Cadence Design Systems' (CDNS) stock experienced a significant plummet of 5.29% in pre-market trading on Wednesday. This downward movement was primarily driven by the company's full-year earnings outlook, which fell short of market expectations, despite reporting better-than-expected fourth-quarter results.
The computational software company projected adjusted earnings per share (EPS) for the full year 2025 to be in the range of $6.65 to $6.75, lower than the current consensus estimate of $6.76 on FactSet. Additionally, Cadence provided revenue guidance of $5.14 billion to $5.22 billion for 2025, while analysts were anticipating nearly $5.21 billion.
Despite the disappointing outlook, Cadence reported strong fourth-quarter results, with adjusted EPS of $1.88, beating the average analyst estimate of $1.82. Revenue for the quarter climbed to $1.36 billion, slightly ahead of the Street's view of $1.35 billion. However, the market's reaction suggests that investors were more focused on the company's cautious forward guidance.