CADENCE DESIGN SYSTEMS INCCDNS

CADENCE DESIGN SYSTEMS INC Earnings Per Share Disclosure

10-KFiled Feb 19, 20261 min read
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 fiscal 2025, 2024 and 2023 are as follows:
 202520242023
 (In thousands, except per share amounts)
Net income$1,108,888 $1,055,484 $1,041,144 
Weighted average common shares used to calculate basic net income per share271,333 271,212 269,381 
Stock-based awards1,979 2,621 3,367 
Weighted average common shares used to calculate diluted net income per share273,312 273,833 272,748 
Net income per share – basic$4.09 $3.89 $3.86 
Net income per share – diluted$4.06 $3.85 $3.82 
The following table presents shares of Cadence’s common stock outstanding for fiscal 2025, 2024 and 2023 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: 
 202520242023
 (In thousands)
Long-term market-based awards1,168 — 1,381 
Options to purchase shares of common stock 207 184 345 
Non-vested shares of restricted stock70 258 232 
Total potential common shares excluded1,445 442 1,958 
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About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

Other Available Disclosures

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