Cadence Design Systems (CDNS) stock surged 5.30% in after-hours trading following the release of its second-quarter financial results, which exceeded analyst expectations. The company reported adjusted earnings of $2.11 per diluted share, surpassing the FactSet consensus of $2.05. Revenue for the period rose 24% year-over-year to $1.58 billion, meeting analyst forecasts.

The after-hours rally was fueled by the company’s significantly raised full-year outlook. Cadence now expects fiscal 2026 adjusted EPS in the range of $8.05 to $8.15, up from prior guidance of $7.85 to $7.95, and revenue between $6.26 billion and $6.34 billion, compared to a previous forecast of $6.13 billion to $6.23 billion. Both figures came in above analyst estimates.

Management cited accelerating demand for AI-driven solutions as a key driver of the strong performance. The company highlighted that revenue from its intellectual property (IP) segment grew more than 40% year-over-year, and its hardware business achieved a record quarter. Cadence’s backlog reached $8.1 billion, providing strong visibility into future growth. The results reinforced the company’s position as a beneficiary of the ongoing AI investment cycle in semiconductor design.