CDNS
Cadence Design Systems
Recurring SaaS
★ Quality 94/100Price today
$292.70
This company value is already calculated
We know what it is worth from its audited numbers, and whether it trades above or below that today. Create your free account to see it.
See what it is worthcharlieapp.co
A monopoly position
This company has a competitive advantage so strong that its rivals find it practically impossible to replicate.
What this business is made of
The business
Without Cadence, designing a chip is like building a skyscraper without blueprints.
Cadence sells the software (EDA) used to design and verify chips before they're manufactured. It charges for recurring multi-year licenses, so ~80% of its revenue is contracted in advance. In 2025 it billed $5.3B with $1.6B in FCF.
Designing a modern chip without Cadence or Synopsys is like building a skyscraper without blueprints. Engineers train on their tools for years, and switching risks million-dollar delays in tape-out. The duopoly with Synopsys controls the critical flow, and the cost of getting it wrong means nobody switches just to save money.
Revenue history
From $3.0B to $5.3B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $5.3B · FY2025
Of every $100 in sales, $79 goes to costs and operations; $21 is left as net profit (21% margin).
Catalysts and risks
AI chip design boom: hyperscaler clients designing their own silicon raise demand for EDA and prices per seat.
Growth in the hardware/IP and emulation segment, which already contributes hundreds of millions and is climbing double digits.
Contracted backlog over $6B that provides revenue visibility for 2026.
Demanding multiple: at 28x FCF, the market already prices in years of perfect growth.
Geographic concentration in China under the risk of U.S. export controls.
Dependence on the semiconductor investment cycle; if designers cut R&D budgets, renewals cool off.
Charlie's note
“A beautiful business: a mandatory toll to make chips, no debt and cash to spare. The problem isn't the quality, it's the price they're asking for it. At 19% growth the story adds up; the day it drops to 10%, the multiple hurts.”
Analysis · June 2026
Want to follow Cadence Design Systems?
We do not calculate a value here: Cadence Design Systems does not generate cash flows you can project, and putting a number on it would be making it up. What you can do is follow it and tell us the price you care about — we will email you when it gets there.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.