Cadence Design Systems Q1 FY12/25 Earnings Review
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What Again?
You’re right. We only posted the Q4 note yesterday. But look, this print from a software company that most people overlook is, I think, of systemic importance. Cadence ($CDNS) is one half of a duopoly (the other half being Synopsys, $SNPS) that sells design software, and licenses intellectual property, to semiconductor companies. In a world where the economy is toast you would expect it to hit chip companies hard, and you would expect those chip companies to go looking for cost savings, chief among which is usually “stop buying software you don’t need if you are not growing”.
Cadence beat its Q4 numbers, and it then raised guidance. This is a company which lives and dies within a global physical supply chain in an era of trade policy uncertainty and unceasing calls from recessionistas. Raised guidance. Not by much, but the point is that (like $SNAP today) they could have reduced or indeed suspended guidance citing the external environment. That they chose to raise I see as a vote of confidence in their own position and by extension a vote of confidence in the semiconductor sector and the economy at large.
Now for numbers, valuation and our stock chart outlook.