06:27 AM EDT, 07/29/2025 (MT Newswires) -- Cadence Design Systems ( CDNS ) shares climbed early Tuesday as the computational software company lifted its full-year outlook and reported better-than-expected second-quarter results.

Adjusted earnings are now anticipated to come in between $6.85 and $6.95 per share for 2025, up from its previous projections of $6.73 to $6.83, the firm said late Monday. Revenue is pegged at $5.21 billion to $5.27 billion, compared with the prior guidance of $5.15 billion to $5.23 billion. The current consensus on FactSet is for non-GAAP EPS of $6.84 and sales of $5.22 billion.

The stock jumped 6.9% in the most recent premarket activity.

Cadence expects to benefit from roughly $140 million in reduced cash tax payments due to the immediate expensing of US research and development expenditures under President Donald Trump's new tax bill, which was signed into law earlier this month.

For the ongoing quarter, the company forecasts adjusted EPS to be in a range of $1.75 to $1.81 and revenue to be at $1.31 billion to $1.34 billion, Chief Financial Officer John Wall said during an earnings call, according to a FactSet transcript. The Street is looking for non-GAAP EPS of $1.78 and sales of $1.33 billion for the third quarter.

Cadence will make a payment of about $140.6 million in the third quarter as part of its settlement with the US Department of Justice and the Bureau of Industry and Security, regarding investigations into certain sales of roughly $45 million in China from 2015 to 2021, Wall said.

The firm posted adjusted EPS of $1.65 for the June quarter, up from $1.28 the year before and topping the average analyst estimate of $1.56. Revenue advanced to $1.28 billion from $1.06 billion, exceeding the Street's view for $1.25 billion.

"I am pleased to report that Cadence delivered excellent results for (the second quarter), with broad-based strength across all businesses, more than offsetting the impact of the temporary restrictions on exports to China imposed on May 23," Wall said in the earnings release.

Product and maintenance revenue inclined to $1.17 billion from about $960.5 million last year, while services rose to $104.9 million from $100.2 million. "Bookings were stronger than expected, highlighting the strategic relevance of our (artificial intelligence)-driven portfolio and the depth of our customer relationships," Chief Executive Anirudh Devgan said on the call.

By geography, Americas made up 49% of the overall revenue for the quarter, in line with the prior-year period. China contributed 9% to the topline results, down from 12% in the 2024 quarter, while Europe, the Middle East and Africa came in at 16%. Japan accounted for 7% of overall revenue.