v3.26.1
ACQUISITIONS
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITIONS ACQUISITIONS
Acquisition of Hexagon Design and Engineering Business
On February 23, 2026, Cadence acquired all of the outstanding equity of the design and engineering (“D&E”) business of Hexagon Smart Solutions AB. The aggregate purchase consideration paid to Hexagon, net of cash acquired of $154.6 million, was $2.9 billion. The aggregate purchase consideration was comprised of $2.2 billion of cash and non-cash consideration of 3.2 million shares of Cadence common stock with an aggregate acquisition date fair value of $902.2 million. This acquisition expands Cadence’s System Design and Analysis (“SD&A”) portfolio, building upon its acquisition of BETA CAE in fiscal 2024.
The total purchase consideration was allocated to the assets acquired and liabilities assumed with Cadence’s acquisition of the D&E business based on their respective fair values on the acquisition date as follows:
 Fair Value
 (In thousands)
Current assets$267,711 
Goodwill2,147,191 
Acquired intangibles1,248,000 
Other assets
18,317 
Total assets acquired3,681,219 
Current liabilities250,361 
Long-term liabilities329,850 
Total liabilities assumed580,211 
Total purchase consideration$3,101,008 
The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce and expected synergies, and is not expected to be deductible for U.S. income tax purposes.
Definite-lived intangible assets acquired with Cadence’s acquisition of the D&E business were as follows:
 Fair ValueWeighted Average Amortization Period
 (In thousands) (in years)
Existing technology$723,000 7.9 years
Agreements and relationships507,000 7.7 years
Tradenames, trademarks and patents18,000 6.0 years
Total acquired intangibles with definite lives$1,248,000 7.8 years
As of June 30, 2026, the allocation of purchase consideration to the acquired assets and assumed liabilities from the D&E business was preliminary. Cadence will continue to evaluate the estimates and assumptions used to derive the fair value of certain acquired assets and assumed liabilities, including operating assets and liabilities, certain long-lived assets and income tax-related assets and liabilities, during the measurement period (up to one year from the acquisition date). The allocation of purchase consideration may change materially as additional information about conditions existing at the acquisition date becomes available.
Pro Forma Financial Information (Unaudited)
The financial information in the table below summarizes the combined results of operations of Cadence and the D&E business, on a pro forma basis, as though the businesses had been combined as of the beginning of the periods presented.
The pro forma financial information includes adjustments to amortization for intangible assets acquired, stock-based compensation costs, interest expense for acquisition financing, adjustments to align lease expense and transaction costs incurred due to acquisition. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the D&E business had been acquired as of the beginning of the periods presented or of results that may occur in the future.
Three Months Ended Six Months Ended
June 30,
2026		June 30,
2025		June 30,
2026		June 30,
2025
(In thousands)
Pro forma total revenue$1,584,451 $1,348,687 $3,122,266 $2,675,666 
Pro forma net income369,964 139,921 689,095 401,268 
Other 2026 Acquisitions
During the first half of fiscal 2026, Cadence completed three other business combinations for aggregate cash consideration of $83.5 million, net of cash acquired. The total purchase consideration was allocated to assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Cadence recorded $42.4 million of definite-lived intangible assets with a weighted average amortization period of 6.8 years. Cadence also recognized $49.9 million of goodwill, which is primarily attributed to the assembled workforce of the acquired businesses. The majority of the goodwill recognized with these acquisitions is expected to be deductible for tax purposes.
In connection with these acquisitions, Cadence paid additional immaterial amounts to third-party escrow agents that will be released to certain former shareholders of the acquired businesses, subject to continued employment with Cadence, through the first quarter of fiscal 2030. The release of these funds is subject to continuous service and other conditions and is accounted for over the required service period as post-acquisition compensation expense in Cadence’s consolidated income statements.
As of June 30, 2026, the allocation of purchase consideration to the acquired assets and assumed liabilities from these acquisitions was preliminary. Cadence will continue to evaluate the estimates and assumptions used to derive the fair value of certain acquired assets and assumed liabilities during the measurement period (up to one year from the acquisition date). The allocation of purchase consideration may change materially as additional information about conditions existing at the acquisition date becomes available.
Cadence has not presented pro forma financial information for any of the other 2026 acquisitions because the results of operations for these businesses are not material to Cadence’s condensed consolidated financial statements.
Acquisition-Related Transaction Costs
Transaction costs associated with acquisitions, which consist of professional fees and administrative costs, are expensed as incurred and are included in general and administrative expense in Cadence’s condensed consolidated income statements. During the three and six months ended June 30, 2026, transaction costs associated with acquisitions were $2.8 million and $9.3 million, respectively. During the three and six months ended June 30, 2025, transaction costs associated with acquisitions were $4.0 million and $6.0 million, respectively.