Is CDNS (Cadence Design Systems, Inc.) Halal or Haram?

Based on our AAOIFI-standard shariah screening, CDNS is Halal and considered permissible for Muslim investors. It passed all 4 of 4 compliance screens including business activity review, debt-to-market-cap ratio (2.76% vs ≤33% threshold), interest income ratio (1.92% vs ≤5% threshold), and cash & securities ratio (3.34% vs ≤33% threshold).

Cadence Design Systems, Inc. is a leading technology company specializing in electronic design automation (EDA). It provides critical software, hardware, and reusable integrated circuit (IC) design blocks, featuring platforms like JasperGold for formal verification and Palladium for enterprise emulation. For Muslim investors, CDNS is considered a Halal investment, having successfully passed all four AAOIFI shariah screens. Its core business of developing software for chip verification and design does not involve any impermissible activities, making it a clean option for a halal portfolio. From an Islamic finance perspective, Cadence exhibits outstanding financial health with a remarkably low debt-to-market cap ratio of just 2.8%. Furthermore, its interest income accounts for only 1.92% of total revenue, meaning investors do not need to worry about significant non-compliant income purification. Since there are no major scholarly debates surrounding the EDA software industry, CDNS remains a solid compliant choice. Investors should simply continue to monitor its quarterly interest income to ensure it remains below the strict 5% AAOIFI threshold. Cadence Design Systems, Inc. operates in the Technology sector under the Software - Application industry and is headquartered in San Jose, CA, US. The company is led by CEO Anirudh Devgan and employs approximately 12,837 people.

CDNS was screened using AAOIFI-based shariah compliance criteria. Four tests are applied: (1) Business Activity — the company's core business must not derive primary income from haram (prohibited) activities such as alcohol, gambling, tobacco, or interest-based finance. (2) Debt-to-Market-Cap — total debt must not exceed 33% of market capitalization. (3) Interest Income — interest income must not exceed 5% of total revenue. (4) Cash & Securities — cash and interest-bearing securities must not exceed 33% of market cap. CDNS passed 4 of these 4 screens.

Although CDNS passes all shariah screens, it does earn $101.6M in interest income (1.92% of revenue). Many scholars recommend purifying this portion by donating the equivalent percentage of any dividends received to charity. For example, if you receive $100 in dividends, you would donate approximately $1.92 to purify the income.

CDNS was last screened on 2026-04-29. Shariah compliance status can change as companies report new financial data, acquire new businesses, or shift revenue streams. We recommend checking back periodically for the most up-to-date screening results.