Revenue (Tables)

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue from external customers by product category

The following table shows the percentage of revenue contributed by each of Cadence’s five product categories for fiscal 2022, 2021 and 2020:

	2022		2021		2020
Custom IC Design and Simulation	22	%	23	%	25	%
Digital IC Design and Signoff	28	%	29	%	29	%
Functional Verification, including Emulation and Prototyping Hardware*	26	%	24	%	22	%
IP	12	%	13	%	14	%
System Design and Analysis	12	%	11	%	10	%
Total	100	%	100	%	100	%

_____________

* Includes immaterial amount of revenue accounted for under leasing arrangements.

Disaggregation of Revenue

The following table shows the percentage of Cadence’s revenue that is classified as recurring or up-front for fiscal 2022, 2021 and 2020:

	2022		2021		2020
Revenue recognized over time	83	%	85	%	85	%
Revenue from arrangements with non-cancelable commitments	2	%	3	%	3	%
Recurring revenue	85	%	88	%	88	%
Up-front revenue	15	%	12	%	12	%
Total	100	%	100	%	100	%

Contract assets and deferred revenue

Cadence’s contract balances as of December 31, 2022 and January 1, 2022 were as follows:

	As of
	December 31, 2022		January 1, 2022
	(In thousands)
Contract assets	$	22,766	$	6,811
Deferred revenue	782,062		655,090