)2018201920202021
Backlog$3.0 $3.6 $3.9 $4.4 
Revenue
(In Millions)Q4 2020*Q1 2021Q2 2021Q3 2021Q4 2021
Product and Maintenance$723 $699 $688 $706 $720 
Services37 37 40 45 53 
   Total Revenue$760 $736 $728 $751 $773 
* Q4 2020 was a 14-week quarter.
(In Millions)201820192020*2021
Product and Maintenance$1,998 $2,204 $2,537 $2,813 
Services140 132 146 175 
   Total Revenue$2,138 $2,336 $2,683 $2,988 
* Fiscal 2020 was a 53-week year.
Revenue Mix by Geography
(% of Total Revenue)Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
Americas41 %46 %44 %46 %43 %
China17 %12 %14 %13 %12 %
Other Asia18 %18 %19 %18 %21 %
Europe, Middle East and Africa17 %18 %17 %17 %18 %
Japan7 %6 %6 %6 %6 %
   Total100 %100 %100 %100 %100 %

(% of Total Revenue)2018201920202021
Americas45 %44 %42 %45 %
China10 %10 %15 %13 %
Other Asia18 %20 %18 %19 %
Europe, Middle East and Africa19 %18 %18 %17 %
Japan8 %8 %7 %6 %
   Total100 %100 %100 %100 %

February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Revenue Mix by Product Category
(% of Total Revenue)Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
Custom IC Design and Simulation26 %23 %23 %23 %24 %
Digital IC Design and Signoff31 %27 %28 %29 %29 %
Functional Verification19 %26 %25 %23 %21 %
IP13 %14 %13 %14 %14 %
System Design and Analysis11 %10 %11 %11 %12 %
   Total100 %100 %100 %100 %100 %
(% of Total Revenue)2018201920202021
Custom IC Design and Simulation26 %25 %25 %23 %
Digital IC Design and Signoff29 %30 %29 %29 %
Functional Verification24 %23 %22 %24 %
IP12 %13 %14 %13 %
System Design and Analysis9 %9 %10 %11 %
   Total100 %100 %100 %100 %
3 Year Revenue CAGR by Product Category
(% of Total Revenue)2018201920202021
Custom IC Design and Simulation7 %9 %9 %8 %
Digital IC Design and Signoff9 %10 %11 %11 %
Functional Verification10 %5 %11 %11 %
IP8 %16 %18 %16 %
System Design and Analysis3 %7 %13 %19 %
   Total 3 Year CAGR8 %9 %11 %12 %
3 Year Revenue CAGR by Product Category Without 53rd Week Impact*
(% of Total Revenue)2018201920202021
Custom IC Design and Simulation7 %9 %8 %8 %
Digital IC Design and Signoff9 %10 %10 %11 %
Functional Verification10 %5 %10 %11 %
IP8 %16 %18 %16 %
System Design and Analysis3 %7 %12 %19 %
   Total 3 Year CAGR8 %9 %11 %12 %
* Fiscal 2020 was a 53-week year and included approximately $45 million revenue impact for the extra week.


February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Gross Margin
Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
GAAP Gross Margin90.3 %88.6 %89.5 %89.8 %91.0 %
Non-GAAP Gross Margin92.2 %90.4 %91.8 %91.6 %92.7 %
2018201920202021
GAAP Gross Margin87.9 %88.6 %88.6 %89.7 %
Non-GAAP Gross Margin90.0 %90.6 %90.6 %91.7 %

Total Costs and Expenses
(In Millions)Q4 2020*Q1 2021Q2 2021Q3 2021Q4 2021
Total GAAP Costs and Expenses$575 $532 $543 $557 $577 
Total Non-GAAP Costs and Expenses$478 $456 $441 $483 $498 
* Q4 2020 was a 14-week quarter.
(In Millions)201820192020*2021
Total GAAP Costs and Expenses$1,742 $1,845 $2,037 $2,209 
Total Non-GAAP Costs and Expenses$1,491 $1,587 $1,739 $1,877 
* Fiscal 2020 was a 53-week year.
Operating Margin
Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
GAAP Operating Margin24.3 %27.7 %25.5 %25.8 %25.3 %
Non-GAAP Operating Margin37.1 %38.1 %39.5 %35.7 %35.5 %
2018201920202021
GAAP Operating Margin18.5 %21.1 %24.1 %26.1 %
Non-GAAP Operating Margin30.2 %32.1 %35.2 %37.2 %

Earnings Per Share
Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
GAAP Net Income Per Share$0.62 $0.67 $0.56 $0.63 $0.63 
Non-GAAP Net Income Per Share$0.83 $0.83 $0.86 $0.80 $0.82 
2018201920202021
GAAP Net Income Per Share$1.23 $3.53 $2.11 $2.50 
Non-GAAP Net Income Per Share$1.87 $2.20 $2.80 $3.29 
Total DSO
Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
DSO4448494040


February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Balance Sheet and Cash Review
Free Cash Flow
(In Millions)Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
Net Cash from Operating Activities$136 $208 $380 $296 $216 
Capital Expenditures31 17 14 19 15 
Free Cash Flow$105 $191 $366 $277 $201 
(In Millions)20172018201920202021
Net Cash from Operating Activities$471 $605 $730 $905 $1,101 
Capital Expenditures58 62 75 95 65 
Free Cash Flow$413 $543 $655 $810 $1,036 
Cash and Cash Equivalents
(In Millions)Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
Cash and Cash Equivalents$928 $743 $847 $1,014 $1,089 
•Approximately 45 percent of our cash and cash equivalents were in the U.S. at quarter-end.
(In Millions)20172018201920202021
Cash and Cash Equivalents$688 $533 $705 $928 $1,089 
Share Repurchase
(In Millions, Except Share Price)Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
Share Repurchase$130 $172 $220 $110 $110 
Number of Shares1.123 1.323 1.720 0.723 0.635 
Average Share Price$115.78 $130.01 $127.91 $152.14 $173.22 
(In Millions, Except Share Price)20172018201920202021
Share Repurchase$100 $250 $306 $380 $612 
Number of Shares2.495 5.934 4.841 4.247 4.401 
Average Share Price$40.09 $42.14 $63.24 $89.49 $139.14 
Employees
Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
Headcount8,746 8,990 9,092 9,257 9,298 
20172018201920202021
Headcount7,214 7,499 8,078 8,746 9,298 

February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Forward Looking Statements
The statements in this CFO Commentary contain forward-looking statements which are 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 highly competitive industries in which it operates; (ii) the success of Cadence’s efforts to maintain and improve operational efficiency and growth; (iii) the mix of products and services sold, the timing of orders and deliveries and the ability to develop, install or deliver Cadence’s products or services; (iv) change in customer demands or supply constraints that could result in delays in purchases, development, installations or deliveries of Cadence's products or services, including those resulting from consolidation, restructurings and other operational efficiency improvements of Cadence’s customers; (v) economic and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates and Cadence’s ability to access capital and debt markets; (vii) the acquisition of other companies or technologies or the failure to successfully integrate and operate them; (viii) events that affect cash flow, liquidity, or reserves, or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation, regulatory or other matters; (ix) the effects of any litigation, regulatory or other proceedings to which Cadence is or may become a party; and (x) the duration, severity, volatility and effects of the COVID-19 pandemic and containment measures on Cadence, its employees, and its suppliers and customers, which may also have the effect of heightening the other risks described in this paragraph. 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 GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this CFO Commentary 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. See our earnings press release issued today for further discussion of our non-GAAP financial measures, as well as the reconciliation provided in the Appendix to this CFO Commentary.

Cadence’s management uses non-GAAP net income because it excludes items that are generally not directly related to the performance of the company’s core business operations and therefore provides supplemental information to Cadence’s 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’s management, including forecasting and budgeting.

© 2022 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.
February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
APPENDIX I
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses
(In Millions)Q4 2020*Q1 2021Q2 2021Q3 2021Q4 2021
GAAP total costs and expenses$575 $532 $543 $557 $577 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(59)(53)(50)(53)(54)
Amortization of acquired intangibles(17)(16)(17)(17)(17)
Acquisition and integration-related costs(7)(5)(6)(5)(6)
Restructuring(10)— — — — 
Non-qualified deferred compensation (expenses) credits(4)(2)(2)1 (2)
Special charges** — — (27)— — 
Non-GAAP total costs and expenses †
$478 $456 $441 $483 $498 
* Q4 2020 was a 14-week quarter.
** Q2 2021 includes costs related to a voluntary retirement program.
† 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.
Reconciliation of GAAP Total Expenses to Non-GAAP Total Expenses
(In Millions)20162017201820192020*20212022E
GAAP total costs and expenses$1,571 $1,619 $1,742 $1,845 $2,037 $2,209 $2,397 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(109)(130)(168)(182)(197)(210)(268)
Amortization of acquired intangibles(60)(57)(53)(53)(64)(67)(52)
Acquisition and integration-related costs(11)(8)(20)(8)(23)(23)(8)
Restructuring (41)(9)(11)(9)(9)1 — 
Non-qualified deferred compensation (expenses) credits(2)(6)1 (5)(5)(6)— 
Special charges **— — — (1)— (27)— 
Non-GAAP total costs and expenses †
$1,348 $1,409 $1,491 $1,587 $1,739 $1,877 $2,069 
* Fiscal 2020 was a 53-week year.
** 2021 includes costs related to a voluntary retirement program.
† 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.
February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Reconciliation of GAAP Gross Margin as a Percent of Total Revenue to Non-GAAP Gross Margin as a Percent of Total Revenue
Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021
GAAP gross margin as a percent of total revenue90.3%88.6%89.5%89.8%91.0%
Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense0.3%0.2%0.2%0.3%0.2%
Amortization of acquired intangibles1.6%1.6%1.7%1.5%1.5%
Non-qualified deferred compensation expenses0.0%0.0%0.0%0.0%0.0%
Special charges *0.0%0.0%0.4%0.0%0.0%
Non-GAAP gross margin as a percent of total revenue †
92.2%90.4%91.8%91.6%92.7%
* Q2 2021 includes costs related to a voluntary retirement program.
† 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.

2018201920202021
GAAP gross margin as a percent of total revenue87.9%88.6%88.6%89.7%
Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense0.3%0.3%0.3%0.3%
Amortization of acquired intangibles1.8%1.7%1.7%1.6%
Non-qualified deferred compensation expenses0.0%0.0%0.0%0.0%
Special charges *0.0%0.0%0.0%0.1%
Non-GAAP gross margin as a percent of total revenue †
90.0%90.6%90.6%91.7%
* 2021 includes costs related to a voluntary retirement program.
† 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.
February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Reconciliation of GAAP Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022E
GAAP operating margin as a percent of total revenue24%28%25%26%25%30% - 31%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense8%7%7%7%7%7%
Amortization of acquired intangibles2%2%2%2%2%2%
Acquisition and integration-related costs1%1%1%1%1%1%
Restructuring 1%0%0%0%0%0%
Non-qualified deferred compensation expenses (credits)1%0%0%0%1%0%
Special charges *0%0%4%0%0%0%
Non-GAAP operating margin as a percent of total revenue †
37%38%39%36%36%40% - 41%
* Q2 2021 includes costs related to a voluntary retirement program.
† 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.
2016201720182019202020212022E
GAAP operating margin as a percent of total revenue13%17%19%21%24%26%27.5% - 29%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense6%7%8%8%7%7%8%
Amortization of acquired intangibles4%3%2%2%3%2%2%
Acquisition and integration-related costs1%0%1%0%1%1%0%
Restructuring 2%1%0%1%0%0%0%
Non-qualified deferred compensation expenses (credits)0%0%0%0%0%0%0%
Special charges *0%0%0%0%0%1%0%
Non-GAAP operating margin as a percent of total revenue †
26%28%30%32%35%37%37.5% - 39%
* 2021 includes costs related to a voluntary retirement program.
† 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.

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Cadence Design Systems, Inc.
Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data)Q4 2020Q1 2021Q2 2021Q3 2021Q4 2021Q1 2022E
Diluted net income per share on a GAAP basis$0.62 $0.67 $0.56 $0.63 $0.63 $0.70 - $0.74
Stock-based compensation expense0.21 0.19 0.18 0.19 0.20 0.22 
Amortization of acquired intangibles0.06 0.06 0.06 0.06 0.06 0.06 
Acquisition and integration-related costs0.02 0.02 0.02 0.02 0.02 0.01 
Restructuring 0.04 — — — — — 
Non-qualified deferred compensation expenses (credits)0.01 — 0.01 — 0.01 — 
Special charges *— — 0.10 — — — 
Other income or expense related to investments and non-qualified deferred compensation plan assets **(0.02)(0.01)(0.01)— (0.01)— 
Income tax effect of non-GAAP adjustments(0.11)(0.10)(0.06)(0.10)(0.09)0.01 
Diluted net income per share on a non-GAAP basis †
$0.83 $0.83 $0.86 $0.80 $0.82 $1.00 - $1.04
Shares used in calculation of diluted net income per share280,173 280,140 278,558 278,311 278,253 
† 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.
* Q2 2021 includes costs related to a voluntary retirement program.
** 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.






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Reconciliation of GAAP Diluted Net Income Per Share to Non-GAAP Diluted Net Income Per Share
(In Thousands, Except Per Share Data)2016201720182019202020212022E
Diluted net income per share on a GAAP basis$0.70 $0.73 $1.23 $3.53 $2.11 $2.50 $2.46 - $2.56
Stock-based compensation expense0.37 0.46 0.60 0.65 0.71 0.75 0.97 
Amortization of acquired intangibles0.21 0.20 0.19 0.19 0.23 0.24 0.19 
Acquisition and integration-related costs0.04 0.03 0.07 0.03 0.08 0.08 0.03 
Restructuring 0.14 0.03 0.04 0.03 0.03 — — 
Non-qualified deferred compensation expenses (credits)0.01 0.02 (0.01)0.02 0.02 0.02 — 
Special charges*— — — — — 0.10 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**(0.02)(0.05)— (0.01)— (0.03)— 
Income tax benefit related to intercompany transfers of certain intellectual property rights— — — (2.05)— — — 
Income tax related to transition tax— 0.24 — — — — — 
Income tax related to tax rate change— 0.09 — — — — — 
Income tax effect of non-GAAP adjustments(0.24)(0.35)(0.25)(0.19)(0.38)(0.37)0.05 
Diluted net income per share on a non-GAAP basis †$1.21 $1.40 $1.87 $2.20 $2.80 $3.29 $3.70 - $3.80
Shares used in calculation of diluted net income per share 291,256 280,221 281,144 280,515 279,641 278,858 277 - 279M
† 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.
* 2021 includes costs related to a voluntary retirement program.
** 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.









February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
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Cadence Design Systems, Inc.
Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense
(In Millions)FY 2020FY 2021FY 2022E
GAAP total other income and expense$(12.8)$(10.7)$(15) - $(23)
Reconciling items to non-GAAP total income and expense
Other income or expense related to investments and non-qualified deferred compensation plan assets*(0.5)(6.7)— 
Non-GAAP total other income and expense†
$(13.3)$(17.4)$(15) - $(23)
† 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.



February 22, 2022Cadence Q4 and Fiscal Year 2021 Financial Results
14