Analysis of Investments
Paying user area
Try for free
Cadence Design Systems Inc. pages available for free this week:
- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Cadence Design Systems Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Cadence Design Systems Inc., adjustment to net income
US$ in thousands
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net income (as reported) | ||||||
| Add: Unrealized gains (losses) on investments | ||||||
| Net income (adjusted) |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of the annual reported and investment adjusted financial data reveals a consistent upward trend in net income over the examined period from 2020 to 2024.
- Reported Net Income
- The reported net income shows a steady increase each year. Starting at approximately 590.6 million USD in 2020, it rises to nearly 696.0 million USD in 2021, and further increases to around 849.0 million USD in 2022. The growth trend continues strongly into 2023 and 2024, with net income reaching just over 1.04 billion USD and approximately 1.06 billion USD respectively. This represents a nearly 79% increase in reported net income from 2020 to 2024.
- Adjusted Net Income
- The adjusted net income closely mirrors the reported net income values, indicating minimal adjustments between the two measurements. Starting at the same figure as reported net income in 2020 (about 590.6 million USD), the adjusted figures increase similarly to around 696.0 million USD in 2021, approximately 849.0 million USD in 2022, and then to about 1.04 billion USD and 1.06 billion USD in 2023 and 2024 respectively. The minor difference observed in 2023 and 2024 suggests very slight adjustments, which do not significantly affect the overall profit trend.
Overall, the data shows strong profitability growth year over year. The close alignment between reported and adjusted net income suggests that non-recurring or special items have little impact on net earnings, enhancing the reliability of the reported figures. The company appears to have maintained effective operational performance and profitability expansion throughout the period analyzed.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Cadence Design Systems Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net Profit Margin
- The reported and adjusted net profit margin demonstrated a generally positive trend from 2020 to 2023. Starting at 22.02% in 2020, the margin increased steadily each year, reaching a peak of 25.46% in 2023. However, in 2024, there was a noticeable decline to approximately 22.74%, almost returning to the 2020 level. This suggests strong profitability growth through 2023 followed by a moderation in profit efficiency in the latest year.
- Return on Equity (ROE)
- ROE showed a consistent upward movement from 2020 until 2022, rising from 23.69% to a peak of 30.93% in 2022, indicating improved effectiveness in generating returns on shareholders’ equity. The figure remained relatively stable in 2023 at 30.58% but experienced a significant drop to 22.58% in 2024. This decline in 2024 indicates a reduction in equity profitability, aligning with the pattern observed in net profit margins.
- Return on Assets (ROA)
- The ROA followed an upward trajectory from 14.95% in 2020 to its highest point at 18.36% in 2023, indicating enhanced efficiency in utilizing assets to generate earnings. However, this trend reversed in 2024, with ROA falling sharply to 11.76%, the lowest point in the observed period. This indicates a notable decrease in asset utilization effectiveness in the most recent year.
- Overall Insights
- Across all profitability and efficiency metrics—net profit margin, ROE, and ROA—there is a clear pattern of improvement from 2020 through 2023, reflecting escalating profitability and operational efficiency. The convergence of both reported and adjusted figures suggests consistency between raw and investment-adjusted results. The abrupt declines in these metrics in 2024 indicate a significant shift, potentially due to changes in operational conditions, market environment, or other external/internal factors impacting financial performance. This downturn calls for further investigation to identify underlying causes and assess their implications for future financial health.
Cadence Design Systems Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × ÷ =
- Net Income Trends
- The reported net income demonstrates a consistent upward trajectory over the five-year period. Beginning at $590,644 thousand in 2020, it increased year-over-year, reaching $1,055,484 thousand in 2024. This reflects a strong growth momentum, with particularly notable jumps between 2021 and 2023. The adjusted net income follows an almost identical trend, with negligible differences in values, indicating stability and reliability in the adjustments made.
- Net Profit Margin Trends
- The reported net profit margin exhibits an overall increasing trend from 22.02% in 2020 to a peak of 25.46% in 2023. This margin reflects an improvement in profitability relative to revenue through most of the observed period. However, in 2024, the margin declines to 22.74%, suggesting a contraction in profitability despite the increase in absolute net income.
- Consistency Between Reported and Adjusted Figures
- Both reported and adjusted figures for net income and net profit margin show extremely close values across all periods, indicating minimal adjustments and a high level of agreement between reported results and adjusted financials. This consistency enhances the credibility of the reported financial outcomes.
- Overall Observations
- The financial performance reflects robust growth in net income over the five years, accompanied by improving net profit margins until 2023. The slight decline in margin in 2024 despite higher net income could suggest increased costs, reduced pricing power, or other operational factors impacting profitability ratios. Continued monitoring of margin trends would be advisable to understand underlying drivers.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × ÷ =
The financial data reveals a consistent upward trend in both reported and adjusted net income over the five-year period, increasing from approximately 590.6 million US dollars in 2020 to around 1.055 billion US dollars in 2024. This reflects strong and sustained profitability growth for the entity under analysis.
Return on Equity (ROE) exhibits more variability over the same timeframe. Both reported and adjusted ROE increase steadily from 23.69% in 2020 to a peak near 30.9% in 2022, and roughly maintain that level in 2023. However, a notable decline occurs in 2024, dropping to approximately 22.58%, which is significantly lower than the preceding two years and also below the initial 2020 figure.
- Net Income Trends
- The growth in net income demonstrates strong operational performance and profitability enhancement through the years. The consistency between reported and adjusted figures suggests minimal non-recurring items impacting net income adjustments.
- Return on Equity Trends
- The steady rise in ROE until 2022 indicates improved efficiency in generating shareholder returns relative to equity. The plateau in 2023 followed by a sharp decline in 2024 may imply increased equity base outpacing net income growth or changes in operational leverage or capital structure.
- Comparison Between Reported and Adjusted Figures
- The very close alignment between reported and adjusted net income and ROE across all years suggests that adjustments have negligible impact on overall profitability and return metrics, reflecting stable core financial performance.
In summary, the data highlights strong net income growth and initially improving shareholder returns up to 2023, followed by a moderate decline in ROE in 2024, warranting further examination of equity changes or external factors influencing this decrease in efficiency.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
- Net Income Trends
- The reported net income shows a consistent upward trajectory from 590,644 thousand US dollars in 2020 to 1,055,484 thousand US dollars in 2024. This represents a substantial increase over the five-year period, indicating strong profitability growth. The adjusted net income closely mirrors this trend, displaying only minimal differences in 2023 and 2024, suggesting limited adjustments to the reported figures.
- Return on Assets (ROA) Analysis
- The reported ROA exhibits an overall increasing trend from 14.95% in 2020 to a peak of 18.36% in 2023, demonstrating improved efficiency in asset utilization over these years. However, in 2024, there is a notable decline to 11.76%, indicating a significant reduction in asset profitability despite the continued increase in net income. The adjusted ROA follows an identical pattern, with negligible differences from the reported ROA, confirming consistency in adjustments.
- Insights
- The steady rise in net income suggests successful operational performance and revenue growth. The improvement in ROA up to 2023 points to enhanced management of asset resources, but the sharp decline in 2024 warrants further investigation as it may reflect increased asset base, reduced asset efficiency, or other operational factors affecting returns. The close alignment between reported and adjusted figures throughout the period indicates transparency and minimal impact of adjustments on the financial results.