Cadence Design Systems Inc (NASDAQ:CDNS) shares are trading lower after the company reported fourth-quarter FY23 results.

The company reported revenue of $1.069 billion, beating the consensus of $1.061 billion.

Adjusted operating margin expanded to 43% from 36% a year ago. Adjusted EPS of $1.38 exceeded the consensus of $1.33.

The company's year-end backlog stood at $6.0 billion, and current remaining performance obligations (contract revenue expected to be recognized as revenue in the next 12 months) came in at $3.2 billion.

As of December 31, cash and cash equivalents stood at $1.01 billion.

Anirudh Devgan, president and chief executive officer said, "Cadence delivered exceptional results for 2023, propelled by our innovative solutions and the successful execution of our Intelligent System Design strategy. I'm thrilled about the opportunities ahead of us, particularly in AI and 3D-IC."

Outlook: For the first quarter of FY24, Cadence Design expects total revenue of $990 million-$1.01 billion (vs. consensus of $1.08 billion) and adjusted EPS of $1.10-$1.14 (vs. consensus of $1.37).

The company expects FY24 revenue of $4.55 billion-$4.61 billion vs. estimates of $4.59 billion and adjusted EPS of $5.87-$5.97 vs. $5.88 estimates.

In the conference call, Cadence Design Systems CEO said it will boost its partnership with NVIDIA Corp (NASDAQ:NVDA), extending it to a millennium multi-physics supercomputer.

In a separate release, the company expanded its ongoing strategic partnership with Dassault Systèmes (OTC:DASTF) by integrating its AI-driven Cadence OrCAD X and Allegro X with Dassault Systèmes' extended 3DEXPERIENCE works portfolio.

Price Action: CDNS shares are down 6.46% at $286.76 premarket on the last check Tuesday.

Photo by Gerd Altmann via Pixabay