Cadence reported fourth quarter 2015 revenue of $441 million, compared to revenue of $423 million reported for the same period in 2014. On a GAAP basis, Cadence recognized net income of $80 million, or $0.26 per share on a diluted basis, in the fourth quarter of 2015, compared to net income of $65 million, or $0.21 per share on a diluted basis, for the same period in 2014. Revenue for 2015 totaled $1.702 billion, compared to revenue of $1.581 billion for 2014. Net income for 2015 was $252 million, or $0.81 per share on a diluted basis, compared to net income of $159 million, or $0.52 per share on a diluted basis, for 2014.
Using the non-GAAP measure defined below, net income in the fourth quarter of 2015 was $95 million, or $0.31 per share on a diluted basis, as compared to net income of $84 million, or $0.27 per share on a diluted basis, for the same period in 2014. For 2015, non-GAAP net income was $341 million, or $1.09 per share on a diluted basis, compared to non-GAAP net income of $287 million, or $0.94 per share on a diluted basis, in 2014.
"In 2015, Cadence produced excellent financial results and continued innovating with the launch of nine new products, including Genus™ Synthesis, Innovus™ Implementation, the Palladium® Z1 Enterprise Emulation Platform and the Tensilica® Vision P5 processor. We expanded our digital business with additional market-shaping customers, and conducted pioneering work at the advanced nodes." said Lip-Bu Tan, president and chief executive officer. "Strong customer demand for the new Palladium Z1 helped drive robust hardware sales in the fourth quarter. Looking ahead to 2016, while we face many industry challenges, we are confident that our innovative technologies and the execution of our strategies will enable us to continue to drive growth and deliver enhanced shareholder value."
"Superb execution led to strong results for Q4 and fiscal 2015 in what continues to be a challenging environment." said Geoff Ribar, senior vice president and chief financial officer. "In 2015, we achieved strong revenue growth, profitability and cash flow that exceeded our expectations, and we initiated a $1.2 billion capital return program."
On January 28, 2016, Cadence entered into a $300 million three-year senior unsecured non-amortizing term loan facility with a group of seven lending institutions. The interest rate will float at a margin of 112.5 basis points over LIBOR, and the initial interest rate is approximately 1.75%. The proceeds from the term loan facility will be used for general corporate purposes, including the repurchase of our common stock. At the same time, Cadence also drew down $50 million on its existing revolving credit facility.
CFO Commentary
Commentary on the fourth quarter and fiscal year 2015 financial results by Geoff Ribar, senior vice president and chief financial officer, is available at www.cadence.com/company/investor_relations.
Business Outlook
For the first quarter of 2016, the company expects total revenue in the range of $440 million to $450 million. First quarter GAAP net income per diluted share is expected to be in the range of $0.17 to $0.19. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.26 to $0.28.
For 2016, the company expects total revenue in the range of $1.790 billion to $1.840 billion. On a GAAP basis, net income per diluted share for 2016 is expected to be in the range of $0.72 to $0.82. Using the non-GAAP measure defined below, net income per diluted share for 2016 is expected to be in the range of $1.15 to $1.25.
A schedule showing a reconciliation of the business outlook from GAAP net income and diluted net income per share to non-GAAP net income and diluted net income per share is included in this release.
Audio Webcast Scheduled
Lip-Bu Tan, president and chief executive officer, and Geoff Ribar, senior vice president and chief financial officer, will host a fourth quarter and fiscal year 2015 financial results audio webcast today, February 3, 2016, at 2 p.m. (Pacific) / 5 p.m. (Eastern). Attendees are asked to register at the website at least 10 minutes prior to the scheduled webcast. An archive of the webcast will be available starting February 3, 2016 at 5 p.m. (Pacific) and ending March 18, 2016 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/company/investor_relations.
About Cadence
Cadence enables global electronic design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence® software, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com.
Cadence, the Cadence logo, Genus, Innovus, Palladium and Tensilica are trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
The statements contained above regarding Cadence's fourth quarter and fiscal year 2015 financial results and term loan facility, as well as the information in the Business Outlook section and the statements by Lip-Bu Tan and Geoff Ribar, are or include forward-looking statements based on current expectations or beliefs and preliminary assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside Cadence's control, including, among others: (i) Cadence's ability to compete successfully in the electronic design automation product and the commercial electronic design and methodology services industries; (ii) the success of Cadence's efforts to improve operational efficiency and growth; (iii) the mix of products and services sold and the timing of significant orders for Cadence's products; (iv) change in customer demands, including those resulting from consolidation among Cadence's customers and the possibility that the restructurings and other efforts to improve operational efficiency of Cadence's customers could result in delays in purchases of Cadence's products and services; (v) economic and industry conditions in regions in which Cadence does business; (vi) fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries in which Cadence does business; (vii) capital expenditure requirements, legislative or regulatory requirements, interest rates and Cadence's ability to access capital and debt markets; (viii) the acquisition of other companies or technologies or the failure to successfully integrate and operate these companies or technologies Cadence acquires, including the potential inability to retain customers, key employees or vendors; (ix) the effects of Cadence's efforts to improve operational efficiency in its business, including strategic, customer and supplier relationships, and its ability to retain key employees; (x) events that affect the reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party.
