As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the design software industry, including Cadence Design Systems (NASDAQ: CDNS) and its peers.

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 6 design software stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 7.7% since the latest earnings results.

Best Q1: 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 $1.47 billion, up 18.7% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.

“Cadence had a strong start to 2026, delivering a solid Q1 with accelerating AI demand and record backlog, reflecting strong customer commitment to our AI-driven portfolio,” said Anirudh Devgan, president and chief executive officer.

Cadence Design Systems delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 6% since reporting and currently trades at $356.78.

Is now the time to buy Cadence Design Systems? Access our full analysis of the earnings results here, it’s free.

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 $6.40 billion, up 12% year on year, outperforming analysts’ expectations by 1.9%. The business had a strong quarter with a solid beat of analysts’ billings estimates and EPS guidance for next quarter beating analysts’ expectations.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 12.6% since reporting. It currently trades at $235.80.

Is now the time to buy Adobe? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Dolby Laboratories (NYSE: DLB)

Known for its iconic "D" logo that appears before countless movies and TV shows, Dolby Laboratories (NYSE: DLB) designs and licenses audio and video technologies that enhance entertainment experiences in movies, TV shows, music, and other media.

Dolby Laboratories reported revenues of $395.6 million, up 7.1% year on year, exceeding analysts’ expectations by 2.8%. Still, it was a slower quarter as it posted revenue and EPS guidance for next quarter missing analysts’ expectations.

Dolby Laboratories delivered the highest full-year guidance raise but had the slowest revenue growth in the group. As expected, the stock is down 15.4% since the results and currently trades at $54.29.

Read our full analysis of Dolby Laboratories’s results here.

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 $359.3 million, up 15.7% year on year. This print topped analysts’ expectations by 1.9%. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.

The stock is down 26.6% since reporting and currently trades at $45.60.

Read our full, actionable report on Procore Technologies here, it’s free.

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 $508.2 million, up 16.8% year on year. This result surpassed analysts’ expectations by 0.9%. It was a strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ billings estimates.

Unity had the weakest performance against analyst estimates among its peers. The stock is down 1.3% since reporting and currently trades at $26.94.

Read our full, actionable report on Unity here, it’s free.

Market Update

Late in 2025 into early 2026, there was hand wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?

These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.

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