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Published: 2024-04-22 16:02:59 ET
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EX-99.02 3 cfocommentary04222024ex9902.htm CFO COMMENTARY Document
Exhibit 99.02
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CADENCE REPORTS FIRST QUARTER
2024
CADENCE DESIGN SYSTEMS, INC.
CFO COMMENTARY
Key Takeaways
• Record Q1 bookings and record Q1 backlog of approximately $6.0 billion
• Raising 2024 revenue outlook
• The pending acquisition of BETA CAE is not included in Cadence's outlook

Q2 2024 Outlook
• Revenue : $1.03 billion - $1.05 billion
• GAAP operating margin: 26.5% - 27.5%
• Non-GAAP operating margin: 38.5% - 39.5%
• GAAP EPS: $0.73 - $0.77
• Non-GAAP EPS: $1.20 - $1.24
• Expect to use at least $125 million to repurchase Cadence shares in Q2
Q1 2024 KEY METRICS
• Revenue $1.009 billion
• GAAP operating margin 25%
• Non-GAAP operating margin 38%
• GAAP EPS $0.91
• Non-GAAP EPS $1.17
• Operating cash flow $253 million

FY 2024 Outlook
• Revenue: $4.56 - $4.62 billion
• GAAP operating margin: 31% - 32%
• Non-GAAP operating margin: 42% - 43%
• GAAP EPS: $4.04 - $4.14
• Non-GAAP EPS $5.88 - $5.98
• Operating cash flow: $1.35 - $1.45 billion
• Expect to use approximately 50% of free cash flow to repurchase Cadence shares for the year
Financial Results Webcast
Our Q1 2024 financial results webcast will begin April 22, 2024 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 April 22, 2024 until 5:00 p.m. (Pacific) on June 14, 2024.
April 22, 2024Cadence Q1 2024 Financial Results
1

Cadence Design Systems, Inc.
Financial Metrics
(In Millions, except per share data)201820192020*20212022
2023*
2024E
Revenue$2,138 $2,336 $2,683 $2,988 $3,562 $4,090 
$4,560- $4,620
Revenue growth*10%9%15%11%19%
15%
11% - 13%
3-year CAGR8%9%11%12%15%15%~15%
3-year CAGR without 53rd week impact11%
16%
GAAP operating expenses$1,742 $1,845 $2,037 $2,209 $2,488 $2,839 
~$3,154
GAAP operating expense growth8%6%10%8%13%
14%
~11%
Non-GAAP operating expenses$1,491 $1,587 $1,739 $1,877 $2,125 $2,373 
~$2,639
Non-GAAP operating expense growth6%6%10%8%13%
12%
~11%
GAAP operating margin**19%21%24%26%30%
31%
32.5 %
Non-GAAP operating margin**30%32%35%37%40%
42%
42.5 %
GAAP earnings per share$1.23 $3.53 $2.11 $2.50 $3.09 $3.82 
$4.04 - $4.14
Non-GAAP earning per share$1.87 $2.20 $2.80 $3.29 $4.27 $5.15 
$5.88 - $5.98
Non-GAAP EPS growth**34%18%27%18%30%
21%
15 %
3-year Non-GAAP EPS CAGR**20%22%26%21%25%
23%
22 %
Weighted average shares diluted outstanding281.1280.5279.6278.9275.0
272.7
272.5 - 274.5
Cash flow from operations6057309051,1011,242
1,349
$1,350 - $1,450
Capital expenditures62759565123
102
~$120
* Fiscal 2020 was a 53-week year, compared to all other years which were 52 week years. 2020 (which impacts the 3 year CAGR in 2023) included approximately $45 million revenue impact for the extra week.
** At midpoint of guidance.
Profitability Trends
(In Millions)20182019202020212022
2023
2024E*
Revenue$2,138 $2,336 $2,683 $2,988 $3,562 $4,090 $4,590 
Revenue Growth 10%9%15%11%19%
15%
12%
3-Year Revenue Growth CAGR 8%9%11%12%15%15%
15%
GAAP operating margin19%21%24%26%30%
31%
32.5%
Non-GAAP operating margin
30.2%
32.1%
35.2%
37.2%
40.3%
42.0%
42.5%
Stock-based compensation
(7.8)%
(7.8)%
(7.4)%
(7.0)%
(7.6)%
(8.0)%
(8.4)%
Non-GAAP operating margin adjusted for stock-based compensation
22.4%
24.3%
27.8%
30.2%
32.7%
34.0%
34.1%
GAAP operating income$396 $492 $646 $779 $1,074 $1,251 $1,436 
Non-GAAP operating income $647 $749 $944 $1,111 $1,436 $1,717 $1,951 
Non-GAAP operating income adjusted for stock-based compensation$479 $567 $747 $901 $1,166 $1,391 $1,565 
* At midpoint of guidance.
April 22, 2024Cadence Q1 2024 Financial Results
2
Cadence Design Systems, Inc.
Second Quarter 2024 Financial Outlook
Q2 2023
Q1 2024
Q2 2024E
Total Revenue ($ Millions)$977 $1,009 
$1,030 - $1,050
   Q/Q Growth
(6)%
2% - 4%
   Y/Y Growth
(1)%
5% - 7%
GAAP Operating Margin
31%
25%
26.5% - 27.5%
Non-GAAP Operating Margin
42%
38%
38.5% - 39.5%
GAAP EPS$0.81 $0.91 
$0.73 - $0.77
Non-GAAP EPS$1.22 $1.17 
$1.20 - $1.24

Fiscal Year 2024 Financial Outlook
PreviousCurrent
FY 2023
FY 2024E
FY 2024E
Recurring Revenue
84%
80% - 85%
80% - 85%
Total Revenue ($ Millions)$4,090 
$4,550 - $4,610
$4,560 - $4,620
   Y/Y Growth
15%
11% - 13%
11% - 13%
Revenue from Beginning Backlog
~75%
~70%
~70%
GAAP Operating Margin
30.6%
32% - 33%
31% - 32%
Non-GAAP Operating Margin
42.0%
42% - 43%
42% - 43%
GAAP Other Income & Expense ($ Millions)$31 
$(10) - $(18)
$49 - $55
Non-GAAP Other Income & Expense ($ Millions)$(15)
$(10) - $(18)
$(5) - $(11)
GAAP Tax Rate19%
~23%
~25%
Non-GAAP Tax Rate17.5%
16.5%
16.5%
Weighted Average Diluted Shares Outstanding (Millions)
272.7
271.5 - 273.5
272.5 - 274.5
GAAP EPS$3.82 
$4.08 - $4.18
$4.04 - $4.14
   Y/Y Growth
24%
7% - 9%
6% - 8%
Non-GAAP EPS$5.15 
$5.87 - $5.97
$5.88 - $5.98
   Y/Y Growth
21%
14% - 16%
14% - 16%
Cash Flow from Operations ($ Millions)$1,349 
$1,350 - $1,450
$1,350 - $1,450
DSO
43
~45~45
Capital Expenditures ($ Millions)$102 
~$120
~$120


April 22, 2024Cadence Q1 2024 Financial Results
3
Cadence Design Systems, Inc.
First Quarter Financial Results
Backlog
(In Billions)202020212022
2023
Q1 2024
Backlog$3.9 $4.4 $5.8 $6.0 $6.0 
Revenue
(In Millions)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Product and Maintenance$964 $923 $966 $982 $913 
Services58 54 57 87 96 
   Total Revenue$1,022 $977 $1,023 $1,069 $1,009 
Recurring and Up-Front Revenue
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Revenue recognized over time77 %82 %83 %85 %87 %
Revenue from arrangements with non-cancelable commitments3 %3 %2 %2 %3 %
Recurring Revenue80 %85 %85 %87 %90 %
Up-Front Revenue20 %15 %15 %13 %10 %
Total100 %100 %100 %100 %100 %
Trailing Twelve Months Recurring and Up-Front Revenue
Trailing Twelve Months Ended
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Recurring Revenue84 %84 %84 %84 %87 %
Up-Front Revenue16 %16 %16 %16 %13 %
   Total 100 %100 %100 %100 %100 %
Revenue Mix by Geography
(% of Total Revenue)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Americas44 %41 %43 %44 %46 %
China17 %18 %17 %15 %12 %
Other Asia18 %18 %19 %19 %20 %
Europe, Middle East and Africa15 %17 %15 %16 %17 %
Japan6 %6 %6 %6 %5 %
   Total100 %100 %100 %100 %100 %
Revenue Mix by Product Category
(% of Total Revenue)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Custom IC Design and Simulation20 %22 %22 %22 %22 %
Digital IC Design and Signoff25 %27 %28 %29 %29 %
Functional Verification32 %27 %26 %24 %25 %
IP11 %11 %11 %13 %12 %
System Design and Analysis12 %13 %13 %12 %12 %
   Total100 %100 %100 %100 %100 %


April 22, 2024Cadence Q1 2024 Financial Results
4
Cadence Design Systems, Inc.

Gross Margin
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
GAAP Gross Margin87.8 %90.1 %89.3 %90.3 %87.6 %
Non-GAAP Gross Margin89.1 %91.4 %90.6 %91.7 %89.1 %
Total Costs and Expenses
(In Millions)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Total GAAP Costs and Expenses$699 $677 $730 $732 $759 
Total Non-GAAP Costs and Expenses$591 $569 $603 $610 $627 
Operating Margin
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
GAAP Operating Margin31.6 %30.7 %28.6 %31.5 %24.8 %
Non-GAAP Operating Margin42.1 %41.8 %41.1 %42.9 %37.8 %
Net Income Per Share
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
GAAP Net Income Per Share$0.89 $0.81 $0.93 $1.19 $0.91 
Non-GAAP Net Income Per Share$1.29 $1.22 $1.26 $1.38 $1.17 
Total DSO
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
DSO4442
39
43
36
Balance Sheet and Cash Review
Free Cash Flow
(In Millions)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Net Cash from Operating Activities$267 $414 $396 $272 $253 
Capital Expenditures26 20 22 34 49 
Free Cash Flow$241 $394 $374 $238 $204 
Cash and Cash Equivalents
(In Millions)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Cash and Cash Equivalents$917 $874 $962 $1,008 $1,012 
•Approximately 27 percent of our cash and cash equivalents were in the U.S. at quarter-end.
Share Repurchase
(In Millions)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Share Repurchase$125 $265 $185 $125 $125 
Number of Shares0.668 1.178 0.811 0.488 0.425 
•Q3 2023 includes 276,330 shares and $60 million equity forward contract from Q2 2023 ASR settled in Q3 2023.
Employees
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Headcount10,579 10,832 11,139 11,226 11,753 
April 22, 2024Cadence Q1 2024 Financial Results
5
Cadence Design Systems, Inc.
Forward Looking Statements
This CFO Commentary contains forward-looking statements, including Cadence's outlook on future operating results, strategic objectives, business prospects, technology and product developments, industry trends, pending transactions and other statements using words such as “anticipates,” “believes,” “expects,” “intends,” “plans,” “will,” and words of similar import and the negatives thereof. Forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence’s control and which may cause actual results to differ materially from expectations expressed or implied in the forward-looking statements, including, among others: (i) Cadence’s ability to compete successfully in the highly competitive industries in which it operates and realize the benefits of its investments in research and development, including opportunities presented by AI; (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, geopolitical and industry conditions, including that of the semiconductor and electronics industries, government regulations and trade restrictions, and rising tensions and conflicts around the world such as in the Middle East and with respect to Taiwan; (vi) capital expenditure requirements, legislative or regulatory requirements, changes in tax laws, interest rates, currency exchange rate fluctuations, inflation rates, Cadence's upcoming debt maturities and Cadence’s ability to access capital and debt markets; (vii) Cadence's pending acquisition of BETA CAE Systems International AG, which remains subject to certain closing conditions, the acquisition of other companies, businesses or technologies or the failure to successfully integrate and operate them; (viii) potential harm caused by compromises in cybersecurity and cybersecurity attacks; (ix) 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; (x) the effects of any litigation, regulatory, tax or other proceedings to which Cadence is or may become a party or to which Cadence or its products, services, technologies or properties are subject; and (xi) Cadence's ability to successfully meet corporate governance, environmental and social targets and strategies. In addition, the timing and amount of Cadence’s repurchases of its common stock are 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, including its most recent report on Form 10-K, subsequent reports on Form 10-Q and future filings.

All forward-looking statements in this document are based on management's expectations as of the date of this document and, except as required by law, Cadence disclaims any obligation to update these forward-looking statements to reflect future events or circumstances.

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.

April 22, 2024Cadence Q1 2024 Financial Results
6
Cadence Design Systems, Inc.
© 2024 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.
April 22, 2024Cadence Q1 2024 Financial Results
7
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)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
GAAP total costs and expenses$699 $677 $730 $732 $759 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(74)(76)(88)(87)(88)
Amortization of acquired intangibles(15)(15)(15)(17)(17)
Acquisition and integration-related costs(16)(14)(14)(13)(22)
Restructuring— — (12)1 — 
Non-qualified deferred compensation (expenses) credits(3)(3)2 (6)(5)
Non-GAAP total costs and expenses*$591 $569 $603 $610 $627 
*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)201820192020*20212022
2023
2024E
GAAP total costs and expenses$1,742 $1,845 $2,037 $2,209 $2,488 $2,839 $3,154 
Reconciling items to non-GAAP total costs and expenses
Stock-based compensation expense(168)(182)(197)(210)(270)(326)(386)
Amortization of acquired intangibles(53)(53)(64)(67)(60)(62)(68)
Acquisition and integration-related costs(20)(8)(23)(23)(41)(56)(56)
Restructuring (11)(9)(9)1 — (11)— 
Non-qualified deferred compensation (expenses) credits1 (5)(5)(6)8 (11)(5)
Special charges**— (1)— (27)— — — 
Non-GAAP total costs and expenses***$1,491 $1,587 $1,739 $1,877 $2,125 $2,373 $2,639 
*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.
April 22, 2024Cadence Q1 2024 Financial Results
8
Cadence Design Systems, Inc.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and Non-GAAP Operating Income Adjusted for Stock-based Compensation
(In Millions)201820192020*20212022
2023
2024E
GAAP operating income
$396 $492 $646 $779 $1,074 $1,251 $1,436 
Reconciling items to non-GAAP operating income
Stock-based compensation expense168 182 197 210 270 326 386 
Amortization of acquired intangibles53 53 64 67 60 62 68 
Acquisition and integration-related costs20 8 23 23 41 56 56 
Restructuring 11 9 9 (1)— 11 — 
Non-qualified deferred compensation expenses (credits)
(1)5 5 6 (8)11 5 
Special charges**— 1 — 27 — — — 
Non-GAAP operating income***
$647 $749 $944 $1,111 $1,436 $1,717 $1,951 
Stock-based compensation expense(168)(182)(197)(210)(270)(326)$(386)
Non-GAAP operating income adjusted for stock-based compensation***
$479 $567 $747 $901 $1,166 $1,391 $1,565 
Table may not foot due to rounding
*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.
April 22, 2024Cadence Q1 2024 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
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
GAAP gross margin as a percent of total revenue87.8%90.1%
89.3%
90.3%
87.6%
Reconciling items to non-GAAP gross margin as a percent of total revenue
Stock-based compensation expense0.3%0.2%0.2%
0.3%
0.3%
Amortization of acquired intangibles1.0%1.1%1.1%1.1%
1.1%
Non-qualified deferred compensation expenses (credits)0.0%0.0%0.0%0.0%0.0%
Acquisition and integration-related costs0.0%0.0%0.0%0.0%
0.1%
Non-GAAP gross margin as a percent of total revenue*89.1%91.4%
90.6%
91.7%
89.1%
*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.


April 22, 2024Cadence Q1 2024 Financial Results
10
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
Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024E
GAAP operating margin as a percent of total revenue32%31%
29%
31%
25%
26.5% - 27.5%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense7%8%
9%
8%
9%
9%
Amortization of acquired intangibles1%2%
1%
2%
2%
2%
Acquisition and integration-related costs2%1%1%1%
2%
1%
Restructuring 0%0%
1%
0%
0%
0%
Non-qualified deferred compensation expenses (credits)0%0%0%
1%
0%
0%
Non-GAAP operating margin as a percent of total revenue*42%42%
41%
43%
38%
38.5% - 39.5%
*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 Operating Margin as a Percent of Total Revenue to Non-GAAP Operating Margin as a Percent of Total Revenue
20182019202020212022
2023
2024E
GAAP operating margin as a percent of total revenue19%21%24%26%30%
31%
31% - 32%
Reconciling items to non-GAAP operating margin as a percent of total revenue
Stock-based compensation expense8%8%7%7%8%
8%
8%
Amortization of acquired intangibles2%2%3%2%2%
2%
2%
Acquisition and integration-related costs1%0%1%1%1%
1%
1%
Restructuring 0%1%0%0%0%
0%
0%
Non-qualified deferred compensation expenses (credits)0%0%0%0%(1)%
0%
0%
Special charges *0%0%0%1%0%0%0%
Non-GAAP operating margin as a percent of total revenue**30%32%35%37%40%
42%
42% - 43%
*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.
April 22, 2024Cadence Q1 2024 Financial Results
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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)Q1 2023Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024E
Diluted net income per share on a GAAP basis$0.89 $0.81 $0.93 $1.19 $0.91 
$0.73 - $0.77
Stock-based compensation expense0.27 0.28 0.32 0.32 0.32 0.32 
Amortization of acquired intangibles0.05 0.06 0.06 0.06 0.06 0.06 
Acquisition and integration-related costs0.06 0.05 0.05 0.04 0.08 0.06 
Restructuring — — 0.04 — — — 
Non-qualified deferred compensation expenses (credits)0.01 0.01 — 0.02 0.02 — 
Other income or expense related to investments and non-qualified deferred compensation plan assets**(0.01)(0.01)(0.04)(0.10)(0.22)— 
Income tax effect of non-GAAP adjustments0.02 0.02 (0.10)(0.15)— 0.03 
Diluted net income per share on a non-GAAP basis*$1.29 $1.22 $1.26 $1.38 $1.17 
$1.20 - $1.24
Shares used in calculation of diluted net income per share273,159 272,996 272,427 272,419 273,544 
*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.





April 22, 2024Cadence Q1 2024 Financial Results
12
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)20182019202020212022
2023
2024E
Diluted net income per share on a GAAP basis$1.23 $3.53 $2.11 $2.50 $3.09 $3.82 
$4.04 - $4.14
Stock-based compensation expense0.60 0.65 0.71 0.75 0.98 1.19 1.41 
Amortization of acquired intangibles0.19 0.19 0.23 0.24 0.22 0.23 0.25 
Acquisition and integration-related costs0.07 0.03 0.08 0.08 0.15 0.21 0.20 
Restructuring 0.04 0.03 0.03 — — 0.04 — 
Non-qualified deferred compensation expenses (credits)(0.01)0.02 0.02 0.02 (0.03)0.04 0.02 
Special charges**— — — 0.10 — — — 
Other income or expense related to investments and non-qualified deferred compensation plan assets***— (0.01)— (0.03)0.05 (0.17)(0.22)
Income tax benefit related to intercompany transfers of certain intellectual property rights— (2.05)— — — — — 
Income tax effect of non-GAAP adjustments(0.25)(0.19)(0.38)(0.37)(0.19)(0.21)0.18 
Diluted net income per share on a non-GAAP basis*$1.87 $2.20 $2.80 $3.29 $4.27 $5.15 
$5.88 - $5.98
Shares used in calculation of diluted net income per share 281,144 280,515 279,641 278,858 275,011 272,748 
272.5 - 274.5M
*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.








April 22, 2024Cadence Q1 2024 Financial Results
13
Cadence Design Systems, Inc.
Reconciliation of GAAP Total Other Income and Expense to Non-GAAP Total Other Income and Expense
(In Millions)
FY 2022
FY 2023
FY 2024E
GAAP total other income and expense$(28)$31 
$49 - $55
Reconciling items to non-GAAP total income and expense
Other income or expense related to investments and non-qualified deferred compensation plan assets**14 (46)(60)
Non-GAAP total other income and expense*$(14)$(15)
$(5) - $(11)
*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.


April 22, 2024Cadence Q1 2024 Financial Results
14