On July 28, Cadence reported Q2 FY2026 revenue of **$1.58 billion**, up from $1.275 billion a year ago, with GAAP operating margin rising to 28.4% from 19.0%. **Total backlog reached a record $8.1 billion (RMB 55 billion)** , with $4.2 billion expected to convert to revenue over the next 12 months.

CEO Anirudh Devgan attributed the strong quarter to bidirectional AI momentum – Cadence both supplies tools for AI chip design and uses AI agents to optimize its own workflows. The company is now the sole provider of a full AI agent stack covering digital and analog design, verification, packaging, and PCB layout.

CFO John Wall noted double-digit growth across all segments. Full-year revenue guidance was raised to $6.26–6.34 billion** , with non-GAAP EPS of **$8.05–8.15 and operating cash flow estimated at $2.0 billion.

Key Q2 highlights: IP revenue grew over 40% , driven by AI and HPC design starts; EDA tools rose 18% ; hardware set a new quarterly record with 12 new clients; and system design & analysis grew 37% , helped by the Hexagon acquisition integration.

The company launched AuraStack AI super-agent during the quarter, extending AI capabilities to packaging and PCB design. ChipStack now has over 20 commercial clients.

China revenue share climbed to 15% of global sales in Q2, up from 9% a year ago and 13% for full-year 2025 – reflecting strong local demand for AI chip and advanced-node design tools.

From ICgoodFind: AI isn't just the end-product – it's the design tool itself. Cadence's record backlog proves that EDA is the first and largest beneficiary of the AI chip boom, and the China share jump shows local design activity is real and accelerating.