Cadence reported second quarter 2017 revenue of $479 million, compared to revenue of $453 million reported for the same period in 2016. On a GAAP basis, Cadence recognized net income of $69 million, or $0.25 per share on a diluted basis, in the second quarter of 2017, compared to net income of $49 million, or $0.17 per share on a diluted basis, for the same period in 2016.
Using the non-GAAP measure defined below, net income in the second quarter of 2017 was $94 million, or $0.34 per share on a diluted basis, as compared to net income of $86 million, or $0.29 per share on a diluted basis, for the same period in 2016.
"Customer adoption of our innovative product portfolio enabled Cadence's strong second quarter results, driven by robust software and IP growth," said Lip-Bu Tan, president and chief executive officer.
"Our excellent financial results for the second quarter were highlighted with revenue near the high end of our guidance range and operating margin, EPS and operating cash flow all exceeding expectations," said Geoff Ribar, senior vice president and chief financial officer, and added, "We are increasing our outlook for the fiscal year and expect to repurchase shares in the third quarter under our existing authorization."
Commentary on the second quarter 2017 financial results by Geoff Ribar, senior vice president and chief financial officer, is available at www.cadence.com/cadence/investor_relations.
For the third quarter of 2017, the company expects total revenue in the range of $475 million to $485 million. Third quarter GAAP net income per diluted share is expected to be in the range of $0.24 to $0.26. Net income per diluted share using the non-GAAP measure defined below is expected to be in the range of $0.33 to $0.35.
For 2017, the company expects total revenue in the range of $1.910 billion to $1.950 billion. On a GAAP basis, net income per diluted share for 2017 is expected to be in the range of $0.98 to $1.04. Using the non-GAAP measure defined below, net income per diluted share for 2017 is expected to be in the range of $1.36 to $1.42.
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, Geoff Ribar, senior vice president and chief financial officer, and John Wall, corporate vice president, finance and corporate controller, will host a second quarter 2017 financial results audio webcast today, July 24, 2017, 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 July 24, 2017 at 5 p.m. (Pacific) and ending September 15, 2017 at 5 p.m. (Pacific). Webcast access is available at www.cadence.com/cadence/investor_relations.
Cadence enables electronic systems and semiconductor companies to create the innovative end products that are transforming the way people live, work and play. Cadence® software, hardware and semiconductor IP are used by customers to deliver products to market faster. The company's System Design Enablement strategy helps customers develop differentiated products-from chips to boards to systems-in mobile, consumer, cloud datacenter, automotive, aerospace, IoT, industrial and other market segments. Cadence is listed as one of Fortune Magazine's 100 Best Companies to Work For. Learn more at cadence.com.
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The statements contained above regarding Cadence's second quarter 2017 financial results and expectation to repurchase shares of its common stock, as well as the information in the Business Outlook section, 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 cash flow, liquidity, reserves or settlement assumptions Cadence may take from time to time with respect to accounts receivable, taxes and tax examinations, litigation or other matters; and (xi) the effects of any litigation or other proceedings to which Cadence is or may become a party. In addition, the actual timing and amount of Cadence's repurchase of its common stock under the existing authorization will be subject to business and market conditions, corporate and regulatory requirements, acquisition opportunities and other factors.