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Cadence (CDNS) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

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Cadence Design Systems (CDNS - Free Report) reported $1.02 billion in revenue for the quarter ended September 2023, representing a year-over-year increase of 13.4%. EPS of $1.26 for the same period compares to $1.06 a year ago.

The reported revenue represents a surprise of +1.66% over the Zacks Consensus Estimate of $1.01 billion. With the consensus EPS estimate being $1.21, the EPS surprise was +4.13%.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how Cadence performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

  • Revenue Mix by Product Group - Custom IC Design: 22% versus 21.1% estimated by two analysts on average.
  • Revenue Mix by Product Group - Digital IC Design and Signoff: 28% versus 28.3% estimated by two analysts on average.
  • Revenue Mix by Product Group - System Design and Analysis: 13% compared to the 12.9% average estimate based on two analysts.
  • Revenue Mix by Product Group - IP: 11% versus the two-analyst average estimate of 11.9%.
  • Revenue Mix by Product Group - Functional Verification, including Emulation Hardware: 26% versus 25.9% estimated by two analysts on average.
  • Revenue- Services: $57.25 million versus $57.37 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +0.9% change.
  • Revenue- Product and maintenance: $965.84 million compared to the $943.74 million average estimate based on four analysts. The reported number represents a change of +14.2% year over year.
View all Key Company Metrics for Cadence here>>>

Shares of Cadence have returned +3.5% over the past month versus the Zacks S&P 500 composite's -4% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.

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