Sector: Information Technology | Focus: Application Software
HQ: San Jose, California
Financial Risks
Cadence faces risks from substantial debt, including difficulty servicing obligations, limited access to future financing, and increased vulnerability to economic downturns. Variable interest rates on debt expose the company to interest rate risk. Covenants in debt agreements restrict operational flexibility and could lead to default. Fluctuations in foreign exchange rates impact revenue and expenses, potentially affecting competitiveness. Uncertainties in legal, administrative, and tax proceedings pose financial risks.
Financial Upside
Cadence's revenue growth from software, services, and IP offerings is a positive sign. Recent acquisitions, like those of BETA CAE and Invecas, aim to expand product portfolios and customer bases. Proceeds from debt issuances and share repurchases provide capital for future investments and acquisitions. Strong cash flow from operations suggests potential for future growth and liquidity.
