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Research Alert: Cdns Posts In-line Organic Results/guidance; Sd&a Growth Remains Stuck

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

CDNS posted Q1 sales of $1.47B (+19% Y/Y), modestly beating consensus ($1.45B), with non-GAAP EPS of $1.96 (+25% Y/Y) also beating the Street ($1.89). Non-GAAP operating margin reached 44.7% (+300 bps Y/Y), above a guidance midpoint of 44.5%, while backlog set another record at $8.0B (+25% Y/Y, +3% Q/Q). IP again led sales growth, up 22% on robust AI spending and growing auto demand. Core EDA impressed with +18% Y/Y growth, accelerating from Q4's +8%, though SD&A remained flattish organically despite reported +18% growth (we estimate $38M of sales owing to the Hexagon D&E acquisition), results that continue to bring concerns about increased competition from SNPS/Ansys. FY 26 revenue guidance ($6.175B) was mostly unchanged ex-$280M or so from Hexagon, with non-GAAP EPS of $7.90 down from a prior $8.10 view given integration costs. We expect new agentic AI tools to boost margins and Core EDA sales growth, but product ramps are in their early stages. China sales remain resilient at 13% of revenue.

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