New York, Feb 18, 2026, 05:16 EST — Premarket
- Shares of Cadence Design Systems jumped over 5% before the bell, following the company’s latest quarterly results and a newly released 2026 forecast.
- Cadence reported fourth-quarter revenue of $1.44 billion, with backlog closing out 2025 at $7.8 billion.
- Traders eye the early move to see if it sticks through the cash open, weighing what that could mean for bookings.
Shares of Cadence Design Systems jumped roughly 5.5% in premarket trade Wednesday, after the chip-design software company posted its latest quarterly numbers. The stock finished Tuesday at $283.46. (Public)
This is significant—Cadence acts as a bellwether in the electronic design automation sector, the backbone software for chipmakers and systems companies developing and testing fresh processors. With AI chip deadlines growing tighter and errors carrying a higher price tag, that development pipeline becomes even more critical.
Uncertainty over chip design tool demand has left investors on edge, with customers tightening budgets and geopolitical tensions clouding tech supply chains. First moves tend to hinge on guidance and backlog—the tally of future contracted work.
Cadence reported fourth-quarter revenue of $1.44 billion, with non-GAAP diluted EPS hitting $1.99. Looking ahead to 2026, management is guiding for revenue between $5.9 billion and $6.0 billion, with non-GAAP EPS expected in the $8.05 to $8.15 range—those figures don’t factor in the company’s pending purchase of Hexagon’s design and engineering unit. CEO Anirudh Devgan pointed to “strong customer demand” for Cadence’s “AI-driven product portfolio” as the key driver this quarter. CFO John Wall flagged a record $7.8 billion backlog heading into 2026. (Sec)
According to a recent filing, Cadence is projecting first-quarter revenue in the range of $1.42 billion to $1.46 billion, with non-GAAP EPS expected between $1.89 and $1.95. The latest CFO deck puts recurring revenue at approximately 80%. For 2026, management sees cash flow from operations landing near $2.0 billion, and capital expenditures coming in around $210 million. (Sec)
Wolfe Research’s Joshua Tilton called it the company’s “largest quarterly beat” and suggested those numbers could “ease near-term concerns” tied to China demand and the pace of its hardware refresh. Bank of America, while still rating the stock a Buy, lowered its price target to $375 from $400, according to the report. (Investing.com UK)
Cadence operates in a tight market with heavyweight Synopsys, offering software, intellectual property, and hardware systems to simulate and test chips ahead of silicon. That blend tends to steady revenue streams, though the company’s bookings and renewal schedules always offer clues on momentum.
But things could flip the other direction, too. If investors think the 2026 outlook is already priced in, even a small earnings beat might not stick. Bookings could lose steam after a big quarter. Delays with the Hexagon deal, tougher export rules, or hardware upgrades slowing down—any of those would weigh on expectations as well.
