CADENCE DESIGN SYSTEMS INCCDNS

CADENCE DESIGN SYSTEMS INC Goodwill & Intangibles Disclosure

10-KFiled Feb 19, 20262 min read
GOODWILL AND ACQUIRED INTANGIBLES
Goodwill
The changes in the carrying amount of goodwill during fiscal 2025 and 2024 were as follows:
 Gross Carrying
Amount
 (In thousands)
Balance as of December 31, 2023$1,535,845 
Goodwill resulting from acquisitions889,585 
Effect of foreign currency translation(46,759)
Balance as of December 31, 20242,378,671 
Goodwill resulting from acquisitions249,712 
Effect of foreign currency translation120,760 
Balance as of December 31, 2025$2,749,143 
Cadence completed its annual goodwill impairment test during the third quarter of fiscal 2025 and determined that the fair value of Cadence’s single reporting unit exceeded the carrying amount of its net assets and that no impairment existed.
Acquired Intangibles, Net
Acquired intangibles as of December 31, 2025, were as follows, excluding intangibles that were fully amortized as of December 31, 2024:
Gross Carrying
Amount		Accumulated
Amortization		Acquired
Intangibles, Net
 (In thousands)
Existing technology$590,211 $(256,589)$333,622 
Agreements and relationships470,334 (114,697)355,637 
Tradenames, trademarks and patents40,984 (12,020)28,964 
Total acquired intangibles$1,101,529 $(383,306)$718,223 
Acquired intangibles as of December 31, 2024, were as follows, excluding intangibles that were fully amortized as of December 31, 2023:
Gross Carrying
Amount		Accumulated
Amortization		Acquired
Intangibles, Net
 (In thousands)
Existing technology$465,453 $(199,126)$266,327 
Agreements and relationships386,365 (78,605)307,760 
Tradenames, trademarks and patents28,113 (7,466)20,647 
Total acquired intangibles$879,931 $(285,197)$594,734 
Amortization expense from existing technology is included in cost of product and maintenance. Amortization expense for fiscal 2025, 2024 and 2023, by consolidated income statement caption, was as follows:
202520242023
 (In thousands)
Cost of product and maintenance$65,395 $60,074 $43,808 
Amortization of acquired intangibles39,937 30,375 18,162 
Total amortization of acquired intangibles$105,332 $90,449 $61,970 
As of December 31, 2025, the estimated amortization expense for intangible assets with definite lives was as follows for the following five fiscal years and thereafter:
 (In thousands)
2026$125,335 
2027117,035 
2028112,320 
202997,511 
203062,280 
Thereafter203,742 
Total estimated amortization expense$718,223 

Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 21, 2025
2023Feb 14, 2024
2022Feb 22, 2022
2021Feb 22, 2021
2019Feb 24, 2020
2018Feb 27, 2019
2017Feb 20, 2018
2016Feb 18, 2016

About Goodwill & Intangibles Disclosures

Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.

Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.

Other Available Disclosures

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