The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Cadence Design Systems (NASDAQ: CDNS) and the rest of the design software stocks fared in Q3.
The demand for rich, interactive 2D, 3D, VR and AR experiences is growing, and while the ubiquitous metaverse might still be more of a buzzword than a real thing, what is real is the demand for the tools to create these experiences, whether they are games, 3D tours or interactive movies.
The 5 design software stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 5.8% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 2.3% on average since the latest earnings results.
Cadence Design Systems (NASDAQ: CDNS)
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Cadence Design Systems reported revenues of $1.34 billion, up 10.1% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and full-year EPS guidance beating analysts’ expectations.
“Cadence delivered excellent results for the third quarter of 2025. With a record backlog and ongoing broad-based strength of our business, we are raising our full year revenue outlook to ~14% growth year-over-year,” said Anirudh Devgan, president and chief executive officer.
Cadence Design Systems delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 6.5% since reporting and currently trades at $329.02.
Best Q3: Unity (NYSE: U)
Powering over half of the world's mobile games and expanding into industries from automotive to architecture, Unity (NYSE: U) provides software tools and services that allow developers to create, run, and monetize interactive 2D and 3D content across multiple platforms.
Unity reported revenues of $470.6 million, up 5.4% year on year, outperforming analysts’ expectations by 4.6%. The business had a very strong quarter with a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 20% since reporting. It currently trades at $43.03.
Is now the time to buy Unity? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Adobe (NASDAQ: ADBE)
Originally named after Adobe Creek that ran behind co-founder John Warnock's house, Adobe (NASDAQ: ADBE) develops software products used for digital content creation, document management, and marketing solutions across desktop, mobile, and cloud platforms.
Adobe reported revenues of $5.99 billion, up 10.7% year on year, exceeding analysts’ expectations by 1.4%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.
As expected, the stock is down 6.2% since the results and currently trades at $329.09.
Read our full analysis of Adobe’s results here.
PTC (NASDAQ: PTC)
Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ: PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM.
PTC reported revenues of $893.8 million, up 42.7% year on year. This number beat analysts’ expectations by 18.7%. It was a strong quarter as it also recorded a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
PTC delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 6.4% since reporting and currently trades at $177.73.
Read our full, actionable report on PTC here, it’s free for active Edge members.
Procore Technologies (NYSE: PCOR)
With a mission to build software for the people that build the world, Procore Technologies (NYSE: PCOR) provides cloud-based software that enables owners, contractors, and other stakeholders to collaborate and manage construction projects from any device.
Procore Technologies reported revenues of $338.9 million, up 14.5% year on year. This print surpassed analysts’ expectations by 3.3%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.
Procore Technologies had the weakest full-year guidance update among its peers. The company added 122 customers to reach a total of 17,623. The stock is up 10.7% since reporting and currently trades at $79.16.
Read our full, actionable report on Procore Technologies here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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