Cadence Announces First Quarter 2000 Results; Company Shows Strong First Quarter and Significant Progress in Growth Plan.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--April 18, 2000

Cadence Design Systems, Inc. (NYSE:CDN), the world's leading supplier of electronic design products and services, today announced first quarter revenues of $257 million and $0.01 diluted earnings per share. In the first quarter, Cadence(R) booked 40 percent of its software products under the subscription model, exceeding its goal of 30 percent. For comparative purposes, except where noted, the results discussed throughout this release reflect earnings before unusual items and amortization of acquired intangibles.

Product revenue for the first quarter of 2000 totaled $106 million. Services revenue was $76 million. Services gross margin came in at 35 percent. Including amortization of acquired intangibles of $20 million, the company reported a diluted loss per share of $0.05 for the first quarter.

"I am extremely pleased with our first quarter results," stated Ray Bingham, president and CEO of Cadence. "We are exceeding our stated growth plans for 2000, and are delivering groundbreaking technology and design solutions for our customers. Cadence is clearly building upon the positive momentum we established at the end of last year."

Continued Electronics Growth Fuels Opportunity

Cadence has a robust portfolio of leading-edge design tools, methodology services, and a world-class design services business. As semiconductor and systems companies continue to show strong momentum, Cadence is uniquely positioned to address customer design challenges and time-to-market pressures with this powerful combination of technology solutions and design expertise.

In the first quarter, Cadence introduced SP&R (synthesis/place-and-route), the industry's first integrated system for high-performance integrated circuit (IC) designs. Cadence is the first company to offer a system that includes both physical synthesis and optimization place-and-route tools. The SP&R system supports design flows from register-transfer-level (RTL) or gates to final tapeout.

Cadence design services continued to demonstrate its strength in the growing information age electronics market by announcing a multi-year, multi-million dollar engagement with Nokia to design wireless basestation products.

In March, Cadence announced iCadence, the new business to business (B2B) Internet and e-services initiative for electronics design that will help reduce cost and speed time-to-market for customers. As part of this initiative, Cadence unveiled SpinCircuit; a B2B e-commerce portal that has created the only Internet gateway that directly connects engineers' design desktops to the electronics supply chain. SpinCircuit is an independent company formed by Cadence, Hewlett Packard, and Flextronics. Other key partners involved in Spincircuit include AVNET, Inc., All American Semiconductor, and Innoveda.

Business Outlook

These statements are forward-looking, and actual results may differ materially. These statements do not include the impact of potential acquisitions that may be completed after the first quarter of 2000.

--  The Company will continue to target booking 30 percent of its
    software transactions as subscription licenses.

--  The Company expects revenues to return to year-over-year growth
    during the second quarter of 2000.

This release contains forward-looking statements based on current expectations or beliefs, as well as a number of assumptions about future events that are subject to factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Readers are cautioned not to put undue reliance on these forward-looking statements, which are not a guarantee of future performance and are subject to a number of uncertainties and other factors, many of which are outside the control of Cadence, including among others: Cadence's ability to compete successfully in the design automation product and the commercial electronic design and methodology services industries; the mix of products and services sold and the timing of significant orders for its products; recent economic uncertainty; fluctuations in rates of exchange between the U.S. dollar and the currencies of other countries; and the acquisition of other companies or the failure to successfully integrate them. For a detailed discussion of these and other cautionary statements, please refer to the Company's filings with the Securities and Exchange Commission. These include the Company's Annual Report on Form 10-K for the year ended January 1, 2000.

About Cadence

Cadence is the largest supplier of electronic design automation products, methodology services, and design services used to accelerate and manage the design of semiconductors, computer systems, networking and telecommunications equipment, consumer electronics, and a variety of other electronics-based products. With approximately 5,000 employees and 1999 revenue of $1.1 billion, Cadence has sales offices, design centers, and research facilities around the world. The Company is headquartered in San Jose, Calif. and traded on the New York Stock Exchange under the symbol CDN. More information about the company, its products and services may be obtained from the World Wide Web at http://www.cadence.com.

Note to Editors: Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All other trademarks are properties of their owners.