Aureus
AExcellent

Cadence Design Systems, Inc.(CDNS)

A

Financial data as of Dec 31, 2025Improving · Technology

FCF Margin30.0%Free Cash Flow / Revenue
Cash Conversion155.9%Operating CF / Net Income
Free Cash Flow$1.6B
Revenue$5.3B
Net Cash$384.9MCash exceeds debt
Debt / FCF1.6xManageable debt load
Current Ratio2.86Adequate short-term liquidity
YoY FCF Growth+26.8%5 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseA
→
+0.5Healthy FCF margin with manageable debt (30.0%, 1.6x)
→
+1Strong YoY FCF growth (26.8% YoY)
→
+1Net cash position with strong FCF margin
→
+1Very low debt-to-FCF ratio (1.6x)
→
+0.5Highly consistent quarterly FCF
→
FinalA

Analysis Summary

Strengths

  • Exceptional FCF margin (30.0%)
  • Excellent cash conversion (156%)
  • Net cash position ($0.4B)
  • Very low debt relative to cash flow (1.6x)
  • Strong liquidity (current ratio: 2.86)
  • Strong YoY FCF growth (+26.8%)
  • Highly consistent quarterly FCF

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin30.0%
Net Margin20.9%
Operating CF Margin32.6%
CapEx Ratio2.7%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash$384.9MCash exceeds debt
Debt / FCF1.6xManageable debt load
Current Ratio2.86Strong liquidity
Debt / Equity0.48Low leverage

Quarterly FCF Trend

+26.8% YoYImproving (+26.8%)

Free cash flow per quarter

Sector Comparison — Technology

FCF Margin ranked against sector peers

View all →

Detailed Metrics

Company NameCadence Design Systems, Inc.
SectorTechnology
Free Cash Flow$1.6B
Revenue$5.3B
Net Income$1.1B
Operating Cash Flow$1.7B
Capital Expenditure$141.9M
FCF Margin30.0%
Cash Conversion Rate155.9%
Net Margin20.9%
Total Debt$2.6B
Total Cash$3.0B
Net Cash$384.9M
Current Ratio2.86
Debt / Equity0.48
Debt / FCF1.6x
YoY FCF Growth+26.8%
Positive Quarters5 of 5
Trend DirectionImproving
Report DateDec 31, 2025
GradeA
Data SourceYahoo Finance