Confidential

Cadence Design Systems, Inc.

February/March 2019

© 2019 Cadence Design Systems, Inc. All rights reserved.2

Safe Harbor Statement

The following discussion contains forward looking statements, and our actual results may differ materially from those expectations discussed here.

Additional information concerning factors that could cause such a difference can be found in our Form 10-Q for the quarter ended September 29, 2018, our Form 10-K for the year ended December 29, 2018, the company’s future filings with the Securities and Exchange Commission and the cautionary statements regarding forward-looking statements in our February 19, 2019 earnings press release for the quarter ended December 29, 2018.

Regulation G

In addition to financial results prepared in accordance with Generally Accepted Accounting Principles, or GAAP, this presentation will also contain certain non-GAAP financial measures. Cadence management believes that in addition to using GAAP results in evaluating our business, it can also be useful to measure results using certain non-GAAP financial measures. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures with their most direct comparable GAAP financial results, including those set forth in our February 19, 2019 press release and our CFO Commentary for the quarter ended December 29, 2018, both of which can be found in the quarterly earnings section of the investor relations portion of our website at cadence.com.

Safe Harbor Statement and Regulation G

© 2019 Cadence Design Systems, Inc. All rights reserved.3

• Leading provider of system design enablement (SDE) solutions – software, hardware, and IP

• Mission critical technology for designing today’s electronic systems

• Culture of innovation - more than 20 significant new products in last 3 years

• Subscription software model with very high customer renewal rates and loyalty

• Revenue: ~$2.14B • Headquarters in Silicon Valley

~7500 employees worldwide

Cadence-at-a-glance

NASDAQ: CDNS; S&P 500 & Nasdaq 100 indexes

© 2019 Cadence Design Systems, Inc. All rights reserved.4

Financial summary

Revenue1

$2.14B

Non-GAAPoperatingmargin1

30%

Freecash flow$543M

2018

Notes:1. Non-GAAP operating margin and non-GAAP EPS (excludes amortization of acquired intangibles, stock-based compensation, non-qualified deferred compensation expenses

and certain non-recurring cash expenses. See quarterly earnings releases and CFO Commentary for reconciliations to GAAP measures.

0

500

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2012 2013 2014 2015 2016 2017 2018

($ m

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Revenue

$0.00$0.25$0.50$0.75$1.00$1.25$1.50$1.75$2.00

2012 2013 2014 2015 2016 2017 2018

Non-GAAP EPS1

© 2019 Cadence Design Systems, Inc. All rights reserved.5

Industry landscape

Cadence and its peers develop highly specialized software, hardware, and IP solutions for the automated design and verification of electronic products and systems

Our technology is critical to semiconductors, and is increasingly deployed by a variety of systems companies

SDE/EDA economics within the 2017 electronics framework

SDE/EDA & IP

$9.8B

Semi $445B

Electronic Systems$1.50T

Applications

Source: The McClean Report, 2018, ESD Alliance Market Survey Service Q4 2017, Cadence analysis

© 2019 Cadence Design Systems, Inc. All rights reserved.6

Data-driven economy (DDE) drives growth opportunities

DataCreation

DataStorage

DataTransmission

DataAnalytics

© 2019 Cadence Design Systems, Inc. All rights reserved.7

Key technology waves propel DDE

Machine learning

Mobile

Automotive Datacenter

Edge computing

© 2019 Cadence Design Systems, Inc. All rights reserved.8

System Design Enablement (SDE) strategy

SYSTEM INTEGRATION

PACKAGE AND BOARD

CHIP (Core EDA)

Partnerships with Ecosystem Leaders

IP

System analysis * HW-SW verification * Software applications

PCB design * Package design * PCB and package analysis

Design and implementation * IP/SoC verification * Software drivers

MOBILE AUTOMOTIVEDATACENTER EDGE COMPUTING AERO & DEFENSE AND MORE…

SECU

RITY

© 2019 Cadence Design Systems, Inc. All rights reserved.9

SDE – expanding beyond traditional EDA

Strategy takes end-product view and provide tools and content that enable system development

Core EDA at the heart of the SDE strategy− Deliver innovative, differentiated core products & flows− Tight partnerships with top customers and key ecosystem players

Provide comprehensive printed circuit board and IC package design solutions

Offer focused and differentiated IP portfolio

Expand to system level through solutions for HW/SW integration, software development and system analysis

Gear solutions to specific vertical markets

© 2019 Cadence Design Systems, Inc. All rights reserved.10

Innovation – engine of growth

Tensilica®

Vision Q6 DSP

Legato™

Reliability

Liberate™

Trio

Cadence Cloud

112G SerDes IP

TSMC VDE

TensilicaDNA 100

2018

Virtuoso®

RF Solution

Next GenJasper GoldStratus™ HLS

Innovus™

ImplementationSystem

TensilicaFusion DSP

Indago™

DebugPlatform

Genus™

SynthesisSolution

Joules™

RTL PowerSolution

TensilicaVision P5

DSP

Palladium® Z1EnterpriseEmulationPlatform

Modus™

DFT SoftwareSolution

Next-GenVirtuoso ADE

Tensilica®

Vision P6DSP

TensilicaFusion G3

DSP

OrCAD®

Capture Cloud

Allegro Pulse

Allegro PCBDesignTrue

ConformalSmart LEC

JasperGoldRTL Signoff

LegatoMemorySolution

TensilicaHiFi 3z DSP

VirtuosoSystem Design

Platform

CCIX VIPand DIP

TensilicaVision C5

DSP

PegasusVerification

System

Protium S1Prototyping

Platform

XceliumParallel

Simulator

USB Type-CIP

2015 - 2017

More than 20 significant new products in past 3 years

© 2019 Cadence Design Systems, Inc. All rights reserved.11

Recurring revenue model

High visibility software revenue stream

~90% of total revenue recognized over time

Backlog: $2.8B (Q4’18)

Revenue growth

10% (2018/2017)

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© 2019 Cadence Design Systems, Inc. All rights reserved.12

Diversified business across products and regions

24%

29%26%

9%

12%VerificationDigitalAnalogPCB/PkgIP 45%

28%

19%

8%Americas

Asia

EMEA

Japan

Revenue mix for 2018

© 2019 Cadence Design Systems, Inc. All rights reserved.13

Driving profitable growth

Strong operating profitability:

Focus on growth and disciplined ROI-centric resource allocation Non-GAAP operating margin 30%1 (2018)

0%

5%

10%

15%

20%

25%

30%

35%

2012 2013 2014 2015 2016 2017 2018

Non-GAAP Operating Margin1

Notes:1. Non-GAAP operating margin and non-GAAP EPS (excludes amortization of acquired intangibles, stock-based compensation, non-qualified deferred compensation expenses

and certain non-recurring cash expenses. See quarterly earnings releases and CFO Commentary for reconciliations to GAAP measures.

© 2019 Cadence Design Systems, Inc. All rights reserved.14

Cash flow, capital structure and uses of cash

Free cash flow generation $543M (2018)

Capital structure (Q4‘18)

Cash: $533M LT Debt: $450M

Credit facility: $350M ($100M drawn)

Capital allocation Internal investment M&A Repurchase stock

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2012 2013 2014 2015 2016 2017 2018

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Free cash flow

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2012 2013 2014 2015 2016 2017 2018

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Stock repurchase

© 2019 Cadence Design Systems, Inc. All rights reserved.15

In summary

Mission critical solutions for designing semiconductors and electronic systems

Data-driven economy and supporting technology waves drive growth

Culture of innovation creates the products for growth

Growth, focus and discipline drive financial performance

© 2019 Cadence Design Systems, Inc. All rights reserved worldwide. Cadence, the Cadence logo, and the other Cadence marks found at www.cadence.com/go/trademarksare trademarks or registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.