Item 1.01 Entry into a Material Definitive Agreement.

As previously disclosed, Cadence Design Systems, Inc. ("Cadence") has been responding to subpoenas received from the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce in February 2021 and the U.S. Department of Justice (the "DOJ") in November 2023. In December 2024, Cadence began discussions with BIS and the DOJ regarding their preliminary findings and a potential resolution. In June 2025, Cadence, BIS and the DOJ started making substantial progress toward reaching a resolution. On July 27, 2025, Cadence reached a settlement with each of BIS and the DOJ that resolve these matters.

The settlements relate to export law violations that took place between 2015 and 2021 primarily involving sales initiated by a Cadence subsidiary of products and services valued at $45.3 million in total over that period to a customer in China, as well as the subsequent transfer of technology involved in those sales to a third party in China, without the requisite authorization from BIS.

Cadence is pleased to have reached these settlements and believes they are in the best interests of Cadence, its customers and its stockholders. Cadence has agreed to the terms of the settlement agreements at the parent corporate level to accept responsibility for the past conduct and to address the laws of both the United States and the People's Republic of China. Since the conduct occurred, Cadence has further invested in and significantly enhanced its export compliance programs across its business, including implementing policies and procedures designed to proactively address evolving trade restrictions, and will continue to do so.

As part of the settlements, Cadence has entered into a plea agreement with the DOJ pursuant to which Cadence has agreed to plead guilty to one count of conspiracy to commit export controls violations. The plea agreement has a three-year probationary term and includes obligations to implement additional export compliance programs and policies, including ongoing reporting and certification requirements and risk assessments, as well as obligations to cooperate in any ongoing or future investigations. The plea agreement is subject to court approval.

In addition, Cadence has entered into an administrative settlement agreement with BIS. Obligations under the administrative settlement agreement include two internal annual audits of Cadence's export compliance programs. Compliance with the administrative settlement agreement is a condition to Cadence's continued ability to export products.

Under these agreements, Cadence has also agreed to pay BIS and the DOJ aggregate net penalties and forfeitures of $140.6 million during the fiscal quarter ending September 30, 2025.