Cadence Design Systems (CDNS) 10-Q 26 Jul 21 2021 Q2 Quarterly report Financial data

Cover Page

Cover Page	6 Months Ended
	Jul. 03, 2021shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 3, 2021
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	276,780,000
Entity Central Index Key	0000813672
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--01-01

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Current assets:
Cash and cash equivalents	$ 847,160	$ 928,432
Receivables, net	389,986	338,487
Inventories	90,479	75,956
Prepaid expenses and other	129,442	135,712
Total current assets	1,457,067	1,478,587
Property, plant and equipment, net	301,979	311,125
Goodwill	929,525	782,087
Acquired intangibles, net	264,789	210,590
Deferred taxes	729,790	732,290
Other assets	439,398	436,106
Total assets	4,122,548	3,950,785
Current liabilities:
Accounts payable and accrued liabilities	340,607	349,951
Current portion of deferred revenue	586,109	446,857
Total current liabilities	926,716	796,808
Long-term liabilities:
Long-term portion of deferred revenue	98,408	107,064
Long-term debt	347,186	346,793
Other long-term liabilities	233,495	207,102
Total long-term liabilities	679,089	660,959
Commitments and contingencies
Stockholders’ equity:
Common stock and capital in excess of par value	2,354,801	2,217,939
Treasury stock, at cost	(2,509,668)	(2,057,829)
Retained earnings	2,693,402	2,350,333
Accumulated other comprehensive loss	(21,792)	(17,425)
Total stockholders’ equity	2,516,743	2,493,018
Total liabilities and stockholders’ equity	$ 4,122,548	$ 3,950,785

Condensed Consolidated Income S

Condensed Consolidated Income Statements - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Revenues [Abstract]
Revenues	$ 728,285	$ 638,418	$ 1,464,313	$ 1,256,375
Costs and Expenses:
Marketing and sales	135,967	120,476	268,793	246,220
Research and development	285,227	250,821	556,219	492,489
General and administrative	40,333	35,641	80,285	69,233
Amortization of acquired intangibles	5,030	4,590	9,661	8,796
Restructuring and other credits	(469)	(275)	(746)	(1,342)
Total costs and expenses	542,847	486,468	1,074,938	965,074
Income from operations	185,438	151,950	389,375	291,301
Interest expense	(4,316)	(5,914)	(8,533)	(10,551)
Other income, net	2,143	4,630	4,844	96
Income before provision for income taxes	183,265	150,666	385,686	280,846
Provision for income taxes	27,365	19,378	42,617	25,570
Net income	$ 155,900	$ 131,288	$ 343,069	$ 255,276
Net income per share - basic (usd per share)	$ 0.57	$ 0.48	$ 1.25	$ 0.93
Net Income per share - diluted (usd per share)	$ 0.56	$ 0.47	$ 1.23	$ 0.91
Weighted average common shares outstanding - basic (in shares)	273,565	273,432	273,843	273,488
Weighted average common shares outstanding - diluted (in shares)	278,558	279,080	279,399	279,207
Product and maintenance [Member]
Revenues [Abstract]
Revenues	$ 687,884	$ 601,356	$ 1,386,938	$ 1,183,055
Costs and Expenses:
Cost of sales	55,842	55,669	120,748	111,115
Service [Member]
Revenues [Abstract]
Revenues	40,401	37,062	77,375	73,320
Costs and Expenses:
Cost of sales	$ 20,917	$ 19,546	$ 39,978	$ 38,563

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 155,900	$ 131,288	$ 343,069	$ 255,276
Other comprehensive income (loss), net of tax effects:
Foreign currency translation adjustments	5,788	1,108	(4,136)	(8,510)
Changes in defined benefit plan liabilities	(543)	450	(231)	419
Total other comprehensive income (loss), net of tax effects	5,245	1,558	(4,367)	(8,091)
Comprehensive income	$ 161,145	$ 132,846	$ 338,702	$ 247,185

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	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. 28, 2019	$ 2,102,894		$ 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	255,276				255,276
Other comprehensive loss, net of taxes	$ (8,091)						(8,091)
Purchase of treasury stock, shares	(2,408)	(2,408)
Purchase of treasury stock	$ (175,036)			(175,036)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares		1,957
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	43,855		10,758	33,097
Stock received for payment of employee taxes on vesting of restricted stock, shares		(610)
Stock received for payment of employee taxes on vesting of restricted stock	(53,657)		(7,368)	(46,289)
Stock-based compensation expense	93,389		93,389
Ending balance at Jun. 27, 2020	2,256,631		2,143,016	(1,856,333)	2,014,965		(45,017)
Ending balance, shares at Jun. 27, 2020		278,794
Beginning balance at Mar. 28, 2020	2,157,994		2,099,425	(1,778,533)	1,883,677		(46,575)
Beginning balance, shares at Mar. 28, 2020		279,187
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	131,288				131,288
Other comprehensive loss, net of taxes	$ 1,558						1,558
Purchase of treasury stock, shares	(920)	(920)
Purchase of treasury stock	$ (75,014)			(75,014)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares		673
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	10,027		(119)	10,146
Stock received for payment of employee taxes on vesting of restricted stock, shares		(146)
Stock received for payment of employee taxes on vesting of restricted stock	(16,129)		(3,197)	(12,932)
Stock-based compensation expense	46,907		46,907
Ending balance at Jun. 27, 2020	2,256,631		2,143,016	(1,856,333)	2,014,965		(45,017)
Ending balance, shares at Jun. 27, 2020		278,794
Beginning balance at Jan. 02, 2021	2,493,018		2,217,939	(2,057,829)	2,350,333		(17,425)
Beginning balance, shares at Jan. 02, 2021		278,941
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	343,069				343,069
Other comprehensive loss, net of taxes	$ (4,367)						(4,367)
Purchase of treasury stock, shares	(3,043)	(3,043)
Purchase of treasury stock	$ (392,290)			(392,290)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares		1,391
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	52,252		42,917	9,335
Stock received for payment of employee taxes on vesting of restricted stock, shares		(509)
Stock received for payment of employee taxes on vesting of restricted stock	(78,053)		(9,169)	(68,884)
Stock-based compensation expense	103,114		103,114
Ending balance at Jul. 03, 2021	2,516,743		2,354,801	(2,509,668)	2,693,402		(21,792)
Ending balance, shares at Jul. 03, 2021		276,780
Beginning balance at Apr. 03, 2021	2,542,432		2,307,965	(2,275,998)	2,537,502		(27,037)
Beginning balance, shares at Apr. 03, 2021		278,265
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	155,900				155,900
Other comprehensive loss, net of taxes	$ 5,245						5,245
Purchase of treasury stock, shares	(1,720)	(1,720)
Purchase of treasury stock	$ (220,023)			(220,023)
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures, shares		367
Issuance of common stock and reissuance of treasury stock under equity incentive plans, net of forfeitures	4,339		791	3,548
Stock received for payment of employee taxes on vesting of restricted stock, shares		(132)
Stock received for payment of employee taxes on vesting of restricted stock	(21,668)		(4,473)	(17,195)
Stock-based compensation expense	50,518		50,518
Ending balance at Jul. 03, 2021	$ 2,516,743		$ 2,354,801	$ (2,509,668)	$ 2,693,402		$ (21,792)
Ending balance, shares at Jul. 03, 2021		276,780

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020
Statement of Cash Flows [Abstract]
Cash and Cash Equivalents, at Carrying Value	$ 847,160	$ 1,189,186
Cash flows from operating activities:
Net income	343,069	255,276
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	71,799	69,902
Amortization of debt discount and fees	687	512
Stock-based compensation	103,114	93,389
(Gain) loss on investments, net	(795)	4,036
Deferred income taxes	1,710	(1,609)
Provisions for losses on receivables	242	922
ROU asset amortization and change in operating lease liabilities	(2,483)	1,502
Other non-cash items	183	296
Changes in operating assets and liabilities, net of effect of acquired businesses:
Receivables	(48,016)	(2,497)
Inventories	(14,527)	11,020
Prepaid expenses and other	7,690	9,910
Other assets	6,991	(17,687)
Accounts payable and accrued liabilities	(14,771)	(11,141)
Deferred revenue	127,286	148,508
Other long-term liabilities	6,639	504
Net cash provided by operating activities	588,818	562,843
Cash flows from investing activities:
Purchases of property, plant and equipment	(31,139)	(43,535)
Cash paid in business combinations, net of cash acquired	(220,660)	(195,118)
Net cash used for investing activities	(251,799)	(238,653)
Cash flows from financing activities:
Proceeds from revolving credit facility	0	350,000
Payment of debt issuance costs	(1,285)	0
Proceeds from issuance of common stock	52,252	43,667
Stock received for payment of employee taxes on vesting of restricted stock	(78,053)	(53,657)
Payments for repurchases of common stock	(392,290)	(175,036)
Net cash provided by (used for) financing activities	(419,376)	164,974
Effect of exchange rate changes on cash and cash equivalents	1,085	(5,188)
Increase (decrease) in cash and cash equivalents	(81,272)	483,976
Supplemental cash flow information:
Cash paid for interest	7,920	10,076
Cash paid for taxes, net	$ 28,619	$ 20,897

Basis of Presentation and Summa

Basis of Presentation and Summary of Significant Accounting Policies	6 Months Ended
	Jul. 03, 2021
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 January 2, 2021. 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 ongoing 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 July 26, 2021, 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 Accounting for Income Taxes In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards Codification 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Cadence adopted the new standard on January 3, 2021, the first day of fiscal 2021. The adoption of this standard did not impact Cadence’s condensed consolidated financial statements for the period ended July 3, 2021.

Debt

Debt	6 Months Ended
	Jul. 03, 2021
Debt Disclosure [Abstract]
DEBT	DEBT Cadence’s outstanding debt as of July 3, 2021 and January 2, 2021 was as follows: July 3, 2021 January 2, 2021 (In thousands) Principal Unamortized Discount Carrying Value Principal Unamortized Discount Carrying Value Revolving Credit Facility $ — $ — $ — $ — $ — $ — 2024 Notes 350,000 (2,814) 347,186 350,000 (3,207) 346,793 Total outstanding debt $ 350,000 $ (2,814) $ 347,186 $ 350,000 $ (3,207) $ 346,793 Revolving Credit Facility In June 2021, Cadence terminated its existing revolving credit facility, dated January 30, 2017, and entered into a five-year senior unsecured revolving credit facility with a group of lenders led by Bank of America, N.A., as administrative agent (the “2021 Credit Facility”). The 2021 Credit Facility provides for borrowings up to $700.0 million, with the right to request increased capacity up to an additional $350.0 million upon the receipt of lender commitments, for total maximum borrowings of $1.05 billion. The 2021 Credit Facility expires on June 30, 2026. Any outstanding loans drawn under such credit facility are due at maturity on June 30, 2026, subject to an option to extend the maturity date. Outstanding borrowings may be repaid at any time prior to maturity. Debt issuance costs of $1.3 million were recorded to other assets in Cadence’s condensed consolidated balance sheet at the inception of the agreement and are being amortized to interest expense over the term of the 2021 Credit Facility. Interest accrues on borrowings under the 2021 Credit Facility at a rate equal to, at Cadence’s option, either (1) LIBOR plus a margin between 0.750% and 1.250% per annum, determined by reference to the credit rating of Cadence’s unsecured debt, or (2) the base rate plus a margin between 0.000% and 0.250% per annum, determined by reference to the credit rating of Cadence’s unsecured debt. Interest is payable quarterly. A commitment fee ranging from 0.070% to 0.175% is assessed on the daily average undrawn portion of revolving commitments. The 2021 Credit Facility also includes provisions addressing the potential transition from LIBOR to a new replacement benchmark. The 2021 Credit Facility contains customary negative covenants that, among other things, restrict Cadence’s ability to incur additional indebtedness and grant liens. In addition, the 2021 Credit Facility contains financial covenants that require Cadence to maintain a funded debt to EBITDA ratio not greater than 3.25 to 1, with a step up to 3.75 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 3.00 to 1 and 3.50 to 1. As of July 3, 2021, Cadence was in compliance with all financial covenants associated with the 2021 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 $385.2 million as of July 3, 2021. 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	6 Months Ended
	Jul. 03, 2021
Receivables [Abstract]
RECEIVABLES, NET	RECEIVABLES, NET Cadence’s current and long-term receivables balances as of July 3, 2021 and January 2, 2021 were as follows: As of July 3, January 2, (In thousands) Accounts receivable $ 250,812 $ 196,990 Unbilled accounts receivable 142,846 144,364 Long-term receivables 4,879 3,655 Total receivables 398,537 345,009 Less allowance for doubtful accounts (3,672) (2,867) Total receivables, net $ 394,865 $ 342,142

Revenue

Revenue	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Custom Integrated Circuit (“IC”) Design and Simulation 23 % 24 % 23 % 25 % Digital IC Design and Signoff 28 % 28 % 28 % 28 % Functional Verification, including Emulation and Prototyping Hardware* 25 % 24 % 26 % 23 % Intellectual Property (“IP”) 13 % 14 % 13 % 14 % System Design and Analysis 11 % 10 % 10 % 10 % Total 100 % 100 % 100 % 100 % _____________ * Includes immaterial amount of revenue accounted for under leasing arrangements. Cadence generates revenue from contracts with customers and applies judgment in identifying and evaluating any terms and conditions in contracts which may impact revenue recognition. 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. Revenue by product category fluctuates from period to period based on demand for products and services, and Cadence’s available resources to deliver them. 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 limited 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 included in 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 July 3, 2021 and January 2, 2021 were as follows: As of July 3, January 2, (In thousands) Contract assets $ 6,057 $ 9,709 Deferred revenue 684,517 553,921 Cadence recognized revenue of $103.4 million and $330.0 million during the three and six months ended July 3, 2021, and $88.1 million and $241.6 million during the three and six months ended June 27, 2020, 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 $3.9 billion as of July 3, 2021, which included $110.0 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 July 3, 2021, Cadence expected to recognize approximately 55% of the contracted but unsatisfied performance obligations, excluding non-cancellable IPAA commitments, as revenue over the next 12 months and the remainder thereafter. Cadence recognized revenue of $11.5 million and $21.7 million during the three and six months ended July 3, 2021, and $11.3 million and $20.8 million during the three and six months ended June 27, 2020, 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	6 Months Ended
	Jul. 03, 2021
Business Combinations [Abstract]
ACQUISITIONS	ACQUISITIONS On February 23, 2021, Cadence acquired all of the outstanding equity of Belgium-based Numerical Mechanics Applications International SA (“NUMECA”). The addition of NUMECA’s technologies and talent supports Cadence’s Intelligent System Design™ strategy, servicing the computational fluid dynamics (“CFD”) market segment as part of System Design and Analysis. The aggregate cash consideration for Cadence’s acquisition of NUMECA, net of cash acquired of $9.5 million, was $189.3 million. Cadence expects to recognize expense for consideration paid to certain former NUMECA shareholders that is subject to service and other conditions, through the first quarter of fiscal 2023. The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates as follows: Acquisition Date Fair Value (In thousands) Current assets $ 16,423 Goodwill 133,326 Acquired intangibles 72,200 Other long-term assets 6,928 Total assets acquired 228,877 Current liabilities 9,951 Long-term liabilities 20,091 Total liabilities assumed 30,042 Total purchase consideration $ 198,835 The allocation of purchase consideration to certain assets acquired and liabilities assumed from NUMECA has not been finalized. Cadence will continue to evaluate certain estimates and assumptions, primarily related to taxes and assumed liabilities, during the measurement period (up to one year from the acquisition date). The recorded goodwill is attributed to intangible assets that do not qualify for separate recognition, including the acquired assembled workforce and expected synergies from combining operations of NUMECA with Cadence. Cadence has not completed its assessment to determine whether the goodwill will be deductible for tax purposes. On April 14, 2021, Cadence acquired all of the outstanding equity of Pointwise, Inc. (“Pointwise”), a leader in mesh generation for CFD for cash consideration of approximately $31.4 million, net of cash acquired. The addition of Pointwise’s technologies and experienced team supports Cadence’s Intelligent System Design™ strategy and further broadens its System Design and Analysis portfolio, complementing its acquisition of NUMECA. The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates. Cadence recorded $16.7 million of definite-lived intangible assets and $16.7 million of goodwill with its acquisition of Pointwise. All of the goodwill related to Cadence’s acquisition of Pointwise will be deductible for tax purposes. Definite-lived intangible assets acquired with Cadence’s fiscal 2021 acquisitions were as follows: Acquisition Date Fair Value Weighted-Average Amortization Period (In thousands) (in years) Existing technology $ 55,400 14.2 years Agreements and relationships 28,900 13.7 years Tradenames, trademarks and patents 4,600 14.3 years Total acquired intangibles with definite lives $ 88,900 14.1 years Cadence has not presented pro forma financial information for its fiscal 2021 acquisitions because the results of operations for the acquired businesses are not material to Cadence’s condensed consolidated financial statements. During the three and six months ended July 3, 2021, and the three and six months ended June 27, 2020, transaction costs associated with acquisitions were not material and were expensed as incurred.

Goodwill and Acquired Intangibl

Goodwill and Acquired Intangibles	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 were as follows: Gross Carrying (In thousands) Balance as of January 2, 2021 $ 782,087 Goodwill resulting from acquisitions 150,021 Effect of foreign currency translation (2,583) Balance as of July 3, 2021 $ 929,525 Acquired Intangibles, Net Acquired intangibles as of July 3, 2021 were as follows, excluding intangibles that were fully amortized as of January 2, 2021: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 402,440 $ (231,006) $ 171,434 Agreements and relationships 205,928 (120,674) 85,254 Tradenames, trademarks and patents 10,830 (2,729) 8,101 Total acquired intangibles $ 619,198 $ (354,409) $ 264,789 Acquired intangibles as of January 2, 2021 were as follows, excluding intangibles that were fully amortized as of December 28, 2019: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 370,838 $ (230,654) $ 140,184 Agreements and relationships 180,023 (113,629) 66,394 Tradenames, trademarks and patents 10,590 (6,578) 4,012 Total acquired intangibles with definite lives $ 561,451 $ (350,861) $ 210,590 Amortization expense from existing technology and maintenance agreements is included in cost of product and maintenance. Amortization expense for the three and six months ended July 3, 2021 and June 27, 2020 by condensed consolidated income statement caption was as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Cost of product and maintenance $ 12,232 $ 11,484 $ 24,000 $ 22,344 Amortization of acquired intangibles 5,030 4,590 9,661 8,796 Total amortization of acquired intangibles $ 17,262 $ 16,074 $ 33,661 $ 31,140 As of July 3, 2021, the estimated amortization expense for acquired intangible assets with definite lives was as follows for the following five fiscal years and thereafter: (In thousands) 2021 - remaining period $ 33,316 2022 49,716 2023 34,186 2024 32,723 2025 22,204 Thereafter 92,644 Total estimated amortization expense $ 264,789

Stock Based Compensation

Stock Based Compensation	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020 as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Cost of product and maintenance $ 909 $ 683 $ 1,716 $ 1,374 Cost of services 992 869 2,019 1,749 Marketing and sales 10,294 10,116 21,500 20,127 Research and development 31,286 29,690 64,144 59,036 General and administrative 7,037 5,549 13,735 11,103 Total stock-based compensation expense $ 50,518 $ 46,907 $ 103,114 $ 93,389

Stock Repurchase Program

Stock Repurchase Program	6 Months Ended
	Jul. 03, 2021
Class of Stock Disclosures [Abstract]
STOCK REPURCHASE PROGRAM	STOCK REPURCHASE PROGRAM In July 2020, Cadence’s Board of Directors authorized $750 million for the repurchase of shares of Cadence common stock. 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 July 3, 2021, approximately $346 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 six months ended July 3, 2021 and June 27, 2020 were as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Shares repurchased 1,720 920 3,043 2,408 Total cost of repurchased shares $ 220,023 $ 75,014 $ 392,290 $ 175,036

Restructuring and Other Termina

Restructuring and Other Termination Benefits	6 Months Ended
	Jul. 03, 2021
Restructuring and Related Activities [Abstract]
RESTRUCTURING AND OTHER CHARGES	RESTRUCTURING AND OTHER TERMINATION BENEFITS Restructuring Cadence has initiated restructuring plans in an effort to better align its resources with its business strategy. The charges associated with these restructuring plans have primarily been comprised of severance payments and termination benefits related to headcount reductions and charges related to impacted facilities and are included in restructuring and other charges on Cadence’s condensed consolidated income statements. The following table presents activity for Cadence’s restructuring plans during the six months ended July 3, 2021: Severance and Benefits Facilities Total (In thousands) Balance, January 2, 2021 $ 7,321 $ 1,372 $ 8,693 Restructuring and other credits (1,135) 389 (746) Cash payments (5,340) (1,314) (6,654) Effect of foreign currency translation (67) (1) (68) Balance, July 3, 2021 $ 779 $ 446 $ 1,225 The remaining liability for Cadence’s restructuring plans is recorded in the condensed consolidated balance sheet as follows: As of July 3, 2021 (In thousands) Accounts payable and accrued liabilities $ 1,207 Other long-term liabilities 18 Total restructuring liabilities $ 1,225 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 sheets as of July 3, 2021. Restructuring liabilities included in other long-term liabilities represent liabilities from impacted facilities, and Cadence expects to make cash payments to settle these liabilities through fiscal 2022. Other Termination Benefits During the second quarter of fiscal 2021, Cadence offered a voluntary retirement program to eligible employees in the United States. This program resulted in a one-time charge of $26.8 million for voluntary termination and post-employment benefits. These charges are included in each category of costs and expenses on Cadence’s condensed consolidated income statements. As of July 3, 2021, liabilities related to the voluntary retirement program were $26.6 million and were included in accounts payable and accrued liabilities and other long-term liabilities on Cadence’s condensed consolidated balance sheet. Cadence expects to make cash payments to settle these liabilities through fiscal 2023, including $22.3 million that is expected to be paid within the next twelve months.

Net Income Per Share

Net Income Per Share	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020 are as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands, except per share amounts) Net income $ 155,900 $ 131,288 $ 343,069 $ 255,276 Weighted average common shares used to calculate basic net income per share 273,565 273,432 273,843 273,488 Stock-based awards 4,993 5,648 5,556 5,719 Weighted average common shares used to calculate diluted net income per share 278,558 279,080 279,399 279,207 Net income per share - basic $ 0.57 $ 0.48 $ 1.25 $ 0.93 Net income per share - diluted $ 0.56 $ 0.47 $ 1.23 $ 0.91 The following table presents shares of Cadence’s common stock outstanding for the three and six months ended July 3, 2021 and June 27, 2020 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 Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Long-term market-based awards — 40 — 713 Options to purchase shares of common stock 331 506 235 376 Non-vested shares of restricted stock 75 4 67 102 Total potential common shares excluded 406 550 302 1,191

Fair Value

Fair Value	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021. 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 July 3, 2021 and January 2, 2021: Fair Value Measurements as of July 3, 2021 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 396,096 $ 396,096 $ — $ — Marketable equity securities 5,576 5,576 — — Securities held in Non-Qualified Deferred Compensation (“NQDC”) trust 48,341 48,341 — — Total Assets $ 450,013 $ 450,013 $ — $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts $ 7,099 $ — $ 7,099 $ — Total Liabilities $ 7,099 $ — $ 7,099 $ — Fair Value Measurements as of January 2, 2021 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 541,386 $ 541,386 $ — $ — Marketable equity securities 4,452 4,452 — — Securities held in NQDC trust 42,769 42,769 — — Foreign currency exchange contracts 8,868 — 8,868 — Total Assets $ 597,475 $ 588,607 $ 8,868 $ — As of January 2, 2021, 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 $88.9 million with its acquisition of NUMECA and Pointwise during the first half of fiscal 2021. 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. For acquired existing technology, the fair value was determined by applying the relief-from-royalty method. This method is based on the application of a royalty rate to forecasted revenue to quantify the benefit of owning the intangible asset rather than paying a royalty for use of the asset. To estimate royalty savings over time, Cadence projected revenue from the acquired existing technology over the estimated remaining life of the technology, including the effect of assumed technological obsolescence, before applying an assumed royalty rate. For NUMECA, Cadence assumed technological obsolescence at a rate of 6.7% annually, before applying an assumed royalty rate of 22%. For Pointwise, Cadence assumed technological obsolescence at a rate of 10.0% annually, before applying an assumed royalty rate of 25%. The fair value for acquired agreements and relationships was determined by using the multi-period excess earnings method. This method reflects the present value of the projected cash flows that are expected to be generated from existing customers, less charges representing the contribution of other assets to those cash flows. Projected income from existing customer relationships considered a customer retention rate of 95% for both NUMECA and Pointwise. The present value of operating cash flows from existing customers was determined using discount rates ranging from 10.5% to 12.0%. Cadence believes that its estimates and assumptions related to the fair value of its acquired intangible assets are reasonable, but significant judgment is involved.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jul. 03, 2021
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 hardware products, generally for a 90-day period. Cadence did not incur any significant costs related to warranty obligations during the three and six months ended July 3, 2021 and June 27, 2020. 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 six months ended July 3, 2021 and June 27, 2020.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	6 Months Ended
	Jul. 03, 2021
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 July 3, 2021 and January 2, 2021: As of July 3, January 2, (In thousands) Foreign currency translation loss $ (15,266) $ (11,130) Changes in defined benefit plan liabilities (6,526) (6,295) Total accumulated other comprehensive loss $ (21,792) $ (17,425) For the three and six months ended July 3, 2021 and June 27, 2020 there were no significant amounts related to foreign currency translation loss or changes in defined benefit plan liabilities reclassified from accumulated other comprehensive loss to net income.

Segment Reporting

Segment Reporting	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Americas: United States $ 313,138 $ 267,000 $ 639,462 $ 525,489 Other Americas 10,190 10,120 19,866 18,957 Total Americas 323,328 277,120 659,328 544,446 Asia: China 99,591 77,232 189,032 161,031 Other Asia 134,389 121,276 268,237 230,875 Total Asia 233,980 198,508 457,269 391,906 Europe, Middle East and Africa 124,502 116,540 254,735 232,259 Japan 46,475 46,250 92,981 87,764 Total $ 728,285 $ 638,418 $ 1,464,313 $ 1,256,375 The following table presents a summary of long-lived assets by geography as of July 3, 2021 and January 2, 2021: As of July 3, January 2, (In thousands) Americas: United States $ 239,207 $ 248,292 Other Americas 652 753 Total Americas 239,859 249,045 Asia: China 15,962 16,416 Other Asia 4,985 28,668 Total Asia 20,947 45,084 Europe, Middle East and Africa 40,631 16,304 Japan 542 692 Total $ 301,979 $ 311,125

Basis of Presentation and Sum_2

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 03, 2021
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	In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update 2019-12, “Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes, eliminates certain exceptions within Accounting Standards Codification 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. Cadence adopted the new standard on January 3, 2021, the first day of fiscal 2021. The adoption of this standard did not impact Cadence’s condensed consolidated financial statements for the period ended July 3, 2021.
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 six months ended July 3, 2021.
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)	6 Months Ended
	Jul. 03, 2021
Debt Disclosure [Abstract]
Summary of debt outstanding	Cadence’s outstanding debt as of July 3, 2021 and January 2, 2021 was as follows: July 3, 2021 January 2, 2021 (In thousands) Principal Unamortized Discount Carrying Value Principal Unamortized Discount Carrying Value Revolving Credit Facility $ — $ — $ — $ — $ — $ — 2024 Notes 350,000 (2,814) 347,186 350,000 (3,207) 346,793 Total outstanding debt $ 350,000 $ (2,814) $ 347,186 $ 350,000 $ (3,207) $ 346,793

Receivables, net (Tables)

Receivables, net (Tables)	6 Months Ended
	Jul. 03, 2021
Receivables [Abstract]
Current and long-term accounts receivable balances	Cadence’s current and long-term receivables balances as of July 3, 2021 and January 2, 2021 were as follows: As of July 3, January 2, (In thousands) Accounts receivable $ 250,812 $ 196,990 Unbilled accounts receivable 142,846 144,364 Long-term receivables 4,879 3,655 Total receivables 398,537 345,009 Less allowance for doubtful accounts (3,672) (2,867) Total receivables, net $ 394,865 $ 342,142

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, Custom Integrated Circuit (“IC”) Design and Simulation 23 % 24 % 23 % 25 % Digital IC Design and Signoff 28 % 28 % 28 % 28 % Functional Verification, including Emulation and Prototyping Hardware* 25 % 24 % 26 % 23 % Intellectual Property (“IP”) 13 % 14 % 13 % 14 % System Design and Analysis 11 % 10 % 10 % 10 % Total 100 % 100 % 100 % 100 % _____________ * Includes immaterial amount of revenue accounted for under leasing arrangements.
Contract balances	Cadence’s contract balances as of July 3, 2021 and January 2, 2021 were as follows: As of July 3, January 2, (In thousands) Contract assets $ 6,057 $ 9,709 Deferred revenue 684,517 553,921

Acquisitions (Tables)

Acquisitions (Tables)	6 Months Ended
	Jul. 03, 2021
Business Combinations [Abstract]
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed	The total purchase consideration was allocated to the assets acquired and liabilities assumed based on their respective estimated fair values on the acquisition dates as follows: Acquisition Date Fair Value (In thousands) Current assets $ 16,423 Goodwill 133,326 Acquired intangibles 72,200 Other long-term assets 6,928 Total assets acquired 228,877 Current liabilities 9,951 Long-term liabilities 20,091 Total liabilities assumed 30,042 Total purchase consideration $ 198,835
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination	Acquisition Date Fair Value Weighted-Average Amortization Period (In thousands) (in years) Existing technology $ 55,400 14.2 years Agreements and relationships 28,900 13.7 years Tradenames, trademarks and patents 4,600 14.3 years Total acquired intangibles with definite lives $ 88,900 14.1 years

Goodwill and Acquired Intangi_2

Goodwill and Acquired Intangibles (Tables)	6 Months Ended
	Jul. 03, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Changes in the carrying amount of goodwill	The changes in the carrying amount of goodwill during the six months ended July 3, 2021 were as follows: Gross Carrying (In thousands) Balance as of January 2, 2021 $ 782,087 Goodwill resulting from acquisitions 150,021 Effect of foreign currency translation (2,583) Balance as of July 3, 2021 $ 929,525
Schedule of acquired intangibles with finite and indefinite lives (excluding goodwill)	Acquired intangibles as of July 3, 2021 were as follows, excluding intangibles that were fully amortized as of January 2, 2021: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 402,440 $ (231,006) $ 171,434 Agreements and relationships 205,928 (120,674) 85,254 Tradenames, trademarks and patents 10,830 (2,729) 8,101 Total acquired intangibles $ 619,198 $ (354,409) $ 264,789 Acquired intangibles as of January 2, 2021 were as follows, excluding intangibles that were fully amortized as of December 28, 2019: Gross Carrying Accumulated Acquired (In thousands) Existing technology $ 370,838 $ (230,654) $ 140,184 Agreements and relationships 180,023 (113,629) 66,394 Tradenames, trademarks and patents 10,590 (6,578) 4,012 Total acquired intangibles with definite lives $ 561,451 $ (350,861) $ 210,590
Amortization of acquired intangibles	Amortization expense for the three and six months ended July 3, 2021 and June 27, 2020 by condensed consolidated income statement caption was as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Cost of product and maintenance $ 12,232 $ 11,484 $ 24,000 $ 22,344 Amortization of acquired intangibles 5,030 4,590 9,661 8,796 Total amortization of acquired intangibles $ 17,262 $ 16,074 $ 33,661 $ 31,140
Estimated amortization expense	As of July 3, 2021, the estimated amortization expense for acquired intangible assets with definite lives was as follows for the following five fiscal years and thereafter: (In thousands) 2021 - remaining period $ 33,316 2022 49,716 2023 34,186 2024 32,723 2025 22,204 Thereafter 92,644 Total estimated amortization expense $ 264,789

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020 as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Cost of product and maintenance $ 909 $ 683 $ 1,716 $ 1,374 Cost of services 992 869 2,019 1,749 Marketing and sales 10,294 10,116 21,500 20,127 Research and development 31,286 29,690 64,144 59,036 General and administrative 7,037 5,549 13,735 11,103 Total stock-based compensation expense $ 50,518 $ 46,907 $ 103,114 $ 93,389

Stock Repurchase Program (Table

Stock Repurchase Program (Tables)	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020 were as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Shares repurchased 1,720 920 3,043 2,408 Total cost of repurchased shares $ 220,023 $ 75,014 $ 392,290 $ 175,036

Restructuring and Other Termi_2

Restructuring and Other Termination Benefits (Tables)	6 Months Ended
	Jul. 03, 2021
Restructuring and Related Activities [Abstract]
Restructuring reserve rollforward by major type of cost	The following table presents activity for Cadence’s restructuring plans during the six months ended July 3, 2021: Severance and Benefits Facilities Total (In thousands) Balance, January 2, 2021 $ 7,321 $ 1,372 $ 8,693 Restructuring and other credits (1,135) 389 (746) Cash payments (5,340) (1,314) (6,654) Effect of foreign currency translation (67) (1) (68) Balance, July 3, 2021 $ 779 $ 446 $ 1,225
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 July 3, 2021 (In thousands) Accounts payable and accrued liabilities $ 1,207 Other long-term liabilities 18 Total restructuring liabilities $ 1,225

Net Income Per Share (Tables)

Net Income Per Share (Tables)	6 Months Ended
	Jul. 03, 2021
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 six months ended July 3, 2021 and June 27, 2020 are as follows: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands, except per share amounts) Net income $ 155,900 $ 131,288 $ 343,069 $ 255,276 Weighted average common shares used to calculate basic net income per share 273,565 273,432 273,843 273,488 Stock-based awards 4,993 5,648 5,556 5,719 Weighted average common shares used to calculate diluted net income per share 278,558 279,080 279,399 279,207 Net income per share - basic $ 0.57 $ 0.48 $ 1.25 $ 0.93 Net income per share - diluted $ 0.56 $ 0.47 $ 1.23 $ 0.91
Potential shares of Cadence's common stock excluded	The following table presents shares of Cadence’s common stock outstanding for the three and six months ended July 3, 2021 and June 27, 2020 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 Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Long-term market-based awards — 40 — 713 Options to purchase shares of common stock 331 506 235 376 Non-vested shares of restricted stock 75 4 67 102 Total potential common shares excluded 406 550 302 1,191

Fair Value (Tables)

Fair Value (Tables)	6 Months Ended
	Jul. 03, 2021
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 July 3, 2021 and January 2, 2021: Fair Value Measurements as of July 3, 2021 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 396,096 $ 396,096 $ — $ — Marketable equity securities 5,576 5,576 — — Securities held in Non-Qualified Deferred Compensation (“NQDC”) trust 48,341 48,341 — — Total Assets $ 450,013 $ 450,013 $ — $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts $ 7,099 $ — $ 7,099 $ — Total Liabilities $ 7,099 $ — $ 7,099 $ — Fair Value Measurements as of January 2, 2021 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 541,386 $ 541,386 $ — $ — Marketable equity securities 4,452 4,452 — — Securities held in NQDC trust 42,769 42,769 — — Foreign currency exchange contracts 8,868 — 8,868 — Total Assets $ 597,475 $ 588,607 $ 8,868 $ — As of January 2, 2021, Cadence did not have any financial liabilities requiring a recurring fair value measurement.

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)	6 Months Ended
	Jul. 03, 2021
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 July 3, 2021 and January 2, 2021: As of July 3, January 2, (In thousands) Foreign currency translation loss $ (15,266) $ (11,130) Changes in defined benefit plan liabilities (6,526) (6,295) Total accumulated other comprehensive loss $ (21,792) $ (17,425)

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jul. 03, 2021
Segment Reporting [Abstract]
Summary of revenue by geography	The following table presents a summary of revenue by geography for the three and six months ended July 3, 2021 and June 27, 2020: Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, (In thousands) Americas: United States $ 313,138 $ 267,000 $ 639,462 $ 525,489 Other Americas 10,190 10,120 19,866 18,957 Total Americas 323,328 277,120 659,328 544,446 Asia: China 99,591 77,232 189,032 161,031 Other Asia 134,389 121,276 268,237 230,875 Total Asia 233,980 198,508 457,269 391,906 Europe, Middle East and Africa 124,502 116,540 254,735 232,259 Japan 46,475 46,250 92,981 87,764 Total $ 728,285 $ 638,418 $ 1,464,313 $ 1,256,375
Summary of long-lived assets by geography	The following table presents a summary of long-lived assets by geography as of July 3, 2021 and January 2, 2021: As of July 3, January 2, (In thousands) Americas: United States $ 239,207 $ 248,292 Other Americas 652 753 Total Americas 239,859 249,045 Asia: China 15,962 16,416 Other Asia 4,985 28,668 Total Asia 20,947 45,084 Europe, Middle East and Africa 40,631 16,304 Japan 542 692 Total $ 301,979 $ 311,125

Debt (Details)

Debt (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021	Oct. 09, 2014
Debt Instrument [Line Items]
Principal	$ 350,000	$ 350,000
Unamortized Discount	(2,814)	(3,207)
Carrying Value	347,186	346,793
Carrying Value	347,186	346,793
Senior Notes [Member] | Senior Notes Due 2024 [Member]
Debt Instrument [Line Items]
Principal	350,000	350,000	$ 350,000
Unamortized Discount	(2,814)	(3,207)	$ (1,400)
Carrying Value	347,186	346,793
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Principal	0	0
Carrying Value	$ 0	$ 0

Debt Credit Facility (Details T

Debt Credit Facility (Details Textual) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 03, 2021	Jul. 03, 2021	Jun. 27, 2020
Line of Credit Facility [Line Items]
Payments of Debt Issuance Costs		$ 1,285	$ 0
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, current borrowing capacity	$ 700,000	700,000
Credit facility additional borrowing capacity available	350,000	350,000
Credit facility, maximum borrowing capacity	1,050,000	$ 1,050,000
Credit facility, maturity date		Jun. 30, 2026
Payments of Debt Issuance Costs	1,300
Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, commitment fee percentage		0.07%
Credit facility, covenant, pro forma leverage ratio		3
Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, commitment fee percentage		0.175%
Credit facility, covenant, pro forma leverage ratio		3.50
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread		0.75%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread		1.25%
Base Rate [Member] | Minimum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread		0.00%
Base Rate [Member] | Maximum [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, interest rate spread		0.25%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Credit facility, covenant, debt to EBITDA ratio		3.25
Credit facility, covenant, debt to EBITDA ratio after step up triggered by acquisition		3.75
Credit facility, covenant, required business acquisition consideration, minimum	$ 250,000	$ 250,000

Debt (Details Textual)

Debt (Details Textual) - USD ($) $ in Thousands	Oct. 09, 2014	Jul. 03, 2021	Jan. 02, 2021
Debt Instrument [Line Items]
Unamortized discount		$ 2,814	$ 3,207
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	2,814	$ 3,207
Debt issuance costs	$ 6,200
Fair value, notes payable		$ 385,200

Receivables, net (Details Textu

Receivables, net (Details Textual) - Customer	Jul. 03, 2021	Jan. 02, 2021
Receivables [Abstract]
Number of customers with receivables balance greater than ten percent of total balance	1	0
Percentage of receivables, net attributable to single customer	11.00%	10.00%

Receivables, net (Details)

Receivables, net (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Current and long-term receivables balances
Accounts receivable	$ 250,812	$ 196,990
Unbilled accounts receivable	142,846	144,364
Long-term receivables	4,879	3,655
Total receivables	398,537	345,009
Less allowance for doubtful accounts	(3,672)	(2,867)
Total receivables, net	$ 394,865	$ 342,142

Revenue (Details)

Revenue (Details)	3 Months Ended			6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020		Jul. 03, 2021		Jun. 27, 2020
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group	100.00%	100.00%		100.00%		100.00%
Custom Integrated Circuit (“IC”) Design and Simulation
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group	23.00%	24.00%		23.00%		25.00%
Digital IC Design and Signoff
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group	28.00%	28.00%		28.00%		28.00%
Functional Verification, including Emulation and Prototyping Hardware*
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group	25.00%	24.00%	[1]	26.00%	[1]	23.00%	[1]
Intellectual Property (“IP”)
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group	13.00%	14.00%		13.00%		14.00%
System Design and Analysis
Revenue from External Customer [Line Items]
Percentage of product and maintenance revenue by product group	11.00%	10.00%		10.00%		10.00%
[1]	Includes immaterial amount of revenue accounted for under leasing arrangements.

Revenue (Details 1)

Revenue (Details 1) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Revenue from Contract with Customer [Abstract]
Contract assets	$ 6,057	$ 9,709
Deferred revenue	$ 684,517	$ 553,921

Revenue (Details Textual)

Revenue (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Revenue from Contract with Customer [Abstract]
Revenue recognized from deferred revenue during the period	$ 103.4	$ 88.1	$ 330	$ 241.6
Remaining performance obligations	3,900		3,900
Non-cancellable IP access agreements included in remaining performance obligations	$ 110		$ 110
Percent of remaining performance obligations, current	55.00%		55.00%
Revenue recognized from satisfaction of performance obligations	$ 11.5	$ 11.3	$ 21.7	$ 20.8

Acquisitions (Details Textual)

Acquisitions (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Apr. 14, 2021	Feb. 23, 2021	Jan. 02, 2021
Business Acquisition [Line Items]
Cash consideration to acquire businesses, net of cash acquired	$ 220,660	$ 195,118
Goodwill	929,525				$ 782,087
NUMECA
Business Acquisition [Line Items]
Cash acquired				$ 9,500
Cash consideration to acquire businesses, net of cash acquired	189,300
Acquired intangibles				72,200
Goodwill				$ 133,326
Pointwise
Business Acquisition [Line Items]
Cash consideration to acquire businesses, net of cash acquired	$ 31,400
Acquired intangibles			$ 16,700
Goodwill			$ 16,700

Acquisitions (Details 1)

Acquisitions (Details 1) - USD ($) $ in Thousands	Jul. 03, 2021	Feb. 23, 2021	Jan. 02, 2021
Business Acquisition [Line Items]
Goodwill	$ 929,525		$ 782,087
NUMECA
Business Acquisition [Line Items]
Current assets		$ 16,423
Goodwill		133,326
Acquired intangibles		72,200
Other long-term assets		6,928
Total assets acquired		228,877
Current liabilities		9,951
Long-term liabilities		20,091
Total liabilities assumed		30,042
Total purchase consideration		$ 198,835

Acquisitions (Details 2)

Acquisitions (Details 2) - Fiscal 2021 Acquisitions $ in Thousands	6 Months Ended
	Jul. 03, 2021USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 88,900
Weighted-average useful life of definite-lived intangible assets acquired	14 years 1 month 6 days
Existing Technology [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 55,400
Weighted-average useful life of definite-lived intangible assets acquired	14 years 2 months 12 days
Agreements and Relationship [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 28,900
Weighted-average useful life of definite-lived intangible assets acquired	13 years 8 months 12 days
Tradename Trademark and Patents [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired	$ 4,600
Weighted-average useful life of definite-lived intangible assets acquired	14 years 3 months 18 days

Goodwill and Acquired Intangi_3

Goodwill and Acquired Intangibles (Details) $ in Thousands	6 Months Ended
	Jul. 03, 2021USD ($)
Changes in the carrying amount of goodwill
Balance at beginning of period	$ 782,087
Goodwill resulting from acquisitions	150,021
Effect of foreign currency translation	(2,583)
Balance at end of period	$ 929,525

Goodwill and Acquired Intangi_4

Goodwill and Acquired Intangibles (Details 1) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount	$ 619,198	$ 561,451
Accumulated amortization	(354,409)	(350,861)
Total estimated amortization expense	264,789	210,590
Existing Technology [Member]
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount	402,440	370,838
Accumulated amortization	(231,006)	(230,654)
Total estimated amortization expense	171,434	140,184
Agreements and Relationships [Member]
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount	205,928	180,023
Accumulated amortization	(120,674)	(113,629)
Total estimated amortization expense	85,254	66,394
Tradenames Trademarks And Patents [Member]
Acquired intangibles with finite lives, excluding intangibles fully amortized at end of prior fiscal year
Gross carrying amount	10,830	10,590
Accumulated amortization	(2,729)	(6,578)
Total estimated amortization expense	$ 8,101	$ 4,012

Goodwill and Acquired Intangi_5

Goodwill and Acquired Intangibles (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Amortization of acquired intangibles
Cost of product and maintenance	$ 12,232	$ 11,484	$ 24,000	$ 22,344
Amortization of acquired intangibles	5,030	4,590	9,661	8,796
Total amortization of acquired intangibles	$ 17,262	$ 16,074	$ 33,661	$ 31,140

Goodwill and Acquired Intangi_6

Goodwill and Acquired Intangibles (Details 3) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Estimated amortization expense
2021 - remaining period	$ 33,316
2022	49,716
2023	34,186
2024	32,723
2025	22,204
Thereafter	92,644
Total estimated amortization expense	$ 264,789	$ 210,590

Stock-Based Compensation (Detai

Stock-Based Compensation (Details Textual) - Stock option and restricted stock grants [Member] $ in Millions	6 Months Ended
	Jul. 03, 2021USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation expense	$ 283.2
Weighted-average vesting period over which unrecognized compensation expense will be recognized	2 years 1 month 6 days

Stock-Based Compensation (Det_2

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	$ 50,518	$ 46,907	$ 103,114	$ 93,389
Cost of product and maintenance
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	909	683	1,716	1,374
Cost of services
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	992	869	2,019	1,749
Marketing and sales
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	10,294	10,116	21,500	20,127
Research and development
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	31,286	29,690	64,144	59,036
General and administrative
Share-based compensation expense and allocation by cost [Line Items]
Stock-based compensation expense	$ 7,037	$ 5,549	$ 13,735	$ 11,103

Stock Repurchase Program (Detai

Stock Repurchase Program (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020	Jul. 17, 2020
Class of Stock Disclosures [Abstract]
Additional authorized repurchase amount					$ 750,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 346,000		$ 346,000
Shares repurchased	1,720	920	3,043	2,408
Total cost of repurchased shares	$ 220,023	$ 75,014	$ 392,290	$ 175,036

Restructuring and Other Termi_3

Restructuring and Other Termination Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Restructuring Reserve [Roll Forward]
Beginning balance			$ 8,693
Restructuring and other credits	$ (469)	$ (275)	(746)	$ (1,342)
Cash payments			(6,654)
Effect of foreign currency translation			(68)
Ending balance	1,225		1,225
Employee Severance and Benefits [Member]
Restructuring Reserve [Roll Forward]
Beginning balance			7,321
Restructuring and other credits			(1,135)
Cash payments			(5,340)
Effect of foreign currency translation			(67)
Ending balance	779		779
Excess Facilities [Member]
Restructuring Reserve [Roll Forward]
Beginning balance			1,372
Restructuring and other credits			389
Cash payments			(1,314)
Effect of foreign currency translation			(1)
Ending balance	$ 446		$ 446

Restructuring and Other Termi_4

Restructuring and Other Termination Benefits (Details 1) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 1,225	$ 8,693
Accounts Payable and Accrued Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	1,207
Other Long Term Liabilities [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 18

Restructuring and Other Termi_5

Restructuring and Other Termination Benefits (Details 2) $ in Millions	3 Months Ended
	Jul. 03, 2021USD ($)
Restructuring Cost and Reserve [Line Items]
Voluntary retirement program, period expense	$ 26.8
Voluntary retirement program, liability	26.6
Voluntary retirement program liability, current	$ 22.3

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 27,365	$ 19,378	$ 42,617	$ 25,570

Net Income Per Share (Details)

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Earnings Per Share, Basic and Diluted [Abstract]
Net income	$ 155,900	$ 131,288	$ 343,069	$ 255,276
Weighted average common shares used to calculate basic net income per share	273,565	273,432	273,843	273,488
Stock-based awards	4,993	5,648	5,556	5,719
Weighted average common shares used to calculate diluted net income per share (in shares)	278,558	279,080	279,399	279,207
Net income per share - basic (usd per share)	$ 0.57	$ 0.48	$ 1.25	$ 0.93
Net income per share - diluted (usd per share)	$ 0.56	$ 0.47	$ 1.23	$ 0.91

Net Income Per Share (Details 1

Net Income Per Share (Details 1) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Potential shares of Cadence's common stock excluded
Potential common shares excluded from the computation of diluted earnings per share	406	550	302	1,191
Long-term market-based awards
Potential shares of Cadence's common stock excluded
Potential common shares excluded from the computation of diluted earnings per share	0	40	0	713
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	331	506	235	376
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	75	4	67	102

Fair Value (Details)

Fair Value (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Assets
Marketable equity securities	$ 5,576	$ 4,452
Securities held in Non-Qualified Deferred Compensation trust, or NQDC	48,341	42,769
Foreign currency exchange contracts		8,868
Total Assets	450,013	597,475
Foreign currency exchange contracts	7,099
Total Liabilities	7,099
Money Market Funds
Assets
Money market funds	396,096	541,386
Fair Value Measurements, Level 1 [Member]
Assets
Marketable equity securities	5,576	4,452
Securities held in Non-Qualified Deferred Compensation trust, or NQDC	48,341	42,769
Foreign currency exchange contracts		0
Total Assets	450,013	588,607
Foreign currency exchange contracts	0
Total Liabilities	0
Fair Value Measurements, Level 1 [Member] | Money Market Funds
Assets
Money market funds	396,096	541,386
Fair Value Measurements, Level 2 [Member]
Assets
Marketable equity securities	0	0
Securities held in Non-Qualified Deferred Compensation trust, or NQDC	0	0
Foreign currency exchange contracts		8,868
Total Assets	0	8,868
Foreign currency exchange contracts	7,099
Total Liabilities	7,099
Fair Value Measurements, Level 2 [Member] | Money Market Funds
Assets
Money market funds	0	0
Fair Value Measurements, Level 3 [Member]
Assets
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
Money market funds	$ 0	$ 0

Fair Value Fair Value (Details

Fair Value Fair Value (Details Textual) $ in Millions	6 Months Ended
	Jul. 03, 2021USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
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 six months ended July 3, 2021. 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 July 3, 2021 and January 2, 2021: Fair Value Measurements as of July 3, 2021 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 396,096 $ 396,096 $ — $ — Marketable equity securities 5,576 5,576 — — Securities held in Non-Qualified Deferred Compensation (“NQDC”) trust 48,341 48,341 — — Total Assets $ 450,013 $ 450,013 $ — $ — Total Level 1 Level 2 Level 3 (In thousands) Liabilities Foreign currency exchange contracts $ 7,099 $ — $ 7,099 $ — Total Liabilities $ 7,099 $ — $ 7,099 $ — Fair Value Measurements as of January 2, 2021 Total Level 1 Level 2 Level 3 (In thousands) Assets Cash equivalents: Money market funds $ 541,386 $ 541,386 $ — $ — Marketable equity securities 4,452 4,452 — — Securities held in NQDC trust 42,769 42,769 — — Foreign currency exchange contracts 8,868 — 8,868 — Total Assets $ 597,475 $ 588,607 $ 8,868 $ — As of January 2, 2021, 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 $88.9 million with its acquisition of NUMECA and Pointwise during the first half of fiscal 2021. 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. For acquired existing technology, the fair value was determined by applying the relief-from-royalty method. This method is based on the application of a royalty rate to forecasted revenue to quantify the benefit of owning the intangible asset rather than paying a royalty for use of the asset. To estimate royalty savings over time, Cadence projected revenue from the acquired existing technology over the estimated remaining life of the technology, including the effect of assumed technological obsolescence, before applying an assumed royalty rate. For NUMECA, Cadence assumed technological obsolescence at a rate of 6.7% annually, before applying an assumed royalty rate of 22%. For Pointwise, Cadence assumed technological obsolescence at a rate of 10.0% annually, before applying an assumed royalty rate of 25%. The fair value for acquired agreements and relationships was determined by using the multi-period excess earnings method. This method reflects the present value of the projected cash flows that are expected to be generated from existing customers, less charges representing the contribution of other assets to those cash flows. Projected income from existing customer relationships considered a customer retention rate of 95% for both NUMECA and Pointwise. The present value of operating cash flows from existing customers was determined using discount rates ranging from 10.5% to 12.0%. Cadence believes that its estimates and assumptions related to the fair value of its acquired intangible assets are reasonable, but significant judgment is involved.
Fair Value, Inputs, Level 3 [Member] | 2021 Acquisitions [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Finite-lived intangible assets acquired during period	$ 88.9
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | NUMECA
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Estimated Technological Obsolescence Rate	6.70%
Estimated Royalty Rate	22.00%
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | NUMECA | Customer Relationships
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Estimated Customer Retention Rate	95.00%
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | NUMECA | Minimum [Member] | Customer Relationships
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	10.50%
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | NUMECA | Maximum [Member] | Customer Relationships
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	12.00%
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Pointwise
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Estimated Technological Obsolescence Rate	10.00%
Estimated Royalty Rate	25.00%
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Pointwise | Customer Relationships
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Estimated Customer Retention Rate	95.00%
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Pointwise | Minimum [Member] | Customer Relationships
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	10.50%
Fair Value, Inputs, Level 3 [Member] | Measurement Input, Discount Rate [Member] | Pointwise | Maximum [Member] | Customer Relationships
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Valuation significant input, discount rate	12.00%

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (21,792)	$ (17,425)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(21,792)	(17,425)
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	(15,266)	(11,130)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	(15,266)	(11,130)
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	(6,526)	(6,295)
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated Other Comprehensive Income (Loss), Net of Tax	$ (6,526)	$ (6,295)

Segment Reporting (Details)

Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 03, 2021	Jun. 27, 2020	Jul. 03, 2021	Jun. 27, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 728,285	$ 638,418	$ 1,464,313	$ 1,256,375
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	313,138	267,000	639,462	525,489
Other Americas [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	10,190	10,120	19,866	18,957
Americas [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	323,328	277,120	659,328	544,446
China [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	99,591	77,232	189,032	161,031
Other Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	134,389	121,276	268,237	230,875
Asia [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	233,980	198,508	457,269	391,906
EMEA [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	124,502	116,540	254,735	232,259
Japan [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 46,475	$ 46,250	$ 92,981	$ 87,764

Segment Reporting (Details 1)

Segment Reporting (Details 1) - USD ($) $ in Thousands	Jul. 03, 2021	Jan. 02, 2021
Summary of long-lived assets by geography
Total long-lived assets	$ 301,979	$ 311,125
United States [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	239,207	248,292
Other Americas [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	652	753
Americas [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	239,859	249,045
China [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	15,962	16,416
Other Asia [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	4,985	28,668
Asia [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	20,947	45,084
EMEA [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	40,631	16,304
Japan [Member]
Summary of long-lived assets by geography
Long-lived assets in individual foreign countries	$ 542	$ 692