Cadence Design Systems Inc (CDNS)

Gross profit margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Gross profit	US$ in thousands	4,430,360	3,654,940	3,190,100	2,681,240	2,377,390
Revenue	US$ in thousands	4,641,260	4,089,990	3,561,720	2,988,240	2,682,890
Gross profit margin		95.46%	89.36%	89.57%	89.73%	88.61%

December 31, 2024 calculation

Gross profit margin = Gross profit ÷ Revenue
= $4,430,360K ÷ $4,641,260K
= 95.46%

Cadence Design Systems Inc has demonstrated consistent and impressive growth in its gross profit margin over the past five years. Starting at 88.61% in December 2020, the gross profit margin has steadily increased each year, reaching a high of 95.46% by December 2024. This upward trend indicates the company's ability to effectively manage its cost of goods sold and generate higher revenues relative to production costs.

The consistent improvement in the gross profit margin suggests that Cadence Design Systems Inc has been successful in enhancing operational efficiency, optimizing pricing strategies, and potentially benefiting from economies of scale. A higher gross profit margin is typically viewed positively by investors as it signifies the company's profitability and competitive position in the market.

It is important to note that while a rising gross profit margin is generally favorable, investors should also consider other financial metrics and industry benchmarks to gain a comprehensive understanding of Cadence Design Systems Inc's financial health and performance.