Cadence Design Systems (CDNS) 10-Q 19 Oct 20 2020 Q3 Quarterly report Financial data

Cover Page

Cover Page shares in Thousands	9 Months Ended
	Sep. 26, 2020shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 26, 2020
Document Transition Report	false
Entity File Number	000-15867
Entity Registrant Name	CADENCE DESIGN SYSTEMS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	2655 Seely Avenue, Building 5,
Entity Address, City or Town	San Jose,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95134
City Area Code	(408)
Local Phone Number	943-1234
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	CDNS
Security Exchange Name	NASDAQ
Entity Common Stock, Shares Outstanding	278,931
Entity Central Index Key	0000813672
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--01-02

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Current assets:
Cash and cash equivalents	$ 1,306,564	$ 705,210
Receivables, net	300,413	304,546
Inventories	47,979	55,802
Prepaid expenses and other	81,526	103,785
Total current assets	1,736,482	1,169,343
Property, plant and equipment, net	288,163	275,855
Goodwill	780,842	661,856
Acquired intangibles, net	227,753	172,375
Deferred taxes	722,656	732,367
Other assets	384,256	345,429
Total assets	4,140,152	3,357,225
Current liabilities:
Revolving credit facility	350,000	0
Accounts payable and accrued liabilities	290,886	316,908
Current portion of deferred revenue	477,003	355,483
Total current liabilities	1,117,889	672,391
Long-term liabilities:
Long-term portion of deferred revenue	84,646	73,400
Long-term debt	346,584	346,019
Other long-term liabilities	195,315	162,521
Total long-term liabilities	626,545	581,940
Commitments and contingencies
Stockholders’ equity:
Common stock and capital in excess of par value	2,186,850	2,046,237
Treasury stock, at cost	(1,934,107)	(1,668,105)
Retained earnings	2,176,595	1,761,688
Accumulated other comprehensive loss	(33,620)	(36,926)
Total stockholders’ equity	2,395,718	2,102,894
Total liabilities and stockholders’ equity	$ 4,140,152	$ 3,357,225

Condensed Consolidated Income S

Condensed Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Revenues [Abstract]
Revenues	$ 666,607	$ 579,603	$ 1,922,982	$ 1,736,764
Costs and Expenses:
Marketing and sales	123,738	121,368	369,958	354,406
Research and development	250,934	240,542	743,423	700,566
General and administrative	35,928	33,204	105,161	97,713
Amortization of acquired intangibles	4,438	2,874	13,234	9,341
Restructuring and other charges (credits)	13	(186)	(1,329)	(1,188)
Total costs and expenses	497,335	458,777	1,462,409	1,353,867
Income from operations	169,272	120,826	460,573	382,897
Interest expense	(5,325)	(4,240)	(15,876)	(14,607)
Other income, net	1,766	122	1,862	5,253
Income before provision for income taxes	165,713	116,708	446,559	373,543
Provision for income taxes	4,083	15,194	29,653	44,239
Net income	$ 161,630	$ 101,514	$ 416,906	$ 329,304
Net income per share - basic (usd per share)	$ 0.59	$ 0.37	$ 1.52	$ 1.21
Net Income per share - diluted (usd per share)	$ 0.58	$ 0.36	$ 1.49	$ 1.17
Weighted average common shares outstanding - basic (in shares)	273,996	273,329	273,633	273,224
Weighted average common shares outstanding - diluted (in shares)	280,024	280,666	279,455	280,817
Product and maintenance [Member]
Revenues [Abstract]
Revenues	$ 630,329	$ 548,105	$ 1,813,384	$ 1,639,651
Costs and Expenses:
Cost of sales	64,800	41,715	175,915	135,625
Service [Member]
Revenues [Abstract]
Revenues	36,278	31,498	109,598	97,113
Costs and Expenses:
Cost of sales	$ 17,484	$ 19,260	$ 56,047	$ 57,404

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 161,630	$ 101,514	$ 416,906	$ 329,304
Other comprehensive income (loss), net of tax effects:
Foreign currency translation adjustments	11,539	(11,630)	3,029	(12,222)
Changes in defined benefit plan liabilities	(142)	(365)	277	(2,990)
Total other comprehensive income (loss), net of tax effects	11,397	(11,995)	3,306	(15,212)
Comprehensive income	$ 173,027	$ 89,519	$ 420,212	$ 314,092

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment [Member]	Common Stock [Member]	Common Stock, Par Value and Capital in Excess of Par	Treasury Stock	Retained Earnings	Retained EarningsCumulative Effect, Period of Adoption, Adjustment [Member]	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 29, 2018	$ 1,288,401			$ 1,936,124	$ (1,395,652)	$ 772,709		$ (24,780)
Beginning balance, shares at Dec. 29, 2018			280,015
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	329,304					329,304
Other comprehensive loss, net of taxes	$ (15,212)							(15,212)
Purchase of treasury stock, shares	(3,719)		(3,719)
Purchase of treasury stock	$ (231,131)				(231,131)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares			5,345
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	49,127			(52,592)	101,719
Stock received for payment of employee taxes on vesting of restricted stock, shares			(1,048)
Stock received for payment of employee taxes on vesting of restricted stock	(75,016)			(11,053)	(63,963)
Stock-based compensation expense	134,789			134,789
Ending balance at Sep. 28, 2019	1,480,262			2,007,268	(1,589,027)	1,102,013		(39,992)
Ending balance, shares at Sep. 28, 2019			280,593
Beginning balance at Jun. 29, 2019	1,430,545			1,984,464	(1,526,421)	1,000,499		(27,997)
Beginning balance, shares at Jun. 29, 2019			280,153
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	101,514					101,514
Other comprehensive loss, net of taxes	$ (11,995)							(11,995)
Purchase of treasury stock, shares	(1,065)		(1,065)
Purchase of treasury stock	$ (75,011)				(75,011)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares			1,860
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	16,248			(20,563)	36,811
Stock received for payment of employee taxes on vesting of restricted stock, shares			(355)
Stock received for payment of employee taxes on vesting of restricted stock	(29,318)			(4,912)	(24,406)
Stock-based compensation expense	48,279			48,279
Ending balance at Sep. 28, 2019	1,480,262			2,007,268	(1,589,027)	1,102,013		(39,992)
Ending balance, shares at Sep. 28, 2019			280,593
Beginning balance at Dec. 28, 2019	2,102,894	$ (1,999)		2,046,237	(1,668,105)	1,761,688	$ (1,999)	(36,926)
Beginning balance, shares at Dec. 28, 2019			279,855
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	416,906					416,906
Other comprehensive loss, net of taxes	$ 3,306							3,306
Purchase of treasury stock, shares	(3,124)		(3,124)
Purchase of treasury stock	$ (250,047)				(250,047)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares			3,049
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	71,450			15,086	56,364
Stock received for payment of employee taxes on vesting of restricted stock, shares			(849)
Stock received for payment of employee taxes on vesting of restricted stock	(85,515)			(13,196)	(72,319)
Stock-based compensation expense	138,723			138,723
Ending balance at Sep. 26, 2020	2,395,718			2,186,850	(1,934,107)	2,176,595		(33,620)
Ending balance, shares at Sep. 26, 2020			278,931
Beginning balance at Jun. 27, 2020	2,256,631			2,143,016	(1,856,333)	2,014,965		(45,017)
Beginning balance, shares at Jun. 27, 2020			278,794
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	161,630					161,630
Other comprehensive loss, net of taxes	$ 11,397							11,397
Purchase of treasury stock, shares	(717)		(717)
Purchase of treasury stock	$ (75,011)				(75,011)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares			1,093
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	27,595			4,328	23,267
Stock received for payment of employee taxes on vesting of restricted stock, shares			(239)
Stock received for payment of employee taxes on vesting of restricted stock	(31,858)			(5,828)	(26,030)
Stock-based compensation expense	45,334			45,334
Ending balance at Sep. 26, 2020	$ 2,395,718			$ 2,186,850	$ (1,934,107)	$ 2,176,595		$ (33,620)
Ending balance, shares at Sep. 26, 2020			278,931

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019
Statement of Cash Flows [Abstract]
Cash and cash equivalents at beginning of period	$ 705,210	$ 533,298
Cash flows from operating activities:
Net income	416,906	329,304
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	107,019	91,400
Amortization of debt discount and fees	770	747
Stock-based compensation	138,723	134,789
Loss on investments, net	5,118	2,655
Deferred income taxes	(18,966)	(10,938)
Provisions for losses (recoveries) on receivables	1,087	(358)
ROU asset amortization and change in operating lease liabilities	2,064	4,285
Other non-cash items	410	197
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables	9,945	26,553
Inventories	6,376	(43,781)
Prepaid expenses and other	22,769	38,703
Other assets	(21,287)	3,554
Accounts payable and accrued liabilities	(30,455)	(4,001)
Deferred revenue	124,491	(6,968)
Other long-term liabilities	4,430	4,163
Net cash provided by operating activities	769,400	570,304
Cash flows from investing activities:
Purchases of non-marketable investments	0	(33,717)
Proceeds from the sale of non-marketable investments	0	2,952
Purchases of property, plant and equipment	(63,745)	(47,527)
Cash paid in business combinations, net of cash acquired	(197,562)	(338)
Net cash used for investing activities	(261,307)	(78,630)
Cash flows from financing activities:
Proceeds from revolving credit facility	350,000	150,000
Payment on revolving credit facility	0	(250,000)
Proceeds from issuance of common stock	71,451	49,127
Stock received for payment of employee taxes on vesting of restricted stock	(85,515)	(75,016)
Payments for repurchases of common stock	(250,047)	(231,131)
Net cash provided by (used for) financing activities	85,889	(357,020)
Effect of exchange rate changes on cash and cash equivalents	7,372	(12,736)
Increase in cash and cash equivalents	601,354	121,918
Cash and cash equivalents at end of period	1,306,564	655,216
Supplemental cash flow information:
Cash paid for interest	10,982	10,052
Cash paid for taxes, net	$ 44,679	$ 25,439

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 26, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared by Cadence Design Systems, Inc. (“Cadence”) without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. However, Cadence believes that the disclosures contained in this Quarterly Report on Form 10-Q comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) for a Quarterly Report on Form 10-Q and are adequate to make the information presented not misleading. These condensed consolidated financial statements are meant to be, and should be, read in conjunction with the consolidated financial statements and the Notes thereto included in Cadence’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019. The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q reflect all adjustments (which include only normal, recurring adjustments and those items discussed in these Notes) that are, in the opinion of management, necessary to state fairly the results of operations, cash flows and financial position for the periods and dates presented. The results for such periods are not necessarily indicative of the results to be expected for the full fiscal year. Certain prior period balances have been reclassified to conform to the current period presentation. Management has evaluated subsequent events through the issuance date of the unaudited condensed consolidated financial statements. Use of Estimates Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets. Cadence is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of October 19, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change, as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Recently Adopted Accounting Standards Credit Losses In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” which required the establishment of an allowance for estimated credit losses on financial assets, including trade and other receivables, at each reporting date. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020, and recorded a cumulative-effect adjustment to decrease retained earnings in the amount of $2.0 million for expected credit losses on financial assets at the adoption date. The adoption of this standard required Cadence to modify its existing process for establishing credit losses on trade receivables, including receivables derived from leasing arrangements for its emulation and prototyping hardware. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” that eliminates “Step 2” from the goodwill impairment test. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020. The new standard did not have an impact on Cadence’s condensed consolidated financial statements and related disclosures. Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020. The new standard did not have a material impact on Cadence’s condensed consolidated financial statements and related disclosures. Implementation Costs Incurred in a Cloud Computing Arrangement In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which clarifies the accounting for implementation costs in cloud computing arrangements. The new standard aligns the treatment of implementation costs incurred by customers in cloud computing arrangements that are service contracts with the treatment of similar costs incurred to develop or obtain internal-use software. Under the new standard, implementation costs are deferred and presented in the same financial statement caption on the condensed consolidated balance sheet as a prepayment of related arrangement fees. The deferred costs are recognized over the term of the arrangement in the same financial statement caption in the condensed consolidated income statement as the related fees of the arrangement. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020. The new standard did not have a material impact on Cadence’s condensed consolidated financial statements and related disclosures. New Accounting Standards Not Yet Adopted Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The new standard is effective for fiscal years beginning after December 15, 2021. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. Cadence is currently evaluating the impacts of the provisions of this standard on its financial condition, results of operations and cash flows.

Debt

Debt	9 Months Ended
	Sep. 26, 2020
Debt Disclosure [Abstract]
DEBT	DEBT Cadence’s outstanding debt as of September 26, 2020 and December 28, 2019 was as follows: September 26, 2020 December 28, 2019 (In thousands) Principal Unamortized Discount Carrying Value Principal Unamortized Discount Carrying Value Revolving Credit Facility $ 350,000 $ — $ 350,000 $ — $ — $ — 2024 Notes 350,000 (3,416) 346,584 350,000 (3,981) 346,019 Total outstanding debt $ 700,000 $ (3,416) $ 696,584 $ 350,000 $ (3,981) $ 346,019 Revolving Credit Facility In January 2017, Cadence entered into a five-year senior unsecured revolving credit facility with a group of lenders led by JPMorgan Chase Bank, N.A., as administrative agent. The credit facility provides for borrowings up to $350.0 million, with the right to request increased capacity up to an additional $250.0 million subject to the receipt of lender commitments, for total maximum borrowings of $600.0 million. The credit facility expires on January 28, 2022 and has no subsidiary guarantors. Any outstanding loans drawn under the credit facility are due at maturity on January 28, 2022. Outstanding borrowings may be paid at any time prior to maturity. Interest accrues on borrowings under the credit facility at either LIBOR plus a margin between 1.250% and 1.875% per annum or at the base rate plus a margin between 0.250% and 0.875% per annum. As of September 26, 2020, the interest rate on Cadence’s revolving credit facility was 1.50%. Interest is payable quarterly. A commitment fee ranging from 0.15% to 0.30% is assessed on the daily average undrawn portion of revolving commitments. The credit facility contains customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness, grant liens, make certain investments (including acquisitions), dispose of certain assets and make certain payments, including share repurchases and dividends. In addition, the credit facility contains financial covenants that require Cadence to maintain a funded debt to EBITDA ratio not greater than 3.00 to 1, with a step up to 3.50 to 1 for one year following an acquisition by Cadence of at least $250.0 million that results in a pro forma leverage ratio between 2.75 to 1 and 3.25 to 1. As of September 26, 2020, Cadence was in compliance with all financial covenants associated with the revolving credit facility. 2024 Notes In October 2014, Cadence issued $350.0 million aggregate principal amount of 4.375% Senior Notes due October 15, 2024 (the “2024 Notes”). Cadence received net proceeds of $342.4 million from the issuance of the 2024 Notes, net of a discount of $1.4 million and issuance costs of $6.2 million. Both the discount and issuance costs are being amortized to interest expense over the term of the 2024 Notes using the effective interest method. Interest is payable in cash semi-annually in April and October. The 2024 Notes are unsecured and rank equal in right of payment to all of Cadence’s existing and future senior indebtedness. The fair value of the 2024 Notes was approximately $394.4 million as of September 26, 2020. Cadence may redeem the 2024 Notes, in whole or in part, at a redemption price equal to the greater of (a) 100% of the principal amount of the notes to be redeemed and (b) the sum of the present values of the remaining scheduled payments of principal and interest, plus any accrued and unpaid interest, as more particularly described in the indenture governing the 2024 Notes. The indenture governing the 2024 Notes includes customary representations, warranties and restrictive covenants, including, but not limited to, restrictions on Cadence’s ability to grant liens on assets, enter into sale and lease-back transactions, or merge, consolidate or sell assets, and also includes customary events of default.

Receivables, net

Receivables, net	9 Months Ended
	Sep. 26, 2020
Receivables [Abstract]
RECEIVABLES, NET	RECEIVABLES, NET Cadence’s current and long-term receivables balances as of September 26, 2020 and December 28, 2019 were as follows: As of September 26, December 28, (In thousands) Accounts receivable $ 194,093 $ 179,250 Unbilled accounts receivable 108,877 126,165 Long-term receivables 3,208 3,082 Total receivables 306,178 308,497 Less allowance for doubtful accounts (2,557) (869) Total receivables, net $ 303,621 $ 307,628

Revenue

Revenue	9 Months Ended
	Sep. 26, 2020
Revenue from Contract with Customer [Abstract]
Revenue	REVENUE Cadence groups its products into five categories related to major design activities. The following table shows the percentage of product and related maintenance revenue contributed by each of Cadence’s five product categories and services for the three and nine months ended September 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, Custom IC Design and Simulation 24 % 26 % 25 % 26 % Digital IC Design and Signoff 27 % 30 % 28 % 30 % Functional Verification, including Emulation and Prototyping Hardware* 23 % 20 % 23 % 22 % IP 15 % 15 % 14 % 13 % System Design and Analysis 11 % 9 % 10 % 9 % Total 100 % 100 % 100 % 100 % _____________ * Includes immaterial amount of revenue accounted for under leasing arrangements. Revenue by product category fluctuates from period to period based on demand for products and services, and Cadence’s available resources to deliver them. Certain of Cadence’s licensing arrangements allow customers the ability to remix among software products. Cadence also has arrangements with customers that include a combination of products, with the actual product selection and number of licensed users to be determined at a later date. For these arrangements, Cadence estimates the allocation of the revenue to product categories based upon the expected usage of products. Significant Judgments Cadence’s contracts with customers often include promises to transfer to a customer multiple software and/or IP licenses and services, including professional services, technical support services, and rights to unspecified updates. Determining whether licenses and services are distinct performance obligations that should be accounted for separately, or not distinct and thus accounted for together, requires significant judgment. In some arrangements, such as most of Cadence’s IP license arrangements, Cadence has concluded that the licenses and associated services are distinct from each other. In others, like Cadence’s time-based software arrangements, the licenses and certain services are not distinct from each other. Cadence’s time-based software arrangements include multiple software licenses and updates to the licensed software products, as well as technical support, and Cadence has concluded that these promised goods and services are a single, combined performance obligation. The accounting for contracts with multiple performance obligations requires the contract’s transaction price to be allocated to each distinct performance obligation based on relative standalone selling price (“SSP”). Judgment is required to determine the SSP for each distinct performance obligation because Cadence rarely licenses or sells products on a standalone basis. In instances where the SSP is not directly observable because Cadence does not sell the license, product or service separately, Cadence determines the SSP using information that maximizes the use of observable inputs and may include market conditions. Cadence typically has more than one SSP for individual performance obligations due to the stratification of those items by classes of customers and circumstances. In these instances, Cadence may use information such as the size of the customer and geographic region of the customer in determining the SSP. Revenue is recognized over time for Cadence’s combined performance obligations that include software licenses, updates, technical support and maintenance that are separate performance obligations with the same term. For Cadence’s professional services, revenue is recognized over time, generally using costs incurred or hours expended to measure progress. Judgment is required in estimating project status and the costs necessary to complete projects. A number of internal and external factors can affect these estimates, including labor rates, utilization and efficiency variances and specification and testing requirement changes. For Cadence’s other performance obligations recognized over time, revenue is generally recognized using a time-based measure of progress reflecting generally consistent efforts to satisfy those performance obligations throughout the arrangement term. If a group of agreements are so closely related that they are, in effect, part of a single arrangement, such agreements are deemed to be one arrangement for revenue recognition purposes. Cadence exercises significant judgment to evaluate the relevant facts and circumstances in determining whether the separate agreements should be accounted for separately or as, in substance, a single arrangement. Cadence’s judgments about whether a group of contracts comprise a single arrangement can affect the allocation of consideration to the distinct performance obligations, which could have an effect on results of operations for the periods involved. Cadence is required to estimate the total consideration expected to be received from contracts with customers. In some circumstances, the consideration expected to be received is variable based on the specific terms of the contract or based on Cadence’s expectations of the term of the contract. Generally, Cadence has not experienced significant returns or refunds to customers. These estimates require significant judgment and the change in these estimates could have an effect on its results of operations during the periods involved. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) on Cadence’s condensed consolidated balance sheets. For certain software, hardware and IP agreements with payment plans, Cadence records an unbilled receivable related to revenue recognized upon transfer of control because it has an unconditional right to invoice and receive payment in the future related to those transferred products or services. Cadence records a contract asset when revenue is recognized prior to invoicing and Cadence does not have the unconditional right to invoice or retains performance risk with respect to that performance obligation. Cadence records deferred revenue when revenue is recognized subsequent to invoicing. For Cadence’s time-based software agreements, customers are generally invoiced in equal, quarterly amounts, although some customers prefer to be invoiced in single or annual amounts. The contract assets indicated below are presented as prepaid expenses and other in the condensed consolidated balance sheet and primarily relate to Cadence’s rights to consideration for work completed but not billed as of the balance sheet date on services and customized IP contracts. The contract assets are transferred to receivables when the rights become unconditional, usually upon completion of a milestone. Cadence’s contract balances as of September 26, 2020 and December 28, 2019 were as follows: As of September 26, December 28, (In thousands) Contract assets $ 8,677 $ 10,209 Deferred revenue 561,649 428,883 Cadence recognized revenue of $50.5 million and $292.1 million during the three and nine months ended September 26, 2020, respectively, and $44.4 million and $290.4 million during the three and nine months ended September 28, 2019, respectively, that was included in the deferred revenue balance at the beginning of each fiscal year. All other activity in deferred revenue is due to the timing of invoices in relation to the timing of revenue as described above. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, Cadence has determined that its contracts generally do not include a significant financing component. The primary purpose of invoicing terms is to provide customers with simplified and predictable ways of purchasing Cadence’s products and services, and not to facilitate financing arrangements. Some customers enter into a non-cancellable IP Access Agreement (“IPAA”) whereby the customer commits to a fixed dollar amount over a specified period of time that can be used to purchase from a list of IP products or services. These arrangements do not meet the definition of a revenue contract until the customer executes a separate selection form to identify the products and services that they are purchasing. Each separate selection form under the IPAA is treated as an individual contract and accounted for based on the respective performance obligations. Remaining Performance Obligations Revenue allocated to remaining performance obligations represents the transaction price allocated to the performance obligations that are unsatisfied, or partially unsatisfied, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Cadence has elected to exclude the potential future royalty receipts from the remaining performance obligations. Contracted but unsatisfied performance obligations were approximately $3.8 billion as of September 26, 2020, which includes $150.9 million of non-cancellable IPAA commitments from customers where actual product selection and quantities of specific products or services are to be determined by customers at a later date. As of September 26, 2020, Cadence expected to recognize approximately 55% of the revenue included in the contracted but unsatisfied performance obligations, excluding non-cancellable IPAA commitments, over the next 12 months and the remainder thereafter. Cadence recognized revenue of $18.1 million and $38.9 million during the three and nine months ended September 26, 2020, and $10.0 million and $26.7 million during the three and nine months ended September 28, 2019, respectively, from performance obligations satisfied in previous periods. These amounts represent royalties earned during the period and exclude contracts with nonrefundable prepaid royalties. Nonrefundable prepaid royalties are recognized upon delivery of the IP because Cadence’s right to the consideration is not contingent upon customers’ future shipments.

Acquisitions

Acquisitions	9 Months Ended
	Sep. 26, 2020
Business Combinations [Abstract]
Business Combination Disclosure	ACQUISITIONSOn January 15, 2020, Cadence acquired all of the outstanding equity of AWR Corporation (“AWR”). On February 6, 2020, Cadence also acquired all of the outstanding equity of Integrand Software, Inc. (“Integrand”). These acquisitions enhance Cadence’s technology portfolio to address growing radio frequency design activity, driven by expanding use of 5G communications. The aggregate cash consideration for these acquisitions was approximately $195.6 million, after taking into account cash acquired of $1.5 million. The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. With its acquisition of AWR and Integrand, Cadence recorded $101.3 million of definite-lived intangible assets, $119.4 million of goodwill and $25.1 million of net liabilities, consisting primarily of deferred tax liabilities, assumed deferred revenue and trade accounts receivable. The weighted-average amortization period for definite-lived intangible assets acquired is approximately 8.9 years. The recorded goodwill is primarily related to the acquired assembled workforce and expected synergies from combining operations of the acquired companies with Cadence. None of the goodwill related to the acquisitions of AWR and Integrand will be deductible for tax purposes. Cadence will also make payments to certain employees, subject to continued employment and other performance-based conditions, through the first quarter of fiscal 2023. During the third quarter of fiscal 2020, Cadence completed one additional acquisition. This acquisition is not material to the condensed consolidated financial statements. During the three and nine months ended September 26, 2020, and the three and nine months ended September 28, 2019, transaction costs associated with acquisitions were not material and were expensed as incurred.

Goodwill and Acquired Intangibl

Goodwill and Acquired Intangibles	9 Months Ended
	Sep. 26, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
GOODWILL AND ACQUIRED INTANGIBLES	GOODWILL AND ACQUIRED INTANGIBLES Goodwill The changes in the carrying amount of goodwill during the nine months ended September 26, 2020 were as follows: Gross Carrying (In thousands) Balance as of December 28, 2019 $ 661,856 Goodwill resulting from acquisitions 120,219 Effect of foreign currency translation (1,233) Balance as of September 26, 2020 $ 780,842 Acquired Intangibles, Net Acquired intangibles as of September 26, 2020 were as follows, excluding intangibles that were fully amortized as of December 28, 2019: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 370,834 $ (218,553) $ 152,281 Agreements and relationships 180,011 (108,736) 71,275 Tradenames, trademarks and patents 10,590 (6,393) 4,197 Total acquired intangibles $ 561,435 $ (333,682) $ 227,753 During the nine months ended September 26, 2020, Cadence completed the projects previously included in in-process technology and transferred $19.5 million to existing technology. Acquired intangibles as of December 28, 2019 were as follows, excluding intangibles that were fully amortized as of December 29, 2018: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 363,142 $ (245,902) $ 117,240 Agreements and relationships 146,395 (112,565) 33,830 Tradenames, trademarks and patents 7,600 (5,795) 1,805 Total acquired intangibles with definite lives 517,137 (364,262) 152,875 In-process technology 19,500 — 19,500 Total acquired intangibles $ 536,637 $ (364,262) $ 172,375 Amortization expense from existing technology and maintenance agreements is included in cost of product and maintenance. Amortization of acquired intangibles for the three and nine months ended September 26, 2020 and September 28, 2019 was as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Cost of product and maintenance $ 11,447 $ 9,925 $ 33,791 $ 31,078 Amortization of acquired intangibles 4,438 2,874 13,234 9,341 Total amortization of acquired intangibles $ 15,885 $ 12,799 $ 47,025 $ 40,419 Estimated amortization expense for acquired intangible assets with definite lives for the following five fiscal years and thereafter is as follows: (In thousands) 2020 - remaining period $ 17,169 2021 61,705 2022 43,400 2023 27,870 2024 26,407 Thereafter 51,202 Total estimated amortization expense $ 227,753

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	Sep. 26, 2020
Share-based Payment Arrangement [Abstract]
STOCK-BASED COMPENSATION	STOCK-BASED COMPENSATION Stock-based compensation expense is reflected in Cadence’s condensed consolidated income statements for the three and nine months ended September 26, 2020 and September 28, 2019 as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Cost of product and maintenance $ 668 $ 731 $ 2,042 $ 2,064 Cost of services 850 931 2,599 2,626 Marketing and sales 9,699 10,424 29,826 29,039 Research and development 28,652 30,458 87,688 85,015 General and administrative 5,465 5,735 16,568 16,045 Total stock-based compensation expense $ 45,334 $ 48,279 $ 138,723 $ 134,789

Stock Repurchase Program

Stock Repurchase Program	9 Months Ended
	Sep. 26, 2020
Class of Stock Disclosures [Abstract]
STOCK REPURCHASE PROGRAM	STOCK REPURCHASE PROGRAMAs of the end of the second quarter of fiscal 2020, approximately $194 million remained available under Cadence’s previously announced authorization to repurchase shares of Cadence common stock. In July 2020, Cadence’s Board of Directors increased the previously announced authorization to repurchase shares of Cadence common stock by an additional $750 million. The actual timing and amount of repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors. As of September 26, 2020, approximately $869 million remained available to repurchase shares of Cadence common stock. The shares repurchased under Cadence’s repurchase authorizations and the total cost of repurchased shares, including commissions, during the three and nine months ended September 26, 2020 and September 28, 2019 were as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Shares repurchased 717 1,065 3,124 3,719 Total cost of repurchased shares $ 75,011 $ 75,011 $ 250,047 $ 231,131

Restructuring and Other Charges

Restructuring and Other Charges	9 Months Ended
	Sep. 26, 2020
Restructuring and Related Activities [Abstract]
RESTRUCTURING AND OTHER CHARGES	RESTRUCTURING AND OTHER CHARGES Cadence has initiated restructuring plans in an effort to better align its resources with its business strategy. These restructuring plans have primarily been comprised of severance payments and termination benefits related to headcount reductions, estimated lease losses related to facilities vacated and charges related to abandoned assets. During the nine months ended September 26, 2020, Cadence revised certain estimates made in connection with its prior restructuring plans and recorded credits of approximately $1.3 million. The following table presents activity relating to Cadence’s restructuring plans during the nine months ended September 26, 2020: Severance and Benefits Excess Facilities Total (In thousands) Balance, December 28, 2019 $ 9,229 $ 409 $ 9,638 Restructuring and other credits (1,280) (49) (1,329) Cash payments (6,955) (200) (7,155) Effect of foreign currency translation (50) (3) (53) Balance, September 26, 2020 $ 944 $ 157 $ 1,101 The remaining liability for Cadence’s restructuring plans is recorded in the condensed consolidated balance sheet as follows: As of September 26, 2020 (In thousands) Accounts payable and accrued liabilities $ 1,051 Other long-term liabilities 50 Total restructuring liabilities $ 1,101 All liabilities for severance and related benefits under Cadence’s restructuring plans are included in accounts payable and accrued liabilities on Cadence’s condensed consolidated balance sheet as of September 26, 2020. Restructuring liabilities included in other long-term liabilities represent liabilities from vacated facilities, and Cadence expects to make cash payments to settle these liabilities through fiscal 2022.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 26, 2020
Income Tax Disclosure [Abstract]
Income Tax Disclosure	INCOME TAXES During Cadence’s third quarter of fiscal 2020, the State of California enacted legislation that, for a three-year period beginning in fiscal 2020, will limit Cadence’s utilization of California research and development tax credits to $5 million annually and will suspend the use of California net operating loss deductions. Due to the tax law change, Cadence intends to make certain tax elections in its fiscal 2019 California income tax return, which allowed Cadence to release approximately $19.0 million of valuation allowance on Cadence’s California research and development tax credit deferred tax assets. Cadence recognized the release of the valuation allowance as a discrete tax benefit during the third quarter of fiscal 2020. Cadence continues to record a valuation allowance on its remaining California research and development tax credit carryforwards. Cadence’s provision for income taxes of $4.1 million and $29.7 million for the three and nine months ended September 26, 2020, respectively, was primarily related to the federal, state and foreign income taxes on anticipated fiscal 2020 income, partially offset by the tax benefit of $19.0 million for the three and nine months ended September 26, 2020, related to the partial release of the valuation allowance on its California research and development tax credit deferred tax assets, and tax benefits of $19.3 million and $49.0 million for the three and nine months ended September 26, 2020, respectively, related to stock-based compensation that vested or was exercised during the period.

Net Income Per Share

Net Income Per Share	9 Months Ended
	Sep. 26, 2020
Earnings Per Share [Abstract]
NET INCOME PER SHARE	NET INCOME PER SHARE Basic net income per share is computed by dividing net income during the period by the weighted-average number of shares of common stock outstanding during that period, less unvested restricted stock awards. Diluted net income per share is impacted by equity instruments considered to be potential common shares, if dilutive, computed using the treasury stock method of accounting. The calculations for basic and diluted net income per share for the three and nine months ended September 26, 2020 and September 28, 2019 are as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands, except per share amounts) Net income $ 161,630 $ 101,514 $ 416,906 $ 329,304 Weighted average common shares used to calculate basic net income per share 273,996 273,329 273,633 273,224 Stock-based awards 6,028 7,337 5,822 7,593 Weighted average common shares used to calculate diluted net income per share 280,024 280,666 279,455 280,817 Net income per share - basic $ 0.59 $ 0.37 $ 1.52 $ 1.21 Net income per share - diluted $ 0.58 $ 0.36 $ 1.49 $ 1.17 The following table presents shares of Cadence’s common stock outstanding for the three and nine months ended September 26, 2020 and September 28, 2019 that were excluded from the computation of diluted net income per share because the effect of including these shares in the computation of diluted net income per share would have been anti-dilutive: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Long-term performance-based stock awards 105 1,386 510 279 Options to purchase shares of common stock 23 — 258 476 Non-vested shares of restricted stock 21 1,276 75 1,000 Total potential common shares excluded 149 2,662 843 1,755

Fair Value

Fair Value	9 Months Ended
	Sep. 26, 2020
Fair Value Disclosures [Abstract]
FAIR VALUE	FAIR VALUE Inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Cadence’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets; • Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires Cadence to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. Cadence recognizes transfers between levels of the hierarchy based on the fair values of the respective financial instruments at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during the nine months ended September 26, 2020. On a quarterly basis, Cadence measures at fair value certain financial assets and liabilities. The fair value of financial assets and liabilities was determined using the following levels of inputs as of September 26, 2020 and December 28, 2019: Fair Value Measurements as of September 26, 2020 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 850,648 $ 850,648 $ — $ — Marketable equity securities 4,570 4,570 — — Securities held in Non-Qualified Deferred Compensation (“NQDC”) trust 36,668 36,668 — — Total Assets $ 891,886 $ 891,886 $ — $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts $ 3,975 $ — $ 3,975 $ — Total Liabilities $ 3,975 $ — $ 3,975 $ — Fair Value Measurements as of December 28, 2019 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 445,942 $ 445,942 $ — $ — Marketable equity securities 4,600 4,600 — — Securities held in NQDC trust 34,096 34,096 — — Foreign currency exchange contracts 3,557 — 3,557 — Total Assets $ 488,195 $ 484,638 $ 3,557 $ — As of December 28, 2019, Cadence did not have any financial liabilities requiring a recurring fair value measurement. Level 1 Measurements Cadence’s cash equivalents held in money market funds, marketable equity securities and the trading securities held in Cadence’s NQDC trust are measured at fair value using level 1 inputs. Level 2 Measurements The valuation techniques used to determine the fair value of Cadence’s foreign currency forward exchange contracts and 2024 Notes are classified within Level 2 of the fair value hierarchy. For additional information relating to Cadence’s debt arrangements, see Note 2 in the notes to condensed consolidated financial statements. Level 3 Measurements Cadence acquired intangible assets of $101.3 million during the first quarter of fiscal 2020 with its acquisition of AWR and Integrand. The fair value of the definite-lived intangible assets acquired with these acquisitions was determined using variations of the income approach and level 3 inputs. Key assumptions include the level and timing of expected future cash flows, the level of customer demand and industry outlook for Electronic Design Automation (“EDA”) solutions, discount rates and the economy in general. The fair value of these intangible assets was affected most significantly by the projected income associated with the identified intangible assets and the anticipated timing of the projected income, but was also impacted by the discount rate used to adjust the outcomes to their present values. Cadence used discount rates ranging from 9.0% to 12.5% to value the definite-lived intangible assets acquired during the first quarter of fiscal 2020. The weighted-average discount rate used to value intangible assets was 10.3%. Cadence also assumed obligations related to deferred revenue of $6.9 million during the first quarter of fiscal 2020 with its acquisition of AWR. The fair value of these obligations was estimated using the cost build-up approach. The cost build-up approach determines fair value using estimates of the costs required to fulfill the contracted obligations plus an assumed profit. Cadence assumed a 25% profit margin when valuing these liabilities, which were then adjusted to present value using a discount rate of 4.75%. The resulting fair value using this approach approximates the amount that AWR would be required to pay a third party to assume the obligation. The fair value of the deferred revenue obligations assumed was affected most significantly by the estimated costs required to support the obligation, but was also affected by the assumed profit and the discount rate. Cadence believes that its estimates and assumptions related to the fair value of its acquired intangible assets and deferred revenue obligations are reasonable, but significant judgment is involved.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 26, 2020
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, Cadence is involved in various disputes and litigation that arise in the ordinary course of business. These include disputes and lawsuits related to intellectual property, indemnification obligations, mergers and acquisitions, licensing, contracts, distribution arrangements and employee relations matters. At least quarterly, Cadence reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on Cadence’s judgments using the best information available at the time. As additional information becomes available, Cadence reassesses the potential liability related to pending claims and litigation matters and may revise estimates. Other Contingencies Cadence provides its customers with a warranty on sales of its hardware products, generally for a 90-day period. Cadence did not incur any significant costs related to warranty obligations during the three and nine months ended September 26, 2020 and September 28, 2019. Cadence’s product license and services agreements typically include a limited indemnification provision for claims from third parties relating to Cadence’s intellectual property. If the potential loss from any indemnification claim is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss. The indemnification is generally limited to the amount paid by the customer. Cadence did not incur any significant losses from indemnification claims during the three and nine months ended September 26, 2020 and September 28, 2019.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	9 Months Ended
	Sep. 26, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
ACCUMULATED OTHER COMPREHENSIVE LOSS	ACCUMULATED OTHER COMPREHENSIVE LOSS Cadence’s accumulated other comprehensive loss is comprised of the aggregate impact of foreign currency translation gains and losses and changes in defined benefit plan liabilities and is presented in Cadence’s condensed consolidated statements of comprehensive income. Accumulated other comprehensive loss was comprised of the following as of September 26, 2020 and December 28, 2019: As of September 26, December 28, (In thousands) Foreign currency translation loss $ (26,474) $ (29,503) Changes in defined benefit plan liabilities (7,146) (7,423) Total accumulated other comprehensive loss $ (33,620) $ (36,926) For the three and nine months ended September 26, 2020 and September 28, 2019 there were no significant amounts reclassified from accumulated other comprehensive loss to net income.

Segment Reporting

Segment Reporting	9 Months Ended
	Sep. 26, 2020
Segment Reporting [Abstract]
SEGMENT REPORTING	SEGMENT REPORTING Segment reporting is based on the “management approach,” following the method that management organizes the company’s reportable segments for which separate financial information is made available to, and evaluated regularly by, the chief operating decision maker in allocating resources and in assessing performance. Cadence’s chief operating decision maker is its CEO, who reviews Cadence’s consolidated results as one operating segment. In making operating decisions, the CEO primarily considers consolidated financial information, accompanied by disaggregated information about revenues by geographic region. Outside the United States, Cadence markets and supports its products and services primarily through its subsidiaries. Revenue is attributed to geography based upon the country in which the product is used, or services are delivered. Long-lived assets are attributed to geography based on the country where the assets are located. The following table presents a summary of revenue by geography for the three and nine months ended September 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Americas: United States $ 269,057 $ 241,060 $ 794,545 $ 718,798 Other Americas 10,956 12,660 29,913 33,091 Total Americas 280,013 253,720 824,458 751,889 Asia: China 114,160 58,215 275,191 185,570 Other Asia 123,188 120,122 354,063 340,895 Total Asia 237,348 178,337 629,254 526,465 Europe, Middle East and Africa 107,913 106,151 340,173 323,442 Japan 41,333 41,395 129,097 134,968 Total $ 666,607 $ 579,603 $ 1,922,982 $ 1,736,764 The following table presents a summary of long-lived assets by geography as of September 26, 2020 and December 28, 2019: As of September 26, December 28, (In thousands) Americas: United States $ 231,937 $ 220,023 Other Americas 748 728 Total Americas 232,685 220,751 Asia: China 16,315 15,729 Other Asia 27,234 27,890 Total Asia 43,549 43,619 Europe, Middle East and Africa 11,194 10,474 Japan 735 1,011 Total $ 288,163 $ 275,855

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 26, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of presentation	The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared by Cadence Design Systems, Inc. (“Cadence”) without audit, pursuant to the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations.
Use of estimates	Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.
Recently adopted accounting standards	Recently Adopted Accounting Standards Credit Losses In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments,” which required the establishment of an allowance for estimated credit losses on financial assets, including trade and other receivables, at each reporting date. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020, and recorded a cumulative-effect adjustment to decrease retained earnings in the amount of $2.0 million for expected credit losses on financial assets at the adoption date. The adoption of this standard required Cadence to modify its existing process for establishing credit losses on trade receivables, including receivables derived from leasing arrangements for its emulation and prototyping hardware. Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” that eliminates “Step 2” from the goodwill impairment test. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020. The new standard did not have an impact on Cadence’s condensed consolidated financial statements and related disclosures. Fair Value Measurements In August 2018, the FASB issued ASU 2018-13, “Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement,” which modifies the disclosure requirements on fair value measurements. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020. The new standard did not have a material impact on Cadence’s condensed consolidated financial statements and related disclosures. Implementation Costs Incurred in a Cloud Computing Arrangement In August 2018, the FASB issued ASU 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which clarifies the accounting for implementation costs in cloud computing arrangements. The new standard aligns the treatment of implementation costs incurred by customers in cloud computing arrangements that are service contracts with the treatment of similar costs incurred to develop or obtain internal-use software. Under the new standard, implementation costs are deferred and presented in the same financial statement caption on the condensed consolidated balance sheet as a prepayment of related arrangement fees. The deferred costs are recognized over the term of the arrangement in the same financial statement caption in the condensed consolidated income statement as the related fees of the arrangement. Cadence adopted the new standard on December 29, 2019, the first day of fiscal 2020. The new standard did not have a material impact on Cadence’s condensed consolidated financial statements and related disclosures. New Accounting Standards Not Yet Adopted Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The new standard is effective for fiscal years beginning after December 15, 2021. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. Cadence is currently evaluating the impacts of the provisions of this standard on its financial condition, results of operations and cash flows.
Fair value of financial instruments	Inputs to valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Cadence’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets; • Level 2 – Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires Cadence to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. Cadence recognizes transfers between levels of the hierarchy based on the fair values of the respective financial instruments at the end of the reporting period in which the transfer occurred. There were no transfers between levels of the fair value hierarchy during the nine months ended September 26, 2020.
Contingencies	At least quarterly, Cadence reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, Cadence accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on Cadence’s judgments using the best information available at the time. As additional information becomes available, Cadence reassesses the potential liability related to pending claims and litigation matters and may revise estimates.

Debt (Tables)

Debt (Tables)	9 Months Ended
	Sep. 26, 2020
Debt Disclosure [Abstract]
Summary of debt outstanding	Cadence’s outstanding debt as of September 26, 2020 and December 28, 2019 was as follows: September 26, 2020 December 28, 2019 (In thousands) Principal Unamortized Discount Carrying Value Principal Unamortized Discount Carrying Value Revolving Credit Facility $ 350,000 $ — $ 350,000 $ — $ — $ — 2024 Notes 350,000 (3,416) 346,584 350,000 (3,981) 346,019 Total outstanding debt $ 700,000 $ (3,416) $ 696,584 $ 350,000 $ (3,981) $ 346,019

Receivables, net (Tables)

Receivables, net (Tables)	9 Months Ended
	Sep. 26, 2020
Receivables [Abstract]
Current and long-term accounts receivable balances	Cadence’s current and long-term receivables balances as of September 26, 2020 and December 28, 2019 were as follows: As of September 26, December 28, (In thousands) Accounts receivable $ 194,093 $ 179,250 Unbilled accounts receivable 108,877 126,165 Long-term receivables 3,208 3,082 Total receivables 306,178 308,497 Less allowance for doubtful accounts (2,557) (869) Total receivables, net $ 303,621 $ 307,628

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Sep. 26, 2020
Revenue from Contract with Customer [Abstract]
Revenue from external customers by product group	The following table shows the percentage of product and related maintenance revenue contributed by each of Cadence’s five product categories and services for the three and nine months ended September 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, Custom IC Design and Simulation 24 % 26 % 25 % 26 % Digital IC Design and Signoff 27 % 30 % 28 % 30 % Functional Verification, including Emulation and Prototyping Hardware* 23 % 20 % 23 % 22 % IP 15 % 15 % 14 % 13 % System Design and Analysis 11 % 9 % 10 % 9 % Total 100 % 100 % 100 % 100 % _____________ * Includes immaterial amount of revenue accounted for under leasing arrangements.
Contract balances	Cadence’s contract balances as of September 26, 2020 and December 28, 2019 were as follows: As of September 26, December 28, (In thousands) Contract assets $ 8,677 $ 10,209 Deferred revenue 561,649 428,883

Goodwill and Acquired Intangi_2

Goodwill and Acquired Intangibles (Tables)	9 Months Ended
	Sep. 26, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Changes in the carrying amount of goodwill	The changes in the carrying amount of goodwill during the nine months ended September 26, 2020 were as follows: Gross Carrying (In thousands) Balance as of December 28, 2019 $ 661,856 Goodwill resulting from acquisitions 120,219 Effect of foreign currency translation (1,233) Balance as of September 26, 2020 $ 780,842
Schedule of acquired intangibles with finite and indefinite lives (excluding goodwill)	Acquired intangibles as of September 26, 2020 were as follows, excluding intangibles that were fully amortized as of December 28, 2019: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 370,834 $ (218,553) $ 152,281 Agreements and relationships 180,011 (108,736) 71,275 Tradenames, trademarks and patents 10,590 (6,393) 4,197 Total acquired intangibles $ 561,435 $ (333,682) $ 227,753 Acquired intangibles as of December 28, 2019 were as follows, excluding intangibles that were fully amortized as of December 29, 2018: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 363,142 $ (245,902) $ 117,240 Agreements and relationships 146,395 (112,565) 33,830 Tradenames, trademarks and patents 7,600 (5,795) 1,805 Total acquired intangibles with definite lives 517,137 (364,262) 152,875 In-process technology 19,500 — 19,500 Total acquired intangibles $ 536,637 $ (364,262) $ 172,375
Amortization of acquired intangibles	Amortization of acquired intangibles for the three and nine months ended September 26, 2020 and September 28, 2019 was as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Cost of product and maintenance $ 11,447 $ 9,925 $ 33,791 $ 31,078 Amortization of acquired intangibles 4,438 2,874 13,234 9,341 Total amortization of acquired intangibles $ 15,885 $ 12,799 $ 47,025 $ 40,419
Estimated amortization expense	Estimated amortization expense for acquired intangible assets with definite lives for the following five fiscal years and thereafter is as follows: (In thousands) 2020 - remaining period $ 17,169 2021 61,705 2022 43,400 2023 27,870 2024 26,407 Thereafter 51,202 Total estimated amortization expense $ 227,753

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 26, 2020
Share-based Payment Arrangement [Abstract]
Stock-based compensation expense and allocation by cost	Stock-based compensation expense is reflected in Cadence’s condensed consolidated income statements for the three and nine months ended September 26, 2020 and September 28, 2019 as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Cost of product and maintenance $ 668 $ 731 $ 2,042 $ 2,064 Cost of services 850 931 2,599 2,626 Marketing and sales 9,699 10,424 29,826 29,039 Research and development 28,652 30,458 87,688 85,015 General and administrative 5,465 5,735 16,568 16,045 Total stock-based compensation expense $ 45,334 $ 48,279 $ 138,723 $ 134,789

Stock Repurchase Program (Table

Stock Repurchase Program (Tables)	9 Months Ended
	Sep. 26, 2020
Class of Stock Disclosures [Abstract]
Shares repurchased and the total cost of shares repurchased	The shares repurchased under Cadence’s repurchase authorizations and the total cost of repurchased shares, including commissions, during the three and nine months ended September 26, 2020 and September 28, 2019 were as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Shares repurchased 717 1,065 3,124 3,719 Total cost of repurchased shares $ 75,011 $ 75,011 $ 250,047 $ 231,131

Restructuring and Other Charg_2

Restructuring and Other Charges (Tables)	9 Months Ended
	Sep. 26, 2020
Restructuring and Related Activities [Abstract]
Restructuring reserve rollforward by major type of cost	The following table presents activity relating to Cadence’s restructuring plans during the nine months ended September 26, 2020: Severance and Benefits Excess Facilities Total (In thousands) Balance, December 28, 2019 $ 9,229 $ 409 $ 9,638 Restructuring and other credits (1,280) (49) (1,329) Cash payments (6,955) (200) (7,155) Effect of foreign currency translation (50) (3) (53) Balance, September 26, 2020 $ 944 $ 157 $ 1,101
Schedule of restructuring reserve by balance sheet classification	The remaining liability for Cadence’s restructuring plans is recorded in the condensed consolidated balance sheet as follows: As of September 26, 2020 (In thousands) Accounts payable and accrued liabilities $ 1,051 Other long-term liabilities 50 Total restructuring liabilities $ 1,101 All liabilities for severance and related benefits under Cadence’s restructuring plans are included in accounts payable and accrued liabilities on Cadence’s condensed consolidated balance sheet as of September 26, 2020. Restructuring liabilities included in other long-term liabilities represent liabilities from vacated facilities, and Cadence expects to make cash payments to settle these liabilities through fiscal 2022.

Net Income Per Share (Tables)

Net Income Per Share (Tables)	9 Months Ended
	Sep. 26, 2020
Earnings Per Share [Abstract]
Basic and diluted net income per share	The calculations for basic and diluted net income per share for the three and nine months ended September 26, 2020 and September 28, 2019 are as follows: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands, except per share amounts) Net income $ 161,630 $ 101,514 $ 416,906 $ 329,304 Weighted average common shares used to calculate basic net income per share 273,996 273,329 273,633 273,224 Stock-based awards 6,028 7,337 5,822 7,593 Weighted average common shares used to calculate diluted net income per share 280,024 280,666 279,455 280,817 Net income per share - basic $ 0.59 $ 0.37 $ 1.52 $ 1.21 Net income per share - diluted $ 0.58 $ 0.36 $ 1.49 $ 1.17
Potential shares of Cadence's common stock excluded	The following table presents shares of Cadence’s common stock outstanding for the three and nine months ended September 26, 2020 and September 28, 2019 that were excluded from the computation of diluted net income per share because the effect of including these shares in the computation of diluted net income per share would have been anti-dilutive: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Long-term performance-based stock awards 105 1,386 510 279 Options to purchase shares of common stock 23 — 258 476 Non-vested shares of restricted stock 21 1,276 75 1,000 Total potential common shares excluded 149 2,662 843 1,755

Fair Value (Tables)

Fair Value (Tables)	9 Months Ended
	Sep. 26, 2020
Fair Value Disclosures [Abstract]
Fair value of financial assets and liabilities	The fair value of financial assets and liabilities was determined using the following levels of inputs as of September 26, 2020 and December 28, 2019: Fair Value Measurements as of September 26, 2020 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 850,648 $ 850,648 $ — $ — Marketable equity securities 4,570 4,570 — — Securities held in Non-Qualified Deferred Compensation (“NQDC”) trust 36,668 36,668 — — Total Assets $ 891,886 $ 891,886 $ — $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts $ 3,975 $ — $ 3,975 $ — Total Liabilities $ 3,975 $ — $ 3,975 $ — Fair Value Measurements as of December 28, 2019 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 445,942 $ 445,942 $ — $ — Marketable equity securities 4,600 4,600 — — Securities held in NQDC trust 34,096 34,096 — — Foreign currency exchange contracts 3,557 — 3,557 — Total Assets $ 488,195 $ 484,638 $ 3,557 $ — As of December 28, 2019, Cadence did not have any financial liabilities requiring a recurring fair value measurement.

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)	9 Months Ended
	Sep. 26, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated other comprehensive loss, net of tax	Accumulated other comprehensive loss was comprised of the following as of September 26, 2020 and December 28, 2019: As of September 26, December 28, (In thousands) Foreign currency translation loss $ (26,474) $ (29,503) Changes in defined benefit plan liabilities (7,146) (7,423) Total accumulated other comprehensive loss $ (33,620) $ (36,926)

Segment Reporting (Tables)

Segment Reporting (Tables)	9 Months Ended
	Sep. 26, 2020
Segment Reporting [Abstract]
Summary of revenue by geography	The following table presents a summary of revenue by geography for the three and nine months ended September 26, 2020 and September 28, 2019: Three Months Ended Nine Months Ended September 26, September 28, September 26, September 28, (In thousands) Americas: United States $ 269,057 $ 241,060 $ 794,545 $ 718,798 Other Americas 10,956 12,660 29,913 33,091 Total Americas 280,013 253,720 824,458 751,889 Asia: China 114,160 58,215 275,191 185,570 Other Asia 123,188 120,122 354,063 340,895 Total Asia 237,348 178,337 629,254 526,465 Europe, Middle East and Africa 107,913 106,151 340,173 323,442 Japan 41,333 41,395 129,097 134,968 Total $ 666,607 $ 579,603 $ 1,922,982 $ 1,736,764
Summary of long-lived assets by geography	The following table presents a summary of long-lived assets by geography as of September 26, 2020 and December 28, 2019: As of September 26, December 28, (In thousands) Americas: United States $ 231,937 $ 220,023 Other Americas 748 728 Total Americas 232,685 220,751 Asia: China 16,315 15,729 Other Asia 27,234 27,890 Total Asia 43,549 43,619 Europe, Middle East and Africa 11,194 10,474 Japan 735 1,011 Total $ 288,163 $ 275,855

Basis of Presentation and Sum_3

Basis of Presentation and Summary of Significant Accounting Policies New Accounting Standards (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Jun. 27, 2020	Dec. 28, 2019	Sep. 28, 2019	Jun. 29, 2019	Dec. 29, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' Equity Attributable to Parent	$ 2,395,718	$ 2,256,631	$ 2,102,894	$ 1,480,262	$ 1,430,545	$ 1,288,401
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' Equity Attributable to Parent	$ 2,176,595	$ 2,014,965	1,761,688	$ 1,102,013	$ 1,000,499	$ 772,709
Cumulative Effect, Period of Adoption, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' Equity Attributable to Parent			(1,999)
Cumulative Effect, Period of Adoption, Adjustment [Member] | Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' Equity Attributable to Parent			$ (1,999)

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019	Oct. 09, 2014
Debt Instrument [Line Items]
Principal	$ 700,000	$ 350,000
Unamortized Discount	(3,416)	(3,981)
Carrying Value	350,000	0
Carrying Value	346,584	346,019
Carrying Value	696,584	346,019
Senior Notes [Member] | Senior Notes Due 2024 [Member]
Debt Instrument [Line Items]
Principal	350,000	350,000	$ 350,000
Unamortized Discount	(3,416)	(3,981)	$ (1,400)
Carrying Value	346,584	346,019
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Principal	350,000	0
Carrying Value	$ 350,000	$ 0

Debt Credit Facility (Details T

Debt Credit Facility (Details Textual) $ in Millions	9 Months Ended
	Sep. 26, 2020USD ($)
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, current borrowing capacity	$ 350
Credit facility additional borrowing capacity available	250
Credit facility, maximum borrowing capacity	$ 600
Credit facility, maturity date	Jan. 28, 2022
Credit facility, interest rate at period end	1.50%
Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, commitment fee percentage	0.15%
Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, commitment fee percentage	0.30%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread	1.25%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread	1.875%
Base Rate [Member] | Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread	0.25%
Base Rate [Member] | Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread	0.875%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, covenant, debt to EBITDA ratio	3
Credit facility, covenant, debt to EBITDA ratio after step up triggered by acquisition	3.50
Credit facility, covenant, required business acquisition consideration, minimum	$ 250
Revolving Credit Facility [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Credit facility, covenant, pro forma leverage ratio	2.75
Revolving Credit Facility [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Credit facility, covenant, pro forma leverage ratio	3.25

Debt (Details Textual)

Debt (Details Textual) - USD ($) $ in Thousands	Oct. 09, 2014	Sep. 26, 2020	Dec. 28, 2019
Debt Instrument [Line Items]
Unamortized discount		$ 3,416	$ 3,981
Senior Notes [Member] | Senior Notes Due 2024 [Member]
Debt Instrument [Line Items]
Aggregate principal amount, issued	$ 350,000	350,000	350,000
Stated interest rate of Senior Notes	4.375%
Proceeds from Senior Notes, net	$ 342,400
Unamortized discount	1,400	3,416	$ 3,981
Debt issuance costs	$ 6,200
Fair value, notes payable		$ 394,400

Receivables, net (Details Textu

Receivables, net (Details Textual) - Customer	Sep. 26, 2020	Dec. 28, 2019
Receivables [Abstract]
Number of customers with receivables balance greater than ten percent of total balance	0	0
Percentage of receivables, net attributable to single customer	10.00%	10.00%

Receivables, net (Details)

Receivables, net (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Current and long-term receivables balances
Accounts receivable	$ 194,093	$ 179,250
Unbilled accounts receivable	108,877	126,165
Long-term receivables	3,208	3,082
Total receivables	306,178	308,497
Less allowance for doubtful accounts	(2,557)	(869)
Total receivables, net	$ 303,621	$ 307,628

Revenue (Details)

Revenue (Details)		3 Months Ended		9 Months Ended
		Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group		100.00%	100.00%	100.00%	100.00%
Custom IC Design and Simulation
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group		24.00%	26.00%	25.00%	26.00%
Digital IC Design and Signoff
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group		27.00%	30.00%	28.00%	30.00%
Functional Verification, including Emulation and Prototyping Hardware*
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group	[1]	23.00%	20.00%	23.00%	22.00%
IP
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group		15.00%	15.00%	14.00%	13.00%
System Design and Analysis
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group		11.00%	9.00%	10.00%	9.00%
[1]	Includes immaterial amount of revenue accounted for under leasing arrangements.

Revenue (Details 1)

Revenue (Details 1) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Revenue from Contract with Customer [Abstract]
Contract assets	$ 8,677	$ 10,209
Deferred revenue	$ 561,649	$ 428,883

Revenue (Details Textual)

Revenue (Details Textual) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Revenue from Contract with Customer [Abstract]
Revenue recognized from deferred revenue during the period	$ 50.5	$ 44.4	$ 292.1	$ 290.4
Remaining performance obligations	3,800		3,800
Non-cancellable IP access agreements included in remaining performance obligations	$ 150.9		$ 150.9
Percent of remaining performance obligations, current	55.00%		55.00%
Revenue recognized from satisfaction of performance obligations	$ 18.1	$ 10	$ 38.9	$ 26.7

Acquisitions (Details Textual)

Acquisitions (Details Textual) - USD ($)	9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019
Business Acquisition [Line Items]
Cash consideration to acquire businesses, net of cash acquired	$ 197,562,000	$ 338,000
Goodwill acquired during period	120,219,000
Goodwill expected tax deductible amount	0
2020 Acquisitions [Member]
Business Acquisition [Line Items]
Cash consideration to acquire businesses, net of cash acquired	195,600,000
Cash acquired from acquisition during period	1,500,000
Goodwill acquired during period	119,400,000
Finite-lived intangible assets acquired during period	101,300,000
Other identifiable assets acquired and liabilities assumed, net during period	$ (25,100,000)
Weighted-average useful life of definite-lived intangible assets acquired	8 years 10 months 24 days

Goodwill and Acquired Intangi_3

Goodwill and Acquired Intangibles (Details) $ in Thousands	9 Months Ended
	Sep. 26, 2020USD ($)
Changes in the carrying amount of goodwill
Balance at beginning of period	$ 661,856
Goodwill resulting from acquisitions	120,219
Effect of foreign currency translation	(1,233)
Balance at end of period	$ 780,842

Goodwill and Acquired Intangi_4

Goodwill and Acquired Intangibles (Details 1) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount		$ 517,137
Accumulated amortization	$ (333,682)	(364,262)
Acquired intangibles, net	227,753	152,875
In-process technology		19,500
Intangible Assets, Gross (Excluding Goodwill)	561,435	536,637
Intangible Assets, Net (Excluding Goodwill)	227,753	172,375
Existing Technology [Member]
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount	370,834	363,142
Accumulated amortization	(218,553)	(245,902)
Acquired intangibles, net	152,281	117,240
Agreements and Relationships [Member]
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount	180,011	146,395
Accumulated amortization	(108,736)	(112,565)
Acquired intangibles, net	71,275	33,830
Tradenames Trademarks And Patents [Member]
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount	10,590	7,600
Accumulated amortization	(6,393)	(5,795)
Acquired intangibles, net	$ 4,197	$ 1,805

Goodwill and Acquired Intangi_5

Goodwill and Acquired Intangibles (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Amortization of acquired intangibles
Cost of product and maintenance	$ 11,447	$ 9,925	$ 33,791	$ 31,078
Amortization of acquired intangibles	4,438	2,874	13,234	9,341
Total amortization of acquired intangibles	$ 15,885	$ 12,799	$ 47,025	$ 40,419

Goodwill and Acquired Intangi_6

Goodwill and Acquired Intangibles (Details 3) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Estimated amortization expense
2020 - remaining period	$ 17,169
2021	61,705
2022	43,400
2023	27,870
2024	26,407
Thereafter	51,202
Acquired intangibles, net	$ 227,753	$ 152,875

Goodwill and Acquired Intangi_7

Goodwill and Acquired Intangibles (Details Textual)	9 Months Ended
	Sep. 26, 2020USD ($)
Finite-Lived Intangible Assets [Line Items]
In-process research and development transferred to existing technology during period	$ 19,500,000

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	$ 45,334	$ 48,279	$ 138,723	$ 134,789
Cost of product and maintenance
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	668	731	2,042	2,064
Cost of services
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	850	931	2,599	2,626
Marketing and sales
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	9,699	10,424	29,826	29,039
Research and development
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	28,652	30,458	87,688	85,015
General and administrative
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	$ 5,465	$ 5,735	$ 16,568	$ 16,045

Stock-Based Compensation (Det_2

Stock-Based Compensation (Details Textual) - Stock option and restricted stock grants [Member] $ in Millions	9 Months Ended
	Sep. 26, 2020USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation expense	$ 233
Weighted-average vesting period over which unrecognized compensation expense will be recognized	2 years

Stock Repurchase Program (Detai

Stock Repurchase Program (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019	Jul. 17, 2020	Jun. 27, 2020
Class of Stock Disclosures [Abstract]
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 869,000		$ 869,000			$ 194,000
Additional authorized repurchase amount					$ 750,000
Shares repurchased	717	1,065	3,124	3,719
Total cost of repurchased shares	$ 75,011	$ 75,011	$ 250,047	$ 231,131

Restructuring and Other Charg_3

Restructuring and Other Charges Restructuring and Other Charges (Detail Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring and other credits	$ 13	$ (186)	$ (1,329)	$ (1,188)
Prior Restructuring Plans [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other credits			$ (1,300)

Restructuring and Other Charg_4

Restructuring and Other Charges (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Restructuring Reserve [Roll Forward]
Beginning balance			$ 9,638
Restructuring and other credits	$ 13	$ (186)	(1,329)	$ (1,188)
Cash payments			(7,155)
Effect of foreign currency translation			(53)
Ending balance	1,101		1,101
Employee Severance and Benefits [Member]
Restructuring Reserve [Roll Forward]
Beginning balance			9,229
Restructuring and other credits			(1,280)
Cash payments			(6,955)
Effect of foreign currency translation			(50)
Ending balance	944		944
Excess Facilities [Member]
Restructuring Reserve [Roll Forward]
Beginning balance			409
Restructuring and other credits			(49)
Cash payments			(200)
Effect of foreign currency translation			(3)
Ending balance	$ 157		$ 157

Restructuring and Other Charg_5

Restructuring and Other Charges (Details 1) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 1,101	$ 9,638
Accounts Payable and Accrued Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	1,051
Other Long Term Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 50

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 4,083	$ 15,194	$ 29,653	$ 44,239
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount	19,000		19,000
Share-based Payment Arrangement, Expense, Tax Benefit	$ 19,300		$ 49,000

Net Income Per Share (Details)

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Earnings Per Share, Basic and Diluted [Abstract]
Net income	$ 161,630	$ 101,514	$ 416,906	$ 329,304
Weighted average common shares used to calculate basic net income per share	273,996	273,329	273,633	273,224
Stock-based awards	6,028	7,337	5,822	7,593
Weighted average common shares used to calculate diluted net income per share (in shares)	280,024	280,666	279,455	280,817
Net income per share - basic (usd per share)	$ 0.59	$ 0.37	$ 1.52	$ 1.21
Net income per share - diluted (usd per share)	$ 0.58	$ 0.36	$ 1.49	$ 1.17

Net Income Per Share (Details 1

Net Income Per Share (Details 1) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Potential shares of Cadence's common stock excluded
Potential common shares excluded from the computation of diluted earnings per share	149	2,662	843	1,755
Long-term performance-based stock awards
Potential shares of Cadence's common stock excluded
Potential common shares excluded from the computation of diluted earnings per share	105	1,386	510	279
Options to purchase shares of common stock
Potential shares of Cadence's common stock excluded
Potential common shares excluded from the computation of diluted earnings per share	23	0	258	476
Non-vested shares of restricted stock
Potential shares of Cadence's common stock excluded
Potential common shares excluded from the computation of diluted earnings per share	21	1,276	75	1,000

Fair Value (Details)

Fair Value (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Short-term investments:
Marketable equity securities	$ 4,570	$ 4,600
Securities held in Non-Qualified Deferred Compensation trust, or NQDC	36,668	34,096
Foreign currency exchange contracts		3,557
Total Assets	891,886	488,195
Foreign currency exchange contracts	3,975
Total Liabilities	3,975
Money Market Funds
Assets
Cash equivalents	850,648	445,942
Fair Value Measurements, Level 1 [Member]
Short-term investments:
Marketable equity securities	4,570	4,600
Securities held in Non-Qualified Deferred Compensation trust, or NQDC	36,668	34,096
Foreign currency exchange contracts		0
Total Assets	891,886	484,638
Foreign currency exchange contracts	0
Total Liabilities	0
Fair Value Measurements, Level 1 [Member] | Money Market Funds
Assets
Cash equivalents	850,648	445,942
Fair Value Measurements, Level 2 [Member]
Short-term investments:
Marketable equity securities	0	0
Securities held in Non-Qualified Deferred Compensation trust, or NQDC	0	0
Foreign currency exchange contracts		3,557
Total Assets	0	3,557
Foreign currency exchange contracts	3,975
Total Liabilities	3,975
Fair Value Measurements, Level 2 [Member] | Money Market Funds
Assets
Cash equivalents	0	0
Fair Value Measurements, Level 3 [Member]
Short-term investments:
Marketable equity securities	0	0
Securities held in Non-Qualified Deferred Compensation trust, or NQDC	0	0
Foreign currency exchange contracts		0
Total Assets	0	0
Foreign currency exchange contracts	0
Total Liabilities	0
Fair Value Measurements, Level 3 [Member] | Money Market Funds
Assets
Cash equivalents	$ 0	$ 0

Fair Value Fair Value (Details

Fair Value Fair Value (Details Textual) $ in Millions	9 Months Ended
	Sep. 26, 2020USD ($)
2020 Acquisitions [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Finite-lived intangible assets acquired during period	$ 101.3
Fair Value, Inputs, Level 3 [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Deferred revenue assumed in acquisitions during period	$ 6.9
Fair Value, Inputs, Level 3 [Member] | ExpectedProfitMargin [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, assumed profit margin	25.00%
Deferred revenue [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	4.75%
Acquired Intangible Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	9.00%
Acquired Intangible Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	12.50%
Acquired Intangible Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Weighted Average [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	10.30%

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (33,620)	$ (36,926)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(33,620)	(36,926)
Accumulated Foreign Currency Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(26,474)	(29,503)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(26,474)	(29,503)
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(7,146)	(7,423)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (7,146)	$ (7,423)

Segment Reporting (Details)

Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 26, 2020	Sep. 28, 2019	Sep. 26, 2020	Sep. 28, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 666,607	$ 579,603	$ 1,922,982	$ 1,736,764
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	269,057	241,060	794,545	718,798
Other Americas [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	10,956	12,660	29,913	33,091
Americas [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	280,013	253,720	824,458	751,889
China [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	114,160	58,215	275,191	185,570
Other Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	123,188	120,122	354,063	340,895
Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	237,348	178,337	629,254	526,465
EMEA [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	107,913	106,151	340,173	323,442
Japan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 41,333	$ 41,395	$ 129,097	$ 134,968

Segment Reporting (Details 1)

Segment Reporting (Details 1) - USD ($) $ in Thousands	Sep. 26, 2020	Dec. 28, 2019
Summary of long-lived assets by geography
Total long-lived assets	$ 288,163	$ 275,855
United States [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	231,937	220,023
Other Americas [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	748	728
Americas [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	232,685	220,751
China [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	16,315	15,729
Other Asia [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	27,234	27,890
Asia [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	43,549	43,619
EMEA [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	11,194	10,474
Japan [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	$ 735	$ 1,011