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Cadence Design Systems Gross Margin %

: 89.80% (As of Sep. 2021)
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Gross Margin % is calculated as gross profit divided by its revenue. Cadence Design Systems's Gross Profit for the three months ended in Sep. 2021 was $674 Mil. Cadence Design Systems's Revenue for the three months ended in Sep. 2021 was $751 Mil. Therefore, Cadence Design Systems's Gross Margin % for the quarter that ended in Sep. 2021 was 89.80%.


The historical rank and industry rank for Cadence Design Systems's Gross Margin % or its related term are showing as below:

NAS:CDNS' s Gross Margin % Range Over the Past 10 Years
Min: 83.03   Med: 86.14   Max: 88.61
Current: 89.55

83.03
88.61

During the past 13 years, the highest Gross Margin % of Cadence Design Systems was 88.61%. The lowest was 83.03%. And the median was 86.14%.

NAS:CDNS's Gross Margin % is ranked higher than
82% of the 525 Companies
in the Software industry.

( Industry Median: 60.80 vs. NAS:CDNS: 89.55 )

Cadence Design Systems had a gross margin of 89.80% for the quarter that ended in Sep. 2021 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Cadence Design Systems was 0.70% per year.


Cadence Design Systems Gross Margin % Historical Data

The historical data trend for Cadence Design Systems's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Cadence Design Systems Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
Gross Margin %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 85.88 87.78 87.90 88.60 88.61

Cadence Design Systems Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 87.66 90.32 88.59 89.47 89.80

Competitive Comparison

For the Software - Application subindustry, Cadence Design Systems's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Cadence Design Systems Gross Margin % Distribution

For the Software industry and Technology sector, Cadence Design Systems's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Cadence Design Systems's Gross Margin % falls into.



Cadence Design Systems Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Cadence Design Systems's Gross Margin for the fiscal year that ended in Dec. 2020 is calculated as

Gross Margin % (A: Dec. 2020 )=Gross Profit (A: Dec. 2020 ) / Revenue (A: Dec. 2020 )
=2377.4 / 2682.891
=(Revenue - Cost of Goods Sold) / Revenue
=(2682.891 - 305.498) / 2682.891
=88.61 %

Cadence Design Systems's Gross Margin for the quarter that ended in Sep. 2021 is calculated as


Gross Margin % (Q: Sep. 2021 )=Gross Profit (Q: Sep. 2021 ) / Revenue (Q: Sep. 2021 )
=674.3 / 750.895
=(Revenue - Cost of Goods Sold) / Revenue
=(750.895 - 76.602) / 750.895
=89.80 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Cadence Design Systems  (NAS:CDNS) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Cadence Design Systems had a gross margin of 89.80% for the quarter that ended in Sep. 2021 => Durable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


Cadence Design Systems Gross Margin % Related Terms

Thank you for viewing the detailed overview of Cadence Design Systems's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.


Cadence Design Systems Business Description

Cadence Design Systems logo
Industry
Technology » Software NAICS : 511210 SIC : 7372
Traded in Other Exchanges
Address
2655 Seely Avenue, Building 5, San Jose, CA, USA, 95134
Cadence Design Systems was founded in 1988 after the merger of ECAD and SDA Systems. Cadence is known as an electronic design automation, or EDA, firm that specializes in developing software, hardware, and intellectual property that automates the design and verification of integrated circuits or larger chip systems. Historically, semiconductor firms have relied on the firm's tools, but there has been a shift toward other nontraditional "systems" users given the development of the Internet of Things, artificial intelligence, autonomous vehicles, and cloud computing. Cadence is headquartered in Silicon Valley, has approximately 8,100 employees worldwide, and was added to the S&P 500 in late 2017.
Executives
Teng Chin-chi officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Tan Lip Bu director, officer: CEO ONE CALIFORNIA STREET 28TH FLOOR SAN FRANCISCO CA 94111
Beckley Thomas P officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Wall John M officer: Sr. VP & CFO 2655 SEELY AVENUE SAN JOSE CA 95134
Mandava Surendra Babu officer: Sr. Vice President 47211 LAKEVIEW BLVD FREMONT CA 94538
Devgan Anirudh officer: President 2655 SEELY AVENUE SAN JOSE CA 95134
Zaman Aneel officer: Sr. Vice President 2655 SEELY AVENUE SAN JOSE CA 95134
Bostrom Susan L director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: BOSTROM SUSAN L a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Flaminia Alinka officer: Sr. VP, Chief Legal Officer 3975 FREEDOM CIRCLE SANTA CLARA CA 95054
Siboni Roger S director 1900 SOUTH NORFOLK STREET SAN MATEO CA 94403
Cowie James J officer: Sr. VP, General Counsel 2655 SEELY AVENUE BLDG. 5 SAN JOSE CA 95134
Chew Lewis director DOLBY LABORATORIES, INC. 1275 MARKET STREET SAN FRANCISCO CA 94103
Brennan Ita M director 5453 GREAT AMERICA PARKWAY SANTA CLARA CA 95054
Adams Mark director 834 TERRACE DRIVE LOS ALTOS CA 94024
Wilderotter Mary Agnes director 115 ALPINE TERRACE OAKLAND CA 94618

Cadence Design Systems Headlines

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