CDNS - Earnings call transcript Q3 2017 | Cadence Design Systems, Inc.

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Operator

Good afternoon, my name is Jennifer, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cadence Design Systems Third Quarter 2017 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Alan Lindstrom, Senior Group Director of Investor Relations for Cadence Design Systems. Please go ahead.

Alan Lindstrom

Thank you, Jennifer, and welcome, everyone, to our third quarter 2017 Earnings Conference Call. Lip-Bu President and and are Wall, and today Vice Senior CFO. me Tan, CEO; President John With The webcast December of our website, this call can and be be will archived through XX, cadence.com, XXXX. accessed through website today's prepared call. also on of A copy at remarks conclusion of the be will available our today's

note from and Next, actual that please please results note those will discussion may today's during today's that materially expectations. our contain next, differ -- that forward-looking statements

our could Commission. For we and refer XX-K in results, most quarter information the our in factors a September including company's release the XX-Q XX, Note please press Exchange that our ended XX-Q, XXXX. and cause recent on comments These with filings afternoon, Form and regarding Form today. to difference the the the future filed Cadence's earnings reports Securities forward-looking statements filings, for on issued the include this cautionary that

financial review our comparable financial or results management financial be measures. Generally in review results Earnings of our today. to with of Cadence potential to prepared believes accordance will using certain found the In or can be of in it portion business, non-GAAP financial evaluating measures results encouraged useful measures certain the GAAP Relations website. to Quarterly results, using section and we non-GAAP measures are addition the present with investors GAAP addition GAAP, to financial their Investors in Investor direct non-GAAP reconciliation most Principles, which in can that Accounting also Accepted also

John our commentary, present found can filing ended September Lip-Bu. over our will And in will XX, and Wall October the release Investor which of financial quarter financial remarks, the was copy in available and today, outlook. XX, tables the following Additionally, call Lip-Bu to included related press a of be for be dated today's turn XXXX, the period. also now our website. the I John Then CFO and results will and X-K Relations during Lip-Bu's portion Today, question-and-answer XXXX,

Lip-Bu Tan

thank on and John quarter Cadence everyone, consistent solutions. proliferation operating adoption and custom-analog today. IP provide afternoon, for third signoff, few a broad-based execution more the the such and trends machine results and and will is Cadence, you of us semiconductor minutes. through details joining IoT, a autonomous technologies in digital dynamic excellent Good achieved for emerging driven learning, this that is EDA growth favorable and There edge industry, in benefiting driving. computing by and as

unit as development enablement the starting spanning such automotive learning functional strength ecosystem us solution, X-nanometer a and for closer for of an Interconnect with data mixed-signal hardware/software for machine of analysis, TSMC partner let FinFET FinFET business to as design use codesign, with CCIX, expanded develops search, simulation XG delivery their TDK safety Year Plus using infrastructure awards QX, Applications sensor thermal and of level. QX, designs design is Now Partner customer the our joint FinFET for solution. collaboration from become analytics, chip long-time for as requirements. IP wireless designed Semiconductor, mixed-signal flow. based and of Dialog extended Cadence Cadence joint prime EDA X to our we In with with that We our their and process. of XX-nanometer using the to contains have will design ARM signed agreement X-nanometer both or Cadence Xilinx, Accelerators, the platform. from Compact a design SOCs our they where InvenSense grown design of first our digital Cadence customer, with and and products latest benefit take recognized implementation. on well now system is in full we the enablement, using big build co-verification mixed-signal Coherent to address highlights CCIX. are at collaborating chip Cache TSMC look at test This the TSMC and Hitachi PCB-level chip-level

I increasing move revenue to in and year-over-year Digital will other grew highlights. customers. adoption market-shaping and signoff with QX, driven proliferation products XX% by broadening on Now customers by

including flash node our including process a DSPs, technology, the customers for Innovus QX A PHYs and the In of XX-nanometer comprehensive WiFi Tensilica signoff. Quantenna generation their leadership relationship Tensilica XX% More have Express in that and and price digital as strong leader XX company In terms of more includes We in Tempus designs. In Implementation carrier-class their be a QX, were digital XX for of NAND growing TSMC's Asian for China. for refined IP specific deepened vision under technology foundation the customers which customers IP of achieve chip highlights. solutions. the chips, and platform. market flagship China and designs, controllers. we our global licensed a full PHYs continues is delivered investment Communications, with X new. key adoption a PCI continues X-nanometer PCI results in our for automotive IP our large Four marquee that for FinFET and than deployed is for partner processing, than and now X Tensilica automotive DSPs GenX, revenue to are XX our Mandava. next leader expanded for neural LPDDRX, synergy signoff memory Express Genus Babu our portfolio audio our flow, Synthesis, maker IP, and signal tuned timing DDR networks. Cadence adopted expanded advanced those QX, with for grew in products and digital to including year-over-year

all building in to and QX, parallel on In Marvell adopted system XX extend most advanced which of use logic engineering simulation relationship, XX the strong ZX The ZX year-over-year our up new including customers memory. design XX to have were to in and year momentum simulator, Revenue is FPGA-based investment XX% More of for advanced driving increasing design our in the storage as repeat Palladium verification, now Xcelium, added SX need for QX, than in communication, increased and Palladium projects. mobile, orders. prototyping continue more been X which new continues Protium custom is system solutions, purchases, and this For Xcelium. segments, software its comprehensive QX its growth complexity customers for custom has emulator than gain traction solution. emulation analog with expanded design market. the node

and solutions Our X% with QX, integrity power and year-over-year IC system interconnect growth analysis implementation, PCB for packaging Sigrity analysis. grew in

strategy. this and my have of our solution of to market-shaping excellent has XX% and both been number financial to refined customers, and execution broadening comments. to and Before adoption and to emerging with review let now IP financial solutions broad-based and John, customers. results it proliferation adoption John our benefiting quickly turning me digital rebounded Semiconductors, year signoff grow technology will are and EDA Proliferation our drove outlook. growth provide continues is over a small as results. is growth with to of trends. from summarize adding strong Consistent analog capacity. Cadence the Custom other customers and large our

John Wall

operating products our and guidance strong Thanks, afternoon, quarter, end as by third demand for above or non-GAAP excellent as of the highlighted results operating cash EPS margin at execution high consistent for to good deliver range Lip-Bu, revenue, and Strong the our well and flow. Cadence enabled everyone.

recognized functional will was XX%. revenue share over modestly Non-GAAP I $XXX maintain P&L. The was income XX.X% was through revenue time below share starting verification focus software up were and go X% and per $X.XX, a of revenue and result results cost. with per diligent First, GAAP the was on the Total year-over-year. year-ago as quarter. strongest, continuing non-GAAP to net per million, with IP IP Digital XX% $X.XX, margin key approximately revenue over higher QX was up level. operating custom/analog the XXXX net and the income signoff, a mix

Now QX, and of long-term turning were We flow. outstanding days. shares cash We of million Cadence were quarter-end, and shares $XX balance Operating in we DSOs cash million of QX. sheet to at was expect $XXX the $XX worth in at flow $XXX was continue to million, million quarter-end. repurchased investments repurchasing the XX million debt and in had which $XXX U.S. Cash short-term and

QX Next, XXXX. will present outlook and fiscal I the for

$X.XX we of range in Please of and $X.XXX $X.XX fiscal year to to QX, $X.XX this: range backlog; million from come non-GAAP million to revenue revenue, we of and to billion, Based $XXX of of XX%, to operating $XXX expected cash expect $X.XX. in in $X.XX $X.XX, QX to EPS outlook, revenue range range to of XXXX revenue $X.XX; the expect in approximately operating of the we $XXX the billion $X.XXX our in beginning EPS flow the non-GAAP margin operating for XX% the on and $X.XX of margin million. EPS XX% outlook EPS in increased to million, like flow. For non-GAAP EPS $XXX to look range the now GAAP GAAP with non-GAAP range cash that this of note approximately XX%; fiscal of to

guidance in You additional CFO will items for find the commentary.

known preparations. XXXX. My Cadence our Next, Topic accounting for XXX, revenue for treatment, lot is as previously, fiscal where that I retain an stand we is for expect on have in we discuss ASC the and team our I to to standard, to said want of revenue-over-time time the new which update standard substantially new today required preparations we implement a spent and here

XX%. at of standard adjustment results under one-time adoption expect earnings mix new from slightly our of to remain under standard. expect upon year approximately be old the revenue This will that the We the standard. than In revenue-over-time to our retained lower new we adoption, the a accounting

and adoption, the and we method, the are means will standard the new or modified for old that XXXX. business. would during do cash we transition revenue which report We on the There year under been retrospective old in By using what will economics expect be under of both no of or XXXX, flow difference revenue impact material new expenses have standard. the a the not

and to we to questions. the Cadence take with more we'll to Lip-Bu the working very strong drive a going and my now our closely just looking completed Now to of that, forward operator, remarks, continue raised for the rest numbers And quarter, conclude company with year, forward. I'm success

Operator

Your question from [Operator Krish with first Instructions] of Bank comes America. Sankar

Krish Sankar

would 'XX, XXX. be to around a FY XX%? the year? your housekeeping First Or one, it ratable just John, ASC the going is be on transition still revenue In on

John Wall

to approximately the of Yes, XX% time. revenue we continue over expect to at remain

Krish Sankar

you're the margin, looks like we XXs pretty on run Should new year, QX. trending margins? towards almost be rate expect then or high in And norm XX% well op the like would the XX% or it doing XX% op this of for XX%

John Wall

any not in Everything for we for guidance we're giving point, guidance XXXX. that was our this QX. At know

Krish Sankar

at I big of like memory in for that there's power for long for look the understand then Lip-Bu. EDA logic question you design that like the in look same computing happening designs And EDA power more the whole newer storage of curious, the also the run? a -- a for new like trying And how improve is transforming you're to and processing processing AI, in the but at to for like or mix just industry, been utilized. foundry part happen like industry translate side being does not that I'm general Cadence all Cadence? general, thing and and these, the things dramatically, a does I'm power storage. has from just out how long-term if companies Sir, memory seeing impact applications figure memory

Lip-Bu Tan

and thank become then with the very access, And computing latency as questions. first and memory Yes, critical. you all important because big of and and know, a local Krish, the of And the more it's very question. storage for now, all, is all and critical analytics more edge this right data you the the

edge of and more So memory-centric lot to for more and me, computing. a designs become data center

some So very mentioned think beside us. why that's to memory our the And big important about memory become company an tools. Asian we of I adopting IPs key

mentioned I the storage become more of side lot memory driving, see. that this edge my IoT major I a or because trend put we into and effort the about so In autonomous that and this critical. computing, remarks And

and about. we the for mixed-signal some there, players part addressing and solution also our opportunity And that player. to memory fact, announced the Solution, DDR, these Legato so verification a also role. and some offer our and playing -- Tensilica And to the And you of the the other storage very lot PCIe, we solution, us. become are of is important memory then have -- excited become this And what integrated so is key IP, critical other Memory we to describe memory first design the a it's in beside other

Krish Sankar

of your And total just revenues then what a systems? the percentage is is auto from total Of question. from percentage revenue, what industry? final And your

Lip-Bu Tan

percent for industrial divide cloud exciting. system? down And IoT. of growth. like difficult us, the huge some And -- with revenue that, they silicon, are to we system verticals your growing to and is it. a XX%-plus, So TAM to future the that's have how beside have market that the question the in don't about pursue moving bigger enablement. part application, us. thing is And towards design very I a our for target I a a that we many center are is also because mentioned automotive opportunity are And some system for EDA, we much back then couple other our the to about of and and huge trend, same how companies, whole it's ADAS-related to storage me, and roughly to And as think is our of very the overall very break these opportunity and But this issue, they latency verticals have earlier, us and important data question and the

Krish Sankar

I I is would silicon, business? systems? -- If one it's apologize you would your core this. of And can that of it since considered like last, part EDA squeeze ADAS, be -- this characterize Would like as part applications just for

Lip-Bu Tan

call, in about the And system process. we the ADAS last on that PCIE Gen for providing using fact, company there in ADAS, our mentioned new companies And earnings are X IP our the advanced some are X-nanometer system.

X automotive just very important part semiconductor one we us, companies And that's so using other many top using some of a semiconductor companies they are part our about them then mentioned And in design semiconductor of working and Tier one the engine. example some with company, of automotive. of OEM. automotive to are the Tensilica mixed-signal this IP, And then system is or application, player. Cadence it's And are our the using And our also flow. lidar

For example, we've highlighted last quarter, that. ROHM,

growing verticals pursuing -- how all slowly tracking and of is for So in fully exciting when us of can you all, the these we in strategy. we trend terms some and system opportunity going think this are design successful I changing, because are we're our us, after of in enablement

Operator

RBC question comes Your Capital next from Mitch with Markets. Steves

Mitch Steves

had I two.

one first and ASP kind you're to of how is to the the sell more customers. on going So your

So more to, any you complex? does as things example, as and get or mechanism how the chips Or the more But chips do have pricing that. get to go prices? and for MCM work guys like more the raise complicated, you GPUs modules ability

Lip-Bu Tan

believe ecosystems. product disciplined sector across price the And every lines. X So product clearly, various with then clearly, pricing, I in think driving and and strongly working competitive disciplined the value EDA collaborating in it's from But the -- of all we by a then very are I the market, to sector and our value-driven. years, with very And we partnership customer, to terms with product. closely deep customer, raise and

then So and complex, the why to and because chip tool shine more more more our design a lot complexity. And challenges is drive getting that's because of leadership. technology we really want and

can And XXXX, have and they verify customers because disruptive last, customer we complex simulate, mid-XXXX products. quicker In organically new very XX quicker. are design that to in really chip those developed -- them fact, to up go products new help and to so since now, our it then love

starting now. I think the is investment show to right our result all And so now

shares at big digital, And though even growing then we at and XX%; we're analog, a custom are we grew market at we have IP, XX%. go You growing and XX%. look

in competitive, consumer So the most the the of rewrite investment all some across our advanced we proliferating and engineering all make adopting most nodes, organizations. now the really tools

are that. So with we very pleased

Mitch Steves

And more then geographic-focused. is my second one

maybe good you we any as additional long-term for if or for Is to and 'XX investment? How the of I'm couple there? be positive think So guys there that's growth China we aware for changing of Is beyond? a has a years negative? there's now. but geography trend look guidance either that just about of lever looking change been not at anything do there

Lip-Bu Tan

well next is heavy And we for really of there investment. are are fast-growing terms think, very China China. IPs, committed and to I positioned as tool government positioned of very, you very all, opportunity industry a know, we first very domestic a in very in China the their very go building us, well then and all with a And semiconductor opportunity. is of maybe critical semiconductor all I percent, growth, XX-plus available. and And then a at a the U.S. look is it's And customers. because platform And with at we China growing every to the but work and you China month if there lot leading with single-digit big growth, global become funding

So and region. I and think, an continue it's we to clearly, are committed doing well, we position to space, that and exciting

Operator

line Your comes with next Ahmad Farhan the of from Suisse. question Crédit

Farhan Ahmad

growth? functional My we in on for And revenues the X Can a row. first that question are is why there market? year-on-year and happening about is in dropping what seeing are emulation. you not quarters just verification The talk

Lip-Bu Tan

Incisive, So then quarter, Jasper, -- for continue we but previously bought comfortable this Xcelium. using on we Palladium formal X-X, this we And consists Rocketick, I we capacity. suite have adopting the that excited and for engineering we're the both verification we audio their are verification. of advanced highlight HiSilicon, the and think new are verification And ZX, simulation, the projects. expanding had And side, adopting last Marvell, is with right are we customers tool. and we than total then completely we rewrite highlight quarter. I'll a with now, on then tool the is new that. comfortable And And design more And highlight, have have then just XX Xcelium. the a where, have tool. This we our And we we this about happy business, of XX, emulator, and we most very the

that and a work same like building prototyping marketplace. FPGA-based -- from in ZX, the somehow Palladium to be is the And the -- we so be customer So And the that scaling compiler the best business really we seamlessly is the it's can really prototyping. massive is to can our using other continue but quietly be up Protium the they lumpy can together. part the we're

of with a the So we couple on products. verification are new of focused suite really kind

Just did ago, innovation. we're the digital like what a we of years to in our couple driving continue going

Some you of time, them. love these products, stay it. customer new to with will performance we're from And And continue see excellent going over them. tuned, engaging

John Wall

And Farhan, was remind John is year for verification. you a this just here. functional last year that record I'll

Farhan Ahmad

Is hardware? Or year from driven the predominantly on? by going is something decline there last else

John Wall

good, Yes, results. But our approach hardware, business. a of pipeline we with and converting lumpiness Lip-Bu as to performance for capacity intact. we're may hardware revenue. The earlier there some to looks said The have that happy that the trend quarterly demand secular be pipeline disciplined hardware with remains to in

Lip-Bu Tan

we -- And clearly, doing think that very overall, and that recurring, the I strategy IP, growth. year-to-year, our I and, we is are quarter, working, that this QX XX% results are think is very proud refined have we confident the and software our well, very

the the growth for set We year. goal are we this will for confident XX% we exceed

Farhan Ahmad

IP on question side. the quick X then And

a used advantages significant the for DSP talked You comes and client for when Tensilica to And on it's applications sort seen it suited side. the technology the AI has power of being AI. compute, of very about the

how of kind in And now could potentially kind you opportunity terms what wanted just of I over be term? long to for X do the sizing see you that from large you? have market in years market of So any done understand,

Lip-Bu Tan

strategy after our on go IP. it's low are is IP. So IP the also we the we secondly, most standard making really Tensilica that, vertical and star try and machine market programmability key and then, that tier very off-the-shelf and top IoT very of we then power think overall, and focusing and the scalable, their because are is process quietly Saying focused also suitable more for star for customer And nodes I on refined that and building the to learning of IPs. up edge the one their computing. the advanced

accelerate that, -- So clearly, our be using that tool, and to EDA there's and side the in that. is apply are the tool a lot to that's to machine for the infant of where optimize to focusing, be on experience learning the can internally, inference, our And applied. of to the fact, we're something a draw we to we knowledge closure come quicker

terms the of the to standard a is to good overall, think layer. Tensilica compiler, optimize industry engine, kernel, it be the the application with other DSP engine, can and top I how the it's So of but we're in on players that, in a going work software,

So very product also I really this opportunity, to that And markets. and applying machine think deep level. learning, there's a own in especially to sense, meanwhile, applying shine broad in customer the using to a huge then learning our the clearly, vertical whole performance in different we're very tool

Operator

comes question Vleeschhouwer from with next Griffin Securities. Your Jay

Jay Vleeschhouwer

with customer and start that concentration. if comment me concentration, customer your you in on Let trends is about asking could

top -- XX% typically of You XX% the your customers business. account for to XX about had

likely a percentage couple that the couple your of that of it disclose customers to in developed accounts are that seems of receivable. And mid-single-digit probably years used the business. you've last of You terms in

of And so accounting there business? the percentage that out, is so say? you perhaps customers? any of that may towards spread -- other direction words, a think to, might they think Or somehow Do one's perhaps this semiconductor effects say, a John, concentration? any more buy do And XXX? compared the the the could for and about as implications there customers systems connection larger connection mix more you customer you talk mitigate XXX is rev that customer predisposition gravitate being are see to for business and about there to is of anything In of let's between rec hardware you'll

Lip-Bu Tan

on John portion then XXX address customer impact. the first will the address concentration, So the I and will

I'm very more have concentration, let customer pleased of the X% customer to everyone we know, than no our revenue. on So

And base, no customer there's a than broad so we single have X%. customer and more so very of

hyperscale we're And semiconductor, now excited the moving a customer, right of pursuing the and are I and services we area. names, can clearly, real now when then part, then so think even really market-shaping the now service distributing customer-shaking lot And systems up marquee web that lot about with from base providers, the -- broaden other moving overall, to broad and a customer customers. then we and of

So what good our all think with I in position. grow we to customer all, we we We are very continue our in a as and business. have, like we grow

very it's very analog and so And mixed-signal, forget, PCB in in also the the side, customer then a a the diversified thousands. don't also And we is semiconductor. have strong

And we customer stable have. are broad that have very base so very and a we

So customer. PCB, on Tier mixed-signal strong of we pursuing a nodes, and the the analog, And us most very traction then then lot and most the getting a we're X base. give are digital, complex process advanced

widening So I adopting the customer broadening products. our overall, think is of our base

John, think we can and very you the then, are I So that. XXX what have, continue to we'll on impact? share And we pleased build maybe with

John Wall

software it's And Yes, because normally of misleading gave would the you the our to and revenue XX% our looking it it time. there AOR are customers systems Jay, our looking which licenses of technologies not view on expect at is I Lip-Bu -- said, in XXX, our -- based will if concentration XX how X% a semi our you're customer versus going customer. semi that industry of at XX top revenue, forward. And in change said, revenue. software to really licenses at of customers and versus differ Cadence that semi, systems top approximately to that as a to customer That's remain used just our because over we'll of an systems to you customer most to to are our Like a arrangements required good. But that customers, the for comparing and customer give customers, our DSOs wouldn't DSOs we're AORs, thanks, of Cadence, to you like Lip-Bu. over contain -- rapidly, top mix I take time, whether going expect our But make commentary that add we or all X%, applies up XX%. Lip-Bu change our about base.

Jay Vleeschhouwer

Just out in of how up play what to were for your the thoughts terms finish emulation you us XXXX. would Remind for on thought emulation. year

your of that year-over-year. Your revenues year, there if well. Palladium XX-Q we quarter A were for of otherwise shows ex maybe last an that adjustment of of the inventory list revenue your down build as Protium, third increase hardware cost cost some for But the hardware. be for in in organic out would is the for

you that would mentioned elsewhere in it be pipeline back would So perhaps in the you you might business? have But it like, upside growth, disciplined your approach. some year-over-year say fair had looks because And to that emulation. emulation you held deliberately on

we back you to the between the that I perhaps and you revenues held hardware didn't into QX. kind think suggest per read there quarter John, se to that need make lines really could of

John Wall

hardware we like to -- always a on pricing approach would said, to I say mean have that our value-driven disciplined and that business. what is Jay, we I

record The first for the approach like although us like may just be remind say lumpiness happy Our revenue. a the to intact. That into much year I'd the that, were than trend I I'll they business. we're you to performance convert margins for remains time read I to The pipeline quarterly in half, say, helping against QX pipeline I results from some that so like were capacity of time, business. And too in hardware is good. comparing lower of demand our we're looks goods secular that happy in better It's said, we're last with there year. wouldn't cost with the sold. disciplined

Operator

Mobley with from is Gary Benchmark. next Your question

Gary Mobley

report with the of and want tiny question year-end for promotion, consecutive like now a the isn't value on to typically long-term. decreased the dollar either Congrats quarters John. both short about start and as what X deferred looks revenue, percentage have metrics you backlog. I It those

that's generally So share trends. I'm most with payments has product overall group And indicator upfront generally of which if you revenue. backlog or if us specifically, then deferred could the hence, and, wondering an carries

John Wall

just generally. too I Cadence, customers. flows the reflection it, transferred economic timing into with in billings. of wouldn't cash quarter X to value and -- the But we any read -- our so But at generally, match of revenue -- much try deferred is revenue timing from to with a

Gary Mobley

way. merchant couple ask which growth the got a since And the growth from and tired to XX% probably we've I'll seen of growth got in consolidation even of answering XXXX. which different memory I different that crosscurrents is in customer chip about Lip-Bu, XX%, chip the industry, but now you're whatnot, best contribution We've know affects question question slightly industry, else, We've a everything your the going customers. in to the in up

a a the we and in maybe seeing to addressable continuing hand, other you're the On crosscurrents have opportunities slower you pace. there? consolidation of trends software context lot those about licensable seats Could your in the measured just chip think industry market of

Lip-Bu Tan

consolidation. Clearly, we're customer of mindful this

we then and design and are business. doing through mentioned they now X% more well, So with all in with computing in edge adding for the clearly, we and I broad. the the customer the very revenue center, on system the are and consolidation, material customer, to some of and revenue, customers, And far, X%, so these the the managing business, new think consolidation right now. expanding And I actually, in complexity of previous it's impact growing are continue we question, in and IoT, it nothing data we're as is successfully acquisitions. than also increasing. new all this our have managed and XXXX. automotive of no We And grow And very we minimal

wood, so love along -- we growing we we are way, far, I So the customer do think knock continue well, to also. us. And on have meanwhile, we growing and great with to

percentage So or a is on depending X X customers. not in way, the

have. so we And healthy more way, a it's in portfolio a

Operator

KeyBanc. your final comes question And with Garg from Monika

Monika Garg

or the emulation Sorry, to your is first one weak. that last I absolutely you talked Q-on-Q. in and lower kind about emulation. call, your half. But expectation was in had on your also year actually peak expect second on Last the QX half, -- emulation -- Then you of have

you add So there? color maybe could some

John Wall

is this John. Monika,

we've the outlook hardware advanced business with many in times the a half. And did to also our We and the to know, including our nature. at capacity. times, challenging. visibility business On lumpy We're in ZX most as And currently is the increased how can we've for market. for is being strong, overall stronger expected And their business expanded large we the call, earnings happy with in in inherently that and software reiterate, QX, the we've remains ZX be QX some Marvell, said And hardware second believe IP that said particularly little emulator QX, be great positioned. the hardware customers, year. you

Monika Garg

in in have Mentor seen the not close months you industry? really and since semiconductor market Siemens X It's especially, acquisition, competitive any of the in change dynamics is given

Lip-Bu Tan

first of thank the you So all, questions. Monika, for

$XXX their over is for company great in all, respect So their a team. revenue Siemens and first is lot billion, of a management and them of very

Mentor remains so to be the competitive under Siemens leadership. And

respect, their lot -- of very But we're to of closely terms line see monitoring in far, respect, looking have. have product about. they lot we continue emulation hardware a so We and we a forward to what and that of the heard

Monika Garg

last Lip-Bu, one Then here.

silicon trends in intelligence. artificial trends Cadence? a you machine industry, We driving, in industrial and, autos, impact general have these autonomous specifically, impact learning, seen content how more Maybe about how the big could in lot talk could EDA of industry it IoT,

Lip-Bu Tan

mentioned our I in excited about remarks. fact, trends, In what few. And these are just very all that's technology highlight a emerging we

the them There's learning, learning in provide down of these these deep exploring for the I it. also almost architecture deep their a just of to seeing we them suite that some we IPs, success. startups of doubled compiler, of beginning terms think day. in new machine see think some the and of are to they learning, every learning, linear of companies machine whole the are new The silicon, startups, are development. other we of the new And some big them support tool, and I excited scaling --

and range, the sensor camera and driving So Same lidar, of scale companies on right driving. refraction the some terms to really the lot thing now, with the really by level the forward And the small drive beyond, also and level X. day XXX-meter that looking companies, have A it of I big improvement. the my car are the itself. in to I'm the so lidar X, and move would to don't that. addressing of from towards autonomous drive

are that, then that. sure do also learning, well we startups of whole machine beyond thing this then tool of lot and they they think of cloud, intelligent. And IP doing very that, are also are And and doing to companies our development those now exciting, learning, and to that IoT use that. they low doing them well a the other really positioned some driving use meter also that this are companies power There's there's flow apply and great. of are to And The make Cadence the for this cloud. I have deep are into in then and have a So pursuing computing big gateway, this delighted and are of the they some edge lot very and win our more to we that. and terms positioned

why IP, growth system I well in That and have exciting. with we design that all and building market, so And all, excited have refining. in very been we years, the that. really ties right the tools enablement are see of, our kind that those we're the about capture we and really And our you now, strategy in can that's over think

Monika Garg

quantitatively is a think it any in grow points, way there XXX to manner? basis quantitative to like adds Lip-Bu, basis size how points, XXX it

Lip-Bu Tan

And at too also, I on think haven't looking early. bit we spent little that. a time

our engaging get opportunities of far, customer really tool look sure are haven't their will also, We busy we And for definitely and are we that we with really plenty time, when it. to have into But optimized make exciting. design. they the think so But on the so quantified I it.

them. We with work busy extremely are to

Operator

Thank remarks. at call closing back this any no you we I to the over And time. Tan Lip-Bu questions. further have And would for like to turn

Lip-Bu Tan

all proliferating for closing, broader our I thank you design a my further well In and customers. we our are solution on execution, strategy enablement to our with of success of base the to build positioned through innovation all would executive their customer and team afternoon. shareholders, partners, Board and like continued for and support. dear this of Thank to us joining hard-working employees Directors, system

Operator

Cadence Third Thank This concludes Earnings participating today's Systems you for today's Quarter Design Conference Call. call. XXXX in

You may now disconnect.

Cadence Design Systems (CDNS) 27 Oct 172017 Q3 Earnings call transcript