CADENCE DESIGN SYSTEMS INC, 10-K filed on 2/21/2025
Annual Report
v3.25.0.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2024
Jan. 31, 2025
Jun. 30, 2024
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2024    
Document Transition Report false    
Entity File Number 000-15867    
Entity Registrant Name CADENCE DESIGN SYSTEMS, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 00-0000000    
Entity Address, Address Line One 2655 Seely Avenue, Building 5,    
Entity Address, City or Town San Jose,    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 95134    
City Area Code (408)    
Local Phone Number 943-1234    
Title of 12(b) Security Common Stock, $0.01 par value per share    
Trading Symbol CDNS    
Security Exchange Name NASDAQ    
Entity Central Index Key 0000813672    
Amendment Flag false    
Document Fiscal Year Focus 2024    
Document Fiscal Period Focus FY    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Large Accelerated Filer    
Entity Small Business false    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag true    
Document Financial Statement Error Correction [Flag] false    
Entity Shell Company false    
Entity Public Float     $ 84,268,000,000
Entity Common Stock, Shares Outstanding   274,108,000  
Current Fiscal Year End Date --12-31    
v3.25.0.1
Audit Information
12 Months Ended
Dec. 31, 2024
Auditor [Line Items]  
Auditor Firm ID 238
Auditor Name PricewaterhouseCoopers LLP
Auditor Location San Jose, California
v3.25.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 2,644,030 $ 1,008,152
Receivables, net 680,460 489,224
Inventories 257,711 181,661
Prepaid expenses and other 433,878 297,180
Total current assets 4,016,079 1,976,217
Property, plant and equipment, net 458,200 403,213
Goodwill 2,378,671 1,535,845
Acquired intangibles, net 594,734 336,843
Deferred taxes 982,057 880,001
Other assets 544,741 537,372
Total assets 8,974,482 5,669,491
Current liabilities:    
Current portion of long-term debt 0 349,285
Accounts payable and accrued liabilities 632,692 576,558
Current portion of deferred revenue 737,413 665,024
Total current liabilities 1,370,105 1,590,867
Long-term liabilities:    
Long-term portion of deferred revenue 115,168 98,931
Long-term debt 2,476,183 299,771
Other long-term liabilities 339,448 275,651
Total long-term liabilities 2,930,799 674,353
Commitments and contingencies
Stockholders' equity:    
Preferred stock – $0.01 par value; authorized 400 shares, none issued or outstanding 0 0
Common stock – $0.01 par value; authorized 600,000 shares; issued and outstanding shares: 273,851 and 271,706, respectively 4,181,737 3,166,964
Treasury stock, at cost; 57,049 shares and 57,453 shares, respectively (5,309,579) (4,604,323)
Retained earnings 5,991,868 4,936,384
Accumulated other comprehensive loss (190,448) (94,754)
Total stockholders’ equity 4,673,578 3,404,271
Total liabilities and stockholders’ equity $ 8,974,482 $ 5,669,491
v3.25.0.1
Consolidated Balance Sheets (Parenthetical) - $ / shares
shares in Thousands
Dec. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Preferred stock par value (in usd per share) $ 0.01 $ 0.01
Preferred stock shares authorized (in shares) 400 400
Preferred stock, shares outstanding (in shares) 0 0
Preferred stock, shares issued (in shares) 0 0
Common stock, par value (in usd per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares) 600,000 600,000
Common stock shares issued (in shares) 273,851 271,706
Common stock shares outstanding (in shares) 273,851 271,706
Treasury Stock, Common, Shares 57,049 57,453
v3.25.0.1
Consolidated Income Statements - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue:      
Total revenue $ 4,641,264 $ 4,089,986 $ 3,561,718
Costs and expenses:      
Marketing and sales 757,483 690,319 604,224
Research and development 1,549,093 1,441,796 1,251,544
General and administrative 282,283 242,430 242,116
Amortization of acquired intangibles 30,375 18,162 18,470
Restructuring 23,765 11,013 55
Total costs and expenses 3,290,501 2,838,761 2,488,032
Income from operations 1,350,763 1,251,225 1,073,686
Interest expense (75,999) (36,185) (22,934)
Other income (expense), net 121,055 66,886 (5,389)
Income before provision for income taxes 1,395,819 1,281,926 1,045,363
Provision for income taxes 340,335 240,782 196,411
Net income $ 1,055,484 $ 1,041,144 $ 848,952
Net income per share - basic (in usd per share) $ 3.89 $ 3.86 $ 3.13
Net income per share - diluted (in usd per share) $ 3.85 $ 3.82 $ 3.09
Weighted average common shares outstanding - basic (shares) 271,212 269,381 271,198
Weighted average common shares outstanding - diluted (shares) 273,833 272,748 275,011
Product and maintenance      
Revenue:      
Total revenue $ 4,213,509 $ 3,834,359 $ 3,340,197
Costs and expenses:      
Cost of sales 436,600 331,760 273,565
Services      
Revenue:      
Total revenue 427,755 255,627 221,521
Costs and expenses:      
Cost of sales $ 210,902 $ 103,281 $ 98,058
v3.25.0.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Statement of Comprehensive Income [Abstract]      
Net income $ 1,055,484 $ 1,041,144 $ 848,952
Other comprehensive income (loss), net of tax effects:      
Foreign currency translation adjustments (87,933) (4,815) (59,310)
Changes in defined benefit plan liabilities (239) 1,566 984
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax (7,038) 0 0
Unrealized gains (losses) on investments (484) 132 0
Total other comprehensive loss, net of tax effects (95,694) (3,117) (58,326)
Comprehensive income $ 959,790 $ 1,038,027 $ 790,626
v3.25.0.1
Consolidated Statements of Stockholders' Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock, Shares
Common Stock, Par Value and Capital in Excess of Par
Treasury Stock
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Beginning balance, shares at Jan. 01, 2022   276,796        
Beginning balance at Jan. 01, 2022 $ 2,740,675   $ 2,467,701 $ (2,740,003) $ 3,046,288 $ (33,311)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 848,952       848,952  
Other comprehensive loss, net of taxes $ (58,326)         (58,326)
Purchase of treasury stock, shares (6,602) [1] (6,602)        
Purchase of treasury stock $ (1,020,091)     1,020,091    
Equity forward contract (30,000)   (12,035) (17,965)    
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares   3,079        
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, value 105,328   56,708 48,620    
Stock received for payment of employee taxes on vesting of restricted stock, shares   (598)        
Stock received for payment of employee taxes on vesting of restricted stock, value (111,864)   (17,140) (94,724)    
Stock-based compensation expense 270,439   270,439      
Ending balance, shares at Dec. 31, 2022   272,675        
Ending balance at Dec. 31, 2022 2,745,113   2,765,673 (3,824,163) 3,895,240 (91,637)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 1,041,144       1,041,144  
Other comprehensive loss, net of taxes $ (3,117)         (3,117)
Purchase of treasury stock, shares (3,145) [2] (3,145)        
Purchase of treasury stock $ (641,041)     (641,041)    
Equity forward contract (60,000)   1,688 (61,688)    
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares   2,704        
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, value 132,957   97,050 35,907    
Stock received for payment of employee taxes on vesting of restricted stock, shares   (528)        
Stock received for payment of employee taxes on vesting of restricted stock, value (136,396)   (23,058) (113,338)    
Stock-based compensation expense $ 325,611   325,611      
Ending balance, shares at Dec. 31, 2023 271,706 271,706        
Ending balance at Dec. 31, 2023 $ 3,404,271   3,166,964 (4,604,323) 4,936,384 (94,754)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net income 1,055,484       1,055,484  
Other comprehensive loss, net of taxes $ (95,694)         (95,694)
Purchase of treasury stock, shares (1,930) (1,930)        
Purchase of treasury stock $ (550,026)     (550,026)    
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares   3,035        
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, value 204,237   154,233 50,004    
Stock Issued During Period, Shares, Acquisitions   1,741        
Stock Issued During Period, Value, Acquisitions 501,824   501,824      
Stock received for payment of employee taxes on vesting of restricted stock, shares   (701)        
Stock received for payment of employee taxes on vesting of restricted stock, value (237,737)   (32,503) (205,234)    
Stock-based compensation expense $ 391,219   391,219      
Ending balance, shares at Dec. 31, 2024 273,851 273,851        
Ending balance at Dec. 31, 2024 $ 4,673,578   $ 4,181,737 $ (5,309,579) $ 5,991,868 $ (190,448)
[1] Includes 109 thousand shares and $30 million equity forward contract from the June 2022 ASR settled in September 2022.
[2] Includes 276 thousand shares and $60 million equity forward contract from the June 2023 ASR settled in August 2023, and excludes $0.9 million of excise tax.
v3.25.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Statement of Cash Flows [Abstract]      
Cash and cash equivalents at beginning of year $ 1,008,152 $ 882,325 $ 1,088,940
Cash flows from operating activities:      
Net income 1,055,484 1,041,144 848,952
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 196,935 145,292 132,088
Amortization of debt discount and fees 3,473 1,262 1,134
Stock-based compensation 391,219 325,611 270,439
(Gain) loss on investments, net (49,593) (34,602) 5,425
Deferred income taxes (128,737) (36,512) (107,606)
Provisions for losses on receivables 2,078 3,325 204
ROU asset amortization and change in operating lease liabilities (1,920) 451 3,342
Other non-cash items 587 1,983 371
Changes in operating assets and liabilities, net of effect of acquired businesses:      
Receivables (180,287) (11,748) (138,471)
Inventories (82,771) (65,895) (23,073)
Prepaid expenses and other (81,529) 39,015 (38,927)
Other assets 11,866 (45,784) (933)
Accounts payable and accrued liabilities 33,676 5,415 113,945
Deferred revenue 66,478 (21,583) 131,462
Other long-term liabilities 23,592 1,802 43,542
Net cash provided by operating activities 1,260,551 1,349,176 1,241,894
Cash flows from investing activities:      
Purchases of investments (4,982) (176,170) (1,000)
Proceeds from the sale and maturity of investments 47,980 64,775 366
Purchases of property, plant and equipment (142,542) (102,337) (123,215)
Purchases of intangible assets 0 (166) (1,000)
Cash paid in business combinations, net of cash acquired (737,574) (198,351) (613,785)
Net cash used for investing activities (837,118) (412,249) (738,634)
Cash flows from financing activities:      
Proceeds from revolving credit facility 0 50,000 585,000
Payments on revolving credit facility 0 (150,000) (485,000)
Proceeds from the issuance of debt 3,196,595 0 300,000
Payments of debt (1,350,000) 0 0
Payments of debt issuance costs (23,828) 0 (425)
Proceeds from issuance of common stock 204,237 132,957 105,331
Stock received for payment of employee taxes on vesting of restricted stock (237,737) (136,396) (111,864)
Payments for repurchases of common stock (550,026) (700,134) (1,050,091)
Net cash provided by (used for) financing activities 1,239,241 (803,573) (657,049)
Effect of exchange rate changes on cash and cash equivalents (26,796) (7,527) (52,826)
Increase (decrease) in cash and cash equivalents 1,635,878 125,827 (206,615)
Cash and cash equivalents at end of year 2,644,030 1,008,152 882,325
Supplemental cash flow information:      
Cash paid for interest 43,219 34,934 21,122
Cash paid for income taxes, net $ 509,979 $ 253,700 $ 233,235
v3.25.0.1
Business Overview
12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
BUSINESS OVERVIEW BUSINESS OVERVIEWCadence® is a global market leader that develops computational, AI-driven software, accelerated hardware, and IP solutions for engineers and scientists to create new and innovative products to life. The world’s most innovative technology companies use Cadence solutions and services to deliver transformational products to multiple industries that drive the global economy. The products these companies develop are some of the most complex systems in the world. Since its inception, Cadence has been at the forefront of technology innovation with its customers, helping them solve their most complex challenges in the semiconductor and electronic systems industries to unlock limitless opportunities.
v3.25.0.1
Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Cadence and its subsidiaries after elimination of intercompany accounts and transactions. All consolidated subsidiaries are wholly owned by Cadence. Certain prior year information has been reclassified to conform to the current year presentation.
Historically, Cadence’s fiscal years were 52- or 53-week periods ending on the Saturday closest to December 31. During fiscal 2022, Cadence’s Board of Directors approved a change in its fiscal year end from the Saturday closest to December 31 of each year to December 31 of each year. The fiscal year change became effective beginning with Cadence’s 2023 fiscal year, which began on January 1, 2023. Fiscal year 2022, which is included in this report for comparative purposes, represents a 52-week period.
Cadence’s first three fiscal quarters end on March 31, June 30, and September 30.
Use of Estimates
Preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Recently Adopted Accounting Standards
Segment Reporting
In November 2023. the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” intended to improve reportable segment disclosure requirements, primarily through enhanced annual and interim disclosures about significant segment expenses. Cadence adopted this ASU retrospectively during fiscal 2024. See Note 21 in the notes to the consolidated financial statements for further details.
New Accounting Standards Not Yet Adopted
Income Taxes
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. This standard is effective for fiscal years beginning after December 15, 2024, and may be applied on a retrospective or prospective basis. Cadence is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.
Income Statement - Expense Disaggregation Disclosure
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,” which requires additional disclosure of certain costs and expenses in the notes to the financial statements. The updated standard is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted and will be applied prospectively with the option for retrospective application. Cadence is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.
Foreign Operations
Cadence transacts business in various foreign currencies. The United States dollar is the functional currency of Cadence’s consolidated entities operating in the United States and certain of its consolidated subsidiaries operating outside the United States. The functional currency for Cadence’s other consolidated entities operating outside of the United States is generally the country’s local currency.
Cadence translates the financial statements of consolidated entities whose functional currency is not the United States dollar into United States dollars. Cadence translates assets and liabilities at the exchange rate in effect as of the financial statement date and translates income statement accounts using an average exchange rate for the period. Cadence includes adjustments from translating assets and liabilities into United States dollars, and the effect of exchange rate changes on intercompany transactions of a long-term investment nature in stockholders’ equity as a component of accumulated other comprehensive income. Cadence reports gains and losses from foreign exchange rate changes related to intercompany receivables and payables that are not of a long-term investment nature, as well as gains and losses from foreign currency transactions of a monetary nature in other income (expense), net, in the consolidated income statements.
Concentrations of Credit Risk
Financial instruments, including derivative financial instruments, that may potentially subject Cadence to concentrations of credit risk, consist principally of cash and cash equivalents, accounts receivable, investments and forward contracts. Credit exposure related to Cadence’s foreign currency forward contracts is limited to the realized and unrealized gains on these contracts.
Cash and Cash Equivalents
Cadence considers all highly liquid investments with original maturities of three months or less on the date of purchase to be cash equivalents.
Receivables
Cadence’s receivables, net includes invoiced accounts receivable and the current portion of unbilled receivables. Unbilled receivables represent amounts Cadence has recorded as revenue for which payments from a customer are due over time and Cadence has an unconditional right to the payment. Cadence’s accounts receivable and unbilled receivables were initially recorded at the transaction value. Cadence’s long-term receivables balance includes receivable balances to be invoiced more than one year after each balance sheet date.
Allowances for Doubtful Accounts
Cadence assesses its ability to collect outstanding receivables and provides customer-specific allowances, allowances for credit losses and general allowances for the portion of its receivables that are estimated to be uncollectible. The allowances are based on the current creditworthiness of its customers, historical experience, expected credit losses, changes in customer demand and the overall economic climate in the industries that Cadence serves. Provisions for these allowances are recorded in general and administrative expense in Cadence’s consolidated income statements.
Inventories
Inventories are computed at standard costs which approximate actual costs and are valued at the lower of cost or net realizable value based on the first-in, first-out method. Cadence’s inventories include high technology parts and components for complex accelerated hardware systems. These parts and components are specialized in nature and may be subject to rapid technological obsolescence. While Cadence has programs to manage the required inventories on hand and considers technological obsolescence when estimating required reserves to reduce recorded amounts to market values, it is reasonably possible that such estimates could change in the near term. Cadence’s policy is to reserve for inventory in excess of future demand forecasts or for other known obsolescence or realization issues. Provisions for obsolescence reserves are recorded as a component of cost of product and maintenance in Cadence’s consolidated income statements.
Property, Plant and Equipment
Property, plant and equipment is stated at historical cost. Depreciation and amortization are generally provided over the estimated useful lives, using the straight-line method, as follows:
Equipment and internal-use software
2-7 years
Buildings
25-32 years
Leasehold improvementsShorter of the lease term or the estimated useful life
Building improvements and land improvements
Up to 32 years
Furniture and fixtures
3-5 years
Cadence capitalizes certain costs of software developed for internal use. Capitalization of software developed for internal use begins at the application development phase of the project. Amortization begins when the computer software is substantially complete and ready for its intended use. Amortization is recorded on a straight-line basis over the estimated useful life. Capitalized costs were not material during fiscal 2024, 2023 or 2022.
Cadence recorded depreciation and amortization expense of $96.9 million, $78.4 million and $69.1 million during fiscal 2024, 2023 and 2022, respectively, for property, plant and equipment.
Software Development Costs
Software development costs are capitalized beginning when a product’s technological feasibility has been established by completion of a working model of the product and amortization begins when a product is available for general release to customers. The period between the achievement of technological feasibility and the general release of Cadence’s products has typically been of short duration. Costs incurred during fiscal 2024, 2023 and 2022 were not material.
Deferred Sales Commissions
Cadence records an asset for the incremental costs of obtaining a contract with a customer, including direct sales commissions that are earned upon execution of the contract. Cadence uses the portfolio method to recognize the amortization expense related to these capitalized costs related to initial contracts and renewals and such expense is recognized over a period associated with the revenue of the related portfolio, which is generally two to three years for Cadence’s software arrangements and upon delivery for its hardware and IP arrangements. Incremental costs related to initial contracts and renewals are amortized over the period of the arrangement in each case because Cadence pays the same commission rate for both new contracts and renewals. Deferred sales commissions are tested for impairment on an ongoing basis when events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment is recognized to the extent that the amount of deferred sales commission exceeds the remaining expected gross margin (remaining revenue less remaining direct costs) on the goods and services to which the deferred sales commission relates. Total capitalized costs were $51.9 million and $47.6 million as of December 31, 2024, and December 31, 2023, respectively, and are included in other assets in Cadence’s consolidated balance sheet. Amortization of these assets was $47.6 million, $41.4 million and $40.5 million during fiscal 2024, 2023 and 2022, respectively, and is included in sales and marketing expense in Cadence’s consolidated income statement.
Goodwill
Cadence conducts a goodwill impairment analysis annually and as necessary if changes in facts and circumstances indicate that the fair value of Cadence’s single reporting unit may be less than its carrying amount. To assess for impairment, Cadence compares the estimated fair value of its single reporting unit to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired, and no further analysis is required. If the fair value of the reporting unit is less than the carrying value of its net assets, Cadence would be required to record an impairment charge.
Long-Lived Assets, Including Acquired Intangibles
Cadence’s long-lived assets consist of property, plant and equipment, and acquired intangibles. Acquired intangibles consist of acquired technology, certain contract rights, customer relationships, trademarks and trade names, capitalized software, and in-process research and development. These acquired intangibles are acquired through business combinations or direct purchases. Acquired intangibles with definite lives are amortized on a straight-line basis over the estimated economic life of the underlying products and technologies, which range from one year to fifteen years. Acquired intangibles with indefinite lives, or in-process technology, consists of projects that had not reached technological feasibility by the date of acquisition. Upon completion of the project, the assets are amortized over their estimated useful lives. If the project is abandoned rather than completed, the asset is written off. In-process technology is tested for impairment annually and as necessary if changes in facts and circumstances indicate that the assets might be impaired.
Cadence reviews its long-lived assets, including acquired intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of an asset or asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset or asset group is expected to generate. If it is determined that the carrying amount of an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset or asset group exceeds its fair value.
Leases
Lessee Considerations
Cadence has operating leases primarily consisting of facilities with remaining lease terms of approximately one year to fourteen years. Cadence has options to terminate many of its leases early. The lease term represents the period up to the early termination date unless it is reasonably certain that Cadence will not exercise the early termination option. For certain leases, Cadence has options to extend the lease term for additional periods ranging from one year to ten years. Renewal options are not considered in the remaining lease term unless it is reasonably certain that Cadence will exercise such options.
At inception of a contract, Cadence determines an arrangement contains a lease if the arrangement conveys the right to use an identified asset and Cadence obtains substantially all of the economic benefits from the asset and has the ability to direct the use of the asset. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, Cadence combines the lease and non-lease components in determining the lease liabilities and right-of-use (“ROU”) assets. Non-lease components primarily include common-area maintenance and other management fees.
Operating lease expense is generally recognized evenly over the term of the lease. Payments under Cadence’s lease agreements are primarily fixed; however, certain agreements contain rental payments that are adjusted periodically based on changes in consumer price and other indices. Changes to payments resulting from changes in indices are expensed as incurred and not included in the measurement of lease liabilities and ROU assets. Cadence’s lease agreements do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The incremental borrowing rate represents a comparable rate to borrow on a collateralized basis over a similar term and in the economic environment where the leased asset is located.
Lessor Considerations
Although most of Cadence’s revenue from its hardware business comes from sales of hardware, Cadence also leases its hardware products to some customers. Cadence determines the existence of a lease when the customer controls the use of the identified hardware for a period of time defined in the lease agreement. 
Cadence’s leases range in duration up to three years with payments generally collected in equal quarterly installments. Cadence’s leases do not include termination rights or variable pricing and typically do not include purchase rights at the end of the lease. Short-term leases are usually less than two years and are classified as operating leases with revenue recognized and depreciation expensed on a straight-line basis over the term of the lease. Long-term leases are typically for three years and are classified as sales-type leases with revenue and cost of sales recognized upon installation.
Cadence’s operating leases and sales-type leases contain both lease and non-lease components. Because the pattern of revenue recognition is the same for both the lease and non-lease components in Cadence’s operating leases, Cadence has elected the practical expedient to not separate lease and related non-lease components and accounts for both components under Topic 842. Cadence allocates value to the lease and non-lease components in its sales-type leases using standalone selling prices (“SSPs”) similar to those used under ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” the current accounting standard governing revenue recognition. When Cadence leases its hardware in the same arrangement as software or IP, Cadence allocates value to each performance obligation using SSPs.
Investments in Equity Securities
Cadence’s investments in marketable equity securities are carried at fair value as a component of prepaid expenses and other in the consolidated balance sheets. Cadence records realized and unrealized holding gains or losses as part of other income (expense), net in the consolidated income statements.
Cadence’s non-marketable investments include its investments in privately held companies. These investments are initially recorded at cost and are included in other assets in the consolidated balance sheets. Cadence accounts for these investments using the measurement alternative when the fair value of the investment is not readily determinable, and Cadence does not have the ability to exercise significant influence, or the equity method of accounting when it is determined that Cadence has the ability to exercise significant influence. For investments accounted for using the equity method of accounting, Cadence records its proportionate share of the investee’s income or loss, net of the effects of any basis differences, to other income (expense), net on a one-quarter lag in Cadence’s consolidated income statements.
Cadence reviews its non-marketable investments for impairment on a regular basis by considering investee financial performance and other information received from the investee companies that indicates a decline in value has occurred. For non-marketable equity investments accounted for using the measurement alternative, the carrying amount may also be adjusted based on observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments to the carrying amounts of non-marketable investments are recorded in other income (expense), net in the consolidated income statements. There were no material events or circumstances impacting the carrying amount of our non-marketable investments during the periods presented.
Investments in Debt Securities
Cadence’s investments in debt securities are comprised of investments in mortgage-backed and asset backed-securities and are carried at fair value as a component of prepaid expenses and other in the consolidated balance sheets. Cadence classifies its investment in debt securities as available-for-sale, and gross unrealized gains and losses are recorded as a component of accumulated other comprehensive loss on its consolidated balance sheets.
Cadence assesses its portfolio of debt securities for impairment at least quarterly. Cadence records an allowance for credit losses on debt securities when the fair value of a debt security is below its amortized cost, and it is more likely than not that Cadence will either sell the impaired security before recovery of its amortized basis or has the intention to sell the security. Provisions for credit losses on impaired debt securities are recorded as a component of other income (expense), net in the consolidated income statements.
Derivative Financial Instruments
Cadence enters into foreign currency forward exchange contracts with financial institutions to protect against currency exchange risks associated with existing assets and liabilities. A foreign currency forward exchange contract acts as a hedge by increasing in value when underlying assets decrease in value or underlying liabilities increase in value due to changes in foreign exchange rates. Conversely, a foreign currency forward exchange contract decreases in value when underlying assets increase in value or underlying liabilities decrease in value due to changes in foreign exchange rates. The forward contracts are not designated as accounting hedges and, therefore, the unrealized gains and losses are recognized in other income (expense), net, in advance of the actual foreign currency cash flows. The fair value of these forward contracts is recorded in accrued liabilities or in other current assets. These forward contracts generally have maturities of 90 days or less.
Nonqualified Deferred Compensation Trust
Executive officers, senior management and members of Cadence’s Board of Directors may elect to defer compensation payable to them under Cadence’s Nonqualified Deferred Compensation Plan (“NQDC”). Deferred compensation payments are held in investment accounts and the values of the accounts are adjusted each quarter based on the fair value of the investments held in the NQDC.
The selected investments held in the NQDC accounts are carried at fair value, with the unrealized gains and losses recognized in the consolidated income statements as other income (expense), net. These securities are classified in other assets in the consolidated balance sheets because they are not available for Cadence’s use in its operations.
Cadence’s obligation with respect to the NQDC trust is recorded in other long-term liabilities on the consolidated balance sheets. Increases and decreases in the NQDC trust liability are recorded as compensation expense in the consolidated income statements.
Treasury Stock
Cadence generally issues shares related to its stock-based compensation plans from shares held in treasury. When treasury stock is reissued at an amount higher than its cost, the difference is recorded as a component of capital in excess of par in the consolidated statements of stockholders’ equity. When treasury stock is reissued at an amount lower than its cost, the difference is recorded as a component of capital in excess of par to the extent that gains exist to offset the losses. If there are no accumulated treasury stock gains in capital in excess of par, the losses upon reissuance of treasury stock are recorded as a component of retained earnings in the consolidated statements of stockholders’ equity. There were no losses recorded as a component of retained earnings by Cadence on the reissuance of treasury stock during fiscal 2024, 2023 or 2022.
The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. Cadence did not incur any excise tax on the net value of stock repurchases during fiscal 2024. During fiscal 2023, Cadence recorded excise tax of $0.9 million as a component of treasury stock to account for the incremental cost of the shares repurchased.
Revenue Recognition
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which Cadence expects to be entitled in exchange for promised goods or services. Cadence’s performance obligations are satisfied either over time or at a point in time.
Product and maintenance revenue includes Cadence’s licenses of software and IP, sales of emulation hardware and the related maintenance on these licenses and sales.
Services revenue includes revenue received for performing engineering services (which are generally not related to the functionality of other licensed products), customized IP on a fixed fee basis, and sales from cloud-based solutions that provide customers with software, hardware and services over a period of time.
Cadence enters into contracts that can include various combinations of licenses, products and services, some of which are distinct and are accounted for as separate performance obligations. For contracts with multiple performance obligations, Cadence allocates the transaction price of the contract to each performance obligation, generally on a relative basis using its SSP. Cadence generates revenue from contracts with customers and applies judgment in identifying and evaluating any terms and conditions in contracts which may impact revenue recognition. Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities.
Some customers enter into non-cancelable commitments whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of products or services. These arrangements do not meet the definition of a revenue contract until the customer executes a separate selection form to identify the products and services that they are purchasing. Each separate selection form under the arrangement is treated as an individual contract and accounted for based on the respective performance obligations. Cadence records a customer deposit liability for amounts received from customers prior to the arrangement meeting the definition of a revenue contract.
Software Revenue Recognition
Cadence’s time-based license arrangements grant customers the right to access and use all of the licensed products at the outset of an arrangement and updates are generally made available throughout the entire term of the arrangement, which is generally two to three years. Cadence’s updates provide continued access to evolving technology as customers’ designs migrate to more advanced nodes and as its customers’ technological requirements evolve. In addition, certain time-based license arrangements include remix rights and unspecified additional products that become commercially available during the term of the agreement. Payments are generally received in equal or near equal installments over the term of the agreement.
Multiple software licenses, related updates, and technical support in these time-based arrangements constitute a single, combined performance obligation and revenue is recognized over the term of the license, commencing upon the later of the effective date of the arrangement or transfer of the software license. Remix rights are not an additional promised good or service in the contract, and where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer.
For certain software arrangements where the updates are not critical to maintaining the utility of the software, Cadence considers the license, related updates and technical support as separate performance obligations. In these instances, the total consideration is allocated across the separate performance obligations using SSPs and the license revenue is recognized upon the later of the delivery or effective date of the contract and the revenue related to the updates and technical support is recognized over the term of the arrangement.
Hardware Revenue Recognition
Cadence generally has two performance obligations in arrangements involving the sale or lease of hardware products. The first performance obligation is to transfer the hardware product (which includes software integral to the functionality of the hardware product). The second performance obligation is to provide maintenance on hardware and its embedded software, which includes rights to technical support, hardware repairs and software updates that are all provided over the same term and have the same time-based pattern of transfer to the customer. The transaction price allocated to the hardware product is generally recognized as revenue at the time of delivery because the customer obtains control of the product at that point in time. Cadence has concluded that control generally transfers at that point in time because the customer has title to the hardware, physical possession, and a present obligation to pay for the hardware. The transaction price allocated to maintenance is recognized as revenue ratably over the maintenance term. Payments for hardware contracts are generally received upon delivery of the hardware product. Shipping and handling costs are considered fulfillment costs and are included in cost of product and maintenance in Cadence’s consolidated income statements.
IP Revenue Recognition
Cadence generally licenses IP under nonexclusive license agreements that provide usage rights for specific designs. In addition, for certain of Cadence’s IP license agreements, royalties are collected as customers ship their own products that incorporate Cadence IP. These arrangements generally have two performance obligations—transferring the licensed IP and associated maintenance, which includes rights to technical support, and software updates that are all provided over the maintenance term and have a time-based pattern of transfer to the customer.
Revenue allocated to the IP license is recognized at a point in time upon the later of the delivery of the IP or the beginning of the license period and revenue allocated to the maintenance is recognized over the maintenance term. Royalties are recognized as revenue in the quarter in which the applicable Cadence customer ships its products that incorporate Cadence IP. Payments for IP contracts are generally received upon delivery of the IP. Cadence customizes certain IP and revenue related to this customization is recognized as services revenue as described below.
Services Revenue Recognition
Revenue from service contracts is recognized over time, generally using costs incurred or hours expended to measure progress. Cadence has a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. Payments for services are generally due upon milestones in the contract or upon consumption of the hourly resources.
Stock-Based Compensation
Cadence recognizes the cost of awards of equity instruments granted to employees in exchange for their services as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the value of the award and is recognized as expense over the requisite service period, which is typically the vesting period. Cadence recognizes stock-based compensation expense on the straight-line method for awards that only contain a service condition and on the graded-vesting method for awards that contain both a service and performance condition. Cadence recognizes the impact of forfeitures on stock-based compensation expense as they occur.
The fair value of stock options and purchase rights issued under Cadence’s Employee Stock Purchase Plan (“ESPP”) are calculated using the Black-Scholes option pricing model. The computation of the expected volatility assumption used for new awards is based on a weighting of historical and implied volatilities. When determining the expected term, Cadence reviews historical employee exercise behavior from options having similar vesting periods. The risk-free interest rate for the period within the expected term of the option is based on the yield of United States Treasury notes for the comparable term in effect at the time of grant. The expected dividend yield used in the calculation is zero because Cadence has not historically paid and currently does not expect to pay dividends in the foreseeable future.
The fair value of market-based performance stock awards is calculated using a Monte Carlo simulation model and takes into account the same input assumptions as the Black-Scholes model, as well as the possibility that the market conditions may not be satisfied. Cadence recognizes stock-based compensation expense on the graded-vesting method for market-based performance stock awards.
Advertising
Cadence expenses the costs of advertising as incurred. Total advertising expense, including marketing programs and events, was $23.2 million, $21.7 million and $17.0 million during fiscal 2024, 2023 and 2022, respectively, and is included in marketing and sales in the consolidated income statements.
Restructuring
Cadence records personnel-related restructuring charges with termination benefits when the costs are both probable and estimable. Cadence records personnel-related restructuring charges with non-customary termination benefits when the plan has been communicated to the affected employees. Cadence generally begins recording facilities-related restructuring charges in the period in which a formal plan to vacate an affected facility is established. In connection with facilities-related restructuring plans, Cadence has made certain assumptions and estimates related to facilities, particularly the timing of exit and the ability to sublease. Facility closure costs in restructuring charges primarily includes accelerated ROU asset amortization, lease buyout costs and certain contractual costs to maintain facilities during the period after abandonment.
Cadence records estimated provisions for termination benefits and outplacement costs along with other personnel-related restructuring costs, asset impairments related to abandoned assets and other costs associated with the restructuring plan. Cadence regularly evaluates the adequacy of its restructuring liabilities and adjusts the balances based on actual costs incurred or changes in estimates and assumptions. Subsequent adjustments to restructuring accruals are classified as restructuring in the consolidated income statements.
Accounting for Income Taxes
Cadence accounts for the effect of income taxes in its consolidated financial statements using the asset and liability method. This process involves estimating actual current tax liabilities together with assessing carryforwards and temporary differences resulting from differing treatment of items, such as depreciation, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, measured using enacted tax rates expected to apply to taxable income in the years when those temporary differences are expected to be recovered or settled. Cadence accounts for the United States global intangible low-taxed income as a period expense.
Cadence then records a valuation allowance to reduce the deferred tax assets to the amount that Cadence believes is more likely than not to be realized based on its judgment of all available positive and negative evidence. The weight given to the potential effect of negative and positive evidence is commensurate with the extent to which the strength of the evidence can be objectively verified. This assessment, which is completed on a taxing jurisdiction basis, takes into account a number of types of evidence, including the following:
the nature and history of current or cumulative financial reporting income or losses;
sources of future taxable income;
the anticipated reversal or expiration dates of the deferred tax assets; and
tax planning strategies.
Cadence takes a two-step approach to recognizing and measuring the financial statement benefit of uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement of the audit. Cadence classifies interest and penalties on unrecognized tax benefits as income tax expense or benefit.
For additional discussion of income taxes, see Note 8 in the notes to the consolidated financial statements.
v3.25.0.1
REVENUE
12 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
Cadence groups its products and services into categories related to major design activities. The following table shows the percentage of revenue contributed by each of Cadence’s product categories for fiscal 2024, 2023 and 2022:
 202420232022
Core EDA
71 %76 %76 %
IP13 %12 %12 %
System Design and Analysis16 %12 %12 %
Total100 %100 %100 %
_____________
* Includes immaterial amount of revenue accounted for under leasing arrangements.
Cadence generates revenue from contracts with customers and applies judgment in identifying and evaluating any terms and conditions in contracts which may impact revenue recognition. Certain of Cadence’s licensing arrangements allow customers the ability to remix among software products. Cadence also has arrangements with customers that include a combination of products, with the actual product selection and number of licensed users to be determined at a later date. For these arrangements, Cadence estimates the allocation of the revenue to product categories based upon the expected usage of products. Revenue by product category fluctuates from period to period based on demand for products and services, and Cadence’s available resources to deliver them. No single customer accounted for 10% or more of total revenue during fiscal 2024, 2023 or 2022.
Recurring revenue includes revenue recognized over time from Cadence’s software arrangements, services, royalties, maintenance on IP licenses and hardware, and operating leases of hardware. Recurring revenue also includes revenue recognized at varying points in time over the term of other arrangements with non-cancelable commitments, whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of products or services. These arrangements do not meet the definition of a revenue contract until the customer executes a separate selection form to identify the products and services that they are purchasing. Each separate selection form under the arrangement is treated as an individual contract and accounted for based on the respective performance obligations.
The remainder of Cadence’s revenue is recognized at a point in time and is characterized as up-front revenue. Up-front revenue is primarily generated by sales of hardware, individual IP licenses and certain software licenses. The percentage of Cadence’s recurring and up-front revenue in any single fiscal period is primarily impacted by delivery of hardware and IP products to its customers.
The following table shows the percentage of Cadence’s revenue that is classified as recurring or up-front for fiscal 2024, 2023 and 2022:
 202420232022
Revenue recognized over time80 %81 %83 %
Revenue from arrangements with non-cancelable commitments%%%
Recurring revenue83 %84 %85 %
Up-front revenue17 %16 %15 %
Total100 %100 %100 %
Significant Judgments
Cadence’s contracts with customers often include promises to transfer to a customer multiple software and/or IP licenses and services, including professional services, technical support services, and rights to unspecified updates. Determining whether licenses and services are distinct performance obligations that should be accounted for separately, or not distinct and thus accounted for together, requires significant judgment. In some arrangements, such as most of Cadence’s IP license arrangements and the license of certain software, Cadence has concluded that the licenses and the related updates and technical support are distinct from each other. In others, like Cadence’s time-based software arrangements, the licenses and certain services are not distinct from each other. These time-based software arrangements include multiple software licenses and updates to the licensed software products, as well as technical support, and Cadence has concluded that these promised goods and services are a single, combined performance obligation.
The accounting for contracts with multiple performance obligations requires the contract’s transaction price to be allocated to each distinct performance obligation based on relative SSP. Judgment is required to determine the SSP for each distinct performance obligation because Cadence rarely licenses or sells products on a standalone basis. In instances where the SSP is not directly observable because Cadence does not sell the license, product or service separately, Cadence determines the SSP using information that maximizes the use of observable inputs and may include market conditions. Cadence typically has more than one SSP for individual performance obligations due to the stratification of those items by classes of customers and circumstances. In these instances, Cadence may use information such as the size of the customer and geographic region of the customer in determining the SSP.
Revenue is recognized over time for Cadence’s combined performance obligations that include software licenses, updates, technical support and maintenance that are separate performance obligations with the same term. For Cadence’s professional services, revenue is recognized over time, generally using costs incurred or hours expended to measure progress. Judgment is required in estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. For Cadence’s other performance obligations recognized over time, revenue is generally recognized using a time-based measure of progress reflecting generally consistent efforts to satisfy those performance obligations throughout the arrangement term.
If a group of agreements are so closely related that they are, in effect, part of a single arrangement, such agreements are deemed to be one arrangement for revenue recognition purposes. Cadence exercises significant judgment to evaluate the relevant facts and circumstances in determining whether the separate agreements should be accounted for separately or as, in substance, a single arrangement. Cadence’s judgments about whether a group of contracts comprise a single arrangement can affect the allocation of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved.
Cadence is required to estimate the total consideration expected to be received from contracts with customers. In limited circumstances, the consideration expected to be received is variable based on the specific terms of the contract or based on Cadence’s expectations of the term of the contract. Generally, Cadence has not experienced significant returns or refunds to customers. These estimates require significant judgment and a change in these estimates could have an effect on its results of operations during the periods involved.
Contract Balances
The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on Cadence’s consolidated balance sheets. For certain software, hardware and IP agreements with payment plans, Cadence records an unbilled receivable related to revenue recognized upon transfer of control because it has an unconditional right to invoice and receive payment in the future related to those transferred products or services. Cadence records a contract asset when revenue is recognized prior to invoicing and Cadence does not have the unconditional right to invoice or retains performance risk with respect to that performance obligation. Cadence records deferred revenue when revenue is recognized subsequent to invoicing. For Cadence’s time-based software agreements, customers are generally invoiced in equal, quarterly amounts, although some customers prefer to be invoiced in single or annual amounts.
The contract assets indicated below are included in prepaid expenses and other in the consolidated balance sheets and primarily relate to Cadence’s rights to consideration for work completed but not billed as of the balance sheet date on services and customized IP contracts. The contract assets are transferred to receivables when the rights become unconditional, usually upon completion of a milestone.
Cadence’s contract balances as of December 31, 2024, and December 31, 2023, were as follows:
 As of
 December 31,
2024
December 31,
2023
 (In thousands)
Contract assets$29,339 $17,554 
Deferred revenue852,581 763,955 
Cadence recognized revenue of $669.9 million, $689.7 million and $540.7 million during fiscal 2024, 2023 and 2022, respectively, that was included in the deferred revenue balance at the beginning of each respective fiscal year. All other activity in deferred revenue, with the exception of deferred revenue assumed from acquisitions, is due to the timing of invoices in relation to the timing of revenue as described above.
Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, Cadence has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing Cadence’s products and services, and not to facilitate financing arrangements.
Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Cadence has elected to exclude the potential future royalty receipts from the remaining performance obligations. Contracted but unsatisfied performance obligations were approximately $6.8 billion as of December 31, 2024, which included $0.5 billion of non-cancelable commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date.
Cadence estimates its remaining performance obligations at a point in time. Actual amounts and timing of revenue recognition may differ from these estimates largely due to changes in actual installation and delivery dates, as well as contract renewals, modifications and terminations. As of December 31, 2024, Cadence expected to recognize 54% of the contracted but unsatisfied performance obligations, excluding non-cancelable commitments, as revenue over the next 12 months, 42% over the next 13 to 36 months and the remainder thereafter.
Cadence recognized revenue of $68.0 million, $55.0 million and $52.8 million during fiscal 2024, 2023 and 2022, respectively, from performance obligations satisfied in previous periods. These amounts represent royalties earned during the period and exclude contracts with nonrefundable prepaid royalties. Nonrefundable prepaid royalties are recognized upon delivery of the IP because Cadence’s right to the consideration is not contingent upon customers’ future shipments.
v3.25.0.1
RECEIVABLES, NET
12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
RECEIVABLES, NET RECEIVABLES, NET
Cadence’s current and long-term receivables balances as of December 31, 2024, and December 31, 2023, were as follows:
 As of
 December 31,
2024
December 31,
2023
 (In thousands)
Accounts receivable$393,017 $299,814 
Unbilled accounts receivable293,251 193,963 
Long-term receivables24,179 10,755 
Total receivables710,447 504,532 
Less allowance for doubtful accounts(5,808)(4,553)
Total receivables, net$704,639 $499,979 
Cadence’s customers are primarily concentrated within the semiconductor and electronics systems industries. As of December 31, 2024, one customer accounted for approximately 11% of Cadence’s total receivables. As of December 31, 2023, no single customer accounted for 10% or more of Cadence’s total receivables.
Allowance for doubtful accounts
Cadence’s provisions for losses on its accounts receivable during fiscal 2024, 2023 and 2022 were as follows:
Balance at Beginning of PeriodCharged to Costs and ExpensesUncollectible Accounts Written Off, NetBalance at End of Period
Year ended December 31, 2024$4,553 $2,078 $(823)$5,808 
Year ended December 31, 20232,290 3,325 (1,062)4,553 
Year ended December 31, 2022$3,692 $204 $(1,606)$2,290 
v3.25.0.1
DEBT
12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
DEBT DEBT
Cadence’s outstanding debt as of December 31, 2024, and December 31, 2023, was as follows:
 December 31, 2024December 31, 2023
 (In thousands)
Principal
Unamortized Discount and Issuance Costs
Carrying ValuePrincipal
Unamortized Discount and Issuance Costs
Carrying Value
2024 Notes$— $— $— $350,000 $(715)$349,285 
2025 Term Loan— — — 300,000 (229)299,771 
2027 Notes500,000 (3,206)496,794 — — — 
2029 Notes1,000,000 (9,666)990,334 — — — 
2034 Notes1,000,000 (10,945)989,055 — — — 
Total outstanding debt$2,500,000 $(23,817)$2,476,183 $650,000 $(944)$649,056 
Senior Notes
In October 2014, Cadence issued $350.0 million aggregate principal amount of 4.375% Senior Notes that were due October 15, 2024 (the “2024 Notes”). As of December 31, 2023, the carrying value of the 2024 Notes was classified as a current liability on Cadence’s consolidated balance sheet. In October 2024, Cadence settled the outstanding principal of $350.0 million and accrued interest on its 2024 Notes.
In September 2024, Cadence issued $500.0 million aggregate principal amount of 4.200% Senior Notes due September 10, 2027 (the “2027 Notes”). Cadence received net proceeds of $496.5 million from the issuance of the 2027 Notes, net of a discount of $0.1 million and issuance costs of $3.5 million. As of December 31, 2024, the fair value of the 2027 Notes was approximately $495 million.
In September 2024, Cadence issued $1.0 billion aggregate principal amount of 4.300% Senior Notes due September 10, 2029 (the “2029 Notes”). Cadence received net proceeds of $989.8 million from the issuance of the 2029 Notes, net of a discount of $1.4 million and issuance costs of $8.8 million. As of December 31, 2024, the fair value of the 2029 Notes was approximately $980 million.
In September 2024, Cadence issued $1.0 billion aggregate principal amount of 4.700% Senior Notes due September 10, 2034 (the “2034 Notes,” and together with the 2027 Notes and the 2029 Notes, the “New Notes”, and together with the 2024 Notes, the “Senior Notes”). Cadence received net proceeds of $988.8 million from the issuance of the 2034 Notes, net of a discount of $1.9 million and issuance costs of $9.3 million. As of December 31, 2024, the fair value of the 2034 Notes was approximately $960 million.
Cadence may redeem the New Notes, in whole or in part, at any time or from time to time, at redemption prices specified in the governing indenture. In addition, Cadence may be required to repurchase New Notes upon occurrence of a change of control triggering event, as set forth in the governing indenture.
The indentures governing Cadence’s New Notes include customary representations, warranties and restrictive covenants, including, but not limited to, restrictions on Cadence’s ability to grant liens on certain assets, enter into certain sale and lease-back transactions, or merge, consolidate or sell assets, and also include customary events of default. As of December 31, 2024, Cadence was in compliance with all covenants associated with the New Notes.
Both the discount and issuance costs are being amortized to interest expense over the term of the New Notes using the effective interest method. Interest on the New Notes is payable semi-annually in arrears in March and September of each year, beginning March 2025. Cadence’s New Notes are unsecured and rank equal in right of payment to all of Cadence’s existing and future senior indebtedness.
Term Loans
In September 2022, Cadence entered into a $300.0 million three-year senior non-amortizing term loan facility due on September 7, 2025, as amended, with a group of lenders led by Bank of America, N.A., as administrative agent (the “2025 Term Loan”). Proceeds from the loan were used to finance Cadence’s acquisition of OpenEye Scientific Software, Inc. (“OpenEye”) in fiscal 2022. Debt issuance costs associated with the 2025 Term Loan were not material.
In May 2024, Cadence entered into a $700.0 million two-year senior non-amortizing term loan facility due on May 30, 2026, as amended, with a group of lenders led by Bank of America, N.A., as administrative agent (the “2026 Term Loan”). All proceeds from the 2026 Term Loan were used to finance Cadence’s acquisition of BETA CAE Systems International AG (“BETA CAE”). Debt issuance costs associated with the 2026 Term Loan were not material.
In September 2024, Cadence used a portion of the net proceeds from the New Notes to fully prepay the outstanding principal and accrued interest of both the 2025 Term Loan and the 2026 Term Loan.
Revolving Credit Facility
In August 2024, Cadence terminated its existing revolving credit facility, dated June 30, 2021, and amended in September 2022, and entered into a five-year senior unsecured revolving credit facility with a group of lenders led by Bank of America, N.A., as administrative agent (the “2024 Credit Facility”). The 2024 Credit Facility provides for borrowings up to $1.25 billion, with the right to request increased capacity up to an additional $500.0 million upon the receipt of lender commitments, for total maximum borrowings of $1.75 billion. The 2024 Credit Facility expires on August 14, 2029. Any outstanding loans drawn under the 2024 Credit Facility are due at maturity on August 14, 2029, subject to an option to extend the maturity date. Outstanding borrowings may be repaid at any time prior to maturity. Cadence paid debt issuance costs of $1.3 million that were recorded to other assets in Cadence’s consolidated balance sheet at the inception of the agreement. The debt issuance costs will be amortized to interest expense over the term of the 2024 Credit Facility. As of December 31, 2024, there were no outstanding borrowings under the 2024 Credit Facility.
Interest accrues on borrowings under the 2024 Credit Facility at a rate equal to, at Cadence’s option, either (1) secured overnight financing rate (“SOFR”) plus a margin between 0.625% and 1.125% per annum, determined by reference to the credit rating of Cadence’s unsecured debt, plus a SOFR adjustment of 0.10% or (2) the base rate plus a margin between 0.000% and 0.125% per annum, determined by reference to the credit rating of Cadence’s unsecured debt. Interest is payable quarterly. A commitment fee ranging from 0.050% to 0.125% is assessed on the daily average undrawn portion of revolving commitments. Borrowings bear interest at what is estimated to be current market rates of interest. Accordingly, the carrying value of the 2024 Credit Facility approximates fair value.
The 2024 Credit Facility contains customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness, grant liens and make certain asset dispositions. In addition, the 2024 Credit Facility contains financial covenants that require Cadence to maintain a funded debt to EBITDA ratio not greater than 3.5 to 1, with a step up to 4 to 1 for one year following an acquisition by Cadence of at least $250.0 million that results in a pro forma leverage ratio between 3.25 to 1 and 3.75 to 1. As of December 31, 2024, Cadence was in compliance with all covenants associated with the 2024 Credit Facility.
v3.25.0.1
ACQUISITIONS
12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
ACQUISITIONS ACQUISITIONS
2024 Acquisitions
Acquisition of BETA CAE
On May 30, 2024, Cadence acquired all of the outstanding equity of BETA CAE, a system analysis platform provider of multi-domain, engineering simulation solutions. The aggregate purchase consideration for Cadence’s acquisition of BETA CAE, net of cash acquired of $91.3 million, was $1.14 billion. The aggregate purchase consideration was comprised of $638.2 million of cash and non-cash consideration of 1.74 million shares of Cadence common stock with an aggregate acquisition date fair value of $501.8 million. The addition of BETA CAE’s technologies and talent is expected to accelerate Cadence’s Intelligent System Design™ strategy by expanding its multiphysics system analysis portfolio and enabling entry into the structural analysis space.
In connection with its acquisition of BETA CAE, Cadence paid an additional $55.8 million to a third-party escrow agent that will be released to certain former BETA CAE shareholders, subject to continued employment with Cadence, through the second quarter of fiscal 2026. The release of these funds is subject to continuous service and other conditions and is accounted for over the required service period as post-acquisition compensation expense in Cadence’s consolidated income statements.
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of BETA CAE based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$118,676 
Goodwill822,129 
Acquired intangibles345,000 
Other long-term assets18,198 
Total assets acquired1,304,003 
Current liabilities36,465 
Long-term liabilities36,250 
Total liabilities assumed72,715 
Total purchase consideration$1,231,288 
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is expected to be deductible for U.S. income tax purposes.
Definite-lived intangible assets acquired with Cadence’s acquisition of BETA CAE were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$140,000 6.0 years
Agreements and relationships190,000 15.0 years
Tradenames, trademarks and patents15,000 7.0 years
Total acquired intangibles with definite lives$345,000 11.0 years
Acquisition of Invecas, Inc.
On January 8, 2024, Cadence acquired all of the outstanding equity of Invecas, Inc. (“Invecas”), a provider of design engineering, embedded software and system-level solutions. The aggregate cash consideration for Cadence’s acquisition of Invecas, net of cash acquired of $23.8 million, was $71.2 million. The acquisition adds a skilled system design engineering team to Cadence, with expertise in providing customers with custom solutions across chip design, product engineering, advanced packaging and embedded software. In connection with the acquisition of Invecas, Cadence paid an additional amount to a third-party escrow agent that will be released to certain former Invecas shareholders, subject to continued employment with Cadence, through the first quarter of fiscal 2028. The release of these funds is subject to continuous service and other conditions and is accounted for over the required service period as post-acquisition compensation expense in Cadence’s consolidated income statements.
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Invecas based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$50,608 
Goodwill42,209 
Acquired intangibles15,500 
Other long-term assets7,414 
Total assets acquired115,731 
Current liabilities17,114 
Long-term liabilities3,647 
Total liabilities assumed20,761 
Total purchase consideration$94,970 
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and will not be deductible for tax purposes.
The definite-lived intangible assets acquired with Cadence’s acquisition of Invecas include agreements and relationships of $15.0 million and tradenames of $0.5 million. These assets will be amortized over a weighted average life of 6.8 years.
Other 2024 Acquisitions
During the first three quarters of fiscal 2024, Cadence completed two other business combinations for aggregate cash consideration of $28.3 million, net of cash acquired. The total purchase consideration was allocated to assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Cadence recorded $5.5 million of definite-lived intangible assets with a weighted average amortization period of 4.9 years. Cadence also recognized $25.2 million of goodwill, which is primarily attributed to the assembled workforce of the acquired businesses. The goodwill recognized with these acquisitions is not expected to be deductible for tax purposes.
2023 Acquisitions
Acquisition of IP Assets from Rambus Inc.
On September 6, 2023, Cadence acquired the serializer/deserializer (“SerDes”) and memory interface physical layer (“Memory”) IP business from Rambus Inc. (“Rambus”) for an aggregate cash consideration of $108.6 million. Memory and SerDes IP design and integration continues to be integral to the design of artificial intelligence, data center and hyperscale applications, CPU architectures and networking devices. The addition of the Rambus IP and seasoned team accelerates Cadence’s Intelligent System Design strategy and strengthens Cadence's IP technology portfolio.
The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$1,460 
Goodwill80,999 
Acquired intangibles26,000 
Other long-term assets2,798 
Total assets acquired111,257 
Current liabilities2,531 
Long-term liabilities142 
Total liabilities assumed2,673 
Total purchase consideration$108,584 
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and will be deductible for tax purposes.
Definite-lived intangible assets acquired with Cadence’s acquisition of the SerDes and Memory business from Rambus were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$16,700 5.0 years
Agreements and relationships9,300 7.0 years
Total acquired intangibles with definite lives$26,000 5.7 years
Acquisition of Pulsic, Ltd.
On May 4, 2023, Cadence acquired all of the outstanding equity of Pulsic, Ltd. (“Pulsic”), a longtime provider of production-proven technology for floor-planning, placement, and routing of custom ICs. The addition of Pulsic’s technologies and experienced team supports Cadence’s Intelligent System Design strategy and strengthens Cadence’s Custom IC Design and Simulation technology portfolio. The aggregate cash consideration for Cadence’s acquisition of Pulsic, net of cash acquired of $3.8 million, was $56.1 million. Subject to service and other conditions, Cadence expects to recognize expense for consideration paid to certain former Pulsic shareholders, subject to continued employment with Cadence, through the second quarter of fiscal 2025.
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Pulsic based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$4,369 
Goodwill47,448 
Acquired intangibles12,400 
Other long-term assets89 
Total assets acquired64,306 
Current liabilities1,553 
Long-term liabilities2,885 
Total liabilities assumed4,438 
Total purchase consideration$59,868 
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is not deductible for tax purposes.
Definite-lived intangible assets acquired with Cadence’s acquisition of Pulsic were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$8,000 6.2 years
Agreements and relationships4,100 8.0 years
Tradenames, trademarks and patents300 6.0 years
Total acquired intangibles with definite lives$12,400 6.8 years
Acquisition of Intrinsix Corporation
On October 2, 2023, Cadence acquired all of the outstanding equity of Intrinsix Corporation (“Intrinsix”) from CEVA, Inc. The acquisition enhances Cadence’s system and IC design services resources with the addition of a team with expertise in advanced nodes, radio frequency, mixed-signal and security algorithms. The acquisition also expands Cadence’s reach in key high-growth vertical sectors, including aerospace and defense. The aggregate cash consideration for Cadence’s acquisition of Intrinsix was $34.6 million, net of cash acquired of $0.5 million. With its acquisition of Intrinsix, Cadence recorded $2.6 million of definite-lived intangible assets, $31.6 million of goodwill and $0.9 million net assets. The weighted average amortization period for the definite-lived intangible assets acquired with Cadence’s acquisition of Intrinsix was 5.0 years. The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is not deductible for tax purposes.
2022 Acquisitions
Acquisition of OpenEye Scientific Software, Inc.
On August 31, 2022, Cadence acquired all of the outstanding equity of OpenEye, a leading provider of computational molecular modeling and simulation software used by pharmaceutical and biotechnology companies for drug discovery. The addition of OpenEye’s technologies and experienced team with its deep scientific expertise is expected to accelerate Cadence’s Intelligent System Design strategy and broadens Cadence’s System Design and Analysis technology portfolio. The acquisition expands Cadence’s total addressable market, bringing Cadence’s computational software expertise to apply proven algorithmic, simulation and solver advances to life sciences. The aggregate cash consideration for Cadence’s acquisition of OpenEye, net of cash acquired of $13.2 million, was $461.3 million. Subject to service and other conditions, Cadence expects to recognize expense for consideration paid to certain former OpenEye shareholders, subject to continued employment with Cadence, through the first quarter of fiscal 2026.
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of OpenEye based on their respective estimated fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$24,890 
Goodwill359,580 
Acquired intangibles117,400 
Other long-term assets6,542 
Total assets acquired508,412 
Current liabilities15,489 
Long-term liabilities18,456 
Total liabilities assumed33,945 
Total purchase consideration$474,467 
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce, and is not deductible for tax purposes.
Definite-lived intangible assets acquired with Cadence’s acquisition of OpenEye were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$53,900 7.0 years
Agreements and relationships61,400 12.3 years
Tradenames, trademarks and patents2,100 7.0 years
Total acquired intangibles with definite lives$117,400 9.8 years
Acquisition of FFG Holdings Limited
On July 14, 2022, Cadence acquired all of the outstanding equity of FFG Holdings Limited (“Future Facilities”), a provider of electronics cooling analysis and energy performance optimization solutions for data center design and operations using physics-based 3D digital twins. The addition of Future Facilities’ technologies and expertise supports Cadence’s Intelligent System Design strategy and broadens its System Design and Analysis technology portfolio with the addition of solutions that enable companies to make informed business decisions about data center design, operations and lifecycle management that reduce their carbon footprint. The aggregate cash consideration for Cadence’s acquisition of Future Facilities, net of cash acquired of $2.8 million, was $100.1 million. Subject to service and other conditions, Cadence expects to recognize expense for consideration paid to certain former Future Facilities shareholders, subject to continued employment with Cadence, subject to service and other conditions, through the third quarter of fiscal 2025.
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Future Facilities based on their respective estimated fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$7,992 
Goodwill67,219 
Acquired intangibles38,100 
Other long-term assets2,708 
Total assets acquired116,019 
Current liabilities4,952 
Long-term liabilities8,167 
Total liabilities assumed13,119 
Total purchase consideration$102,900 
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce and expected synergies from combining operations of Future Facilities with Cadence. The goodwill will not be deductible for tax purposes.
Definite-lived intangible assets acquired with Cadence’s acquisition of Future Facilities were as follows:
Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$20,900 6.0 years
Agreements and relationships15,600 9.0 years
Tradenames, trademarks and patents1,600 8.0 years
Total acquired intangibles with definite lives$38,100 7.3 years
Other 2022 Acquisitions
During fiscal 2022, Cadence completed three other business combinations for aggregate cash consideration of $53.6 million, net of cash acquired. The total purchase consideration was allocated to assets acquired based on their respective estimated fair values on the acquisition dates. Cadence recorded $23.1 million of acquired intangible assets, which consisted of $13.1 million of existing technology, $3.1 million of agreements and relationships, $0.1 million of tradenames, trademarks and patents, and $6.8 million of in-process technology. The weighted average amortization period for the definite-lived intangible assets acquired with these business combinations was 6.9 years. Cadence also recognized $29.5 million of goodwill, which is primarily attributed to the assembled workforce of the acquired businesses. Of the goodwill recognized with these acquisitions, $27.8 million is expected to be deductible for tax purposes.
Pro Forma Financial Information
Cadence has not presented pro forma financial information for any of the businesses it acquired during fiscal 2024, 2023 and fiscal 2022 because the results of operations for these businesses are not material to Cadence’s consolidated financial statements.
Acquisition-Related Transaction Costs
Transaction costs associated with acquisitions, which consist of professional fees and administrative costs, are expensed as incurred and are included in general and administrative expense in Cadence’s consolidated income statement. During fiscal 2024, 2023 and 2022, transaction costs associated with acquisitions were $14.6 million, $12.1 million and $10.1 million, respectively.
v3.25.0.1
GOODWILL AND ACQUIRED INTANGIBLES
12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND ACQUIRED INTANGIBLES GOODWILL AND ACQUIRED INTANGIBLES
Goodwill
The changes in the carrying amount of goodwill during fiscal 2024 and 2023 were as follows:
 Gross Carrying
Amount
 (In thousands)
Balance as of December 31, 2022$1,374,268 
Goodwill resulting from acquisitions160,083 
Effect of foreign currency translation1,494 
Balance as of December 31, 20231,535,845 
Goodwill resulting from acquisitions889,585 
Effect of foreign currency translation(46,759)
Balance as of December 31, 2024$2,378,671 
Cadence completed its annual goodwill impairment test during the third quarter of fiscal 2024 and determined that the fair value of Cadence’s single reporting unit exceeded the carrying amount of its net assets and that no impairment existed.
Acquired Intangibles, Net
Acquired intangibles as of December 31, 2024, were as follows, excluding intangibles that were fully amortized as of December 31, 2023:
Gross Carrying
Amount
Accumulated
Amortization
Acquired
Intangibles, Net
 (In thousands)
Existing technology$465,453 $(199,126)$266,327 
Agreements and relationships386,365 (78,605)307,760 
Tradenames, trademarks and patents28,113 (7,466)20,647 
Total acquired intangibles$879,931 $(285,197)$594,734 
During fiscal 2024, Cadence completed certain projects previously included in in-process technology and transferred $6.8 million to existing technology.
Acquired intangibles as of December 31, 2023, were as follows, excluding intangibles that were fully amortized as of December 31, 2022:
Gross Carrying
Amount
Accumulated
Amortization
Acquired
Intangibles, Net
 (In thousands)
Existing technology$325,710 $(141,659)$184,051 
Agreements and relationships198,259 (61,395)136,864 
Tradenames, trademarks and patents13,460 (4,332)9,128 
Total acquired intangibles with definite lives$537,429 $(207,386)$330,043 
In-process technology6,800 — 6,800 
Total acquired intangibles$544,229 $(207,386)$336,843 
Amortization expense from existing technology is included in cost of product and maintenance. Amortization expense for fiscal 2024, 2023 and 2022, by consolidated income statement caption, was as follows:
202420232022
 (In thousands)
Cost of product and maintenance$60,074 $43,808 $41,348 
Amortization of acquired intangibles30,375 18,162 18,470 
Total amortization of acquired intangibles$90,449 $61,970 $59,818 
As of December 31, 2024, the estimated amortization expense for intangible assets with definite lives was as follows for the following five fiscal years and thereafter:
 (In thousands)
2025$91,486 
202686,763 
202784,480 
202879,023 
202964,292 
Thereafter188,690 
Total estimated amortization expense$594,734 
v3.25.0.1
INCOME TAXES
12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The United States enacted the Tax Cuts and Jobs Act in December 2017, which required companies to capitalize all of their research and development (“R&D”) costs, including software development costs, incurred in tax years beginning after December 31, 2021. Beginning in fiscal 2022, Cadence began capitalizing and amortizing R&D costs over five years for domestic research and fifteen years for international research rather than expensing these costs as incurred. The mandatory capitalization requirement increased Cadence’s fiscal 2024, 2023 and 2022 effective tax rates, deferred tax assets, and cash tax payments.
Cadence’s income before provision for income taxes included income from the United States and from foreign subsidiaries for fiscal 2024, 2023 and 2022, was as follows:
202420232022
(In thousands)
United States$600,088 $533,442 $402,083 
Foreign subsidiaries795,731 748,484 643,280 
Total income before provision for income taxes$1,395,819 $1,281,926 $1,045,363 
Cadence’s provision for income taxes was comprised of the following items for fiscal 2024, 2023 and 2022:
202420232022
(In thousands)
Current:
Federal$281,674 $156,495 $212,380 
State and local50,430 15,933 7,280 
Foreign136,968 104,866 84,357 
Total current469,072 277,294 304,017 
Deferred:
Federal(130,490)(87,851)(79,170)
State and local(5,127)25,440 (50,640)
Foreign6,880 25,899 22,204 
Total deferred(128,737)(36,512)(107,606)
Total provision for income taxes$340,335 $240,782 $196,411 
During fiscal 2024, the State of California enacted legislation that, for a three-year period beginning in fiscal 2024, will limit Cadence's utilization of California research and development tax credits to $5 million annually and provides the ability to receive a refund of credits that would have otherwise been used to reduce the California tax liability. The legislation increased the cash paid for income taxes and long-term receivables for fiscal 2024 by approximately $33 million and $21 million, respectively.
During fiscal 2023, Cadence recognized a tax benefit of approximately $24.8 million due to the recognition of previously unrecognized tax benefits from the expiration of the applicable statute of limitations and a tax benefit of approximately $14.0 million primarily related to a change in R&D expenses that were capitalized in fiscal 2022.
During fiscal 2022, Cadence recognized a tax benefit of approximately $68.7 million due to a release of the valuation allowance on its California research and development tax credit deferred tax assets. In evaluating its ability to realize its deferred tax assets, Cadence considered all available positive and negative evidence, including its past operating results, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. Cadence expects to utilize these tax credits based on current earnings and future taxable income projections.
The provision for income taxes differs from the amount estimated by applying the United States statutory federal income tax rates of 21% to income before provision for income taxes for fiscal 2024, 2023, and 2022 as follows:
202420232022
(In thousands)
Provision computed at federal statutory income tax rate$293,122 $269,205 $219,526 
State and local income tax, net of federal tax effect50,130 40,304 29,622 
Intercompany transfers of intangible property rights7,833 23,826 — 
Foreign income tax rate differential(62,798)(54,210)(49,949)
Foreign-derived intangible income deduction(13,344)(14,253)(2,335)
U.S. tax on foreign entities144,222 113,011 132,563 
Stock-based compensation(6,181)(26,805)(17,023)
Change in deferred tax asset valuation allowance11,441 9,077 (38,073)
Tax credits(135,344)(130,383)(105,366)
Non-deductible acquisitions-related costs
11,770 6,709 4,273 
Withholding taxes20,175 15,300 17,459 
Tax settlements, foreign— 4,034 — 
Increase (decrease) in unrecognized tax benefits9,061 (19,660)2,354 
Other10,248 4,627 3,360 
Provision for income taxes$340,335 $240,782 $196,411 
Effective tax rate24 %19 %19 %
The components of deferred tax assets and liabilities consisted of the following as of December 31, 2024, and December 31, 2023:
As of
December 31,
2024
December 31,
2023
(In thousands)
Deferred tax assets:
Tax credit carryforwards$110,031 $129,513 
Reserves and accruals103,731 78,993 
Intangible assets487,947 506,398 
Capitalized research and development expense for income tax purposes368,085 242,465 
Operating loss carryforwards9,781 9,598 
Deferred income79,195 77,066 
Capital loss carryforwards16,861 16,483 
Stock-based compensation costs34,045 27,409 
Depreciation and amortization17,228 10,671 
Investments20,757 15,949 
Lease liability33,341 33,639 
Prepaid expenses— 3,253 
Total deferred tax assets1,281,002 1,151,437 
Valuation allowance(90,603)(79,162)
Net deferred tax assets1,190,399 1,072,275 
Deferred tax liabilities:
Intangible assets(107,251)(83,308)
Undistributed foreign earnings(76,045)(64,371)
ROU assets(33,341)(33,639)
Investments
(14,171)(6,318)
Other(7,869)(13,455)
Total deferred tax liabilities(238,677)(201,091)
Total net deferred tax assets$951,722 $871,184 
During fiscal 2024, 2023 and 2022 Cadence maintained valuation allowances of $90.6 million, $79.2 million, and $70.1 million, respectively, on certain federal, state and foreign deferred tax assets because the realization of these deferred tax assets requires future income of a specific character or amount that Cadence considered uncertain. The valuation allowance primarily relates to the following:
Tax credits in certain states that are accumulating at a rate greater than Cadence’s capacity to utilize the credits and tax credits in certain states where it is likely the credits will expire unused;
Federal, state and foreign deferred tax assets related to investments and capital losses that can only be utilized against gains that are capital in nature; and
Foreign tax credits that can only be fully utilized if Cadence has sufficient income of a specific character in the future.
The valuation allowance increased by $11.4 million and $9.1 million during fiscal 2024 and fiscal 2023, respectively, and decreased by $38.1 million during fiscal 2022. The valuation allowance activity was primarily related to state research and development tax credits and certain foreign tax credits.
As of December 31, 2024, Cadence’s operating loss carryforwards were as follows:
AmountExpiration Periods
(In thousands)
Federal$61 2033
California26,872 from 2025 through 2043
Other states (tax effected, net of federal benefit)410 from 2025 through indefinite
Foreign (tax effected)8,077 indefinite
As of December 31, 2024, Cadence had tax credit carryforwards of:
AmountExpiration Periods
(In thousands)
Federal*$51,535 from 2031
California58 indefinite
Other states 11,331 from 2033 through indefinite
Foreign 47,107 from 2044 through indefinite
_____________
*Certain of Cadence’s foreign tax credits have yet to be realized and as a result do not yet have an expiration period.
Examinations by Tax Authorities
Taxing authorities regularly examine Cadence’s income tax returns. As of December 31, 2024, Cadence’s earliest tax years that remain open to examination and the assessment of additional tax include:
JurisdictionEarliest Tax Year Open to Examination
United States – Federal2020
United States – California2020
Ireland2020
Israel2017
Korea2019
Unrecognized Tax Benefits
The changes in Cadence’s gross amount of unrecognized tax benefits during fiscal 2024, 2023 and 2022 are as follows:
202420232022
(In thousands)
Unrecognized tax benefits at the beginning of the fiscal year$94,311 $126,073 $130,530 
Gross amount of the increase (decrease) in unrecognized tax benefits of tax positions taken during a prior year*
10,109 (1,401)2,152 
Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year6,669 2,565 2,660 
Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes— (8,000)— 
Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations(3,173)(24,768)(7,430)
Effect of foreign currency translation(528)(158)(1,839)
Unrecognized tax benefits at the end of the fiscal year$107,388 $94,311 $126,073 
Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence’s effective tax rate$106,420 $93,398 $121,415 
_____________
* Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions
Cadence is currently under examination or contesting proposed adjustments by various domestic and international taxing authorities. It is reasonably possible that the amount of unrecognized tax positions could decrease by approximately $9.4 million during the next 12 months. The potential decrease could be a combination of settlements with tax authorities and expiration of statute of limitations. The actual amount could vary significantly depending on the ultimate timing and nature of any settlements or examinations in advance of statute of limitation expirations.
The total amounts of interest, net of tax, and penalties recognized in the consolidated income statements as provision for income taxes for fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands)
Interest$3,893 $2,282 $434 
Penalties143 267 
The total amounts of gross accrued interest and penalties recognized in the consolidated balance sheets as of December 31, 2024, and December 31, 2023, were as follows:
As of
December 31,
2024
December 31,
2023
(In thousands)
Interest$9,010 $4,813 
Penalties1,261 — 
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION
12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION
Equity Incentive Plans
Cadence’s Omnibus Plan provides for the issuance of both incentive and non-qualified options, restricted stock awards, restricted stock units, stock bonuses and the rights to acquire restricted stock to both executive and non-executive employees. During fiscal 2023, Cadence’s stockholders approved an amendment to the Omnibus Plan to increase the number of shares of common stock authorized for issuance by 6.5 million. As of December 31, 2024, the total number of shares available for future issuance under the Omnibus Plan was 14.0 million. Options granted under the Omnibus Plan have an exercise price not less than the fair market value of the stock on the date of grant. Options and restricted stock generally vest over a period of three years to four years. Options granted under the Omnibus Plan expire seven years from the date of grant. Vesting of restricted stock awards granted under the Omnibus Plan may require the attainment of specified performance criteria.
Cadence’s 1995 Directors Stock Incentive Plan (the “Directors Plan”) provides for the issuance of non-qualified options, restricted stock awards and restricted stock units to its non-employee directors. Options granted under the Directors Plan have an exercise price not less than the fair market value of the stock on the date of grant. As of December 31, 2024, the total number of shares available for future issuance under the Directors Plan was 0.4 million. Options granted under the Directors Plan expire after ten years, and options, restricted stock awards and restricted stock units vest one year from the date of grant.
Cadence has assumed certain options granted to employees of acquired companies (“Acquired Options”). The Acquired Options were assumed by Cadence outside of its stock option plans, and each option is administered under the terms of the respective original plans of the acquired companies. All of the Acquired Options have been adjusted for the price conversion under the terms of the acquisition agreement between Cadence and the relevant acquired company. If the Acquired Options are canceled, forfeited or expire, they do not become available for future grant.
Stock-Based Compensation
Stock-based compensation expense and the related income tax benefit recognized in connection with stock options, restricted stock and the ESPP during fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands)
Stock options$18,610 $15,939 $14,597 
Restricted stock338,082 278,567 224,887 
ESPP34,527 31,105 30,955 
Total stock-based compensation expense$391,219 $325,611 $270,439 
Income tax benefit$66,080 $50,994 $40,612 
Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2024, 2023 and 2022 as follows:
202420232022
(In thousands)
Cost of product and maintenance$6,402 $4,500 $3,818 
Cost of services8,149 5,728 4,851 
Marketing and sales77,195 66,304 54,771 
Research and development241,730 194,709 158,937 
General and administrative57,743 54,370 48,062 
Total stock-based compensation expense$391,219 $325,611 $270,439 
Stock Options
The exercise price of each stock option granted under Cadence’s employee equity incentive plans is equal to or greater than the closing price of Cadence’s common stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. The weighted average grant date fair value of options granted, and the weighted average assumptions used in the model for fiscal 2024, 2023 and 2022 were as follows:
202420232022
Dividend yieldNoneNoneNone
Expected volatility31.9 %32.6 %36.0 %
Risk-free interest rate4.34 %3.62 %2.14 %
Expected term (in years)4.85.04.8
Weighted average fair value of options granted$103.79 $71.83 $49.16 
A summary of the changes in stock options outstanding under Cadence’s equity incentive plans during fiscal 2024 is presented below:
Weighted
Average
Weighted
Average
Remaining
Contractual
Terms



Aggregate
Intrinsic
SharesExercise Price(Years)Value
(In thousands)(In thousands)
Options outstanding as of December 31, 2023
2,367 $107.93 
Granted212 297.56 
Exercised(1,231)72.19 
Forfeited(26)138.02 
Options outstanding as of December 31, 20241,322 $171.08 4.0$170,973 
Options vested as of December 31, 2024852 $141.14 3.3$135,744 
Cadence had total unrecognized compensation expense related to stock option grants of $33.3 million as of December 31, 2024, which will be recognized over the remaining vesting period. The remaining weighted average vesting period of unvested awards is 2.2 years.
The total intrinsic value of and cash received from options exercised during fiscal 2024, 2023 and 2022 was:
202420232022
(In thousands)
Intrinsic value of options exercised$266,336 $139,125 $105,242 
Cash received from options exercised88,903 30,940 16,014 
Restricted Stock
Generally, restricted stock, which includes restricted stock awards and restricted stock units, vests over three years to four years and is subject to the employee’s continuing service to Cadence. Stock-based compensation expense is recognized ratably over the vesting term. The vesting of certain restricted stock grants is subject to attainment of specified performance criteria. Each fiscal quarter, Cadence estimates the probability of the achievement of these performance goals and recognizes any related stock-based compensation expense using the graded-vesting method. The amount of stock-based compensation expense recognized in any one period can vary based on the attainment or expected attainment of the various performance goals. If such performance goals are not ultimately met, no compensation expense is recognized and any previously recognized compensation expense is reversed.
Certain long-term, market-based stock awards granted to executives vest over three to five years and are subject to certain market conditions and the executive’s continuing service to Cadence. Vesting of the market-based awards is contingent upon achieving market conditions of total shareholder return relative to a peer index. Stock-based compensation expense is recognized using the graded-vesting method over the vesting term. If the market-based conditions are not ultimately met, compensation expense previously recognized is not reversed. As of December 31, 2024, Cadence had 1.6 million shares of unvested long-term, market-based stock awards outstanding.
Cadence granted market-based awards in fiscal 2023 and fiscal 2022. No market-based awards were granted in fiscal 2024. Compensation expense is calculated using the fair value of the market-based stock awards under Monte Carlo simulation model. The weighted average assumptions used in the model for fiscal 2023 and fiscal 2022 were as follows:
20232022
Dividend yieldNoneNone
Expected volatility33.6 %29.1 %
Risk-free interest rate3.64 %1.98 %
Expected term (in years)3.85.1
Weighted average fair value of market-based awards granted
$132.20 $51.34 
Stock-based compensation expense related to performance-based restricted stock grants and market-based restricted stock grants for fiscal 2024, 2023 and 2022 was as follows:
202420232022
(In thousands)
Stock-based compensation expense related to performance-based restricted stock$29,178 $22,922 $17,753 
Stock-based compensation expense related to market-based stock awards
19,934 30,095 25,259 
A summary of the changes in restricted stock outstanding under Cadence’s equity incentive plans during fiscal 2024 is presented below:
Weighted
Average Grant Date


Aggregate
Intrinsic
SharesFair ValueValue
(In thousands)(In thousands)
Unvested shares as of December 31, 2023
5,597 $129.35 
Granted1,573 310.81 
Vested(2,233)142.37 
Forfeited(380)115.06 
Unvested shares as of December 31, 2024
4,557 $186.79 $1,153,219 
As of December 31, 2024, Cadence had total unrecognized compensation expense related to restricted stock grants of $653.0 million, which will be recognized over a weighted average vesting period of 1.7 years.
The total fair value realized by employees upon vesting of restricted stock during fiscal 2024, 2023 and 2022 was:
202420232022
(In thousands)
Fair value of restricted stock realized upon vesting$649,152 $442,556 $346,003 
Employee Stock Purchase Plan
Cadence provides an ESPP that enables eligible employees to purchase shares of its common stock. Offering periods under the plan last a duration of six months beginning on either February 1 or August 1, with the purchase dates falling on the last day of the six-month offering period. For the offering periods commencing after February 1, 2022, eligible employees may purchase Cadence’s common stock at a price equal to 85% of the lower of the fair market value at the beginning or the end of the applicable offering period, in an amount not to exceed 15% of their annual base earnings plus bonuses and commissions, and subject to a limit in any calendar year of $25,000. The ESPP may be amended from time to time. During fiscal 2024, Cadence's stockholders approved an amendment to Cadence's Employee Stock Purchase Plan to increase the number of shares of common stock authorized for issuance by 3.5 million. As of December 31, 2024, the total number of shares available for future issuance under the ESPP was 6.2 million.
Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes option pricing model. The weighted average grant date fair value of purchase rights granted under the ESPP and the weighted average assumptions used in the model for fiscal 2024, 2023 and 2022 were as follows:
202420232022
Dividend yieldNoneNoneNone
Expected volatility32.1 %29.9 %37.2 %
Risk-free interest rate5.11 %4.50 %1.71 %
Expected term (in years)0.50.50.5
Weighted average fair value of purchase rights granted
$65.50 $50.95 $43.41 
Shares of common stock issued under the ESPP for fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands, except per share amounts)
Cadence shares purchased under the ESPP548 647 703 
Cash received for the purchase of shares under the ESPP$115,335 $102,017 $89,314 
Weighted average purchase price per share$210.31 $157.70 $127.12 
Reserved for Future Issuance
As of December 31, 2024, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:
Shares
(In thousands)
Employee equity incentive plans*18,456 
Employee stock purchase plans6,232 
Directors stock plans*431 
    Total25,119 
_____________
*Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units.
v3.25.0.1
STOCK REPURCHASE PROGRAMS
12 Months Ended
Dec. 31, 2024
Class of Stock Disclosures [Abstract]  
STOCK REPURCHASE PROGRAMS STOCK REPURCHASE PROGRAMS
Cadence is authorized to repurchase shares of its common stock under a publicly announced program that was most recently increased by its Board of Directors in August 2023. The actual timing and amount of repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.
During fiscal 2024, Cadence repurchased approximately 1.9 million shares on the open market for an aggregate purchase price of $550.0 million. As of December 31, 2024, approximately $0.8 billion of the share repurchase authorization remained available to repurchase shares of Cadence common stock.
During fiscal 2023, Cadence repurchased approximately 2.3 million shares on the open market for an aggregate purchase price of $500.0 million. In June 2023, Cadence also entered into an accelerated share repurchase (“ASR”) agreement with HSBC Bank USA, National Association (“HSBC”) to repurchase an aggregate of $200.0 million of Cadence common stock. The ASR agreement was accounted for as two separate transactions (1) a repurchase of common stock and (2) an equity-linked contract on Cadence’s own stock. In June 2023, Cadence received an initial share delivery of approximately 0.6 million shares, which represented the number of shares at a market price equal to $140.0 million. An equity-linked contract for $60.0 million, representing the remaining shares to be delivered by HSBC under the ASR agreement, was recorded to stockholders' equity as of June 30, 2023. In August 2023, the ASR agreement settled and resulted in a delivery of approximately 0.3 million additional shares to Cadence. In total, Cadence received approximately 0.9 million shares under the ASR agreement at an average price per share of $228.26. The shares received were treated as repurchased common stock for purposes of calculating earnings per share.
During fiscal 2022, Cadence repurchased approximately 6.0 million shares on the open market for an aggregate purchase price of $950.1 million. In June 2022, Cadence also entered into an ASR agreement with Royal Bank of Canada to repurchase an aggregate of $100.0 million of Cadence common stock. The ASR agreement was accounted for as two separate transactions (1) a repurchase of common stock and (2) an equity-linked contract on Cadence’s own stock. In June 2022, Cadence received an initial share delivery of approximately 0.5 million shares, which represented the number of shares at a market price equal to $70.0 million. An equity-linked contract for $30.0 million, representing the remaining shares to be delivered by Royal Bank of Canada under the ASR agreement, was recorded to stockholders’ equity. In September 2022, the ASR agreement settled and resulted in a delivery to Cadence of approximately 0.1 million additional shares. In total, approximately 0.6 million shares were repurchased under the ASR agreement at an average price per share of $167.07. The shares received were treated as a repurchase of common stock for purposes of calculating earnings per share.
The shares repurchased under Cadence’s repurchase authorizations and the total cost of repurchased shares, including commissions, during fiscal 2024, 2023 and 2022 were as follows:
20242023*2022**
(In thousands)
Shares repurchased1,930 3,145 6,602 
Total cost of repurchased shares$550,026 $700,134 $1,050,091 
_____________
*Includes 276 thousand shares and $60 million equity forward contract from the June 2023 ASR settled in August 2023, and excludes $0.9 million of excise tax.
**Includes 109 thousand shares and $30 million equity forward contract from the June 2022 ASR settled in September 2022.
v3.25.0.1
RESTRUCTURING AND OTHER CHARGES
12 Months Ended
Dec. 31, 2024
Restructuring and Related Activities [Abstract]  
RESTRUCTURING AND OTHER CHARGES RESTRUCTURING AND OTHER CHARGES
From time to time, Cadence has initiated various restructuring plans in an effort to better align its resources with its business strategy. The most recent of these plans was initiated in August 2024 (the “2024 Restructuring Plan”). The charges incurred with the 2024 Restructuring Plan were comprised of severance payments and termination benefits related to headcount reductions and are included in restructuring on Cadence’s consolidated income statements.
The following table presents activity for Cadence’s restructuring plans during fiscal 2024, 2023 and 2022:
Severance
and
Benefits
Excess
Facilities
Total
(In thousands)
Balance, January 1, 2022$— $43 $43 
Restructuring— 55 55 
Cash payments— (98)(98)
Effect of foreign currency translation— — — 
Balance, December 31, 2022$— $— $— 
Restructuring10,935 78 11,013 
Non-cash changes
— (78)(78)
Cash payments(8,211)— (8,211)
Effect of foreign currency translation(121)— (121)
Balance, December 31, 2023$2,603 $— $2,603 
Restructuring 22,735 1,030 23,765 
Non-cash changes
— (1,030)(1,030)
Cash payments(20,464)— (20,464)
Effect of foreign currency translation(147)— (147)
Balance, December 31, 2024$4,727 $— $4,727 
All liabilities for severance and related benefits under the 2024 Restructuring Plan are included in accounts payable and accrued liabilities on Cadence’s consolidated balance sheet as of December 31, 2024. Cadence expects to make cash payments to settle these liabilities through fiscal 2025.
v3.25.0.1
OTHER INCOME (EXPENSE), NET
12 Months Ended
Dec. 31, 2024
Other Income and Expenses [Abstract]  
OTHER INCOME (EXPENSE), NET OTHER INCOME (EXPENSE), NET
Cadence’s other income (expense), net, for fiscal 2024, 2023 and 2022 was as follows:
 202420232022
 (In thousands)
Interest income$62,484 $29,637 $10,099 
Gains (losses) on investments
49,593 34,602 (5,425)
Gains (losses) on securities in NQDC trust11,145 10,851 (8,744)
Losses on foreign exchange(965)(5,490)(459)
Other expense, net(1,202)(2,714)(860)
Total other income (expense), net$121,055 $66,886 $(5,389)
For additional information relating to Cadence’s investment activity, see Note 14 in the notes to consolidated financial statements.
v3.25.0.1
NET INCOME PER SHARE
12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
NET INCOME PER SHARE NET INCOME PER SHARE
Basic net income per share is computed by dividing net income during the period by the weighted average number of shares of common stock outstanding during that period, less unvested restricted stock awards. Diluted net income per share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock method of accounting.
The calculations for basic and diluted net income per share for fiscal 2024, 2023 and 2022 are as follows:
 202420232022
 (In thousands, except per share amounts)
Net income$1,055,484 $1,041,144 $848,952 
Weighted average common shares used to calculate basic net income per share271,212 269,381 271,198 
Stock-based awards2,621 3,367 3,813 
Weighted average common shares used to calculate diluted net income per share273,833 272,748 275,011 
Net income per share – basic$3.89 $3.86 $3.13 
Net income per share – diluted$3.85 $3.82 $3.09 
The following table presents shares of Cadence’s common stock outstanding for fiscal 2024, 2023 and 2022 that were excluded from the computation of diluted net income per share because the effect of including these shares in the computation of diluted net income per share would have been anti-dilutive: 
 202420232022
 (In thousands)
Long-term market-based awards— 1,381 1,565 
Options to purchase shares of common stock 184 345 716 
Non-vested shares of restricted stock258 232 88 
Total potential common shares excluded442 1,958 2,369 
v3.25.0.1
INVESTMENTS
12 Months Ended
Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
INVESTMENTS INVESTMENTS
Investments in Equity Securities
Marketable Equity Investments
Cadence’s investments in marketable equity securities consist of purchased shares of publicly held companies and are included in prepaid expenses and other in Cadence’s consolidated balance sheets. Changes in the fair value of these investments are recorded to other income (expense), net in Cadence’s consolidated income statements. The carrying value of marketable equity investments was $90.4 million and $80.6 million as of December 31, 2024, and December 31, 2023, respectively.
Non-Marketable Equity Investments
Cadence’s investments in non-marketable equity securities generally consist of stock or other instruments of privately held entities and are included in other assets on Cadence’s consolidated balance sheets. Cadence holds a 16% interest in a privately held company that is accounted for using the equity method of accounting. The carrying value of this investment was $97.5 million and $111.1 million as of December 31, 2024 and December 31, 2023, respectively.
Cadence records its proportionate share of net income from the investee, offset by amortization of basis differences, to other income, net in Cadence’s consolidated income statements. Cadence recognized losses of $2.5 million, $2.7 million and $3.6 million during fiscal 2024, 2023 and 2022, respectively.
Cadence also holds other non-marketable investments in privately held companies where Cadence does not have the ability to exercise significant influence and the fair value of the investments is not readily determinable. The carrying value of these investments was $26.6 million and $27.2 million as of December 31, 2024 and December 31, 2023, respectively. Gains and losses on these investments were not material to Cadence’s consolidated financial statements for the periods presented.
The portion of gains and losses included in Cadence’s consolidated income statements related to equity securities still held at the end of the period were as follows:
202420232022
(In thousands)
Net gains (losses) recognized on equity securities
$49,653 $34,651 $(5,336)
Less: Net gains recognized on equity securities sold
(20,367)(12,283)— 
Net gains (losses) recognized on equity securities still held
$29,286 $22,368 $(5,336)
Investments in Debt Securities
The following is a summary of Cadence’s available-for-sale debt securities recorded within prepaid expenses and other on its consolidated balance sheets:
 As of December 31, 2024
  Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated
Fair Value
 (In thousands)
Available-for-sale debt securities
Mortgage-backed and asset-backed securities$50,604 $230 $(582)$50,252 
Total available-for-sale securities$50,604 $230 $(582)$50,252 
 
As of December 31, 2023
  Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated
Fair Value
 (In thousands)
Available-for-sale debt securities
Mortgage-backed and asset-backed securities$49,653 $375 $(243)$49,785 
Total available-for-sale securities$49,653 $375 $(243)$49,785 
Gross unrealized gains and losses are recorded as a component of accumulated other comprehensive loss on Cadence’s consolidated balance sheets. As of December 31, 2024, the fair value of available-for-sale debt securities in a continuous unrealized loss position for greater than 12 months was $6.0 million, and the unrealized losses on these securities were not material.
As of December 31, 2024, the fair values of available-for-sale debt securities, by remaining contractual maturity, were as follows:
 (In thousands)
Due within 1 year
$569 
Due after 1 year through 5 years9,294 
Due after 5 years through 10 years17,882 
Due after 10 years22,507 
Total$50,252 
As of December 31, 2024, Cadence did not intend to sell any of its available-for-sale debt securities in an unrealized loss position, and it was more likely than not that Cadence will hold the securities until maturity or a recovery of the cost basis.
v3.25.0.1
FAIR VALUE
12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
Inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Cadence’s market assumptions. These two types of inputs have created the following fair value hierarchy:
Level 1 – Quoted prices for identical instruments in active markets;
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
This hierarchy requires Cadence to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. Cadence recognizes transfers between levels of the hierarchy based on the fair values of the respective financial instruments at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during the fiscal years presented.
On a quarterly basis, Cadence measures at fair value certain financial assets and liabilities. The fair value of financial assets and liabilities was determined using the following levels of inputs as of December 31, 2024, and December 31, 2023:
 Fair Value Measurements as of December 31, 2024
  TotalLevel 1Level 2Level 3
 (In thousands)
Assets
Cash equivalents:
Money market funds$1,700,084 $1,700,084 $— $— 
Marketable securities:
Marketable equity securities90,374 90,374 — — 
Mortgage-backed and asset-backed securities50,252 — 50,252 — 
Securities held in NQDC trust96,450 96,450 — — 
Total Assets$1,937,160 $1,886,908 $50,252 $— 
  TotalLevel 1Level 2Level 3
 (In thousands)
Liabilities
Foreign currency exchange contracts7,533 — 7,533 — 
Total Liabilities$7,533 $— $7,533 $— 
 Fair Value Measurements as of December 31, 2023
  TotalLevel 1Level 2Level 3
 (In thousands)
Assets
Cash equivalents:
Money market funds$490,983 $490,983 $— $— 
Marketable securities:
Marketable equity securities80,575 80,575 — — 
Mortgage-backed and asset-backed securities49,785 — 49,785 — 
Securities held in NQDC trust75,671 75,671 — — 
Foreign currency exchange contracts9,327 — 9,327 — 
Total Assets$706,341 $647,229 $59,112 $— 
As of December 31, 2023, Cadence did not have any financial liabilities requiring a recurring fair value measurement.
Level 1 Measurements
Cadence’s cash equivalents held in money market funds, marketable equity securities and the trading securities held in Cadence’s NQDC trust are measured at fair value using Level 1 inputs.
Level 2 Measurements
The valuation techniques used to determine the fair value of Cadence’s investments in marketable debt securities, foreign currency forward exchange contracts and Senior Notes are classified within Level 2 of the fair value hierarchy. For additional information relating to Cadence’s debt arrangements, see Note 5 in the notes to consolidated financial statements.
Level 3 Measurements
During fiscal 2024, Cadence acquired intangible assets of $366.0 million, primarily through its acquisitions of BETA CAE and Invecas. The fair value of the intangible assets acquired was determined using variations of the income approach that utilizes unobservable inputs classified as Level 3 measurements.
For existing technology, the fair value was determined by applying the relief-from-royalty method. This method is based on the application of a royalty rate to forecasted revenue to quantify the benefit of owning the intangible asset rather than paying a royalty for use of the asset. To estimate royalty savings over time, Cadence projected revenue from the acquired existing technology over the estimated remaining life of the technology, including the effect of assumed technological obsolescence, before applying an assumed royalty rate. Cadence assumed technological obsolescence at a rate of 10% annually, before applying an assumed royalty rate of 30% and a discount rate of 10%.
For agreements and relationships, the fair value was determined by using the multi-period excess earnings method. This method reflects the present value of the projected cash flows that are expected to be generated from existing customers, less charges representing the contribution of other assets to those cash flows. Projected income from existing customer relationships was determined using customer retention rates between 85% and 92%. The present value of operating cash flows from existing customers was determined using discount rates between 10% and 14%.
During fiscal 2023, Cadence acquired intangible assets of $41.0 million. The fair value of the intangible assets acquired was determined using variations of the income approach that utilizes unobservable inputs classified as Level 3 measurements.
For existing technology, the fair value was determined by applying the relief-from-royalty method. This method is based on the application of a royalty rate to forecasted revenue to quantify the benefit of owning the intangible asset rather than paying a royalty for use of the asset. To estimate royalty savings over time, Cadence projected revenue from the acquired existing technology over the estimated remaining life of the technology, including the effect of assumed technological obsolescence, before applying an assumed royalty rate. Cadence assumed technological obsolescence at rates between 10% and 13% annually, before applying an assumed royalty rate between 25% and 30%.
For agreements and relationships, the fair value was determined by using the multi-period excess earnings method. This method reflects the present value of the projected cash flows that are expected to be generated from existing customers, less charges representing the contribution of other assets to those cash flows. Projected income from existing customer relationships was determined using customer retention rates between 70% and 90%. The present value of operating cash flows from existing customers was determined using discount rates between 12% and 15%.
Cadence believes that its estimates and assumptions related to the fair value of its acquired intangible assets and assumed liabilities are reasonable, but significant judgment is involved.
v3.25.0.1
BALANCE SHEET COMPONENTS
12 Months Ended
Dec. 31, 2024
Disclosure Text Block Supplement [Abstract]  
Balance Sheet Components [Text Block] BALANCE SHEET COMPONENTS
A summary of certain balance sheet components as of December 31, 2024, and December 31, 2023, is as follows:
As of
December 31,
2024
December 31,
2023
(In thousands)
Inventories:
Raw materials$243,244 $162,754 
Work-in-process
1,216 — 
Finished goods13,251 18,907 
Inventories$257,711 $181,661 
Prepaid expenses and other:
Short-term investments
140,625 130,359 
Other prepaid expenses and other assets293,253 166,821 
Prepaid expenses and other$433,878 $297,180 
Property, plant and equipment:
Equipment and internal-use software
$875,399 $781,683 
Buildings137,781 131,882 
Land57,687 56,641 
Leasehold, building and land improvements245,669 211,854 
Furniture and fixtures43,517 39,998 
In-process capital assets14,879 17,937 
Total cost1,374,932 1,239,995 
Less: Accumulated depreciation and amortization(916,732)(836,782)
Property, plant and equipment, net$458,200 $403,213 
Other assets:
Non-marketable investments$124,086 $138,321 
ROU lease assets146,190 150,797 
Other long-term assets274,465 248,254 
Other assets$544,741 $537,372 
Accounts payable and accrued liabilities:
Trade accounts payable
$5,555 $91,194 
Payroll and payroll-related accruals335,232 294,108 
Other accrued operating liabilities291,905 191,256 
Accounts payable and accrued liabilities$632,692 $576,558 
Other long-term liabilities:
Operating lease liabilities$108,893 $115,358 
Other accrued liabilities230,555 160,293 
Other long-term liabilities$339,448 $275,651 
v3.25.0.1
LEASES
12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Lessee, Operating Leases LEASES
Operating lease expense, which includes immaterial amounts of short-term leases, variable lease costs and sublease income, was as follows during fiscal 2024, 2023 and 2022:
202420232022
(In thousands)
Operating lease expense$61,827 $56,805 $49,165 
Additional activity related to Cadence’s leases during fiscal 2024, 2023 and 2022 was as follows:
202420232022
(In thousands)
Cash paid for amounts included in the measurement of operating lease liabilities$49,978 $46,069 $34,334 
ROU assets obtained in exchange for operating lease obligations42,614 32,597 83,758 
ROU lease assets and lease liabilities for Cadence’s operating leases were recorded in the consolidated balance sheets as follows:
As of
December 31,
2024
December 31,
2023
(In thousands)
Other assets$146,190 $150,797 
Accounts payable and accrued liabilities41,554 41,619 
Other long-term liabilities108,893 115,358 
Total lease liabilities$150,447 $156,977 
Weighted average remaining lease term (in years)5.35.7
Weighted average discount rate%%
Future lease payments included in the measurement of lease liabilities on the consolidated balance sheet as of December 31, 2024, for the following five fiscal years and thereafter were as follows:
Operating
 Leases
(In thousands)
2025$45,456 
202636,750 
202723,178 
202819,048 
202915,136 
Thereafter29,783 
Total future lease payments169,351 
Less imputed interest(18,904)
Total lease liability balance$150,447 
As of December 31, 2024, Cadence had additional operating lease obligations of approximately $4.2 million for facility leases that will commence in 2025.
v3.25.0.1
COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES COMMITMENTS AND CONTINGENCIES
Purchase Obligations
Cadence had purchase obligations of $78.3 million as of December 31, 2024, that were associated with agreements or commitments for purchases of goods or services. Cadence expects to settle these obligations in the following five fiscal years and thereafter as follows:
Purchase
Obligations
(In thousands)
2025$58,893 
202616,084 
20271,951 
20281,204 
2029130 
Thereafter— 
Total
78,262 
Legal Proceedings
From time to time, Cadence is involved in various disputes and litigation that arise in the ordinary course of business. These include disputes and legal proceedings related to IP, indemnification obligations, mergers and acquisitions, licensing, contracts, customers, products, distribution and other commercial arrangements and employee relations matters. Cadence is also subject from time to time to inquiries, investigations and regulatory proceedings involving governments and regulatory agencies in the jurisdictions in which Cadence operates, including the ongoing investigations by the Bureau of Industry and Security (“BIS”) of the U.S. Department of Commerce and the U.S. Department of Justice (“DOJ”) regarding certain historical sales by Cadence to customers in China. At least quarterly, Cadence reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on Cadence’s judgments using the best information available at the time. As additional information becomes available, Cadence reassesses the potential liability related to pending claims and legal proceedings and may revise estimates.
As previously disclosed, Cadence has been responding to subpoenas received from BIS in February 2021 and DOJ in November 2023 regarding sales and business activity in China. In December 2024, Cadence began discussions with BIS and DOJ regarding their preliminary findings and a potential resolution. Although Cadence believes it has defenses to the potential claims, Cadence recorded an estimated probable liability as of December 31, 2024 that is immaterial to Cadence's consolidated financial statements. Actual losses could differ materially.
Tax Proceedings
In December 2022, Cadence received a tax audit assessment, primarily related to value-added taxes, of approximately $49 million from the Korea taxing authorities for years 2017-2019. Cadence was required to pay these assessed taxes, prior to being allowed to contest or litigate the assessment in administrative and judicial proceedings. The assessment was paid by Cadence in January 2023 and was recorded as a component of other assets in the consolidated balance sheets. During August 2024, the Tax Tribunal cancelled the entire tax audit assessment, and during the fourth quarter of fiscal 2024, Cadence received a refund of the payment previously made to the Korea taxing authorities plus interest.
Other Contingencies
Cadence provides its customers with a warranty on sales of hardware products, generally for a 90-day period. Cadence did not incur any significant costs related to warranty obligations during fiscal 2024, 2023 or 2022.
Cadence’s product license and services agreements typically include a limited indemnification provision for claims from third parties relating to Cadence’s IP. If the potential loss from any indemnification claim is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss.
Cadence did not incur any material losses from indemnification claims during fiscal 2024, 2023 or 2022.
v3.25.0.1
EMPLOYEE AND DIRECTOR BENEFIT PLANS
12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
EMPLOYEE AND DIRECTOR BENEFIT PLANS EMPLOYEE AND DIRECTOR BENEFIT PLANS
Cadence maintains various defined contribution plans for its eligible U.S. and non-U.S. employees. For employees in the United States, Cadence maintains a 401(k) savings plan to provide retirement benefits through tax-deferred salary deductions and may make discretionary contributions, as determined by the Board of Directors, which cannot exceed a specified percentage of the annual aggregate salaries of those employees eligible to participate. Cadence’s total contributions made to these plans during fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands)
Contributions to defined contribution plans$45,164 $39,651 $35,464 
Executive Officers and Directors may also elect to defer compensation payable to them under Cadence’s NQDC. Deferred compensation payments are held in investment accounts and the values of the accounts are adjusted each quarter based on the fair value of the investments held in the NQDC. These investments are classified in other assets in the consolidated balance sheets and gains and losses are recognized as other income (expense), net in the consolidated income statements.
Certain of Cadence’s international subsidiaries sponsor defined benefit retirement plans. The unfunded projected benefit obligation for Cadence’s defined benefit retirement plans is recorded in other long-term liabilities in the consolidated balance sheets.
v3.25.0.1
ACCUMULATED OTHER COMPREHENSIVE LOSS
12 Months Ended
Dec. 31, 2024
Other Comprehensive Income (Loss), Net of Tax [Abstract]  
ACCUMULATED OTHER COMPREHENSIVE LOSS ACCUMULATED OTHER COMPREHENSIVE LOSS
Cadence’s accumulated other comprehensive loss is comprised of the aggregate impact of foreign currency translation gains and losses, changes in defined benefit plan liabilities and unrealized gains and losses on investments and is presented in Cadence’s consolidated statements of comprehensive income.
Accumulated other comprehensive loss was comprised of the following as of December 31, 2024, and December 31, 2023:
As of
December 31,
2024
December 31,
2023
 (In thousands)
Foreign currency translation loss$(178,611)$(90,678)
Changes in defined benefit plan liabilities(4,447)(4,208)
Unrealized losses on derivatives designated as hedging instruments
(7,038)— 
Unrealized gains (losses) on available-for-sale debt securities
(352)132 
Total accumulated other comprehensive loss$(190,448)$(94,754)
During the third quarter of fiscal 2024, in anticipation of issuing the New Notes, Cadence entered into a series of treasury lock agreements which fixed benchmark U.S. Treasury rates for an aggregate notional amount of $850 million to hedge the impact of changes in the benchmark interest rate on future interest payments. Upon issuance of the New Notes in September 2024, Cadence settled the treasury lock agreements and incurred a loss of $9.7 million, which will be amortized to interest expense using the effective interest method over the term of the 2034 Notes.
For fiscal 2024, 2023 and 2022, there were no significant amounts related to foreign currency translation loss or changes in defined benefit plan liabilities reclassified to net income from accumulated other comprehensive loss.
v3.25.0.1
SEGMENT REPORTING
12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
SEGMENT REPORTING SEGMENT REPORTING
Segment reporting is based on the “management approach,” following the method that management organizes the company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the chief operating decision maker in allocating resources and in assessing performance. Cadence operates as one operating segment. Cadence’s chief operating decision maker (“CODM”) is its CEO. The CODM makes decisions on resource allocation and assesses performance of the business based on Cadence’s consolidated results, including net income.
For additional information on Cadence’s revenue, including the nature and timing of revenue from contracts with customers, see Note 3 in the notes to consolidated financial statements. The following table presents revenue, significant expenses and net income for fiscal 2024, 2023 and 2022:
 202420232022
 (In thousands)
Revenue
4,641,264 4,089,986 3,561,718 
Costs and Expenses:
Salary, benefits and other employee-related costs
1,936,542 1,754,223 1,574,910 
Stock based compensation
391,219 325,611 270,439 
Manufacturing costs
330,903 232,012 173,160 
Facilities and other infrastructure costs
174,102 156,977 139,150 
Depreciation and amortization
196,935 145,292 132,088 
Professional Services
153,439 117,752 117,442 
Restructuring
23,765 11,013 55 
Other segment items (1)
25,025 58,632 96,276 
Interest income(62,484)(29,637)(10,099)
Interest expense75,999 36,185 22,934 
Provision for income taxes340,335 240,782 196,411 
Net income$1,055,484 $1,041,144 $848,952 
_____________
(1) Other segment items includes direct costs for advertising, marketing events, travel, entertainment, bad debt and other operating expense categories that are not considered significant individually. It also includes non-operating expenses such as gains and losses on investments, foreign currency and other non-operating expenses that are not considered significant individually.
Outside the United States, Cadence markets and supports its products and services primarily through its subsidiaries. Revenue is attributed to geography based upon the country in which the product is used, or services are delivered. Long-lived assets are attributed to geography based on the country where the assets are located.
The following table presents a summary of revenue by geography for fiscal 2024, 2023 and 2022:
 202420232022
 (In thousands)
Americas:
United States$2,159,703 $1,694,529 $1,577,881 
Other Americas93,101 65,259 53,123 
Total Americas2,252,804 1,759,788 1,631,004 
Asia:
China573,096 679,538 521,509 
Other Asia855,919 766,409 629,533 
Total Asia1,429,015 1,445,947 1,151,042 
Europe, Middle East and Africa699,241 655,078 582,350 
Japan260,204 229,173 197,322 
Total$4,641,264 $4,089,986 $3,561,718 
The following table presents a summary of long-lived assets by geography as of December 31, 2024, December 31, 2023, and December 31, 2022: 
 As of
 December 31,
2024
December 31,
2023
December 31,
2022
 (In thousands)
Americas:
United States$412,339 $383,807 $347,822 
Other Americas7,437 10,219 7,548 
Total Americas419,776 394,026 355,370 
Asia:
China22,929 29,598 51,667 
Other Asia83,951 71,365 73,329 
Total Asia106,880 100,963 124,996 
Europe, Middle East and Africa73,551 56,449 56,959 
Japan4,183 2,572 4,505 
Total$604,390 $554,010 $541,830 
v3.25.0.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Pay vs Performance Disclosure      
Net Income (Loss) $ 1,055,484 $ 1,041,144 $ 848,952
v3.25.0.1
Insider Trading Arrangements
3 Months Ended
Dec. 31, 2024
shares
Trading Arrangements, by Individual  
Material Terms of Trading Arrangement
During the fiscal quarter ended December 31, 2024, our directors and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated the contracts, instructions or written plans for the purchase or sale of our securities set forth in the table below.
Type of Trading Arrangement
Name and PositionActionAdoption/ Termination
Date
Rule 10b5-1*Total Shares of Common Stock to be SoldExpiration Date
Ita Brennan, Director
Adoption
12/12/2024
X
Up to 720
3/16/2026
* Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
Ita Brennan [Member]  
Trading Arrangements, by Individual  
Name Ita Brennan
Title Director
Rule 10b5-1 Arrangement Adopted true
Adoption Date 12/12/2024
Expiration Date 3/16/2026
Arrangement Duration 459 days
Aggregate Available 720
v3.25.0.1
Insider Trading Policies and Procedures
12 Months Ended
Dec. 31, 2024
Insider Trading Policies and Procedures [Line Items]  
Insider Trading Policies and Procedures Adopted true
v3.25.0.1
Cybersecurity Risk Management and Strategy Disclosure
12 Months Ended
Dec. 31, 2024
Cybersecurity Risk Management, Strategy, and Governance [Line Items]  
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block]
We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information, including our customers’, vendors’, partners’ and employees’ data, including personal information.
Our cybersecurity risk management program is guided by frameworks and standards promulgated by the EU, National Institute of Standards and Technology, Cloud Security Alliance (“CSA”) and International Organization for Standardization/International Electrotechnical Commission (“ISO/IEC”). While we seek to maintain ISO/IEC 27001:2013 and ISO/IEC 27017:2015 certifications, and seek to achieve the SOC 2 Type 1 and Type 2 attestations, this does not imply that we specifically or comprehensively comply with technical specification or requirements, only that we use all the above-mentioned standards and regulations as a guide to help us identify, assess and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program is integrated into our overall risk oversight strategy and utilizes common reporting channels and governance processes that apply across other risk areas. We have a dedicated Chief Information Security Officer (“CISO”), who leads our Information Security team responsible for managing our cybersecurity processes, strategy and controls. Certain members of our Information Security team hold cybersecurity certifications, including the Certified Information Systems Security Professional (“CISSP”) and the Certified Information Systems Auditor (“CISA”) designations.
Our cybersecurity risk management program includes:
a security incident response plan that includes procedures for responding to cybersecurity incidents;
risk assessment processes designed to help identify cybersecurity risks to our critical systems, information, products, services and our broader enterprise IT environment;
our Information Security team, principally responsible for identifying and mitigating cybersecurity risks, and managing our security controls and our response to cybersecurity incidents;
the use of external service providers, where appropriate, to assess, test (including penetration test) or otherwise assist with certain aspects of our security controls and processes;
global security operations center services through certain service providers;
implementation of new hire and annual data privacy and cybersecurity training of employees, including senior management, and cybersecurity governance training for our Board of Directors;
a cybersecurity insurance policy to cover certain types of costs and losses from cybersecurity incidents; and
a third-party risk management process, including risk assessment and risk rating (using common vulnerability scoring system or similar methodologies based on industry practices), for certain service providers, suppliers and vendors.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Cybersecurity Risk Management Processes Integrated [Flag] true
Cybersecurity Risk Management Processes Integrated [Text Block] Our cybersecurity risk management program is integrated into our overall risk oversight strategy and utilizes common reporting channels and governance processes that apply across other risk areas.
Cybersecurity Risk Management Third Party Engaged [Flag] true
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] true
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] false
Cybersecurity Risk Board of Directors Oversight [Text Block]
Our Board of Directors is responsible for overseeing our enterprise risk management activities in general, and our Board committees assist with certain aspects of risk oversight. With respect to cybersecurity risk, our Board of Directors shares certain of the oversight responsibility and processes with the Audit Committee of the Board of Directors (“Audit Committee”).
The Audit Committee, comprised entirely of independent directors, reviews and discusses with management our guidelines, policies and practices regarding risk assessment and risk management as they relate to our financial condition, and oversees our financial risk exposures, including planning regarding business continuity and cybersecurity. In addition, the Audit Committee oversees our annual enterprise business risk assessment, which includes the review of cybersecurity risks we face and our associated risk mitigation measures, and receives semi-annual reports from management on cybersecurity matters, including areas such as threat intelligence, major cybersecurity risk areas, regulations and cybersecurity incidents. In addition, management updates the Audit Committee, as necessary, regarding significant cybersecurity incidents, as well as any incidents with lesser impact potential.
The Audit Committee reports to the Board of Directors regarding its activities related to cybersecurity. In addition, the Board of Directors also directly receives reports from management on our cybersecurity risk profile and on the performance of our data privacy and cybersecurity risk management program, semi-annually in alternating quarters with the Audit Committee.
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] The Audit Committee, comprised entirely of independent directors, reviews and discusses with management our guidelines, policies and practices regarding risk assessment and risk management as they relate to our financial condition, and oversees our financial risk exposures, including planning regarding business continuity and cybersecurity.
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block]
The Audit Committee reports to the Board of Directors regarding its activities related to cybersecurity. In addition, the Board of Directors also directly receives reports from management on our cybersecurity risk profile and on the performance of our data privacy and cybersecurity risk management program, semi-annually in alternating quarters with the Audit Committee.
Cybersecurity Risk Role of Management [Text Block]
Our management team, including our Chief Information Officer (“CIO”), CISO and the General Counsel, is responsible for assessing and managing material risks from cybersecurity threats, including supervision of our internal security incident response team and our Disclosure Committee comprised of certain of our employees (including any applicable subcommittees thereof). Our management team has relevant expertise in the following:(i) understanding of cybersecurity risks in enterprise operations, including information technology, information security, product security, physical security and legal, (ii) experience in overseeing risk management and understanding risks faced by enterprise operations and (iii) significant operating experience allowing them to provide insight into developing, implementing and assessing our operating plan. In addition, our CISO has over 30 years of broad cybersecurity and information technology risk management experience, is a Certified Information Security Manager (“CISM”) and holds a Master's Degree in computer science and information systems.
Our management team supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents, and is responsible for oversight and management of our cybersecurity risk management program. Our management team receives briefings from our internal Information Security team and the Disclosure Committee whenever applicable. Such briefings include information regarding threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in our information technology environment. Our management team also provides quarterly cybersecurity risk management program updates, to the Board of Directors or to the Audit Committee, in alternating quarters.
Cybersecurity Risk Management Positions or Committees Responsible [Flag] true
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] Our management team, including our Chief Information Officer (“CIO”), CISO and the General Counsel, is responsible for assessing and managing material risks from cybersecurity threats, including supervision of our internal security incident response team and our Disclosure Committee comprised of certain of our employees (including any applicable subcommittees thereof).
Cybersecurity Risk Management Expertise of Management Responsible [Text Block] Our management team has relevant expertise in the following:(i) understanding of cybersecurity risks in enterprise operations, including information technology, information security, product security, physical security and legal, (ii) experience in overseeing risk management and understanding risks faced by enterprise operations and (iii) significant operating experience allowing them to provide insight into developing, implementing and assessing our operating plan. In addition, our CISO has over 30 years of broad cybersecurity and information technology risk management experience, is a Certified Information Security Manager (“CISM”) and holds a Master's Degree in computer science and information systems.
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] Our management team receives briefings from our internal Information Security team and the Disclosure Committee whenever applicable. Such briefings include information regarding threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us, and alerts and reports produced by security tools deployed in our information technology environment.
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] true
v3.25.0.1
Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Cadence and its subsidiaries after elimination of intercompany accounts and transactions. All consolidated subsidiaries are wholly owned by Cadence. Certain prior year information has been reclassified to conform to the current year presentation.
Historically, Cadence’s fiscal years were 52- or 53-week periods ending on the Saturday closest to December 31. During fiscal 2022, Cadence’s Board of Directors approved a change in its fiscal year end from the Saturday closest to December 31 of each year to December 31 of each year. The fiscal year change became effective beginning with Cadence’s 2023 fiscal year, which began on January 1, 2023. Fiscal year 2022, which is included in this report for comparative purposes, represents a 52-week period.
Cadence’s first three fiscal quarters end on March 31, June 30, and September 30.
Use of Estimates
Preparation of the consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
New Accounting Pronouncements
Recently Adopted Accounting Standards
Segment Reporting
In November 2023. the Financial Accounting Standards Board (“FASB”), issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” intended to improve reportable segment disclosure requirements, primarily through enhanced annual and interim disclosures about significant segment expenses. Cadence adopted this ASU retrospectively during fiscal 2024. See Note 21 in the notes to the consolidated financial statements for further details.
New Accounting Standards Not Yet Adopted
Income Taxes
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. This standard is effective for fiscal years beginning after December 15, 2024, and may be applied on a retrospective or prospective basis. Cadence is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.
Income Statement - Expense Disaggregation Disclosure
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,” which requires additional disclosure of certain costs and expenses in the notes to the financial statements. The updated standard is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027. Early adoption is permitted and will be applied prospectively with the option for retrospective application. Cadence is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.
Foreign Operations
Cadence transacts business in various foreign currencies. The United States dollar is the functional currency of Cadence’s consolidated entities operating in the United States and certain of its consolidated subsidiaries operating outside the United States. The functional currency for Cadence’s other consolidated entities operating outside of the United States is generally the country’s local currency.
Cadence translates the financial statements of consolidated entities whose functional currency is not the United States dollar into United States dollars. Cadence translates assets and liabilities at the exchange rate in effect as of the financial statement date and translates income statement accounts using an average exchange rate for the period. Cadence includes adjustments from translating assets and liabilities into United States dollars, and the effect of exchange rate changes on intercompany transactions of a long-term investment nature in stockholders’ equity as a component of accumulated other comprehensive income. Cadence reports gains and losses from foreign exchange rate changes related to intercompany receivables and payables that are not of a long-term investment nature, as well as gains and losses from foreign currency transactions of a monetary nature in other income (expense), net, in the consolidated income statements.
Concentrations of Credit Risk Financial instruments, including derivative financial instruments, that may potentially subject Cadence to concentrations of credit risk, consist principally of cash and cash equivalents, accounts receivable, investments and forward contracts. Credit exposure related to Cadence’s foreign currency forward contracts is limited to the realized and unrealized gains on these contracts.
Cash and Cash Equivalents
Cadence considers all highly liquid investments with original maturities of three months or less on the date of purchase to be cash equivalents.
Receivables Cadence’s receivables, net includes invoiced accounts receivable and the current portion of unbilled receivables. Unbilled receivables represent amounts Cadence has recorded as revenue for which payments from a customer are due over time and Cadence has an unconditional right to the payment. Cadence’s accounts receivable and unbilled receivables were initially recorded at the transaction value. Cadence’s long-term receivables balance includes receivable balances to be invoiced more than one year after each balance sheet date.
Allowance for Doubtful Accounts
Cadence assesses its ability to collect outstanding receivables and provides customer-specific allowances, allowances for credit losses and general allowances for the portion of its receivables that are estimated to be uncollectible. The allowances are based on the current creditworthiness of its customers, historical experience, expected credit losses, changes in customer demand and the overall economic climate in the industries that Cadence serves. Provisions for these allowances are recorded in general and administrative expense in Cadence’s consolidated income statements.
Inventories Inventories are computed at standard costs which approximate actual costs and are valued at the lower of cost or net realizable value based on the first-in, first-out method. Cadence’s inventories include high technology parts and components for complex accelerated hardware systems. These parts and components are specialized in nature and may be subject to rapid technological obsolescence. While Cadence has programs to manage the required inventories on hand and considers technological obsolescence when estimating required reserves to reduce recorded amounts to market values, it is reasonably possible that such estimates could change in the near term.
Inventory Impairment Cadence’s policy is to reserve for inventory in excess of future demand forecasts or for other known obsolescence or realization issues. Provisions for obsolescence reserves are recorded as a component of cost of product and maintenance in Cadence’s consolidated income statements.
Property, Plant and Equipment
Property, plant and equipment is stated at historical cost. Depreciation and amortization are generally provided over the estimated useful lives, using the straight-line method, as follows:
Equipment and internal-use software
2-7 years
Buildings
25-32 years
Leasehold improvementsShorter of the lease term or the estimated useful life
Building improvements and land improvements
Up to 32 years
Furniture and fixtures
3-5 years
Cadence capitalizes certain costs of software developed for internal use. Capitalization of software developed for internal use begins at the application development phase of the project. Amortization begins when the computer software is substantially complete and ready for its intended use. Amortization is recorded on a straight-line basis over the estimated useful life.
Software Development Costs Software development costs are capitalized beginning when a product’s technological feasibility has been established by completion of a working model of the product and amortization begins when a product is available for general release to customers. The period between the achievement of technological feasibility and the general release of Cadence’s products has typically been of short duration. Costs incurred during fiscal 2024, 2023 and 2022 were not material.
Deferred Sales Commisions
Cadence records an asset for the incremental costs of obtaining a contract with a customer, including direct sales commissions that are earned upon execution of the contract. Cadence uses the portfolio method to recognize the amortization expense related to these capitalized costs related to initial contracts and renewals and such expense is recognized over a period associated with the revenue of the related portfolio, which is generally two to three years for Cadence’s software arrangements and upon delivery for its hardware and IP arrangements. Incremental costs related to initial contracts and renewals are amortized over the period of the arrangement in each case because Cadence pays the same commission rate for both new contracts and renewals. Deferred sales commissions are tested for impairment on an ongoing basis when events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment is recognized to the extent that the amount of deferred sales commission exceeds the remaining expected gross margin (remaining revenue less remaining direct costs) on the goods and services to which the deferred sales commission relates. Total capitalized costs were $51.9 million and $47.6 million as of December 31, 2024, and December 31, 2023, respectively, and are included in other assets in Cadence’s consolidated balance sheet. Amortization of these assets was $47.6 million, $41.4 million and $40.5 million during fiscal 2024, 2023 and 2022, respectively, and is included in sales and marketing expense in Cadence’s consolidated income statement.
Goodwill Cadence conducts a goodwill impairment analysis annually and as necessary if changes in facts and circumstances indicate that the fair value of Cadence’s single reporting unit may be less than its carrying amount. To assess for impairment, Cadence compares the estimated fair value of its single reporting unit to the carrying value of the reporting unit’s net assets, including goodwill. If the fair value of the reporting unit is greater than the carrying value of its net assets, goodwill is not considered to be impaired, and no further analysis is required. If the fair value of the reporting unit is less than the carrying value of its net assets, Cadence would be required to record an impairment charge.
Long-lived Assets, Including Acquired Intangibles
Cadence’s long-lived assets consist of property, plant and equipment, and acquired intangibles. Acquired intangibles consist of acquired technology, certain contract rights, customer relationships, trademarks and trade names, capitalized software, and in-process research and development. These acquired intangibles are acquired through business combinations or direct purchases. Acquired intangibles with definite lives are amortized on a straight-line basis over the estimated economic life of the underlying products and technologies, which range from one year to fifteen years. Acquired intangibles with indefinite lives, or in-process technology, consists of projects that had not reached technological feasibility by the date of acquisition. Upon completion of the project, the assets are amortized over their estimated useful lives. If the project is abandoned rather than completed, the asset is written off. In-process technology is tested for impairment annually and as necessary if changes in facts and circumstances indicate that the assets might be impaired.
Cadence reviews its long-lived assets, including acquired intangibles, for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of an asset or asset group is measured by comparison of its carrying amount to the expected future undiscounted cash flows that the asset or asset group is expected to generate. If it is determined that the carrying amount of an asset group is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the asset or asset group exceeds its fair value.
Leases, Lessee Considerations
Lessee Considerations
Cadence has operating leases primarily consisting of facilities with remaining lease terms of approximately one year to fourteen years. Cadence has options to terminate many of its leases early. The lease term represents the period up to the early termination date unless it is reasonably certain that Cadence will not exercise the early termination option. For certain leases, Cadence has options to extend the lease term for additional periods ranging from one year to ten years. Renewal options are not considered in the remaining lease term unless it is reasonably certain that Cadence will exercise such options.
At inception of a contract, Cadence determines an arrangement contains a lease if the arrangement conveys the right to use an identified asset and Cadence obtains substantially all of the economic benefits from the asset and has the ability to direct the use of the asset. Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, Cadence combines the lease and non-lease components in determining the lease liabilities and right-of-use (“ROU”) assets. Non-lease components primarily include common-area maintenance and other management fees.
Operating lease expense is generally recognized evenly over the term of the lease. Payments under Cadence’s lease agreements are primarily fixed; however, certain agreements contain rental payments that are adjusted periodically based on changes in consumer price and other indices. Changes to payments resulting from changes in indices are expensed as incurred and not included in the measurement of lease liabilities and ROU assets. Cadence’s lease agreements do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. The incremental borrowing rate represents a comparable rate to borrow on a collateralized basis over a similar term and in the economic environment where the leased asset is located.
Leases, Lessor Considerations
Lessor Considerations
Although most of Cadence’s revenue from its hardware business comes from sales of hardware, Cadence also leases its hardware products to some customers. Cadence determines the existence of a lease when the customer controls the use of the identified hardware for a period of time defined in the lease agreement. 
Cadence’s leases range in duration up to three years with payments generally collected in equal quarterly installments. Cadence’s leases do not include termination rights or variable pricing and typically do not include purchase rights at the end of the lease. Short-term leases are usually less than two years and are classified as operating leases with revenue recognized and depreciation expensed on a straight-line basis over the term of the lease. Long-term leases are typically for three years and are classified as sales-type leases with revenue and cost of sales recognized upon installation.
Cadence’s operating leases and sales-type leases contain both lease and non-lease components. Because the pattern of revenue recognition is the same for both the lease and non-lease components in Cadence’s operating leases, Cadence has elected the practical expedient to not separate lease and related non-lease components and accounts for both components under Topic 842. Cadence allocates value to the lease and non-lease components in its sales-type leases using standalone selling prices (“SSPs”) similar to those used under ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” the current accounting standard governing revenue recognition. When Cadence leases its hardware in the same arrangement as software or IP, Cadence allocates value to each performance obligation using SSPs.
Investments in Marketable Equity Securities
Cadence’s investments in marketable equity securities are carried at fair value as a component of prepaid expenses and other in the consolidated balance sheets. Cadence records realized and unrealized holding gains or losses as part of other income (expense), net in the consolidated income statements.
Investments in Non-Marketable Equity Securities
Cadence’s non-marketable investments include its investments in privately held companies. These investments are initially recorded at cost and are included in other assets in the consolidated balance sheets. Cadence accounts for these investments using the measurement alternative when the fair value of the investment is not readily determinable, and Cadence does not have the ability to exercise significant influence, or the equity method of accounting when it is determined that Cadence has the ability to exercise significant influence. For investments accounted for using the equity method of accounting, Cadence records its proportionate share of the investee’s income or loss, net of the effects of any basis differences, to other income (expense), net on a one-quarter lag in Cadence’s consolidated income statements.
Cadence reviews its non-marketable investments for impairment on a regular basis by considering investee financial performance and other information received from the investee companies that indicates a decline in value has occurred. For non-marketable equity investments accounted for using the measurement alternative, the carrying amount may also be adjusted based on observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments to the carrying amounts of non-marketable investments are recorded in other income (expense), net in the consolidated income statements. There were no material events or circumstances impacting the carrying amount of our non-marketable investments during the periods presented.
Investments in Debt Securities
Cadence’s investments in debt securities are comprised of investments in mortgage-backed and asset backed-securities and are carried at fair value as a component of prepaid expenses and other in the consolidated balance sheets. Cadence classifies its investment in debt securities as available-for-sale, and gross unrealized gains and losses are recorded as a component of accumulated other comprehensive loss on its consolidated balance sheets.
Cadence assesses its portfolio of debt securities for impairment at least quarterly. Cadence records an allowance for credit losses on debt securities when the fair value of a debt security is below its amortized cost, and it is more likely than not that Cadence will either sell the impaired security before recovery of its amortized basis or has the intention to sell the security. Provisions for credit losses on impaired debt securities are recorded as a component of other income (expense), net in the consolidated income statements.
Derivative Financial Instruments Cadence enters into foreign currency forward exchange contracts with financial institutions to protect against currency exchange risks associated with existing assets and liabilities. A foreign currency forward exchange contract acts as a hedge by increasing in value when underlying assets decrease in value or underlying liabilities increase in value due to changes in foreign exchange rates. Conversely, a foreign currency forward exchange contract decreases in value when underlying assets increase in value or underlying liabilities decrease in value due to changes in foreign exchange rates. The forward contracts are not designated as accounting hedges and, therefore, the unrealized gains and losses are recognized in other income (expense), net, in advance of the actual foreign currency cash flows. The fair value of these forward contracts is recorded in accrued liabilities or in other current assets. These forward contracts generally have maturities of 90 days or less.
Nonqualified Deferred Compensation Trust
Executive officers, senior management and members of Cadence’s Board of Directors may elect to defer compensation payable to them under Cadence’s Nonqualified Deferred Compensation Plan (“NQDC”). Deferred compensation payments are held in investment accounts and the values of the accounts are adjusted each quarter based on the fair value of the investments held in the NQDC.
The selected investments held in the NQDC accounts are carried at fair value, with the unrealized gains and losses recognized in the consolidated income statements as other income (expense), net. These securities are classified in other assets in the consolidated balance sheets because they are not available for Cadence’s use in its operations.
Cadence’s obligation with respect to the NQDC trust is recorded in other long-term liabilities on the consolidated balance sheets. Increases and decreases in the NQDC trust liability are recorded as compensation expense in the consolidated income statements.
Treasury Stock
Cadence generally issues shares related to its stock-based compensation plans from shares held in treasury. When treasury stock is reissued at an amount higher than its cost, the difference is recorded as a component of capital in excess of par in the consolidated statements of stockholders’ equity. When treasury stock is reissued at an amount lower than its cost, the difference is recorded as a component of capital in excess of par to the extent that gains exist to offset the losses. If there are no accumulated treasury stock gains in capital in excess of par, the losses upon reissuance of treasury stock are recorded as a component of retained earnings in the consolidated statements of stockholders’ equity. There were no losses recorded as a component of retained earnings by Cadence on the reissuance of treasury stock during fiscal 2024, 2023 or 2022.
The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. Cadence did not incur any excise tax on the net value of stock repurchases during fiscal 2024. During fiscal 2023, Cadence recorded excise tax of $0.9 million as a component of treasury stock to account for the incremental cost of the shares repurchased.
Revenue Recognition
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration to which Cadence expects to be entitled in exchange for promised goods or services. Cadence’s performance obligations are satisfied either over time or at a point in time.
Product and maintenance revenue includes Cadence’s licenses of software and IP, sales of emulation hardware and the related maintenance on these licenses and sales.
Services revenue includes revenue received for performing engineering services (which are generally not related to the functionality of other licensed products), customized IP on a fixed fee basis, and sales from cloud-based solutions that provide customers with software, hardware and services over a period of time.
Cadence enters into contracts that can include various combinations of licenses, products and services, some of which are distinct and are accounted for as separate performance obligations. For contracts with multiple performance obligations, Cadence allocates the transaction price of the contract to each performance obligation, generally on a relative basis using its SSP. Cadence generates revenue from contracts with customers and applies judgment in identifying and evaluating any terms and conditions in contracts which may impact revenue recognition. Revenue is recognized net of any taxes collected from customers that are subsequently remitted to governmental authorities.
Some customers enter into non-cancelable commitments whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of products or services. These arrangements do not meet the definition of a revenue contract until the customer executes a separate selection form to identify the products and services that they are purchasing. Each separate selection form under the arrangement is treated as an individual contract and accounted for based on the respective performance obligations. Cadence records a customer deposit liability for amounts received from customers prior to the arrangement meeting the definition of a revenue contract.
Software Revenue Recognition
Cadence’s time-based license arrangements grant customers the right to access and use all of the licensed products at the outset of an arrangement and updates are generally made available throughout the entire term of the arrangement, which is generally two to three years. Cadence’s updates provide continued access to evolving technology as customers’ designs migrate to more advanced nodes and as its customers’ technological requirements evolve. In addition, certain time-based license arrangements include remix rights and unspecified additional products that become commercially available during the term of the agreement. Payments are generally received in equal or near equal installments over the term of the agreement.
Multiple software licenses, related updates, and technical support in these time-based arrangements constitute a single, combined performance obligation and revenue is recognized over the term of the license, commencing upon the later of the effective date of the arrangement or transfer of the software license. Remix rights are not an additional promised good or service in the contract, and where unspecified additional software product rights are part of the contract with the customer, such rights are accounted for as part of the single performance obligation that includes the licenses, updates, and technical support because such rights are provided for the same period of time and have the same time-based pattern of transfer to the customer.
For certain software arrangements where the updates are not critical to maintaining the utility of the software, Cadence considers the license, related updates and technical support as separate performance obligations. In these instances, the total consideration is allocated across the separate performance obligations using SSPs and the license revenue is recognized upon the later of the delivery or effective date of the contract and the revenue related to the updates and technical support is recognized over the term of the arrangement.
Hardware Revenue Recognition
Cadence generally has two performance obligations in arrangements involving the sale or lease of hardware products. The first performance obligation is to transfer the hardware product (which includes software integral to the functionality of the hardware product). The second performance obligation is to provide maintenance on hardware and its embedded software, which includes rights to technical support, hardware repairs and software updates that are all provided over the same term and have the same time-based pattern of transfer to the customer. The transaction price allocated to the hardware product is generally recognized as revenue at the time of delivery because the customer obtains control of the product at that point in time. Cadence has concluded that control generally transfers at that point in time because the customer has title to the hardware, physical possession, and a present obligation to pay for the hardware. The transaction price allocated to maintenance is recognized as revenue ratably over the maintenance term. Payments for hardware contracts are generally received upon delivery of the hardware product. Shipping and handling costs are considered fulfillment costs and are included in cost of product and maintenance in Cadence’s consolidated income statements.
IP Revenue Recognition
Cadence generally licenses IP under nonexclusive license agreements that provide usage rights for specific designs. In addition, for certain of Cadence’s IP license agreements, royalties are collected as customers ship their own products that incorporate Cadence IP. These arrangements generally have two performance obligations—transferring the licensed IP and associated maintenance, which includes rights to technical support, and software updates that are all provided over the maintenance term and have a time-based pattern of transfer to the customer.
Revenue allocated to the IP license is recognized at a point in time upon the later of the delivery of the IP or the beginning of the license period and revenue allocated to the maintenance is recognized over the maintenance term. Royalties are recognized as revenue in the quarter in which the applicable Cadence customer ships its products that incorporate Cadence IP. Payments for IP contracts are generally received upon delivery of the IP. Cadence customizes certain IP and revenue related to this customization is recognized as services revenue as described below.
Services Revenue Recognition
Revenue from service contracts is recognized over time, generally using costs incurred or hours expended to measure progress. Cadence has a history of accurately estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. Payments for services are generally due upon milestones in the contract or upon consumption of the hourly resources.
Stock-Based Compensation
Cadence recognizes the cost of awards of equity instruments granted to employees in exchange for their services as stock-based compensation expense. Stock-based compensation expense is measured at the grant date based on the value of the award and is recognized as expense over the requisite service period, which is typically the vesting period. Cadence recognizes stock-based compensation expense on the straight-line method for awards that only contain a service condition and on the graded-vesting method for awards that contain both a service and performance condition. Cadence recognizes the impact of forfeitures on stock-based compensation expense as they occur.
The fair value of stock options and purchase rights issued under Cadence’s Employee Stock Purchase Plan (“ESPP”) are calculated using the Black-Scholes option pricing model. The computation of the expected volatility assumption used for new awards is based on a weighting of historical and implied volatilities. When determining the expected term, Cadence reviews historical employee exercise behavior from options having similar vesting periods. The risk-free interest rate for the period within the expected term of the option is based on the yield of United States Treasury notes for the comparable term in effect at the time of grant. The expected dividend yield used in the calculation is zero because Cadence has not historically paid and currently does not expect to pay dividends in the foreseeable future.
The fair value of market-based performance stock awards is calculated using a Monte Carlo simulation model and takes into account the same input assumptions as the Black-Scholes model, as well as the possibility that the market conditions may not be satisfied. Cadence recognizes stock-based compensation expense on the graded-vesting method for market-based performance stock awards.
Advertising
Cadence expenses the costs of advertising as incurred. Total advertising expense, including marketing programs and events, was $23.2 million, $21.7 million and $17.0 million during fiscal 2024, 2023 and 2022, respectively, and is included in marketing and sales in the consolidated income statements.
Restructuring
Cadence records personnel-related restructuring charges with termination benefits when the costs are both probable and estimable. Cadence records personnel-related restructuring charges with non-customary termination benefits when the plan has been communicated to the affected employees. Cadence generally begins recording facilities-related restructuring charges in the period in which a formal plan to vacate an affected facility is established. In connection with facilities-related restructuring plans, Cadence has made certain assumptions and estimates related to facilities, particularly the timing of exit and the ability to sublease. Facility closure costs in restructuring charges primarily includes accelerated ROU asset amortization, lease buyout costs and certain contractual costs to maintain facilities during the period after abandonment.
Cadence records estimated provisions for termination benefits and outplacement costs along with other personnel-related restructuring costs, asset impairments related to abandoned assets and other costs associated with the restructuring plan. Cadence regularly evaluates the adequacy of its restructuring liabilities and adjusts the balances based on actual costs incurred or changes in estimates and assumptions. Subsequent adjustments to restructuring accruals are classified as restructuring in the consolidated income statements.
Accounting for Income Taxes
Cadence accounts for the effect of income taxes in its consolidated financial statements using the asset and liability method. This process involves estimating actual current tax liabilities together with assessing carryforwards and temporary differences resulting from differing treatment of items, such as depreciation, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, measured using enacted tax rates expected to apply to taxable income in the years when those temporary differences are expected to be recovered or settled. Cadence accounts for the United States global intangible low-taxed income as a period expense.
Cadence then records a valuation allowance to reduce the deferred tax assets to the amount that Cadence believes is more likely than not to be realized based on its judgment of all available positive and negative evidence. The weight given to the potential effect of negative and positive evidence is commensurate with the extent to which the strength of the evidence can be objectively verified. This assessment, which is completed on a taxing jurisdiction basis, takes into account a number of types of evidence, including the following:
the nature and history of current or cumulative financial reporting income or losses;
sources of future taxable income;
the anticipated reversal or expiration dates of the deferred tax assets; and
tax planning strategies.
Cadence takes a two-step approach to recognizing and measuring the financial statement benefit of uncertain tax positions. The first step is to evaluate the tax position for recognition by determining whether the weight of available evidence indicates that it is more likely than not that the tax position will be sustained on audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement of the audit. Cadence classifies interest and penalties on unrecognized tax benefits as income tax expense or benefit.
Fair Value of Financial Instruments
Inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Cadence’s market assumptions. These two types of inputs have created the following fair value hierarchy:
Level 1 – Quoted prices for identical instruments in active markets;
Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
This hierarchy requires Cadence to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. Cadence recognizes transfers between levels of the hierarchy based on the fair values of the respective financial instruments at the end of the reporting period in which the transfer occurred.
Commitments and Contingencies At least quarterly, Cadence reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on Cadence’s judgments using the best information available at the time. As additional information becomes available, Cadence reassesses the potential liability related to pending claims and legal proceedings and may revise estimates.
v3.25.0.1
Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2024
Accounting Policies [Abstract]  
Property, Plant and Equipment [Table Text Block] Depreciation and amortization are generally provided over the estimated useful lives, using the straight-line method, as follows:
Equipment and internal-use software
2-7 years
Buildings
25-32 years
Leasehold improvementsShorter of the lease term or the estimated useful life
Building improvements and land improvements
Up to 32 years
Furniture and fixtures
3-5 years
v3.25.0.1
REVENUE (Tables)
12 Months Ended
Dec. 31, 2024
Revenue from Contract with Customer [Abstract]  
Revenue from external customers by product category The following table shows the percentage of revenue contributed by each of Cadence’s product categories for fiscal 2024, 2023 and 2022:
 202420232022
Core EDA
71 %76 %76 %
IP13 %12 %12 %
System Design and Analysis16 %12 %12 %
Total100 %100 %100 %
_____________
* Includes immaterial amount of revenue accounted for under leasing arrangements.
Disaggregation of Revenue
The following table shows the percentage of Cadence’s revenue that is classified as recurring or up-front for fiscal 2024, 2023 and 2022:
 202420232022
Revenue recognized over time80 %81 %83 %
Revenue from arrangements with non-cancelable commitments%%%
Recurring revenue83 %84 %85 %
Up-front revenue17 %16 %15 %
Total100 %100 %100 %
Contract assets and deferred revenue
Cadence’s contract balances as of December 31, 2024, and December 31, 2023, were as follows:
 As of
 December 31,
2024
December 31,
2023
 (In thousands)
Contract assets$29,339 $17,554 
Deferred revenue852,581 763,955 
v3.25.0.1
RECEIVABLES, NET (Tables)
12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Current and long-term accounts receivable balances
Cadence’s current and long-term receivables balances as of December 31, 2024, and December 31, 2023, were as follows:
 As of
 December 31,
2024
December 31,
2023
 (In thousands)
Accounts receivable$393,017 $299,814 
Unbilled accounts receivable293,251 193,963 
Long-term receivables24,179 10,755 
Total receivables710,447 504,532 
Less allowance for doubtful accounts(5,808)(4,553)
Total receivables, net$704,639 $499,979 
Roll forward of allowance for doubtful accounts
Cadence’s provisions for losses on its accounts receivable during fiscal 2024, 2023 and 2022 were as follows:
Balance at Beginning of PeriodCharged to Costs and ExpensesUncollectible Accounts Written Off, NetBalance at End of Period
Year ended December 31, 2024$4,553 $2,078 $(823)$5,808 
Year ended December 31, 20232,290 3,325 (1,062)4,553 
Year ended December 31, 2022$3,692 $204 $(1,606)$2,290 
v3.25.0.1
DEBT (Tables)
12 Months Ended
Dec. 31, 2024
Debt Disclosure [Abstract]  
Summary of debt outstanding
Cadence’s outstanding debt as of December 31, 2024, and December 31, 2023, was as follows:
 December 31, 2024December 31, 2023
 (In thousands)
Principal
Unamortized Discount and Issuance Costs
Carrying ValuePrincipal
Unamortized Discount and Issuance Costs
Carrying Value
2024 Notes$— $— $— $350,000 $(715)$349,285 
2025 Term Loan— — — 300,000 (229)299,771 
2027 Notes500,000 (3,206)496,794 — — — 
2029 Notes1,000,000 (9,666)990,334 — — — 
2034 Notes1,000,000 (10,945)989,055 — — — 
Total outstanding debt$2,500,000 $(23,817)$2,476,183 $650,000 $(944)$649,056 
v3.25.0.1
ACQUISITIONS (Tables)
12 Months Ended
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of BETA CAE based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$118,676 
Goodwill822,129 
Acquired intangibles345,000 
Other long-term assets18,198 
Total assets acquired1,304,003 
Current liabilities36,465 
Long-term liabilities36,250 
Total liabilities assumed72,715 
Total purchase consideration$1,231,288 
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Invecas based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$50,608 
Goodwill42,209 
Acquired intangibles15,500 
Other long-term assets7,414 
Total assets acquired115,731 
Current liabilities17,114 
Long-term liabilities3,647 
Total liabilities assumed20,761 
Total purchase consideration$94,970 
The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$1,460 
Goodwill80,999 
Acquired intangibles26,000 
Other long-term assets2,798 
Total assets acquired111,257 
Current liabilities2,531 
Long-term liabilities142 
Total liabilities assumed2,673 
Total purchase consideration$108,584 
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Pulsic based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$4,369 
Goodwill47,448 
Acquired intangibles12,400 
Other long-term assets89 
Total assets acquired64,306 
Current liabilities1,553 
Long-term liabilities2,885 
Total liabilities assumed4,438 
Total purchase consideration$59,868 
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of OpenEye based on their respective estimated fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$24,890 
Goodwill359,580 
Acquired intangibles117,400 
Other long-term assets6,542 
Total assets acquired508,412 
Current liabilities15,489 
Long-term liabilities18,456 
Total liabilities assumed33,945 
Total purchase consideration$474,467 
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of Future Facilities based on their respective estimated fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$7,992 
Goodwill67,219 
Acquired intangibles38,100 
Other long-term assets2,708 
Total assets acquired116,019 
Current liabilities4,952 
Long-term liabilities8,167 
Total liabilities assumed13,119 
Total purchase consideration$102,900 
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination
Definite-lived intangible assets acquired with Cadence’s acquisition of BETA CAE were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$140,000 6.0 years
Agreements and relationships190,000 15.0 years
Tradenames, trademarks and patents15,000 7.0 years
Total acquired intangibles with definite lives$345,000 11.0 years
Definite-lived intangible assets acquired with Cadence’s acquisition of the SerDes and Memory business from Rambus were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$16,700 5.0 years
Agreements and relationships9,300 7.0 years
Total acquired intangibles with definite lives$26,000 5.7 years
Definite-lived intangible assets acquired with Cadence’s acquisition of Pulsic were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$8,000 6.2 years
Agreements and relationships4,100 8.0 years
Tradenames, trademarks and patents300 6.0 years
Total acquired intangibles with definite lives$12,400 6.8 years
Definite-lived intangible assets acquired with Cadence’s acquisition of OpenEye were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$53,900 7.0 years
Agreements and relationships61,400 12.3 years
Tradenames, trademarks and patents2,100 7.0 years
Total acquired intangibles with definite lives$117,400 9.8 years
Definite-lived intangible assets acquired with Cadence’s acquisition of Future Facilities were as follows:
Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$20,900 6.0 years
Agreements and relationships15,600 9.0 years
Tradenames, trademarks and patents1,600 8.0 years
Total acquired intangibles with definite lives$38,100 7.3 years
v3.25.0.1
GOODWILL AND ACQUIRED INTANGIBLES (Tables)
12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
Changes in the carrying amount of goodwill
The changes in the carrying amount of goodwill during fiscal 2024 and 2023 were as follows:
 Gross Carrying
Amount
 (In thousands)
Balance as of December 31, 2022$1,374,268 
Goodwill resulting from acquisitions160,083 
Effect of foreign currency translation1,494 
Balance as of December 31, 20231,535,845 
Goodwill resulting from acquisitions889,585 
Effect of foreign currency translation(46,759)
Balance as of December 31, 2024$2,378,671 
Acquired intangibles with finite lives (excluding goodwill), excluding intangibles fully amortized at end of prior fiscal year
Acquired intangibles as of December 31, 2024, were as follows, excluding intangibles that were fully amortized as of December 31, 2023:
Gross Carrying
Amount
Accumulated
Amortization
Acquired
Intangibles, Net
 (In thousands)
Existing technology$465,453 $(199,126)$266,327 
Agreements and relationships386,365 (78,605)307,760 
Tradenames, trademarks and patents28,113 (7,466)20,647 
Total acquired intangibles$879,931 $(285,197)$594,734 
Acquired intangibles as of December 31, 2023, were as follows, excluding intangibles that were fully amortized as of December 31, 2022:
Gross Carrying
Amount
Accumulated
Amortization
Acquired
Intangibles, Net
 (In thousands)
Existing technology$325,710 $(141,659)$184,051 
Agreements and relationships198,259 (61,395)136,864 
Tradenames, trademarks and patents13,460 (4,332)9,128 
Total acquired intangibles with definite lives$537,429 $(207,386)$330,043 
In-process technology6,800 — 6,800 
Total acquired intangibles$544,229 $(207,386)$336,843 
Amortization of acquired intangibles Amortization expense for fiscal 2024, 2023 and 2022, by consolidated income statement caption, was as follows:
202420232022
 (In thousands)
Cost of product and maintenance$60,074 $43,808 $41,348 
Amortization of acquired intangibles30,375 18,162 18,470 
Total amortization of acquired intangibles$90,449 $61,970 $59,818 
Estimated amortization expense
As of December 31, 2024, the estimated amortization expense for intangible assets with definite lives was as follows for the following five fiscal years and thereafter:
 (In thousands)
2025$91,486 
202686,763 
202784,480 
202879,023 
202964,292 
Thereafter188,690 
Total estimated amortization expense$594,734 
v3.25.0.1
INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income before provision for income taxes
Cadence’s income before provision for income taxes included income from the United States and from foreign subsidiaries for fiscal 2024, 2023 and 2022, was as follows:
202420232022
(In thousands)
United States$600,088 $533,442 $402,083 
Foreign subsidiaries795,731 748,484 643,280 
Total income before provision for income taxes$1,395,819 $1,281,926 $1,045,363 
Components of income taxes provision
Cadence’s provision for income taxes was comprised of the following items for fiscal 2024, 2023 and 2022:
202420232022
(In thousands)
Current:
Federal$281,674 $156,495 $212,380 
State and local50,430 15,933 7,280 
Foreign136,968 104,866 84,357 
Total current469,072 277,294 304,017 
Deferred:
Federal(130,490)(87,851)(79,170)
State and local(5,127)25,440 (50,640)
Foreign6,880 25,899 22,204 
Total deferred(128,737)(36,512)(107,606)
Total provision for income taxes$340,335 $240,782 $196,411 
Summary of income tax reconciliation
The provision for income taxes differs from the amount estimated by applying the United States statutory federal income tax rates of 21% to income before provision for income taxes for fiscal 2024, 2023, and 2022 as follows:
202420232022
(In thousands)
Provision computed at federal statutory income tax rate$293,122 $269,205 $219,526 
State and local income tax, net of federal tax effect50,130 40,304 29,622 
Intercompany transfers of intangible property rights7,833 23,826 — 
Foreign income tax rate differential(62,798)(54,210)(49,949)
Foreign-derived intangible income deduction(13,344)(14,253)(2,335)
U.S. tax on foreign entities144,222 113,011 132,563 
Stock-based compensation(6,181)(26,805)(17,023)
Change in deferred tax asset valuation allowance11,441 9,077 (38,073)
Tax credits(135,344)(130,383)(105,366)
Non-deductible acquisitions-related costs
11,770 6,709 4,273 
Withholding taxes20,175 15,300 17,459 
Tax settlements, foreign— 4,034 — 
Increase (decrease) in unrecognized tax benefits9,061 (19,660)2,354 
Other10,248 4,627 3,360 
Provision for income taxes$340,335 $240,782 $196,411 
Effective tax rate24 %19 %19 %
Components of deferred tax assets and liabilities
The components of deferred tax assets and liabilities consisted of the following as of December 31, 2024, and December 31, 2023:
As of
December 31,
2024
December 31,
2023
(In thousands)
Deferred tax assets:
Tax credit carryforwards$110,031 $129,513 
Reserves and accruals103,731 78,993 
Intangible assets487,947 506,398 
Capitalized research and development expense for income tax purposes368,085 242,465 
Operating loss carryforwards9,781 9,598 
Deferred income79,195 77,066 
Capital loss carryforwards16,861 16,483 
Stock-based compensation costs34,045 27,409 
Depreciation and amortization17,228 10,671 
Investments20,757 15,949 
Lease liability33,341 33,639 
Prepaid expenses— 3,253 
Total deferred tax assets1,281,002 1,151,437 
Valuation allowance(90,603)(79,162)
Net deferred tax assets1,190,399 1,072,275 
Deferred tax liabilities:
Intangible assets(107,251)(83,308)
Undistributed foreign earnings(76,045)(64,371)
ROU assets(33,341)(33,639)
Investments
(14,171)(6,318)
Other(7,869)(13,455)
Total deferred tax liabilities(238,677)(201,091)
Total net deferred tax assets$951,722 $871,184 
Summary of operating loss carryforward As of December 31, 2024, Cadence’s operating loss carryforwards were as follows:
AmountExpiration Periods
(In thousands)
Federal$61 2033
California26,872 from 2025 through 2043
Other states (tax effected, net of federal benefit)410 from 2025 through indefinite
Foreign (tax effected)8,077 indefinite
Summary of tax credit carryforwards
As of December 31, 2024, Cadence had tax credit carryforwards of:
AmountExpiration Periods
(In thousands)
Federal*$51,535 from 2031
California58 indefinite
Other states 11,331 from 2033 through indefinite
Foreign 47,107 from 2044 through indefinite
_____________
*Certain of Cadence’s foreign tax credits have yet to be realized and as a result do not yet have an expiration period.
Earliest tax years open to examination by jurisdiction As of December 31, 2024, Cadence’s earliest tax years that remain open to examination and the assessment of additional tax include:
JurisdictionEarliest Tax Year Open to Examination
United States – Federal2020
United States – California2020
Ireland2020
Israel2017
Korea2019
Unrecognized tax benefits roll forward
The changes in Cadence’s gross amount of unrecognized tax benefits during fiscal 2024, 2023 and 2022 are as follows:
202420232022
(In thousands)
Unrecognized tax benefits at the beginning of the fiscal year$94,311 $126,073 $130,530 
Gross amount of the increase (decrease) in unrecognized tax benefits of tax positions taken during a prior year*
10,109 (1,401)2,152 
Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year6,669 2,565 2,660 
Amount of decreases in unrecognized tax benefits relating to settlements with taxing authorities, including the utilization of tax attributes— (8,000)— 
Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations(3,173)(24,768)(7,430)
Effect of foreign currency translation(528)(158)(1,839)
Unrecognized tax benefits at the end of the fiscal year$107,388 $94,311 $126,073 
Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence’s effective tax rate$106,420 $93,398 $121,415 
_____________
* Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions
Interest and penalties recognized in consolidated income statements and balance sheets
The total amounts of interest, net of tax, and penalties recognized in the consolidated income statements as provision for income taxes for fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands)
Interest$3,893 $2,282 $434 
Penalties143 267 
The total amounts of gross accrued interest and penalties recognized in the consolidated balance sheets as of December 31, 2024, and December 31, 2023, were as follows:
As of
December 31,
2024
December 31,
2023
(In thousands)
Interest$9,010 $4,813 
Penalties1,261 — 
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION (Tables)
12 Months Ended
Dec. 31, 2024
Share-Based Payment Arrangement [Abstract]  
Stock based compensation expense and allocation by share based payment award
Stock-based compensation expense and the related income tax benefit recognized in connection with stock options, restricted stock and the ESPP during fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands)
Stock options$18,610 $15,939 $14,597 
Restricted stock338,082 278,567 224,887 
ESPP34,527 31,105 30,955 
Total stock-based compensation expense$391,219 $325,611 $270,439 
Income tax benefit$66,080 $50,994 $40,612 
Stock based compensation expense and allocation by cost
Stock-based compensation expense is reflected in Cadence’s consolidated income statements during fiscal 2024, 2023 and 2022 as follows:
202420232022
(In thousands)
Cost of product and maintenance$6,402 $4,500 $3,818 
Cost of services8,149 5,728 4,851 
Marketing and sales77,195 66,304 54,771 
Research and development241,730 194,709 158,937 
General and administrative57,743 54,370 48,062 
Total stock-based compensation expense$391,219 $325,611 $270,439 
Fair value of options granted and the weighted-average assumptions The weighted average grant date fair value of options granted, and the weighted average assumptions used in the model for fiscal 2024, 2023 and 2022 were as follows:
202420232022
Dividend yieldNoneNoneNone
Expected volatility31.9 %32.6 %36.0 %
Risk-free interest rate4.34 %3.62 %2.14 %
Expected term (in years)4.85.04.8
Weighted average fair value of options granted$103.79 $71.83 $49.16 
Summary of changes in stock options outstanding under equity incentive plans
A summary of the changes in stock options outstanding under Cadence’s equity incentive plans during fiscal 2024 is presented below:
Weighted
Average
Weighted
Average
Remaining
Contractual
Terms



Aggregate
Intrinsic
SharesExercise Price(Years)Value
(In thousands)(In thousands)
Options outstanding as of December 31, 2023
2,367 $107.93 
Granted212 297.56 
Exercised(1,231)72.19 
Forfeited(26)138.02 
Options outstanding as of December 31, 20241,322 $171.08 4.0$170,973 
Options vested as of December 31, 2024852 $141.14 3.3$135,744 
Intrinsic value of and cash received from options exercised
The total intrinsic value of and cash received from options exercised during fiscal 2024, 2023 and 2022 was:
202420232022
(In thousands)
Intrinsic value of options exercised$266,336 $139,125 $105,242 
Cash received from options exercised88,903 30,940 16,014 
Fair value of market-based awards valued granted and the weighted-average assumptions The weighted average assumptions used in the model for fiscal 2023 and fiscal 2022 were as follows:
20232022
Dividend yieldNoneNone
Expected volatility33.6 %29.1 %
Risk-free interest rate3.64 %1.98 %
Expected term (in years)3.85.1
Weighted average fair value of market-based awards granted
$132.20 $51.34 
Stock-based compensation expense related to performance-based restricted stock grants
Stock-based compensation expense related to performance-based restricted stock grants and market-based restricted stock grants for fiscal 2024, 2023 and 2022 was as follows:
202420232022
(In thousands)
Stock-based compensation expense related to performance-based restricted stock$29,178 $22,922 $17,753 
Stock-based compensation expense related to market-based stock awards
19,934 30,095 25,259 
Summary of the changes in restricted stock outstanding under Cadence's equity incentive plans
A summary of the changes in restricted stock outstanding under Cadence’s equity incentive plans during fiscal 2024 is presented below:
Weighted
Average Grant Date


Aggregate
Intrinsic
SharesFair ValueValue
(In thousands)(In thousands)
Unvested shares as of December 31, 2023
5,597 $129.35 
Granted1,573 310.81 
Vested(2,233)142.37 
Forfeited(380)115.06 
Unvested shares as of December 31, 2024
4,557 $186.79 $1,153,219 
Total fair value of restricted stock awards that vested
The total fair value realized by employees upon vesting of restricted stock during fiscal 2024, 2023 and 2022 was:
202420232022
(In thousands)
Fair value of restricted stock realized upon vesting$649,152 $442,556 $346,003 
Weighted-average grant date fair value of purchase rights granted under ESPP and weighted average assumptions used in model The weighted average grant date fair value of purchase rights granted under the ESPP and the weighted average assumptions used in the model for fiscal 2024, 2023 and 2022 were as follows:
202420232022
Dividend yieldNoneNoneNone
Expected volatility32.1 %29.9 %37.2 %
Risk-free interest rate5.11 %4.50 %1.71 %
Expected term (in years)0.50.50.5
Weighted average fair value of purchase rights granted
$65.50 $50.95 $43.41 
Shares of common stock issued under Employee Stock Purchase Plan
Shares of common stock issued under the ESPP for fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands, except per share amounts)
Cadence shares purchased under the ESPP548 647 703 
Cash received for the purchase of shares under the ESPP$115,335 $102,017 $89,314 
Weighted average purchase price per share$210.31 $157.70 $127.12 
Summary of common stock reserved for future issuance
As of December 31, 2024, Cadence had reserved the following shares of authorized but unissued common stock for future issuance:
Shares
(In thousands)
Employee equity incentive plans*18,456 
Employee stock purchase plans6,232 
Directors stock plans*431 
    Total25,119 
_____________
*Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units.
v3.25.0.1
STOCK REPURCHASE PRROGRAMS (Tables)
12 Months Ended
Dec. 31, 2024
Class of Stock Disclosures [Abstract]  
Share repurchased and the total cost of shares repurchased
The shares repurchased under Cadence’s repurchase authorizations and the total cost of repurchased shares, including commissions, during fiscal 2024, 2023 and 2022 were as follows:
20242023*2022**
(In thousands)
Shares repurchased1,930 3,145 6,602 
Total cost of repurchased shares$550,026 $700,134 $1,050,091 
_____________
*Includes 276 thousand shares and $60 million equity forward contract from the June 2023 ASR settled in August 2023, and excludes $0.9 million of excise tax.
**Includes 109 thousand shares and $30 million equity forward contract from the June 2022 ASR settled in September 2022.
v3.25.0.1
RESTRUCTURING AND OTHER CHARGES (Tables)
12 Months Ended
Dec. 31, 2024
Restructuring and Related Activities [Abstract]  
Restructuring reserve rollforward by major type of cost
The following table presents activity for Cadence’s restructuring plans during fiscal 2024, 2023 and 2022:
Severance
and
Benefits
Excess
Facilities
Total
(In thousands)
Balance, January 1, 2022$— $43 $43 
Restructuring— 55 55 
Cash payments— (98)(98)
Effect of foreign currency translation— — — 
Balance, December 31, 2022$— $— $— 
Restructuring10,935 78 11,013 
Non-cash changes
— (78)(78)
Cash payments(8,211)— (8,211)
Effect of foreign currency translation(121)— (121)
Balance, December 31, 2023$2,603 $— $2,603 
Restructuring 22,735 1,030 23,765 
Non-cash changes
— (1,030)(1,030)
Cash payments(20,464)— (20,464)
Effect of foreign currency translation(147)— (147)
Balance, December 31, 2024$4,727 $— $4,727 
v3.25.0.1
OTHER INCOME (EXPENSE), NET (Tables)
12 Months Ended
Dec. 31, 2024
Other Income and Expenses [Abstract]  
Other income (expense), net
Cadence’s other income (expense), net, for fiscal 2024, 2023 and 2022 was as follows:
 202420232022
 (In thousands)
Interest income$62,484 $29,637 $10,099 
Gains (losses) on investments
49,593 34,602 (5,425)
Gains (losses) on securities in NQDC trust11,145 10,851 (8,744)
Losses on foreign exchange(965)(5,490)(459)
Other expense, net(1,202)(2,714)(860)
Total other income (expense), net$121,055 $66,886 $(5,389)
v3.25.0.1
NET INCOME PER SHARE (Tables)
12 Months Ended
Dec. 31, 2024
Earnings Per Share [Abstract]  
Basic and diluted net income per share
The calculations for basic and diluted net income per share for fiscal 2024, 2023 and 2022 are as follows:
 202420232022
 (In thousands, except per share amounts)
Net income$1,055,484 $1,041,144 $848,952 
Weighted average common shares used to calculate basic net income per share271,212 269,381 271,198 
Stock-based awards2,621 3,367 3,813 
Weighted average common shares used to calculate diluted net income per share273,833 272,748 275,011 
Net income per share – basic$3.89 $3.86 $3.13 
Net income per share – diluted$3.85 $3.82 $3.09 
Potential shares of Cadence's common stock excluded
The following table presents shares of Cadence’s common stock outstanding for fiscal 2024, 2023 and 2022 that were excluded from the computation of diluted net income per share because the effect of including these shares in the computation of diluted net income per share would have been anti-dilutive: 
 202420232022
 (In thousands)
Long-term market-based awards— 1,381 1,565 
Options to purchase shares of common stock 184 345 716 
Non-vested shares of restricted stock258 232 88 
Total potential common shares excluded442 1,958 2,369 
v3.25.0.1
INVESTMENTS (Tables)
12 Months Ended
Dec. 31, 2024
Investments, Debt and Equity Securities [Abstract]  
Gain (Loss) on Securities
The portion of gains and losses included in Cadence’s consolidated income statements related to equity securities still held at the end of the period were as follows:
202420232022
(In thousands)
Net gains (losses) recognized on equity securities
$49,653 $34,651 $(5,336)
Less: Net gains recognized on equity securities sold
(20,367)(12,283)— 
Net gains (losses) recognized on equity securities still held
$29,286 $22,368 $(5,336)
Summary of available-for-sale securities
The following is a summary of Cadence’s available-for-sale debt securities recorded within prepaid expenses and other on its consolidated balance sheets:
 As of December 31, 2024
  Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated
Fair Value
 (In thousands)
Available-for-sale debt securities
Mortgage-backed and asset-backed securities$50,604 $230 $(582)$50,252 
Total available-for-sale securities$50,604 $230 $(582)$50,252 
 
As of December 31, 2023
  Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated
Fair Value
 (In thousands)
Available-for-sale debt securities
Mortgage-backed and asset-backed securities$49,653 $375 $(243)$49,785 
Total available-for-sale securities$49,653 $375 $(243)$49,785 
Available-for-sale investments by contractual maturity
As of December 31, 2024, the fair values of available-for-sale debt securities, by remaining contractual maturity, were as follows:
 (In thousands)
Due within 1 year
$569 
Due after 1 year through 5 years9,294 
Due after 5 years through 10 years17,882 
Due after 10 years22,507 
Total$50,252 
v3.25.0.1
FAIR VALUE (Tables)
12 Months Ended
Dec. 31, 2024
Fair Value Disclosures [Abstract]  
Fair value of financial assets and liabilities The fair value of financial assets and liabilities was determined using the following levels of inputs as of December 31, 2024, and December 31, 2023:
 Fair Value Measurements as of December 31, 2024
  TotalLevel 1Level 2Level 3
 (In thousands)
Assets
Cash equivalents:
Money market funds$1,700,084 $1,700,084 $— $— 
Marketable securities:
Marketable equity securities90,374 90,374 — — 
Mortgage-backed and asset-backed securities50,252 — 50,252 — 
Securities held in NQDC trust96,450 96,450 — — 
Total Assets$1,937,160 $1,886,908 $50,252 $— 
  TotalLevel 1Level 2Level 3
 (In thousands)
Liabilities
Foreign currency exchange contracts7,533 — 7,533 — 
Total Liabilities$7,533 $— $7,533 $— 
 Fair Value Measurements as of December 31, 2023
  TotalLevel 1Level 2Level 3
 (In thousands)
Assets
Cash equivalents:
Money market funds$490,983 $490,983 $— $— 
Marketable securities:
Marketable equity securities80,575 80,575 — — 
Mortgage-backed and asset-backed securities49,785 — 49,785 — 
Securities held in NQDC trust75,671 75,671 — — 
Foreign currency exchange contracts9,327 — 9,327 — 
Total Assets$706,341 $647,229 $59,112 $— 
As of December 31, 2023, Cadence did not have any financial liabilities requiring a recurring fair value measurement.
v3.25.0.1
BALANCE SHEET COMPONENTS (Tables)
12 Months Ended
Dec. 31, 2024
Disclosure Text Block Supplement [Abstract]  
Summary of certain balance sheet components
A summary of certain balance sheet components as of December 31, 2024, and December 31, 2023, is as follows:
As of
December 31,
2024
December 31,
2023
(In thousands)
Inventories:
Raw materials$243,244 $162,754 
Work-in-process
1,216 — 
Finished goods13,251 18,907 
Inventories$257,711 $181,661 
Prepaid expenses and other:
Short-term investments
140,625 130,359 
Other prepaid expenses and other assets293,253 166,821 
Prepaid expenses and other$433,878 $297,180 
Property, plant and equipment:
Equipment and internal-use software
$875,399 $781,683 
Buildings137,781 131,882 
Land57,687 56,641 
Leasehold, building and land improvements245,669 211,854 
Furniture and fixtures43,517 39,998 
In-process capital assets14,879 17,937 
Total cost1,374,932 1,239,995 
Less: Accumulated depreciation and amortization(916,732)(836,782)
Property, plant and equipment, net$458,200 $403,213 
Other assets:
Non-marketable investments$124,086 $138,321 
ROU lease assets146,190 150,797 
Other long-term assets274,465 248,254 
Other assets$544,741 $537,372 
Accounts payable and accrued liabilities:
Trade accounts payable
$5,555 $91,194 
Payroll and payroll-related accruals335,232 294,108 
Other accrued operating liabilities291,905 191,256 
Accounts payable and accrued liabilities$632,692 $576,558 
Other long-term liabilities:
Operating lease liabilities$108,893 $115,358 
Other accrued liabilities230,555 160,293 
Other long-term liabilities$339,448 $275,651 
v3.25.0.1
LEASES (Tables)
12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
Operating lease expense
Operating lease expense, which includes immaterial amounts of short-term leases, variable lease costs and sublease income, was as follows during fiscal 2024, 2023 and 2022:
202420232022
(In thousands)
Operating lease expense$61,827 $56,805 $49,165 
Schedule of supplemental balance sheet information related to leases
Additional activity related to Cadence’s leases during fiscal 2024, 2023 and 2022 was as follows:
202420232022
(In thousands)
Cash paid for amounts included in the measurement of operating lease liabilities$49,978 $46,069 $34,334 
ROU assets obtained in exchange for operating lease obligations42,614 32,597 83,758 
ROU lease assets and lease liabilities for Cadence’s operating leases were recorded in the consolidated balance sheets as follows:
As of
December 31,
2024
December 31,
2023
(In thousands)
Other assets$146,190 $150,797 
Accounts payable and accrued liabilities41,554 41,619 
Other long-term liabilities108,893 115,358 
Total lease liabilities$150,447 $156,977 
Weighted average remaining lease term (in years)5.35.7
Weighted average discount rate%%
Table of lease liability maturity
Future lease payments included in the measurement of lease liabilities on the consolidated balance sheet as of December 31, 2024, for the following five fiscal years and thereafter were as follows:
Operating
 Leases
(In thousands)
2025$45,456 
202636,750 
202723,178 
202819,048 
202915,136 
Thereafter29,783 
Total future lease payments169,351 
Less imputed interest(18,904)
Total lease liability balance$150,447 
v3.25.0.1
Commitment and Contingencies (Tables)
12 Months Ended
Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract]  
Purchase obligations
Cadence had purchase obligations of $78.3 million as of December 31, 2024, that were associated with agreements or commitments for purchases of goods or services. Cadence expects to settle these obligations in the following five fiscal years and thereafter as follows:
Purchase
Obligations
(In thousands)
2025$58,893 
202616,084 
20271,951 
20281,204 
2029130 
Thereafter— 
Total
78,262 
v3.25.0.1
EMPLOYEE AND DIRECTOR BENEFIT PLANS (Tables)
12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Contributions to defined contribution plans Cadence’s total contributions made to these plans during fiscal 2024, 2023 and 2022 were as follows:
202420232022
(In thousands)
Contributions to defined contribution plans$45,164 $39,651 $35,464 
v3.25.0.1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)
12 Months Ended
Dec. 31, 2024
Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated other comprehensive income net of tax
Accumulated other comprehensive loss was comprised of the following as of December 31, 2024, and December 31, 2023:
As of
December 31,
2024
December 31,
2023
 (In thousands)
Foreign currency translation loss$(178,611)$(90,678)
Changes in defined benefit plan liabilities(4,447)(4,208)
Unrealized losses on derivatives designated as hedging instruments
(7,038)— 
Unrealized gains (losses) on available-for-sale debt securities
(352)132 
Total accumulated other comprehensive loss$(190,448)$(94,754)
v3.25.0.1
SEGMENT REPORTING (Tables)
12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Consolidated segment income and expenses The following table presents revenue, significant expenses and net income for fiscal 2024, 2023 and 2022:
 202420232022
 (In thousands)
Revenue
4,641,264 4,089,986 3,561,718 
Costs and Expenses:
Salary, benefits and other employee-related costs
1,936,542 1,754,223 1,574,910 
Stock based compensation
391,219 325,611 270,439 
Manufacturing costs
330,903 232,012 173,160 
Facilities and other infrastructure costs
174,102 156,977 139,150 
Depreciation and amortization
196,935 145,292 132,088 
Professional Services
153,439 117,752 117,442 
Restructuring
23,765 11,013 55 
Other segment items (1)
25,025 58,632 96,276 
Interest income(62,484)(29,637)(10,099)
Interest expense75,999 36,185 22,934 
Provision for income taxes340,335 240,782 196,411 
Net income$1,055,484 $1,041,144 $848,952 
_____________
(1) Other segment items includes direct costs for advertising, marketing events, travel, entertainment, bad debt and other operating expense categories that are not considered significant individually. It also includes non-operating expenses such as gains and losses on investments, foreign currency and other non-operating expenses that are not considered significant individually.
Summary of revenue by geography
The following table presents a summary of revenue by geography for fiscal 2024, 2023 and 2022:
 202420232022
 (In thousands)
Americas:
United States$2,159,703 $1,694,529 $1,577,881 
Other Americas93,101 65,259 53,123 
Total Americas2,252,804 1,759,788 1,631,004 
Asia:
China573,096 679,538 521,509 
Other Asia855,919 766,409 629,533 
Total Asia1,429,015 1,445,947 1,151,042 
Europe, Middle East and Africa699,241 655,078 582,350 
Japan260,204 229,173 197,322 
Total$4,641,264 $4,089,986 $3,561,718 
Summary of long-lived assets by geography
The following table presents a summary of long-lived assets by geography as of December 31, 2024, December 31, 2023, and December 31, 2022: 
 As of
 December 31,
2024
December 31,
2023
December 31,
2022
 (In thousands)
Americas:
United States$412,339 $383,807 $347,822 
Other Americas7,437 10,219 7,548 
Total Americas419,776 394,026 355,370 
Asia:
China22,929 29,598 51,667 
Other Asia83,951 71,365 73,329 
Total Asia106,880 100,963 124,996 
Europe, Middle East and Africa73,551 56,449 56,959 
Japan4,183 2,572 4,505 
Total$604,390 $554,010 $541,830 
v3.25.0.1
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment [Line Items]      
Depreciation $ 96.9 $ 78.4 $ 69.1
Equipment and internal-use software | Minimum [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant and Equipment, Useful Life 2 years    
Equipment and internal-use software | Maximum [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant and Equipment, Useful Life 7 years    
Buildings [Member] | Minimum [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant and Equipment, Useful Life 25 years    
Buildings [Member] | Maximum [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant and Equipment, Useful Life 32 years    
Leasehold improvements [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] Useful Life, Shorter of Lease Term or Asset Utility [Member]    
Building improvements and land improvements [Member] | Maximum [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant and Equipment, Useful Life 32 years    
Furniture and fixtures [Member] | Minimum [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant and Equipment, Useful Life 3 years    
Furniture and fixtures [Member] | Maximum [Member]      
Property, Plant and Equipment [Line Items]      
Property, Plant and Equipment, Useful Life 5 years    
v3.25.0.1
Summary of Significant Accounting Policies - Deferred Sales Commissions (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]      
Capitalized contract costs, net $ 51.9 $ 47.6  
Amortization of capitalized contract costs $ 47.6 $ 41.4 $ 40.5
v3.25.0.1
Summary of Significant Accounting Policies - Long-lived Assets (Details)
Dec. 31, 2024
Minimum [Member]  
Acquired Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset, useful life 1 year
Maximum [Member]  
Acquired Finite-Lived Intangible Assets [Line Items]  
Finite-lived intangible asset, useful life 15 years
v3.25.0.1
Summary of Significant Accounting Policies - Leases (Details)
Dec. 31, 2024
Minimum [Member]  
Lessee, Lease, Description [Line Items]  
Lessee, remaining lease term, operating leases 1 year
Lessee, Lease not yet commenced, renewal term, operating leases 1 year
Maximum [Member]  
Lessee, Lease, Description [Line Items]  
Lessee, remaining lease term, operating leases 14 years
Lessee, Lease not yet commenced, renewal term, operating leases 10 years
Lessor, Operating Lease, Term of Contract 3 years
Lessor, Operating Lease, Term of Contract 3 years
v3.25.0.1
Summary of Significant Accounting Policies - Derivative Financial Instruments (Details)
12 Months Ended
Dec. 31, 2024
Forward Contracts [Member]  
Derivative [Line Items]  
Maturity period of forward contracts 90 days
v3.25.0.1
Summary of Significant Accounting Policies - Other (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Accounting Policies [Abstract]      
Treasury stock reissued at lower than repurchase price $ 0 $ 0 $ 0
Excise taxes recorded as a component of treasury stock   900  
Advertising expense $ 23,200 $ 21,700 $ 17,000
v3.25.0.1
REVENUE - Revenue by Product Category (Details)
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue from External Customer [Line Items]      
Percentage of product and maintenance revenue by product group 100.00% 100.00% 100.00%
Core EDA      
Revenue from External Customer [Line Items]      
Percentage of product and maintenance revenue by product group [1] 71.00% 76.00% 76.00%
IP      
Revenue from External Customer [Line Items]      
Percentage of product and maintenance revenue by product group 13.00% 12.00% 12.00%
System Design and Analysis      
Revenue from External Customer [Line Items]      
Percentage of product and maintenance revenue by product group 16.00% 12.00% 12.00%
[1] Includes immaterial amount of revenue accounted for under leasing arrangements
v3.25.0.1
REVENUE - Recurring vs. Up-front Revenue (Details)
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue from External Customer [Line Items]      
Revenue from Contract with Customer, Timing of Goods or Service, Percent 100.00% 100.00% 100.00%
Transferred over Time      
Revenue from External Customer [Line Items]      
Revenue from Contract with Customer, Timing of Goods or Service, Percent 83.00% 84.00% 85.00%
Transferred over Time | Revenue arrangement recognized over time      
Revenue from External Customer [Line Items]      
Revenue from Contract with Customer, Timing of Goods or Service, Percent 80.00% 81.00% 83.00%
Transferred over Time | Revenue arrangement with non-cancelable commitments      
Revenue from External Customer [Line Items]      
Revenue from Contract with Customer, Timing of Goods or Service, Percent 3.00% 3.00% 2.00%
Transferred at Point in Time      
Revenue from External Customer [Line Items]      
Revenue from Contract with Customer, Timing of Goods or Service, Percent 17.00% 16.00% 15.00%
v3.25.0.1
REVENUE - Contract Balances (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]      
Contract assets $ 29,339 $ 17,554  
Deferred revenue 852,581 763,955  
Revenue recognized from deferred revenue during the period $ 669,900 $ 689,700 $ 540,700
v3.25.0.1
REVENUE - Remaining Performance Obligations (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Disaggregation of Revenue [Line Items]      
Unsatisfied performance obligations $ 6,800.0    
Remaining performance obligation, amount from non-cancellable IP access agreements 500.0    
Revenue recognized from performance obligation satisfied in previous periods $ 68.0 $ 55.0 $ 52.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01      
Disaggregation of Revenue [Line Items]      
Expected remaining performance obligation to be converted to revenue, percentage 54.00%    
Expected timing of satisfaction of remaining performance obligation, period 12 months    
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01      
Disaggregation of Revenue [Line Items]      
Expected remaining performance obligation to be converted to revenue, percentage 42.00%    
Expected timing of satisfaction of remaining performance obligation, period 13 months    
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01      
Disaggregation of Revenue [Line Items]      
Expected timing of satisfaction of remaining performance obligation, period 36 months    
v3.25.0.1
RECEIVABLES, NET - Receivables by Category and Concentration (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Jan. 01, 2022
Current and long-term receivables balances        
Accounts receivable $ 393,017 $ 299,814    
Unbilled accounts receivable 293,251 193,963    
Long-term receivables 24,179 10,755    
Total receivables 710,447 504,532    
Less allowance for doubtful accounts (5,808) (4,553) $ (2,290) $ (3,692)
Total receivables, net $ 704,639 $ 499,979    
v3.25.0.1
RECEIVABLES, NET - Allowance for Doubtful Accounts (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]      
Balance at beginning of period $ 4,553 $ 2,290 $ 3,692
Provisions for losses on receivables 2,078 3,325 204
Uncollectible accounts written off, net (823) (1,062) (1,606)
Balance at end of period $ 5,808 $ 4,553 $ 2,290
v3.25.0.1
DEBT - Oustanding Debt by Instrument (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Sep. 10, 2024
Dec. 31, 2023
Sep. 07, 2022
Oct. 09, 2014
Debt Instrument [Line Items]          
Principal $ 2,500,000   $ 650,000    
Unamortized discount and debt issuance costs 23,817   944    
Current portion of long-term debt 0   349,285    
Carrying Value 2,476,183   299,771    
Carrying Value 2,476,183   649,056    
Term Loan Due 2025          
Debt Instrument [Line Items]          
Aggregate principal amount issued       $ 300,000  
Senior Notes [Member] | Senior Notes Due 2024          
Debt Instrument [Line Items]          
Aggregate principal amount issued 0   350,000   $ 350,000
Unamortized discount and debt issuance costs 0   715    
Current portion of long-term debt 0   349,285    
Senior Notes [Member] | Senior Notes Due Twenty-Twenty Seven          
Debt Instrument [Line Items]          
Aggregate principal amount issued 500,000 $ 500,000 0    
Unamortized discount and debt issuance costs 3,206   0    
Carrying Value 496,794   0    
Senior Notes [Member] | Senior Notes Due Twenty-Twenty Nine          
Debt Instrument [Line Items]          
Aggregate principal amount issued 1,000,000 1,000,000 0    
Unamortized discount and debt issuance costs 9,666   0    
Carrying Value 990,334   0    
Senior Notes [Member] | Senior Notes Due Twenty-Thirty Four          
Debt Instrument [Line Items]          
Aggregate principal amount issued 1,000,000 $ 1,000,000 0    
Unamortized discount and debt issuance costs 10,945   0    
Carrying Value 989,055   0    
Notes Payable to Banks | Term Loan Due 2025          
Debt Instrument [Line Items]          
Aggregate principal amount issued 0   300,000    
Unamortized discount and debt issuance costs 0   229    
Carrying Value $ 0   $ 299,771    
v3.25.0.1
DEBT - Senior Notes (Details) - Senior Notes [Member] - USD ($)
$ in Thousands
Oct. 15, 2024
Dec. 31, 2024
Sep. 10, 2024
Dec. 31, 2023
Oct. 09, 2014
Senior Notes Due 2024          
Debt Instrument [Line Items]          
Principal   $ 0   $ 350,000 $ 350,000
Debt Instrument, Interest Rate, Stated Percentage         4.375%
Repayments of Debt $ 350,000        
Senior Notes Due Twenty-Twenty Seven          
Debt Instrument [Line Items]          
Principal   500,000 $ 500,000 0  
Debt Instrument, Interest Rate, Stated Percentage     4.20%    
Long-Term Debt     $ 496,500    
Unamortized discount     100    
Debt issuance costs     3,500    
Fair value of Senior Notes   495,000      
Senior Notes Due Twenty-Twenty Nine          
Debt Instrument [Line Items]          
Principal   1,000,000 $ 1,000,000 0  
Debt Instrument, Interest Rate, Stated Percentage     4.30%    
Long-Term Debt     $ 989,800    
Unamortized discount     1,400    
Debt issuance costs     8,800    
Fair value of Senior Notes   980,000      
Senior Notes Due Twenty-Thirty Four          
Debt Instrument [Line Items]          
Principal   1,000,000 $ 1,000,000 $ 0  
Debt Instrument, Interest Rate, Stated Percentage     4.70%    
Long-Term Debt     $ 988,800    
Unamortized discount     1,900    
Debt issuance costs     $ 9,300    
Fair value of Senior Notes   $ 960,000      
v3.25.0.1
DEBT - Term Loans (Details) - USD ($)
$ in Thousands
May 30, 2024
Sep. 07, 2022
Term Loan Due 2025    
Debt Instrument [Line Items]    
Principal   $ 300,000
Term Loan Due 2026    
Debt Instrument [Line Items]    
Principal $ 700,000  
v3.25.0.1
DEBT - Revolving Credit Facility (Details) - USD ($)
$ in Thousands
1 Months Ended 12 Months Ended
Aug. 31, 2024
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Line of Credit Facility [Line Items]        
Payments of debt issuance costs   $ 23,828 $ 0 $ 425
Revolving Credit Facility [Member]        
Line of Credit Facility [Line Items]        
Credit facility, current borrowing capacity   1,250,000    
Credit facility, additional borrowing capacity available   500,000    
Credit facility, maximum borrowing capacity   $ 1,750,000    
Credit facility, maturity date   Aug. 14, 2029    
Payments of debt issuance costs $ 1,300      
SOFR adjustment   0.10%    
Debt covenant, acquisition amount triggering step up   $ 250,000    
Minimum [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility [Line Items]        
Credit facility, commitment fee percentage   0.05%    
Credit facility, covenant, debit to EBITDA ratio   3.5    
Debt covenant, pro forma leverage ratio   3.25    
Maximum [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility [Line Items]        
Credit facility, commitment fee percentage   0.125%    
Credit facility, covenant, debt to EBITDA ratio after step up triggered by acquisition   4    
Debt covenant, pro forma leverage ratio   3.75    
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility [Line Items]        
Credit facility, interest rate spread   0.625%    
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility [Line Items]        
Credit facility, interest rate spread   1.125%    
Base Rate [Member] | Minimum [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility [Line Items]        
Credit facility, interest rate spread   0.00%    
Base Rate [Member] | Maximum [Member] | Revolving Credit Facility [Member]        
Line of Credit Facility [Line Items]        
Credit facility, interest rate spread   0.125%    
v3.25.0.1
ACQUISITIONS (Details) - Acquistion details
shares in Thousands
12 Months Ended
Dec. 31, 2024
USD ($)
shares
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
acquisition
May 30, 2024
USD ($)
Jan. 08, 2024
USD ($)
Oct. 02, 2023
USD ($)
Sep. 07, 2023
USD ($)
May 04, 2023
USD ($)
Aug. 31, 2022
USD ($)
Jul. 14, 2022
USD ($)
Business Acquisition [Line Items]                    
Cash consideration to acquire businesses, net of cash acquired $ 737,574,000 $ 198,351,000 $ 613,785,000              
Goodwill 2,378,671,000 1,535,845,000 1,374,268,000              
BETA CAE                    
Business Acquisition [Line Items]                    
Cash acquired       $ 91,300,000            
Business Combination, Consideration Transferred 1,140,000,000                  
Cash consideration to acquire businesses, net of cash acquired $ 638,200,000                  
Stock Issued During Period, Shares, Acquisitions | shares 1,740                  
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable $ 501,800,000                  
Business Combination, Separately Recognized Transactions, Assets Recognized       55,800,000            
Current assets       118,676,000            
Goodwill       822,129,000            
Acquired intangibles       345,000,000            
Other long-term assets       18,198,000            
Total assets acquired       1,304,003,000            
Current liabilities       36,465,000            
Long-term liabilities       36,250,000            
Total liabilities assumed       72,715,000            
Total purchase consideration       $ 1,231,288,000            
Finite-lived Intangible Assets Acquired $ 345,000,000                  
Acquired definite-lived intangible assets, weighted average useful life 11 years                  
BETA CAE | Existing Technology [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired $ 140,000,000                  
Acquired definite-lived intangible assets, weighted average useful life 6 years                  
BETA CAE | Agreements and Relationship [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired $ 190,000,000                  
Acquired definite-lived intangible assets, weighted average useful life 15 years                  
BETA CAE | Tradename Trademark and Patents [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired $ 15,000,000                  
Acquired definite-lived intangible assets, weighted average useful life 7 years                  
Invecas                    
Business Acquisition [Line Items]                    
Cash acquired         $ 23,800,000          
Cash consideration to acquire businesses, net of cash acquired $ 71,200,000                  
Current assets         50,608,000          
Goodwill         42,209,000          
Acquired intangibles         15,500,000          
Other long-term assets         7,414,000          
Total assets acquired         115,731,000          
Current liabilities         17,114,000          
Long-term liabilities         3,647,000          
Total liabilities assumed         20,761,000          
Total purchase consideration         94,970,000          
Acquired definite-lived intangible assets, weighted average useful life 6 years 9 months 18 days                  
Invecas | Agreements and Relationship [Member]                    
Business Acquisition [Line Items]                    
Acquired intangibles assets with finite lives         15,000,000.0          
Invecas | Tradename Trademark and Patents [Member]                    
Business Acquisition [Line Items]                    
Acquired intangibles assets with finite lives         $ 500,000          
Other business combinations                    
Business Acquisition [Line Items]                    
Cash consideration to acquire businesses, net of cash acquired $ 28,300,000                  
Goodwill 25,200,000                  
Acquired intangibles $ 5,500,000                  
Acquired definite-lived intangible assets, weighted average useful life 4 years 10 months 24 days                  
IP Business from Rambus                    
Business Acquisition [Line Items]                    
Cash consideration to acquire businesses, net of cash acquired   108,600,000                
Current assets             $ 1,460,000      
Goodwill             80,999,000      
Acquired intangibles             26,000,000      
Other long-term assets             2,798,000      
Total assets acquired             111,257,000      
Current liabilities             2,531,000      
Long-term liabilities             142,000      
Total liabilities assumed             2,673,000      
Total purchase consideration             $ 108,584,000      
Finite-lived Intangible Assets Acquired   $ 26,000,000                
Acquired definite-lived intangible assets, weighted average useful life   5 years 8 months 12 days                
IP Business from Rambus | Existing Technology [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired   $ 16,700,000                
Acquired definite-lived intangible assets, weighted average useful life   5 years                
IP Business from Rambus | Agreements and Relationship [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired   $ 9,300,000                
Acquired definite-lived intangible assets, weighted average useful life   7 years                
Pulsic. Ltd.                    
Business Acquisition [Line Items]                    
Cash acquired               $ 3,800,000    
Cash consideration to acquire businesses, net of cash acquired   $ 56,100,000                
Current assets               4,369,000    
Goodwill               47,448,000    
Acquired intangibles               12,400,000    
Other long-term assets               89,000    
Total assets acquired               64,306,000    
Current liabilities               1,553,000    
Long-term liabilities               2,885,000    
Total liabilities assumed               4,438,000    
Total purchase consideration               $ 59,868,000    
Finite-lived Intangible Assets Acquired   $ 12,400,000                
Acquired definite-lived intangible assets, weighted average useful life   6 years 9 months 18 days                
Pulsic. Ltd. | Existing Technology [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired   $ 8,000,000                
Acquired definite-lived intangible assets, weighted average useful life   6 years 2 months 12 days                
Pulsic. Ltd. | Agreements and Relationship [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired   $ 4,100,000                
Acquired definite-lived intangible assets, weighted average useful life   8 years                
Pulsic. Ltd. | Tradename Trademark and Patents [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired   $ 300,000                
Acquired definite-lived intangible assets, weighted average useful life   6 years                
Intrinsix                    
Business Acquisition [Line Items]                    
Cash acquired           $ 500,000        
Cash consideration to acquire businesses, net of cash acquired   $ 34,600,000                
Goodwill           31,600,000        
Total assets acquired           $ 900,000        
Finite-lived Intangible Assets Acquired   $ 2,600,000                
Acquired definite-lived intangible assets, weighted average useful life   5 years                
OpenEye Scientific Software, Inc.                    
Business Acquisition [Line Items]                    
Cash acquired                 $ 13,200,000  
Cash consideration to acquire businesses, net of cash acquired     461,300,000              
Current assets                 24,890,000  
Goodwill                 359,580,000  
Acquired intangibles                 117,400,000  
Other long-term assets                 6,542,000  
Total assets acquired                 508,412,000  
Current liabilities                 15,489,000  
Long-term liabilities                 18,456,000  
Total liabilities assumed                 33,945,000  
Total purchase consideration                 $ 474,467,000  
Finite-lived Intangible Assets Acquired     $ 117,400,000              
Acquired definite-lived intangible assets, weighted average useful life     9 years 9 months 18 days              
OpenEye Scientific Software, Inc. | Existing Technology [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired     $ 53,900,000              
Acquired definite-lived intangible assets, weighted average useful life     7 years              
OpenEye Scientific Software, Inc. | Agreements and Relationship [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired     $ 61,400,000              
Acquired definite-lived intangible assets, weighted average useful life     12 years 3 months 18 days              
OpenEye Scientific Software, Inc. | Tradename Trademark and Patents [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired     $ 2,100,000              
Acquired definite-lived intangible assets, weighted average useful life     7 years              
FFG Holdings Limited ("Future Facilities")                    
Business Acquisition [Line Items]                    
Cash acquired                   $ 2,800,000
Cash consideration to acquire businesses, net of cash acquired     $ 100,100,000              
Current assets                   7,992,000
Goodwill                   67,219,000
Acquired intangibles                   38,100,000
Other long-term assets                   2,708,000
Total assets acquired                   116,019,000
Current liabilities                   4,952,000
Long-term liabilities                   8,167,000
Total liabilities assumed                   13,119,000
Total purchase consideration                   $ 102,900,000
Finite-lived Intangible Assets Acquired     $ 38,100,000              
Acquired definite-lived intangible assets, weighted average useful life     7 years 3 months 18 days              
FFG Holdings Limited ("Future Facilities") | Existing Technology [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired     $ 20,900,000              
Acquired definite-lived intangible assets, weighted average useful life     6 years              
FFG Holdings Limited ("Future Facilities") | Agreements and Relationship [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired     $ 15,600,000              
Acquired definite-lived intangible assets, weighted average useful life     9 years              
FFG Holdings Limited ("Future Facilities") | Tradename Trademark and Patents [Member]                    
Business Acquisition [Line Items]                    
Finite-lived Intangible Assets Acquired     $ 1,600,000              
Acquired definite-lived intangible assets, weighted average useful life     8 years              
2022 Other business combination                    
Business Acquisition [Line Items]                    
Cash consideration to acquire businesses, net of cash acquired     $ 53,600,000              
Goodwill     29,500,000              
Acquired intangibles     $ 23,100,000              
Acquired definite-lived intangible assets, weighted average useful life     6 years 10 months 24 days              
Number of businesses acquired | acquisition     3              
Goodwill, expected to be tax deductible     $ 27,800,000              
2022 Other business combination | Existing Technology [Member]                    
Business Acquisition [Line Items]                    
Acquired intangibles assets with finite lives     13,100,000              
2022 Other business combination | Agreements and Relationship [Member]                    
Business Acquisition [Line Items]                    
Acquired intangibles assets with finite lives     3,100,000              
2022 Other business combination | Tradename Trademark and Patents [Member]                    
Business Acquisition [Line Items]                    
Acquired intangibles assets with finite lives     100,000              
2022 Other business combination | In-process technology                    
Business Acquisition [Line Items]                    
Acquired intangible assets with infinite lives     $ 6,800,000              
v3.25.0.1
Acquisitions - Acquisition-related transaction costs (Details) - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Business Acquisition [Line Items]      
Transaction costs associated with acquisitions $ 14.6 $ 12.1 $ 10.1
v3.25.0.1
GOODWILL AND ACQUIRED INTANGIBLES - Goodwill (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Changes in the carrying amount of goodwill    
Balance at beginning of period $ 1,535,845 $ 1,374,268
Goodwill resulting from acquisitions 889,585 160,083
Effect of foreign currency translation (46,759) 1,494
Balance at end of period $ 2,378,671 $ 1,535,845
v3.25.0.1
GOODWILL AND ACQUIRED INTANGIBLES - Acquired Intangibles, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year    
Gross carrying amount   $ 537,429
Accumulated amortization $ (285,197) (207,386)
Acquired intangibles, net 594,734 330,043
In-process technology   6,800
Gross carrying amount of acquired intangibles (excluding goodwill) 879,931 544,229
Acquired intangibles, net (excluding goodwill) 594,734 336,843
Existing technology [Member]    
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year    
Gross carrying amount 465,453 325,710
Accumulated amortization (199,126) (141,659)
Acquired intangibles, net 266,327 184,051
Agreements and relationships [Member]    
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year    
Gross carrying amount 386,365 198,259
Accumulated amortization (78,605) (61,395)
Acquired intangibles, net 307,760 136,864
Tradenames, trademarks and patents [Member]    
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year    
Gross carrying amount 28,113 13,460
Accumulated amortization (7,466) (4,332)
Acquired intangibles, net $ 20,647 $ 9,128
v3.25.0.1
GOODWILL AND ACQUIRED INTANGIBLES - Amortization Expense (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]      
Cost of product and maintenance $ 60,074 $ 43,808 $ 41,348
Amortization of acquired intangibles 30,375 18,162 18,470
Total amortization of acquired intangibles $ 90,449 $ 61,970 $ 59,818
v3.25.0.1
GOODWILL AND ACQUIRED INTANGIBLES - Estimated Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Estimated amortization expense    
2025 $ 91,486  
2026 86,763  
2027 84,480  
2028 79,023  
2029 64,292  
Thereafter 188,690  
Acquired intangibles, net $ 594,734 $ 330,043
v3.25.0.1
INCOME TAXES - Components of Income Before Tax Provision (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]      
United States $ 600,088 $ 533,442 $ 402,083
Foreign subsidiaries 795,731 748,484 643,280
Income before provision for income taxes $ 1,395,819 $ 1,281,926 $ 1,045,363
v3.25.0.1
INCOME TAXES - Components of Provision for Income Taxes (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Current:      
Federal $ 281,674 $ 156,495 $ 212,380
State and local 50,430 15,933 7,280
Foreign 136,968 104,866 84,357
Total current 469,072 277,294 304,017
Deferred:      
Federal (130,490) (87,851) (79,170)
State and local (5,127) 25,440 (50,640)
Foreign 6,880 25,899 22,204
Total deferred (128,737) (36,512) (107,606)
Total provision for income taxes $ 340,335 $ 240,782 $ 196,411
v3.25.0.1
INCOME TAXES - Components of Provision for Income Taxes (Details Textual) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]      
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations $ 3,173 $ 24,768 $ 7,430
Unrecognized tax benefits, decrease resulting from prior period tax positions [1]   1,401  
Increase (decrease) in valuation allowance on deferred tax assets 11,400 9,100 (38,100)
California Franchise Tax Board | Research Tax Credit Carryforward [Member]      
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]      
Increase in Cash Paid For Income Taxes Resulting From Tax Legislation 33,000    
Increase in Long-Term Receivables Resulting From Tax Legislation $ 21,000    
Increase (decrease) in valuation allowance on deferred tax assets     $ 68,700
Change in Capitalized R&D Expenses      
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]      
Unrecognized tax benefits, decrease resulting from prior period tax positions   $ 14,000  
[1] Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions
v3.25.0.1
INCOME TAXES - Reconciliation of Effective Tax Rate (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Effective Income Tax Rate Reconciliation, Amount [Abstract]      
Provision computed at federal statutory income tax rate $ 293,122 $ 269,205 $ 219,526
State and local income tax, net of federal tax effect 50,130 40,304 29,622
Intercompany transfers of intangible property rights 7,833 23,826 0
Foreign income tax rate differential (62,798) (54,210) (49,949)
Foreign-derived intangible income deduction (13,344) (14,253) (2,335)
U.S. tax on foreign entities 144,222 113,011 132,563
Stock-based compensation (6,181) (26,805) (17,023)
Change in deferred tax asset valuation allowance 11,441 9,077 (38,073)
Tax credits (135,344) (130,383) (105,366)
Non-deductible acquisitions-related costs 11,770 6,709 4,273
Withholding taxes 20,175 15,300 17,459
Tax settlements, foreign 0 4,034 0
Increase (decrease) in unrecognized tax benefits 9,061 (19,660) 2,354
Other 10,248 4,627 3,360
Total provision for income taxes $ 340,335 $ 240,782 $ 196,411
Effective tax rate 24.00% 19.00% 19.00%
United States statutory federal income tax rate 21.00%    
v3.25.0.1
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Deferred tax assets:      
Tax credit carryforwards $ 110,031 $ 129,513  
Reserves and accruals 103,731 78,993  
Intangible assets 487,947 506,398  
Capitalized research and development expense for income tax purposes 368,085 242,465  
Operating loss carryforwards 9,781 9,598  
Deferred income 79,195 77,066  
Capital loss carryforwards 16,861 16,483  
Stock-based compensation costs 34,045 27,409  
Depreciation and amortization 17,228 10,671  
Investments 20,757 15,949  
Lease liability 33,341 33,639  
Prepaid expenses 0 3,253  
Total deferred tax assets 1,281,002 1,151,437  
Valuation allowance (90,603) (79,162) $ (70,100)
Net deferred tax assets 1,190,399 1,072,275  
Deferred tax liabilities:      
Intangible assets (107,251) (83,308)  
Undistributed foreign earnings (76,045) (64,371)  
ROU assets (33,341) (33,639)  
Investments 14,171 6,318  
Other (7,869) (13,455)  
Total deferred tax liabilities (238,677) (201,091)  
Total net deferred tax assets 951,722 871,184  
Increase (decrease) in valuation allowance on deferred tax assets $ 11,400 $ 9,100 $ (38,100)
v3.25.0.1
INCOME TAXES - Operating Loss and Tax Credit Carryforwards (Details)
$ in Thousands
Dec. 31, 2024
USD ($)
United States federal [Member]  
Operating Loss Carryforwards [Line Items]  
Operating loss carry forwards $ 61
Tax credit carryforward 51,535 [1]
California State [Member]  
Operating Loss Carryforwards [Line Items]  
Operating loss carry forwards 26,872
Tax credit carryforward 58
States other than California [Member]  
Operating Loss Carryforwards [Line Items]  
Operating loss carry forwards 410
Tax credit carryforward 11,331
Foreign Tax Authority [Member]  
Operating Loss Carryforwards [Line Items]  
Operating loss carry forwards 8,077
Tax credit carryforward $ 47,107
[1] Certain of Cadence’s foreign tax credits have yet to be realized and as a result do not yet have an expiration period.
v3.25.0.1
INCOME TAXES - Unrecognized Tax Benefits, Interest & Penalties (Details) - USD ($)
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Unrecognized Tax Benefits      
Unrecognized tax benefits at the beginning of the fiscal year $ 94,311,000 $ 126,073,000 $ 130,530,000
Unrecognized tax benefits, decrease resulting from prior period tax positions [1]   (1,401,000)  
Unrecognized tax benefits, increase resulting from prior period tax positions [1] 10,109,000   2,152,000
Gross amount of the increases in unrecognized tax benefits as a result of tax positions taken during the current year 6,669,000 2,565,000 2,660,000
Amount of decreases in unrecognized tax benefits relating the settlements with taxing authorities, including the utilization of tax attributes 0 (8,000,000) 0
Reductions to unrecognized tax benefits resulting from the lapse of the applicable statute of limitations (3,173,000) (24,768,000) (7,430,000)
Unrecognized Tax Benefits, Decrease Resulting from Foreign Currency Translation (528,000) (158,000) (1,839,000)
Unrecognized tax benefits at the end of the fiscal year 107,388,000 94,311,000 126,073,000
Total amounts of unrecognized tax benefits that, if upon resolution of the uncertain tax positions would reduce Cadence's effective tax rate 106,420,000 93,398,000 121,415,000
Reasonably possible decrease in unrecognized tax benefits 9,400,000    
Interest and penalties recognized in Income Statements      
Interest 3,893,000 2,282,000 434,000
Penalties 143,000 267,000 $ 7,000
Interest and penalties recognized in Balance Sheets      
Interest 9,010,000 4,813,000  
Penalties $ 1,261,000 $ 0  
[1] Includes unrecognized tax benefits of tax positions recorded in connection with acquisitions
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION - Equity Incentive Plans (Details)
shares in Millions
12 Months Ended
Dec. 31, 2024
shares
2014 Omnibus Equity Incentive Plan [Member]  
Stock Compensation Plans (Textual) [Abstract]  
Additional shares authorized and available for issuance under equity incentive plan 6.5
Number of shares available for issuance under equity incentive plan 14.0
Expiration period from date of grant for options granted 7 years
One Thousand Nine Hundred Ninety Five Directors Stock Options Plan [Member]  
Stock Compensation Plans (Textual) [Abstract]  
Number of shares available for issuance under equity incentive plan 0.4
Term of options granted under Directors' Plan 10 years
Stock options [Member] | 2014 Omnibus Equity Incentive Plan [Member] | Maximum [Member]  
Stock Compensation Plans (Textual) [Abstract]  
Vesting period 4 years
Stock options [Member] | 2014 Omnibus Equity Incentive Plan [Member] | Minimum [Member]  
Stock Compensation Plans (Textual) [Abstract]  
Vesting period 3 years
Employee Stock [Member] | One Thousand Nine Hundred Ninety Five Directors Stock Options Plan [Member]  
Stock Compensation Plans (Textual) [Abstract]  
Vesting period 1 year
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION - Expense by Award Type (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation $ 391,219 $ 325,611 $ 270,439
Income tax benefit 66,080 50,994 40,612
Stock options [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation 18,610 15,939 14,597
Restricted stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation 338,082 278,567 224,887
Employee stock purchase plans [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation $ 34,527 $ 31,105 $ 30,955
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION - Expense by Income Statement Caption (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Stock based compensation expense and allocation by cost      
Stock-based compensation $ 391,219 $ 325,611 $ 270,439
Cost of product and maintenance [Member]      
Stock based compensation expense and allocation by cost      
Stock-based compensation 6,402 4,500 3,818
Cost of services [Member]      
Stock based compensation expense and allocation by cost      
Stock-based compensation 8,149 5,728 4,851
Marketing and sales [Member]      
Stock based compensation expense and allocation by cost      
Stock-based compensation 77,195 66,304 54,771
Research and development [Member]      
Stock based compensation expense and allocation by cost      
Stock-based compensation 241,730 194,709 158,937
General and administrative [Member]      
Stock based compensation expense and allocation by cost      
Stock-based compensation $ 57,743 $ 54,370 $ 48,062
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION - Stock Options (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]      
Options outstanding beginning balance 2,367    
Granted 212    
Exercised (1,231)    
Canceled and forfeited (26)    
Options outstanding ending balance 1,322 2,367  
Options vested as of December 31, 2024 852    
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]      
Weighted-Average Exercise Price, Options outstanding beginning balance $ 107.93    
Weighted-Average Exercise Price Granted 297.56    
Weighted-Average Exercise Price Exercised 72.19    
Weighted-Average Exercise Price Canceled and Forfeited 138.02    
Weighted-Average Exercise Price, Options outstanding ending balance 171.08 $ 107.93  
Weighted Average Exercise Price, Options vested as of December 31, 2024 $ 141.14    
Weighted-Average Remaining Contractual Term, Options outstanding as of December 31, 2024 4 years    
Weighted-Average Remaining Contractual Term, Options vested as of December 31, 2024 3 years 3 months 18 days    
Aggregate Intrinsic Value, Options outstanding as of December 31, 2024 $ 170,973    
Aggregate Intrinsic Value, Options vested as of December 31, 2024 135,744    
Intrinsic Value And Cash Received From Stock Options Exercised [Abstract]      
Intrinsic value of options exercised 266,336 $ 139,125 $ 105,242
Cash received from options exercised $ 88,903 $ 30,940 $ 16,014
Stock options [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Dividend yield 0.00% 0.00% 0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate 31.90% 32.60% 36.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate 4.34% 3.62% 2.14%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term 4 years 9 months 18 days 5 years 4 years 9 months 18 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value $ 103.79 $ 71.83 $ 49.16
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount $ 33,300    
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition 2 years 2 months 12 days    
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION - Restricted Stock (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation $ 391,219 $ 325,611 $ 270,439
Restricted stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation $ 338,082 $ 278,567 224,887
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]      
Unvested shares beginning balance 5,597    
Granted 1,573    
Vested (2,233)    
Forfeited (380)    
Unvested shares ending balance 4,557 5,597  
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]      
Unvested shares beginning balance, Weighted-Average Grant Date Fair Value $ 129.35    
Granted, Weighted-Average Grant date Fair Value 310.81    
Vested, Weighted-Average Grant Date Fair Value 142.37    
Forfeited, Weighted-Average Grant Date Fair Value 115.06    
Unvested shares beginning balance, Weighted-Average Grant Date Fair Value $ 186.79 $ 129.35  
Unvested shares as of December 31, 2023, Aggregate Intrinsic Value $ 1,153,219    
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]      
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount $ 653,000    
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition 1 year 8 months 12 days    
Fair value of restricted stock realized upon vesting $ 649,152 $ 442,556 346,003
Restricted stock [Member] | Minimum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]      
Vesting period 3 years    
Restricted stock [Member] | Maximum [Member]      
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract]      
Vesting period 4 years    
Stock-based compensation expense related to performance-based restricted stock [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Stock-based compensation $ 29,178 $ 22,922 $ 17,753
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]      
Unvested shares ending balance 1,600    
Market-based performance restricted stock grants [Member]      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Dividend yield   0.00% 0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate   33.60% 29.10%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate   3.64% 1.98%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term   3 years 9 months 18 days 5 years 1 month 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value   $ 132.20 $ 51.34
Stock-based compensation $ 19,934 $ 30,095 $ 25,259
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION - Employee Stock Purchase Plan (Details) - USD ($)
$ / shares in Units, shares in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Purchase rights granted [Member]      
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract]      
Dividend yield 0.00% 0.00% 0.00%
Expected volatility 32.10% 29.90% 37.20%
Risk-free interest rate 5.11% 4.50% 1.71%
Expected term (in years) 6 months 6 months 6 months
Weighted average fair value of options granted $ 65.50 $ 50.95 $ 43.41
Employee stock purchase plans [Member]      
Shares of Common Stock Issued under Employee Stock Purchase Plan [Abstract]      
Cadence shares purchased under the ESPP 548 647 703
Cash received for the purchase of shares under the ESPP $ 115,335,000 $ 102,017,000 $ 89,314,000
Weighted average purchase price per share $ 210.31 $ 157.70 $ 127.12
Purchase Period for Common Stock 6 months    
Percentage of Lower of Fair Market Value at Beginning or End of Applicable Offering Period Used for Calculating Price of Common Stock to be Purchased by Employees 85.00%    
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Employee Subscription Rate 15.00%    
Maximum Amount for which Common Stock can be Purchased by Employees in any Calendar Year $ 25,000    
Additional shares authorized and available for issuance under equity incentive plan 3,500    
Shares available for future issuance 6,200    
v3.25.0.1
STOCK COMPENSATION PLANS AND STOCK-BASED COMPENSATION - Reserved for Future Issuance (Details)
shares in Thousands
Dec. 31, 2024
shares
Common stock reserved for future issuance  
Common stock reserved for future issuance 25,119
Employee equity incentive plans [Member]  
Common stock reserved for future issuance  
Common stock reserved for future issuance 18,456 [1]
Employee stock purchase plans [Member]  
Common stock reserved for future issuance  
Common stock reserved for future issuance 6,232
Directors stock option plans [Member]  
Common stock reserved for future issuance  
Common stock reserved for future issuance 431 [1]
[1] Includes shares reserved for: (i) issuance upon exercise of future option grants, (ii) issuance upon vesting of future restricted stock grants, (iii) outstanding but unexercised options to purchase common stock, or (iv) unvested restricted stock units.
v3.25.0.1
STOCK REPURCHASE PROGRAMS (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
1 Months Ended 12 Months Ended
Aug. 31, 2023
Jun. 30, 2023
Sep. 30, 2022
Jun. 30, 2022
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Jan. 01, 2022
Equity, Class of Treasury Stock [Line Items]                
Shares repurchased         1,930 3,145 [1] 6,602 [2]  
Total cost of repurchased shares         $ 550,026 $ 700,134 [1] $ 1,050,091 [2]  
Treasury stock acquired         550,026 641,041 $ 1,020,091  
Excise taxes recorded as a component of treasury stock           $ 900    
Stock repurchase program, remaining authorized repurchase amount         $ 800,000      
Share repurchase on open market                
Equity, Class of Treasury Stock [Line Items]                
Shares repurchased         1,900 2,300 6,000  
Treasury stock acquired         $ 550,000 $ 500,000 $ 950,100  
Accelerated Share Repurchase Program                
Equity, Class of Treasury Stock [Line Items]                
Shares repurchased 300 600 100 500 900 600    
Shares from equity forward contract settled during the period           276   109
Treasury stock acquired   $ 140,000   $ 70,000        
Accelerated share repurchase, prepayment during period   $ 200,000   $ 100,000        
Value of equity-linked contract under ASR agreement           $ 60,000   $ 30,000
Average price per share repurchased under ASR agreement         $ 228.26 $ 167.07    
[1] Includes 276 thousand shares and $60 million equity forward contract from the June 2023 ASR settled in August 2023, and excludes $0.9 million of excise tax.
[2] Includes 109 thousand shares and $30 million equity forward contract from the June 2022 ASR settled in September 2022.
v3.25.0.1
RESTRUCTURING AND OTHER CHARGES (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Cadence's Restructuring Plans      
Beginning Balance $ 2,603 $ 0 $ 43
Restructuring 23,765 11,013 55
Non-cash changes (1,030) (78)  
Cash payments (20,464) (8,211) (98)
Effect of foreign currency translation (147) (121) 0
Ending Balance 4,727 2,603 0
Severance and Benefits [Member]      
Cadence's Restructuring Plans      
Beginning Balance 2,603 0 0
Restructuring 22,735 10,935 0
Non-cash changes 0 0  
Cash payments (20,464) (8,211) 0
Effect of foreign currency translation (147) (121) 0
Ending Balance 4,727 2,603 0
Excess Facilities [Member]      
Cadence's Restructuring Plans      
Beginning Balance 0 0 43
Restructuring 1,030 78 55
Non-cash changes (1,030) (78)  
Cash payments 0 0 (98)
Effect of foreign currency translation 0 0 0
Ending Balance $ 0 $ 0 $ 0
v3.25.0.1
OTHER INCOME (EXPNESE), NET (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Other Income, Net      
Interest income $ 62,484 $ 29,637 $ 10,099
Gains (losses) on investments 49,593 34,602 (5,425)
Gains (losses) on securities in NQDC trust 11,145 10,851 (8,744)
Losses on foreign exchange (965) (5,490) (459)
Other expense, net (1,202) (2,714) (860)
Total other income (expense), net $ 121,055 $ 66,886 $ (5,389)
v3.25.0.1
NET INCOME PER SHARE - Basic and Diluted Income Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Earnings Per Share [Abstract]      
Net income $ 1,055,484 $ 1,041,144 $ 848,952
Weighted average common shares used to calculate basic net income per share 271,212 269,381 271,198
Stock-based awards 2,621 3,367 3,813
Weighted average common shares used to calculate diluted net income per share 273,833 272,748 275,011
Net income per share - basic (in usd per share) $ 3.89 $ 3.86 $ 3.13
Net income per share - diluted (in usd per share) $ 3.85 $ 3.82 $ 3.09
v3.25.0.1
NET INCOME PER SHARE - Anti-Dilutive Shares Outstanding (Details) - shares
shares in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Potential shares of Cadence's common stock excluded      
Total potential common shares excluded 442 1,958 2,369
Long-term market-based awards      
Potential shares of Cadence's common stock excluded      
Total potential common shares excluded 0 1,381 1,565
Options to purchase shares of common stock      
Potential shares of Cadence's common stock excluded      
Total potential common shares excluded 184 345 716
Non-vested shares of restricted stock      
Potential shares of Cadence's common stock excluded      
Total potential common shares excluded 258 232 88
v3.25.0.1
INVESTMENTS - Marketable Equity Investments (Details) - USD ($)
$ in Millions
Dec. 31, 2024
Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]    
Marketable equity securities $ 90.4 $ 80.6
v3.25.0.1
INVESTMENTS - Non-Marketable Equity Investments, Equity Method Investments (Details) - Privately held company, equity method - USD ($)
$ in Millions
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Schedule of Equity Method Investments [Line Items]      
Equity method investment, ownership percentage 16.00%    
Equity method investments, carrying value $ 97.5 $ 111.1  
Income (Loss) from equity method investments $ 2.5 $ 2.7 $ 3.6
v3.25.0.1
INVESTMENTS - Non-Marketable Equity Investments, Securities Without Readily Determinable Fair Value (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Equity securities without a readily determinable fair value [Line Items]    
Equity Securities without Readily Determinable Fair Value, Amount $ 124,086 $ 138,321
Other equity investments not readily marketable [Member]    
Equity securities without a readily determinable fair value [Line Items]    
Equity Securities without Readily Determinable Fair Value, Amount $ 26,600 $ 27,200
v3.25.0.1
INVESTMENTS - Investments in Equity Securities, FV-NI Gain (Loss) (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Debt and Equity Securities, FV-NI [Line Items]      
Equity Securities, FV-NI, Gain (Loss) $ 49,653 $ 34,651 $ (5,336)
Equity Securities, FV-NI, Realized Gain (Loss) 20,367 12,283 0
Equity Securities, FV-NI, Unrealized Gain (Loss) $ 29,286 $ 22,368 $ (5,336)
v3.25.0.1
INVESTMENTS - Marketable Debt Securities (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Debt Securities, Available-for-Sale [Line Items]    
Amortized cost basis of available-for-sale securities $ 50,604 $ 49,653
Gross Unrealized Gains 230 375
Gross Unrealized Losses (582) (243)
Estimated fair value of available-for-sale debt securities 50,252 49,785
Remaining contractual maturity within 1 year 569  
Remaining contractual maturity between 1 and 5 years 9,294  
Remaining contractual maturity between 5 and 10 years 17,882  
Remaining contractual maturity after 10 years 22,507  
Mortgage-Backed Securities, Issued by US Government Sponsored Enterprises    
Debt Securities, Available-for-Sale [Line Items]    
Amortized cost basis of available-for-sale securities 50,604 49,653
Gross Unrealized Gains 230 375
Gross Unrealized Losses (582) (243)
Estimated fair value of available-for-sale debt securities 50,252 $ 49,785
Fair value of available-for-sale debt securities in a continuous unrealized loss position, 12 months or longer $ 6,000  
v3.25.0.1
FAIR VALUE - Fair Value of Financial Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total Liabilities   $ 0
Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total Liabilities   7,533
Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total Liabilities   0
Fair Value, Recurring    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Assets, Fair Value Disclosure $ 1,937,160 706,341
Total Liabilities   7,533
Fair Value, Recurring | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Assets, Fair Value Disclosure 1,886,908 647,229
Fair Value, Recurring | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Assets, Fair Value Disclosure 50,252 59,112
Fair Value, Recurring | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Assets, Fair Value Disclosure 0 0
Fair Value, Recurring | Foreign Exchange Contract    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   7,533
Fair Value, Recurring | Foreign Exchange Contract | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   0
Fair Value, Recurring | Foreign Exchange Contract | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   7,533
Fair Value, Recurring | Foreign Exchange Contract | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   0
Fair Value, Recurring | Money Market Funds [Member] | Cash Equivalents    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and Cash Equivalents, Fair Value Disclosure 1,700,084 490,983
Fair Value, Recurring | Money Market Funds [Member] | Cash Equivalents | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and Cash Equivalents, Fair Value Disclosure 1,700,084 490,983
Fair Value, Recurring | Money Market Funds [Member] | Cash Equivalents | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and Cash Equivalents, Fair Value Disclosure 0 0
Fair Value, Recurring | Money Market Funds [Member] | Cash Equivalents | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Cash and Cash Equivalents, Fair Value Disclosure 0 0
Fair Value, Recurring | Equity Securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 90,374 80,575
Fair Value, Recurring | Equity Securities | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 90,374 80,575
Fair Value, Recurring | Equity Securities | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 0 0
Fair Value, Recurring | Equity Securities | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 0 0
Fair Value, Recurring | Mortgage-backed and asset-backed securities    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 50,252 49,785
Fair Value, Recurring | Mortgage-backed and asset-backed securities | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 0 0
Fair Value, Recurring | Mortgage-backed and asset-backed securities | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 50,252 49,785
Fair Value, Recurring | Mortgage-backed and asset-backed securities | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Investments, Fair Value Disclosure 0 0
Fair Value, Recurring | Deferred Compensation Plan Assets    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other Assets, Fair Value Disclosure 96,450 75,671
Fair Value, Recurring | Deferred Compensation Plan Assets | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other Assets, Fair Value Disclosure 96,450 75,671
Fair Value, Recurring | Deferred Compensation Plan Assets | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other Assets, Fair Value Disclosure 0 0
Fair Value, Recurring | Deferred Compensation Plan Assets | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Other Assets, Fair Value Disclosure $ 0 0
Fair Value, Recurring | Foreign Exchange Contract    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   9,327
Fair Value, Recurring | Foreign Exchange Contract | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   0
Fair Value, Recurring | Foreign Exchange Contract | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   9,327
Fair Value, Recurring | Foreign Exchange Contract | Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Foreign currency exchange contracts   $ 0
v3.25.0.1
FAIR VALUE - Level 3 Measurements (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2024
USD ($)
2024 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Finite-lived Intangible Assets Acquired $ 366,000
2023 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Finite-lived Intangible Assets Acquired $ 41,000
Fair Value, Inputs, Level 3 [Member] | Customer Relationships [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member] | 2024 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Estimated Customer Retention Rate 85.00%
Discount rate 10.00%
Fair Value, Inputs, Level 3 [Member] | Customer Relationships [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member] | 2023 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Estimated Customer Retention Rate 70.00%
Discount rate 12.00%
Fair Value, Inputs, Level 3 [Member] | Customer Relationships [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member] | 2024 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Estimated Customer Retention Rate 92.00%
Discount rate 14.00%
Fair Value, Inputs, Level 3 [Member] | Customer Relationships [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member] | 2023 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Estimated Customer Retention Rate 90.00%
Discount rate 15.00%
Fair Value, Inputs, Level 3 [Member] | Technology-Based Intangible Assets | Measurement Input, Discount Rate [Member] | 2024 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Estimated Technological Obsolescence Rate 10.00%
Estimated Royalty Rate 30.00%
Fair Value, Inputs, Level 3 [Member] | Technology-Based Intangible Assets | Minimum [Member] | Measurement Input, Discount Rate [Member] | 2023 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Estimated Technological Obsolescence Rate 10.00%
Estimated Royalty Rate 25.00%
Fair Value, Inputs, Level 3 [Member] | Technology-Based Intangible Assets | Maximum [Member] | Measurement Input, Discount Rate [Member] | 2023 acquisitions  
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]  
Estimated Technological Obsolescence Rate 13.00%
Estimated Royalty Rate 30.00%
v3.25.0.1
BALANCE SHEET COMPONENTS (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Inventories:    
Raw materials $ 243,244 $ 162,754
Work-in-process 1,216 0
Finished goods 13,251 18,907
Inventories 257,711 181,661
Prepaid expenses and other:    
Short-term investments 140,625 130,359
Other prepaid expenses and other assets 293,253 166,821
Prepaid expenses and other 433,878 297,180
Property, plant and equipment:    
Equipment and internal-use software 875,399 781,683
Buildings 137,781 131,882
Land 57,687 56,641
Leasehold, building and land improvements 245,669 211,854
Furniture and fixtures 43,517 39,998
In-process capital assets 14,879 17,937
Total cost 1,374,932 1,239,995
Less: Accumulated depreciation and amortization (916,732) (836,782)
Property, plant and equipment, net 458,200 403,213
Other assets:    
Non-marketable investments 124,086 138,321
ROU lease assets 146,190 150,797
Other long-term assets 274,465 248,254
Other assets 544,741 537,372
Accounts payable and accrued liabilities:    
Trade accounts payable 5,555 91,194
Payroll and payroll-related accruals 335,232 294,108
Other accrued operating liabilities 291,905 191,256
Accounts payable and accrued liabilities 632,692 576,558
Other long-term liabilities:    
Operating lease liabilities 108,893 115,358
Other accrued liabilities 230,555 160,293
Other long-term liabilities $ 339,448 $ 275,651
v3.25.0.1
LEASES - Operating Lease Expense (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]      
Operating lease expense $ 61,827 $ 56,805 $ 49,165
v3.25.0.1
LEASES - Additional Lease Activity (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Leases [Abstract]      
Cash paid for amounts included in the measurement of operating lease liabilities $ 49,978 $ 46,069 $ 34,334
ROU assets obtained in exchange for operating lease obligations $ 42,614 $ 32,597 $ 83,758
v3.25.0.1
LEASES - ROU Lease Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Leases [Abstract]    
Right-of-use assets [Extensible List] Other Assets Other Assets
ROU lease assets $ 146,190 $ 150,797
Operating lease, liability, current [Extensible List] Accounts Payable and Accrued Liabilities, Current Accounts Payable and Accrued Liabilities, Current
Operating lease, liability, current $ 41,554 $ 41,619
Operating lease liabilities 108,893 115,358
Total lease liabilities $ 150,447 $ 156,977
Operating lease, weighted average remaining lease term 5 years 3 months 18 days 5 years 8 months 12 days
Operating lease, weighted average discount rate, 4.00% 4.00%
Operating lease liability, noncurrent [Extensible List] Other Liabilities, Noncurrent Other Liabilities, Noncurrent
v3.25.0.1
LEASES - Future Lease Payments (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Leases [Abstract]    
2025 $ 45,456  
2026 36,750  
2027 23,178  
2028 19,048  
2029 15,136  
Thereafter 29,783  
Total future lease payments 169,351  
Less imputed interest (18,904)  
Total operating lease liability 150,447 $ 156,977
Operating lease obligations for lease not yet commenced $ 4,200  
v3.25.0.1
COMMITMENTS AND CONTINGENCIES - purchase obligations (Details)
$ in Thousands
Dec. 31, 2024
USD ($)
Purchase Obligation, Fiscal Year Maturity [Abstract]  
2025 $ 58,893
2026 16,084
2027 1,951
2028 1,204
2029 130
Thereafter 0
Purchase obligations $ 78,262
v3.25.0.1
COMMITMENTS AND CONTINGENCIES (Details Textual)
$ in Thousands
12 Months Ended
Dec. 31, 2024
USD ($)
Loss Contingencies [Line Items]  
Korea tax audit assessment, payment $ 49,000
v3.25.0.1
EMPLOYEE AND DIRECTOR BENEFIT PLANS (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Contributions to plan      
Contributions to defined contribution plans $ 45,164 $ 39,651 $ 35,464
v3.25.0.1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Sep. 05, 2024
Dec. 31, 2023
Accumulated other comprehensive loss      
Foreign currency translation loss $ (178,611)   $ (90,678)
Changes in defined benefit plan liabilities (4,447)   (4,208)
Unrealized losses on derivatives designated as hedging instruments (7,038)   0
Unrealized gains (losses) on available-for-sale debt securities (352)   132
Total accumulated other comprehensive loss (190,448)   $ (94,754)
Other Comprehensive Income (Loss), before Tax [Abstract]      
Other comprehensive loss, from hedging activities, before reclassification and tax $ 9,700    
Treasury Lock [Member]      
Derivative [Line Items]      
Derivative, Notional Amount   $ 850,000  
v3.25.0.1
SEGMENT REPORTING - Revenue, significant expenses and net income (Details)
$ in Thousands
12 Months Ended
Dec. 31, 2024
USD ($)
segment
Dec. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Revenue $ 4,641,264 $ 4,089,986 $ 3,561,718
Depreciation and amortization 196,935 145,292 132,088
Restructuring 23,765 11,013 55
Interest income (62,484) (29,637) (10,099)
Interest expense 75,999 36,185 22,934
Provision for income taxes 340,335 240,782 196,411
Net income $ 1,055,484 1,041,144 848,952
Number of Operating Segments | segment 1    
Reportable Segment      
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]      
Revenue $ 4,641,264 4,089,986 3,561,718
Salary, benefits and other employee-related costs 1,936,542 1,754,223 1,574,910
Stock based compensation 391,219 325,611 270,439
Manufacturing costs 330,903 232,012 173,160
Facilities and other infrastructure costs 174,102 156,977 139,150
Depreciation and amortization 196,935 145,292 132,088
Professional Services 153,439 117,752 117,442
Restructuring 23,765 11,013 55
Other segment items [1] 25,025 58,632 96,276
Interest income (62,484) (29,637) (10,099)
Interest expense 75,999 36,185 22,934
Provision for income taxes 340,335 240,782 196,411
Net income $ 1,055,484 $ 1,041,144 $ 848,952
[1] Other segment items includes direct costs for advertising, marketing events, travel, entertainment, bad debt and other operating expense categories that are not considered significant individually. It also includes non-operating expenses such as gains and losses on investments, foreign currency and other non-operating expenses that are not considered significant individually.
v3.25.0.1
SEGMENT REPORTING - Summary of Revenue by Geography (Details) - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Total revenue $ 4,641,264 $ 4,089,986 $ 3,561,718
United States      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers 2,159,703 1,694,529 1,577,881
Other Americas [Member]      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers 93,101 65,259 53,123
Americas [Member]      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers 2,252,804 1,759,788 1,631,004
China [Member]      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers 573,096 679,538 521,509
Other Asia [Member]      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers 855,919 766,409 629,533
Asia [Member]      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers 1,429,015 1,445,947 1,151,042
Europe, Middle East and Africa [Member]      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers 699,241 655,078 582,350
Japan [Member]      
Entity Wide Disclosure on Geographic Areas Revenue from External Customers      
Geographic areas, revenue from external customers $ 260,204 $ 229,173 $ 197,322
v3.25.0.1
SEGMENT REPORTING - Summary of Long-Lived Assets by Geography (Details) - USD ($)
$ in Thousands
Dec. 31, 2024
Dec. 31, 2023
Dec. 31, 2022
Summary of long-lived assets by geography      
Long-lived assets $ 604,390 $ 554,010 $ 541,830
United States      
Summary of long-lived assets by geography      
Long-lived assets 412,339 383,807 347,822
Other Americas [Member]      
Summary of long-lived assets by geography      
Long-lived assets 7,437 10,219 7,548
Americas [Member]      
Summary of long-lived assets by geography      
Long-lived assets 419,776 394,026 355,370
China [Member]      
Summary of long-lived assets by geography      
Long-lived assets 22,929 29,598 51,667
Other Asia [Member]      
Summary of long-lived assets by geography      
Long-lived assets 83,951 71,365 73,329
Asia [Member]      
Summary of long-lived assets by geography      
Long-lived assets 106,880 100,963 124,996
Europe, Middle East and Africa [Member]      
Summary of long-lived assets by geography      
Long-lived assets 73,551 56,449 56,959
Japan [Member]      
Summary of long-lived assets by geography      
Long-lived assets $ 4,183 $ 2,572 $ 4,505