Cadence Design Systems Inc filed its 10-Q with the SEC, and its figures are now in our data. Revenue over the twelve months to Q3 2026 was $6.1 billion, a 17.6% increase on the year before. That growth rate stood 2.9 percentage points above the level recorded a quarter earlier.
Source: SEC EDGAR XBRL company facts. Latest period shown: FY26 Q3.
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| Period | Revenue growth, TTM YoY | Operating margin (TTM) | FCF margin (TTM) |
|---|---|---|---|
| FY24 Q4 | 13.5% | 29.1% | 24.1% |
| FY25 Q1 | 19.5% | 30.0% | 28.3% |
| FY25 Q2 | 22.3% | 27.7% | 31.1% |
| FY25 Q3 | 19.7% | 28.5% | 28.4% |
| FY25 Q4 | 14.1% | 28.2% | 30.0% |
| FY26 Q1 | 13.4% | 28.3% | 25.9% |
| FY26 Q2 | 14.7% | 30.3% | 28.8% |
| FY26 Q3 | 17.6% | 28.9% | 28.8% |
What stands out
Capital spending rose 48.0%, outpacing the 21.7% rise in operating cash flow. Consequently, less of the generated cash remained available.
What the company earns
The trailing operating margin reached 28.9%, up 0.4 percentage points from a year earlier. The trailing net margin stood at 22.5%. Net income over the twelve months totaled $1.4 billion, representing a 30.1% increase on the prior year.
The cash picture
Investment is rising faster than operating cash flow, squeezing what remains for shareholders. Operating cash flow over the twelve months was $2.0 billion, up 21.7% on the year before. Capital spending amounted to $204.3 million, or 3.3% of revenue. Free cash flow, defined as operating cash flow less capital spending, reached $1.8 billion, a 19.3% increase on the prior year. This represented a free-cash-flow margin of 28.8%, up 0.4 percentage points from a year earlier.
Share count
The average diluted share count increased by 0.3% over the year.
Against its own history
Set against the company’s own record, today’s free-cash-flow margin of 28.8% exceeds 74% of past quarterly readings, which have ranged from 9.1% to 36.9%. Today’s operating margin of 28.9% is higher than 88% of historical levels (−9.3% to 30.8%). Similarly, the twelve-month revenue growth rate of 17.6% surpasses 81% of past readings (5.4% to 22.9%).
Guidance
The company raised its fiscal year 2026 guidance for revenue growth outlook to 21%, non-gaap EPS (adjusted) to $8.40, and GAAP operating margin to a range of 28.2% to 29.2%. For q4 2026, the company provided revenue guidance of $1.7 billion to $1.73 billion.
The valuation angle
Our model translates these figures into value. In our model, a growth rate 5 percentage points lower would reduce value by 24.4%, while a rate 5 percentage points higher would increase it by 31.3%. A free-cash-flow margin 1 percentage point lower would decrease value by 3.3%.
What to watch
The next filing will show whether the trends above continue, slow or reverse.
