Deutsche Bank 2025 Technology Conference - Cadence Design CFO John Wall - Cadence Design's Strategic Growth and Market Outlook in the AI Super Cycle

Executive Summary

Cadence Design is experiencing strong growth due to its favorable position in the AI super cycle. The widespread adoption of its Cadence.ai product portfolio (led by Cerebras) has not only achieved penetration beyond top customers but is also gradually driving monetization by pulling through sales of traditional tools (like Innovus) and realizing value uplift in renewals. Financially, the company expects to set a new backlog record by year-end and is well-positioned to handle the challenging year-over-year comparisons brought by the hardware business. In the competitive landscape, management views Synopsys' acquisition of Ansys as a neutral to positive catalyst, potentially bringing new customer evaluation opportunities for Cadence. Furthermore, the company effectively manages geopolitical risks in the Chinese market through a consumption-based revenue model and sees Intel as a significant growth opportunity. Finally, Cadence reiterates its "farmers, not hunters" strategy, focusing on organic growth and selective small "tuck-in" acquisitions.