Cadence Design Systems NASDAQ:CDNS, a semiconductor-design software company, jumped more than 5% in Monday's extended trading after raising its annual revenue and profit forecasts. The company's electronic-design-automation tools help engineers design and validate semiconductors and complex electronic systems. Demand has increased as chipmakers and technology companies develop more advanced systems-on-chip and artificial-intelligence accelerators, with NVIDIA NASDAQ:NVDA, an AI-chip designer, and Apple NASDAQ:AAPL, a consumer-technology company, among Cadence's customers.
Cadence now expects 2026 revenue between $6.26 billion and $6.34 billion, compared with its previous range of $6.13 billion to $6.23 billion. Analysts had expected approximately $6.21 billion. The company also raised its adjusted-earnings forecast to between $8.05 and $8.15 per share from $7.85 to $7.95, placing the entire revised range above the $7.96 analyst estimate. Second-quarter revenue increased 24.2% to $1.58 billion, while adjusted earnings of $2.11 per share exceeded the $2.05 consensus.
Cadence ended the quarter with an $8.1 billion backlog, including approximately $4.2 billion expected to become revenue over the following 12 months. Earlier in July, the company introduced AuraStack, an AI super agent that allows engineers to describe objectives in ordinary language before the software plans, lays out and virtually tests circuit designs. The midpoint of Cadence's annual revenue forecast increased by approximately $120 million, while its adjusted-earnings midpoint rose by $0.20 per share. These revisions may indicate that growing AI-design complexity is expanding demand for the software tools required before advanced chips enter production.