

<PAGE> 1
                                FORM 10-Q

                             ______________

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549

(Mark One)
    
  X   Quarterly Report PURSUANT TO Section 13 or 15(d) of the
 ___  Securities Exchange Act of 1934

For the quarterly period ended April 1, 1995

                            OR

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
     THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________to_________________


                  Commission file number 1-10606


                    CADENCE DESIGN SYSTEMS, INC.
       (Exact name of registrant as specified in its charter)



     Delaware                                77-0148231
(State or other jurisdiction of       (I.R.S.Employer Identification No.)
incorporation or organization)



555 River Oaks Parkway, San Jose, California           95134
(Address of principal executive offices)             (Zip Code)



     (408) 943-1234
Registrant's telephone number, including area code

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                    Yes  __X__     No   _____


At May 6, 1995 there were 38,159,929 shares of the
registrant's Common Stock, $0.01 par value outstanding.

<PAGE>  2

                 CADENCE DESIGN SYSTEMS, INC.

                          INDEX

<TABLE>
<CAPTION>
                                                            PAGE NO.

PART I.   FINANCIAL INFORMATION
<S>       <C>                                                  <C>
Item 1.   Financial Statements

     Condensed Consolidated Balance Sheets:
          April 1, 1995 and December 31, 1994                   3

     Condensed Consolidated Statements of Income:
          Three Months Ended April 1, 1995 and March 31,1994    4

     Condensed Consolidated Statements of Cash Flows:
          Three Months Ended April 1, 1995 and March 31,1994    5

     Notes to Condensed Consolidated Financial
          Statements                                            6

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations         8


PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                      11


Signatures                                                      14

</TABLE>

<PAGE>  3
                       CADENCE DESIGN SYSTEMS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                   (In thousands, except share data)
<TABLE>
<CAPTION>
                                        April 1,         December 31,
                                          1995               1994
                                      (Unaudited)
                                          <C>                 <C>
ASSETS
Current Assets:
Cash and cash investments              $  97,920           $  75,011
Short-term investments                    13,275              21,865
Accounts receivable, net                  63,429              78,629
Inventories                                5,867               5,137
Prepaid expenses and other current assets 12,491              11,293

     Total current assets                192,982             191,935

Property, plant and equipment, net       124,407             122,064
Software development costs, net           27,393              27,832
Purchased software and other 
  intangibles, net                        12,708              10,557
Other assets                               9,945               8,660

Total assets                           $ 367,435           $ 361,048


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current portion 
   of long-term obligations            $  26,176           $  26,412
Accounts payable                          13,328              12,522
Accrued liabilities                       49,182              56,359
Income taxes payable                       6,494               7,944
Deferred revenue                          79,406              61,205

     Total current liabilities           174,586             164,442

Long-Term Liabilities:
Long-term obligations                      1,942               2,098
Lease liabilities                          8,348               9,040
Deferred income taxes                      1,380                 904
Other long-term liabilities                9,884               8,501

     Total long-term liabilities          21,554              20,543

Stockholders' Equity:
Common stock                                 487                 476
Additional paid-in capital               271,908             264,697
Treasury shares at cost (10,331,202 and
     9,686,634 shares, respectively)    (151,180)           (133,728)
Retained earnings                         45,559              43,377
Accumulated translation adjustment         4,521               1,241

     Total stockholders' equity          171,295             176,063

Total liabilities and stockholders'
  equity                               $ 367,435            $361,048

</TABLE>
The accompanying notes are an integral part of these statements.
<page 4>

                    CADENCE DESIGN SYSTEMS, INC.
             CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                (In thousands, except per share data)

<TABLE>
<CAPTION>
                                       Three Months Ended     
                                    April 1,       March 31,
                                      1995             1994
                                           (Unaudited)
                                      <C>           <C>
REVENUE:
Product                             $ 62,110       $ 56,407
Service                               10,477          4,740
Maintenance                           43,446         35,631

     Total revenue                   116,033         96,778

COSTS AND EXPENSES:
Cost of product                       11,853         13,759
Cost of service                        9,213          4,564
Cost of maintenance                    3,897          3,993
Marketing and sales                   42,220         39,024
Research and development              20,863         18,214
General and administrative             9,498         10,599
Unusual items                        - - - -         12,104

     Total costs and expenses         97,544        102,257


INCOME (LOSS) FROM OPERATIONS         18,489         (5,479)

Other income (expense), net             (423)           347

Income (loss) before provision (benefit)
     for income taxes                  18,066        (5,132)

Provision (benefit) for income taxes    4,516        (1,283)

NET INCOME (LOSS)                    $ 13,550     $  (3,849)

NET INCOME (LOSS) PER SHARE          $    .32     $    (.09)

Weighted average common and common
     equivalent shares outstanding     42,103        41,208

</TABLE>
The accompanying notes are an integral part of these statements.

<PAGE> 5
                   CADENCE DESIGN SYSTEMS, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (In thousands)
<TABLE>
<CAPTION>
                                            Three Months Ended
                                        April 1,           March 31,
                                          1995                1994
                                                (Unaudited)
                                            <C>               <C>
CASH AND CASH INVESTMENTS AT
  BEGINNING OF PERIOD                       $  75,011     $  61,382

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                            13,550        (3,849)
  Adjustments to reconcile net income 
    (loss) to net cash provided by 
    operating activities:
       Depreciation and amortization           11,496        10,600
       Lease liabilities                         (730)       (1,619)
       Deferred income taxes, noncurrent          476          (235)
       Write-offs of equipment and other 
         long-term assets                         241           807
       Increase in other long-term 
         liabilities                            1,312           247
       Net changes in current assets 
         and liabilities, net of business 
         combinations accounted for as
         purchases:
          Decrease in accounts receivable      18,277         14,891
          Decrease (increase) in inventories     (730)           560
          Decrease (increase) in prepaid expenses
               and other current assets        (1,501)         2,267
          Decrease in accrued liabilities 
               and payables                    (5,861)          (735)
          Increase in deferred revenue         17,436          7,698
               Net cash provided by operating 
                activities                     53,966         30,632

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of short-term investments           (8,484)       (22,874)
  Maturity of short-term investments           17,074         10,747
  Purchase of property and equipment           (8,150)        (2,340)
  Capitalization of software development costs (2,968)        (3,362)
  Decrease (increase) in other assets and 
     purchased software and intangibles        (4,328)           593
  Payment for purchase of third-party interests 
     in partnerships, net of cash acquired    - - - -         (8,729)
        Net cash used for investing activities (6,856)       (25,965)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on notes payable and long-term
    obligations                                (1,028)        (2,057)
  Sale of common stock                          8,712            678
  Purchase of treasury stock                  (21,376)        (1,708)
  Purchase of warrant                         (12,125)        - - - -
       Net cash used for financing activities (25,817)        (3,087)

EFFECT OF EXCHANGE RATE CHANGES ON CASH         1,616           (703)

INCREASE IN CASH AND CASH INVESTMENTS          22,909            877

CASH AND CASH INVESTMENTS AT END OF PERIOD    $97,920        $62,259
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 6

                    CADENCE DESIGN SYSTEMS, INC.
         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

The condensed consolidated financial statements included
herein have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such
rules and regulations.  However, the Company believes that
the disclosures are adequate to make the information
presented not misleading.  These condensed consolidated
financial statements should be read in conjunction with the
financial statements and the notes thereto included in the
Company's annual report on Form 10-K for the year ended
December 31, 1994.

The unaudited condensed consolidated financial statements
included herein reflect all adjustments (which include only
normal, recurring adjustments) that are, in the opinion of
management, necessary to state fairly the results for the
periods presented.  The results for such periods are not
necessarily indicative of the results to be expected for the
full fiscal year.

Certain prior year balances have been reclassified to
conform to the current year presentation.

2.   Change in Fiscal Year End

Effective December 31, 1994 the Company changed its fiscal
year from December 31 to the 52-53 week period ending on the
Saturday closest to December 31.  Beginning in fiscal 1995,
each quarter will be 13 weeks in length. The effect of the
change is not material to the Company's current year
financial statements.

3.   Purchase of Redwood Design Automation, Inc.

In August 1994 the Company acquired all of the outstanding
stock of Redwood Design Automation, Inc. ("Redwood") for
approximately 419,000 shares of the Company's common stock
valued at $4.6 million and $1.8 million of net advances made
to Redwood, prior to the acquisition, which were not repaid.
Redwood was a development stage company formed to design,
develop and market software for use in electronic system
design. The acquisition was accounted for as a purchase, and
the results of Redwood from the date of acquisition forward
have been recorded in the Company's consolidated financial
statements. In connection with the acquisition, net
intangibles of $6.8 million were acquired, of which $4.7
million was reflected as a one-time charge to operations in
the third quarter of 1994, for the write-off of in-process
research and development that had not reached technological
feasibility and, in management's opinion, had no probable
alternative future use.  The one-time charge was reflected
in the Company's statement of income for the quarter ended
September 30, 1994 as an unusual item within operating
expenses.  The remaining intangibles of $2.1 million are
included in purchased software and intangibles in the
accompanying balance sheet and are being amortized over a
useful life of two years.

4.   Net Income (Loss) Per Share

Net income per share for each period is calculated by
dividing net income by the weighted average number of common
stock and common stock equivalents outstanding during the
period (calculated using the modified treasury stock
method).  Common stock equivalents consist of dilutive
shares issuable upon the exercise of outstanding common
stock options and warrants.  Net loss per share is
calculated by dividing net loss by the weighted average
number of common shares outstanding.  Fully diluted net
income (loss) per share is substantially the same as primary
net income (loss) per share.

<PAGE> 7

5.   Inventories

Inventories, which consist primarily of testing equipment,
are stated at the lower of cost (first-in, first-out method)
or market.  Cost includes labor, material and manufacturing
overhead.  Inventories consisted of the following (in
thousands):
<TABLE>
<CAPTION>
                                      April 1,        December 31,
                                        1995              1994
                                            (Unaudited)
<S>                                    <C>                <C>
Raw materials and supplies            $ 1,640           $ 1,268
Work-in-process                         2,713             2,250
Finished goods                          1,514             1,619
Total                                 $ 5,867           $ 5,137

6.   Commitments and Contingencies

Securities class action lawsuits were filed against the
Company and certain of its officers and directors in the
United States District Court for the Northern District of
California, San Jose Division, on April 8 and 9, 1991.  The
lawsuits, which were consolidated into a single action,
allege violation of certain federal securities laws by
maintaining artificially high market prices for the
Company's common stock through alleged misrepresentations
and nondisclosures regarding the Company's financial
condition.  Court rulings in response to the Company's
motions to dismiss the lawsuit limited the class period to
include purchasers of the Company's common stock between
January 29, 1991 and April 3, 1991.

On March 23, 1993 a separate class action lawsuit was filed
against the Company and certain of its directors and
officers in the United States District Court, Northern
District of California, San Jose Division.  This lawsuit,
which was consolidated into a single action with two
virtually identical lawsuits filed later in March and in
April 1993, alleges violation of certain federal securities
laws by maintaining artificially high market prices for the
Company's common stock through alleged misrepresentations
and nondisclosures regarding the Company's financial
condition.  On November 18, 1993, the District Court granted
the Company's motion to dismiss the 1993 complaint.  The
effect of the ruling was to dismiss the complaint except as
to a statement allegedly made on January 28, 1993, but
plaintiffs were granted leave to further amend their
complaint.

In April 1994 the Company entered into tentative agreements
to settle both of the above class action lawsuits for a
combined settlement of $16.5 million, of which approximately
$7.5 million was covered by the Company's insurance
carriers.  Reflected in the Company's operating expenses as
an unusual item at March 31, 1994 is the net settlement cost
of $9.0 million, $1.0 million of legal fees and $2.1 million
of additional settlement and legal costs expected to be
incurred as the result of a dispute with one of the
Company's insurance carriers.  In May 1994, after
negotiation, the Company's secondary insurance carrier
agreed to provide coverage on the second lawsuit.
Accordingly, the results of operations for the second
quarter ended June 30, 1994 included a $2.1 million credit
to operating expenses for the additional insurance proceeds
received and the reduction of accruals for legal expenses
relating to the provision taken in the first quarter.  The
total settlement amount has been remitted into escrow.

7.   Put Warrants and Call Options

The Company has an authorized stock repurchase program.  In
total, as of April 1, 1995, the Company had authorized the
repurchase of 20.2 million shares and approximately 12.4
million shares had been repurchased.  The Company
repurchases common stock, in part, to satisfy estimated
requirements for shares to be issued under its employee
stock option and stock purchase plans as well as in
connection with acquisitions.

Throughout 1994 as part of its authorized stock repurchase
program, the Company sold 5.0 million put warrants through
private placement.  Each warrant entitles the holder to sell
one share of common stock to the Company on a specified date
at a specified price ranging from $13.13 to $20.59 per
share.  Additionally, during this same period, the Company
purchased approximately 3.8 million call options that
entitle the Company to buy on a specified date one share of
common stock, at a specified price ranging from $14.94 to
$22.84 per share.  The Company has the right to settle the
put warrants with stock, or a cash or stock settlement equal
to the difference between the exercise price and market
value at the date of exercise.  The put warrants and call
options outstanding at April 1, 1995 are exercisable on
various dates between April 1995 and November 1995.
<PAGE> 8

At April 1, 1995 the Company has both the unconditional
right and the intent to settle these put warrants with
stock, and therefore, no amount has been classified out of
stockholders' equity in the accompanying balance sheet.
Gains or losses from the exercise of these put warrants and
call options are reported in stockholders' equity.

Settlement of the put warrants with stock could cause the
Company to issue a substantial number of shares, depending
on the amounts of the repurchase obligations and the per
share value of the Company's common stock at the time of
exercise.  In addition, settlement of put warrants in stock
or cash could lead to the disposition by put warrant holders
of shares of the Company's common stock that such holders
may have accumulated in anticipation of the exercise of the
put warrants or call options.

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations

RESULTS OF OPERATIONS

Revenue for the first quarter ended April 1, 1995 was $116.0
million compared with $96.8 million for the same period of
the prior year, an increase of 20%.  Product revenue
increased $5.7 million from $56.4 million for the quarter
ended March 31, 1994.  The increase in product revenue was
primarily the result of increased demand for the Company's
top-down design (HDL), systems and automated test
engineering (ATE) products.  Service revenue increased to
$10.5 million for the first quarter ended April 1, 1995 from
$4.7 million for the first quarter ended March 31, 1994, an
increase of $5.7 million.  The increase in service revenue
was the result of increased demand for the Company's
Spectrum Services consulting business.  Maintenance revenue
was $43.4 million for the quarter ended April 1, 1995, an
increase of $7.8 million from the amount reported for the
quarter ended March 31, 1994.  The increase in maintenance
revenue was attributable to an increase in the Company's
installed base of products as well as the Company's
continued effort toward obtaining customer renewals of
maintenance.

Revenue from international sources was approximately $63.1
million and $53.5 million or 54% and 55% of total revenue
for the three months ended April 1, 1995 and March 31, 1994,
respectively.  In addition to increased sales volume in
Japan, $3.8 million of the $9.6 million increase in
international source revenue was due to the favorable impact
on revenue of foreign exchange rates as the result of the
strengthening of certain foreign currencies in relation to
the U.S. dollar as compared to the quarter ended March 31,
1994.  Although the Company experienced increased revenue
from Japan in the first quarter of 1995 as compared to the
first quarter of 1994, there can be no assurance that the
Company's revenue volume in Japan will continue to
strengthen.  It is anticipated that international revenue
will continue to constitute a significant portion of total
revenue.  International revenues are subject to certain
additional risks normally associated with international
operations, including, among others, adoption and expansion
of government trade restrictions, volatile foreign exchange
rates, currency conversion risks, limitations on
repatriation of earnings and reduced protection of
intellectual property rights.

Cost of product was $11.9 million and $13.8 million for the
three months ended April 1, 1995 and March 31, 1994,
respectively.   The decrease in cost of product was the
result of a $.7 million decrease in product royalties and a
$1.0 million decrease in purchased software amortization due
to the write-off of purchased software in the first quarter
of 1994.  Cost of service increased from $4.6 million for
the quarter ended March 31, 1994 to $9.2 million for the
quarter ended April 1, 1995 due to additional employee
related costs attributable to increased headcount required
to meet the higher demand for the Spectrum Services
consulting business.  Cost of maintenance was $3.9 million
and $4.0 million for the quarters ended April 1, 1995 and
March 31, 1994, respectively.

Product gross margin increased from 76% in the quarter ended
March 31, 1994 to 81% for the quarter ended April 1, 1995.
As more fully described above, the improvement in gross
margin was the result of increased product revenue combined
with lower product costs in the first quarter of 1995 as
compared to the first quarter of 1994.  Service gross margin
increased from 4% for the quarter ended March 31, 1994 to
12% for the quarter ended April 1, 1995.  Service gross
margin for the first quarter of 1994 was adversely affected
due to the Company's addition of consulting services staff
at a faster rate than revenue growth.  Maintenance gross
margin increased from 89% in the first quarter of 1994 to
91% in the first quarter of 1995 due to the increase in
maintenance revenue while the cost of maintenance remained
relatively constant.

<PAGE> 9

In March 1995 the Company signed a five year $75 million
outsourcing agreement with Unisys Corporation to assume
substantial portions of Unisys' internal silicon design
operation.  As part of this agreement, the Company retained
approximately 180 hardware and software designers and
acquired fixed assets and certain intangibles.  While
primarily focused on serving the needs of Unisys, the design
and service resources acquired by Cadence are also intended
to be used to support other customers' design needs.  Until
these newly acquired design and service resources are more
fully utilized through additional revenue contracts or until
further operating efficiencies are obtained, service gross
margins are expected to be adversely affected.

Marketing and sales expenses increased to $42.2 million for
the quarter ended April 1, 1995 compared to $39.0 million
for the same period in 1994, an increase of 8%.  The
increase in marketing and sales expenses was the result of a
$4.4 million increase in employee related expenses of which
approximately $1.7 million was attributable to the effect of
the strengthening of certain foreign currencies in relation
to the U.S. dollar as compared to the quarter ended March
31, 1994.  The remaining increase in employee related
expenses was due to an increase in compensation expenses
that vary with bookings.  These increased costs were
partially offset by lower facilities related costs.

Research and development expenses for the quarter ended
April 1, 1995 were $20.9 million as compared to $18.2
million for the same period of the prior year, an increase
of 15%.  Capitalization of software development costs for
the quarters ended April 1, 1995 and March 31, 1994 were
$3.0 million and $3.4 million, which represented 13% and 16%
of total research and development expenditures made in each
of those periods, respectively.   The amount of software
development costs capitalized in any given period may vary
depending on the exact nature of the development performed.
Gross research and development expenditures before
capitalization increased from $21.6 million for the three
months ended $23.8 million for the same period in the current year.  
The increase in 1995 was primarily due to $2.4 million of increased 
employee related expenses primarily resulting from increased 
headcount. These increased costs were partially offset by lower 
facilities related costs of $.7 million.

General and administrative expenses decreased to $9.5
million for the quarter ended April 1, 1995 from $10.6
million for the same period in 1994, a decrease of 10%.
This decrease was primarily the result of decreased bad debt
expense of $.5 million and decreased legal fees of $.2
million due to the settlement of the stockholder class
action lawsuits at the end of the first quarter of 1994.

In March 1994 the Company recorded a provision of $12.1
million for settlement of the stockholder class action
lawsuits filed against the Company and certain of its
officers and directors in 1991 and 1993.  This provision was
recorded as an unusual item within operating expenses in the
accompanying statement of income. The provision was
comprised of a net settlement amount of $9.0 million, $1.0
million of legal fees and $2.1 million of additional
settlement and legal costs expected to be incurred as the
result of a dispute with one of the Company's insurance
carriers.  In May 1994, after negotiation, the Company's
secondary insurance carrier agreed to provide coverage on
the second lawsuit.  Accordingly, the results of operations
for the second quarter ended June 30, 1994 included a $2.1
million credit to operating expenses for the additional
insurance proceeds received and the reduction of accruals
for legal expenses relating to the provision taken in the
first quarter.

Net other expense for the first quarter ended April 1, 1995
was $.4 million compared with $.3 million of net other
income for the same period in 1994.  The decrease in net
other income for the three month period ended April 1, 1995
was primarily the result of a $.5 million increase in
interest expense related to a secured loan obtained as part
of the Company's acquisition, in the fourth quarter of 1994,
of all third party interests in a real estate partnership
which owns certain of the Company's facilities.

The Company's estimated annual effective tax rate for fiscal
1995 and 1994 is 25%.
<PAGE> 10

FACTORS THAT MAY AFFECT FUTURE RESULTS

The Company's operating expenses are partially based on its
expectations of future revenue.  The Company's results of
operations may be adversely affected if revenue does not
materialize in a quarter as expected.  Since expense levels
are usually committed in advance of revenues and because
only a small portion of expenses vary with revenue, the
Company's operating results may be impacted significantly by
lower revenue.  Based on the Company's operating history and
factors that may cause fluctuations in the quarterly
results, quarter to quarter comparisons should not be relied
upon as indicators of future performance.

The Company's future operating results are dependent on the
Company's ability to successfully implement its strategy to
help its customers meet their business objectives through
optimized product design environments ("PDEs").  The Company
provides these PDEs through a combination of software
products and services.  Inherent in implementing this
strategy are a number of risks that the Company must manage
and which could affect its future operating results.

The Company competes in the highly competitive EDA market
which continues to be characterized by aggressive pricing
practices, rapid technological change and new market
entrants.  The Company's success is dependent on its ability
to develop innovative, cost-competitive EDA software
products and to bring them to market in a timely manner.

In order to more effectively work with customers to help
them build optimized PDEs, the Company has realigned its
sales force along industry lines.  The Company expects this
industry focus will allow the sales force to better
understand and prepare solutions to its customers' business
needs thereby increasing revenue.  Should the benefits of
this realignment take longer to realize than expected, the
Company's revenues could be adversely affected.

Another important part of the Company's strategy is to help
its customers through an increased offering of  services.
While the Company has provided services to its customers for
a number of years, there are a number of risks the Company
must successfully address in order to develop this portion
of its business.  These risks include the ability to
successfully recruit, train and retain a skilled consulting
force and the ability to profitably deliver consulting
services that meet customer expectations.  The Company's
profitability could be adversely affected if it is unable to
develop its consulting services business as expected.

Due to the foregoing, as well as other factors, past
financial performance should not be considered a reliable
indicator of future performance.  In addition, the Company's
participation in a highly dynamic industry often results in
significant volatility of the Company's common stock price.
Any change in revenues or operating results below levels
expected by securities analysts for the Company or its
competitors, and the timing of the announcement of such
shortfalls, could have an immediate and significant adverse
effect on the trading price of the Company's common stock in
any given period.

LIQUIDITY AND CAPITAL RESOURCES

During the three months ended April 1, 1995 the Company's
cash and cash investments and short-term investments
increased $14.3 million from $96.9 million to $111.2
million.  This increase was primarily due to net cash
generated by operating activities exceeding net cash used
for investing (excluding purchases and maturities of short-
term investments) and financing activities.  Cash provided
by operating activities included a decrease of  $18.3
million in accounts receivable due to increased collections
and improved days sales outstanding.  Also included in the
cash generated by operating activities was a $17.4 million
increase in deferred revenue attributable to increased
deferred maintenance due to a larger customer base and
continued focus on customer renewals and an increase in
certain deferred product revenue deferred in accordance with
the American Institute of Certified Public Accountants
Statement of Position 91-1 entitled "Software Revenue
Recognition".  Cash used for financing activities included
approximately $21.4 million of treasury stock purchases and
the purchase of a warrant related to 1.0 million shares of
the Company's common stock for $12.1 million, partially
offset by $8.7 million of cash generated by the sale of
common stock through the exercise of stock options.

Working capital at April 1, 1995 was $18.4 million compared
to $27.5 million at December 31, 1994.  The decrease is
primarily the result of a decrease of $15.2 million in
accounts receivable and an increase of $18.2 million in
deferred revenue offset by an increase in cash, cash
investments and short-term investments of $14.3 million and
a decrease in accrued liabilities of $7.2 million.
<PAGE> 11

The Company has an authorized stock repurchase program.
Prior to 1993, the Company had authorized the repurchase of
up to 2.8 million shares of common stock in the open market.
In 1993 and 1994, the Company authorized the repurchase of
an additional 4.0 million and 13.4 million shares,
respectively, of common stock from time to time.  In total,
as of April 1, 1995, approximately 12.4 million shares had
been repurchased.  Some repurchases are necessary to satisfy
estimated requirements for shares to be issued under the
Company's employee stock option and stock purchase plans as
well as in connection with acquisitions.  During 1994, as
part of its authorized stock repurchase program, the Company
sold 5.0 million put warrants and purchased 3.8 million call
options through private placement.  The Company had a
maximum potential obligation related to the put warrants at
April 1, 1995 to buy back 5.0 million shares of its common
stock at an aggregate price of approximately $81.3 million.
The put warrants are exercisable on various dates between
April 1995 and November 1995.  Alternatively, the Company
can elect to settle the put warrants with stock which could
cause the Company to issue a substantial number of shares,
depending on the amounts of the repurchase obligations and
the per share value of the Company's common stock at the
time of exercise.  In addition, settlement of put warrants
in stock or cash could lead to the disposition by put
warrant holders of shares of the Company's common stock that
such holders may have accumulated in anticipation of the
exercise of the put warrants or call options.  Subsequent to
April 1, 1995 1.0 million of the put warrants expired out of
the money and the Company repurchased approximately .8
million shares of common stock through the exercise of call
options for a total cost of approximately $17.8 million.

In addition to the $111.2 million in cash and cash
investments and short-term investments at April 1, 1995, the
Company had available $10.0 million under a bank line of
credit, which expires in June 1995.  The Company is
currently in negotiations with the bank regarding possible
extension/expansion of this line of credit, but there can be
no assurance that mutually acceptable terms can be reached.

Anticipated cash requirements for fiscal 1995 include the
purchase of treasury stock through the exercise of the
Company's call options and in the open market.  Excluding
the .8 million shares of common stock purchased subsequent
to April 1, 1995 and discussed above, the Company has the
right to purchase an additional 3.0 million shares through
the exercise of call options during 1995 at a cost of
approximately $55.0 million.  Other cash requirements for
the remainder of fiscal 1995 include contemplated additions
of capital equipment of approximately $30.0 million and the
repayment in August 1995, if not refinanced, of a $23.5
million secured loan assumed as part of a 1994 purchase of
corporate facilities.

The Company anticipates that current cash and short-term
investment balances, cash flows from operations and short
and long-term borrowing capabilities will be sufficient to
meet its working capital and capital expenditure
requirements on a short and long-term basis.


PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8K

(a)       The following exhibits are filed herewith:


</TABLE>
<TABLE>

Exhibit
Number              Exhibit Title

<S>            <C>
10.01     The Registrant's 1987 Stock Option Plan, as
          amended to date, (incorporated by reference to Exhibit 4.01
          to the Registrant's Form S-8 Registration Statement (No. 33-
          53913) filed on May 31, 1994 (the "1994 Form S-8")).

10.02     Form of Stock Option Agreement and Form of Stock
          Option Exercise Request, as currently in effect under the
          Registrant's 1987 Stock Option Plan (incorporated by
          reference to Exhibit 4.01 to the Registrant's Form S-8
          Registration Statement (No. 33-22652) filed on June 20,
          1988).

10.03     The Registrant's 1988 Directors Stock Option Plan,
          as amended to date, including the Stock Option Grant and
          Stock Option Exercise Notice and Agreement (the first
          document is incorporated by reference to Exhibit 4.02 of the
          Registrant's 1994 Form S-8 and the latter two documents are
          incorporated by reference to Exhibit 10.08 - 10.10 to the
          Registrant's 1988 Form S-1 Registration Statement (No. 33-
          23107) originally filed on July 18, 1988).

10.04     The Registrant's 1993 Directors Stock Option
          Plan including the Stock Option Grant.

10.05     The Registrant's 1990 Employee Stock Purchase Plan
          as amended to date (incorporated by reference to Exhibit
          4.03 to the 1994 Form S-8).

10.06     The Registrant's Senior Executive Bonus Plan for
          1994 (incorporated by reference to Exhibit 10.08 to the
          Registrant's Form 10-K for the fiscal year ended December
          31, 1993 (the "1993 Form 10-K")).

10.07     The Registrant's Key Contributor Bonus Plan for
          1994 (incorporated by reference to Exhibit 10.09 to the 1993
          Form 10-K).
<PAGE> 12

Exhibit
Number         Exhibit Title


10.08     The Registrant's Senior Executive Bonus Plan for
          1995. (incorporated by reference to Exhibit 10.08 to the
          Registrant's Form 10-K for the fiscal year ended December
          31, 1994 (the "1994 Form 10-K")).

10.09     The Registrant's Deferred Compensation Plan for
          1994 (incorporated by reference to Exhibit 10.09 to the 1994
          Form 10-K).

10.10     Amended and Restated Lease, dated June 29, 1989,
          by and between River Oaks Place Associates, a California
          limited partnership, ("ROPA") and the Registrant, for the
          Registrant's executive offices at 555 River Oaks Parkway,
          San Jose, California (incorporated by reference to Exhibit
          10.14 to the Registrant's Form 10-K for the fiscal year
          ended December 31, 1990 (the "1990 Form 10-K")).

10.11     Lease dated June 29, 1989 by and between ROPA and
          the Registrant for the Registrant's offices at 575 River
          Oaks Parkway, San Jose, California (incorporated by
          reference to Exhibit 10.16 to the 1990 Form 10-K).

10.12     Lease dated June 29, 1989 by and between ROPA and
          the Registrant for the Registrant's offices at 535 and 545
          River Oaks Parkway, San Jose, California  (incorporated by
          reference to Exhibit 10.17 to the 1990 Form 10-K).

10.13     Lease dated September  3, 1985 by and among the
          Richard T. Peery and John Arrillaga Separate Property Trusts
          ("P/A Trusts") and Valid Logic Systems Incorporated
          ("Valid") (which merged into the Registrant) for the
          Registrant's offices at 75 West Plumeria Avenue, San Jose,
          California (incorporated by reference to Exhibit 10.16 to
          the Form 10-K for Valid for the fiscal year ended December
          30, 1990 (the "1990 Valid Form 10-K")).

10.14     Amendment Number 1, dated March 2, 1988, to Lease
          Agreement for 75 West Plumeria Avenue, San Jose, California,
          by and among Valid and the P/A Trusts (incorporated by
          reference to Exhibit 10.17 to the 1990 Valid Form 10-K).

10.15     Lease dated December 19, 1988 by and among the P/A
          Trusts and Valid for the Registrant's offices at 2835 North
          First Street, San Jose, California (incorporated by
          reference to Exhibit 10.18 to the 1990 Valid Form 10-K).

10.16     Lease dated September 3, 1985 by and among the P/A
          Trusts and Valid for the Registrant's offices at 2820
          Orchard Parkway, San Jose, California (incorporated by
          reference to Exhibit 10.14 to the 1990 Valid Form 10-K).

10.17     Amendment Number 1, dated March 2, 1988, to Lease
          Agreement for 2820 Orchard Parkway, San Jose, California, by
          and among Valid and the P/A Trusts (incorporated by
          reference to Exhibit 10.15 to the 1990 Valid Form 10-K).

10.18     Form of Executive Compensation Agreement dated May
          1989 between Registrant and Mr. Costello (incorporated by
          reference to Exhibit 10.20 to the Registrant's Form S-4
          registration Statement (No. 33-31673), originally filed on
          October 18, 1989).

10.19     Offer letter to H. Raymond Bingham dated May 12,
          1993 (incorporated by reference to Exhibit 10.24 to the 1993
          Form 10-K).

10.20     Offer letter to M. Robert Leach dated May 17,
          1993 (incorporated by reference to Exhibit 10.25 to the 1993
          Form 10-K).
<PAGE> 13


Exhibit
Number         Exhibit Title

10.21     Letter agreement dated March 9, 1994 by and among
          C.T. Properties, Inc.("General Partner"), Registrant,
          Montague Investors, L.P. ("Montague") and David M. Thede
          ("Thede") whereby Registrant acquired all of Thede's
          ownership interests in the C.T. Montague I, L.P. and C.T.
          Montague II, L.P. limited partnerships and the General
          Partner and all of Montague's interests in C.T. Montague I,
          L.P. (incorporated by reference to the 1993 Form 10-K).

10.22     1993 Non-Statutory Stock Option Plan (incorporated
          by reference to Exhibit 4.05 to the 1994 Form S-8).

10.23     Consulting agreement dated May 1, 1994 with Henry
          E. Johnston, who was made a director on July 5, 1994 by
          unanimous written consent (incorporated by reference to the
          Registrant's Form 10-Q for the quarterly period ended June
          30, 1994 (the "1994 Second Quarter Form 10-Q")).

10.24     Consulting agreement dated October 26, 1993 with
          Alberto Sangiovanni-Vincentelli (incorporated by reference
          to the 1994 Second Quarter Form 10-Q).

10.25     Letter agreement dated August 17, 1994 by and
          among Registrant, Morris Management Company (the "General
          Partner"), and Morris Associates VI, L.P. ("Morris") whereby
          Registrant acquired all of the interests in River Oaks Place 
          Associates, L.P. (incorporated by reference to the
          Registrant's Form 8-K filed November 14, 1994).

10.26     Agreement of Merger and Plan of Reorganization by
          and among Registrant, Simon Software, Inc. and Redwood
          Design Automation, Inc. ("Redwood") dated as of July 8, 1994
          (incorporated by reference to the Registrant's Form 10-Q/A,
          Amendment Number 1 to the 1994 Second Quarter Form 10-Q,
          filed November 14, 1994 (the "1994 Second Quarter 10-Q/A").

10.27     Agreement of Merger dated as of August 1, 1994
          between Redwood and CDS Corporation (incorporated by
          reference to the Registrant's 1994 Second Quarter 10-Q/A).

10.28     Form of Stock Option Agreement for Registrant's
          1993 Non Statutory Stock Option Plan (incorporated by
          reference to the Registrant's Form 10-Q for the third
          quarter ended September 30, 1994).

27.1      Financial data schedule for the period ended April 1,1995.


(b)       No reports on Form 8-K have been filed during the
          quarter ended April 1, 1995.

<PAGE> 14

                         SIGNATURES



Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.



                            CADENCE DESIGN SYSTEMS, INC.
                                (Registrant)


DATE:     May 12, 1995        By: /s/  Joseph B. Costello
                                  JOSEPH B. COSTELLO
                               President and Chief Executive Officer




DATE:     May 12, 1995        By: /s/ H. Raymond Bingham
                                   H. RAYMOND BINGHAM
                               Executive Vice President and Chief 
                                    Financial Officer




<PAGE> 15




</TABLE>
