CDNS - Earnings call transcript Q2 2019 | Cadence Design Systems, Inc.

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Operator

Good afternoon. My name is Erica and I will be your conference operator today. At this time, I would like to welcome everyone to the Cadence Second Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator

turn of over Please Investor now Senior go Alan Group Director Relations the will to call Lindstrom, ahead. I for Cadence.

Alan Lindstrom

also everyone Vice XXXX Erica, our Lip-Bu am Tan, you, and John would CFO. by September today’s our to Thank is Wall, The and cadence.com Senior and of of will I through available joined prepared archived of today copy through conclusion website, second made and conference our earnings welcome XX, call on quarter A this CEO; be XXXX. the call. President available website be remarks will I like at call. today’s to webcast

forward-looking note and materially results that the actual expectations. differ will Please that contain statements may those discussion from

could our refer cause results, please with filings that in Exchange factors our difference the Commission. to a Securities on the and information For

recent press XX-K Company's regarding These on earnings the future include we and Form the forward-looking the filings reports Cadence's cautionary comments issued today. release XX-Q, in including most Form that statements and

In in can in to or non-GAAP addition using measures results in results Generally to Cadence present business, also our measures. management financial with prepared useful non-GAAP today. certain addition accordance results we will Principles believes GAAP, GAAP Accounting also that certain Accepted be evaluating it financial to review financial using

at most investors Relations Investors Investor their financial non-GAAP comparable direct of are the with and cadence.com. are measures GAAP available potential The encouraged to reconciliation review section financial the results. of reconciliations

all the dated XX, are available related July – June XX of Commentary July XXXX, our XXXX website. ended quarter and tables excuse today's XX, on Copies press for release the financial me CFO

to I turn Now Lip-Bu. the over will call

Lip-Bu Tan

second more shortly. across we outlook Thank for joining delivering product will strong business, provide operating year. strength line. everyone. for revenue on broad-based achieved growth are details the Cadence us our of raising afternoon, strength our the today. of for John year-over-year XX% XXXX, Based the results on you quarter Good our

there confident drive and XG, driven economic long-term uncertainty, geopolitical remain by continue a While design as new building trend, and by to design strength Intelligence of – automotive, is is Artificial startups workload-specific activity digital strong driven and multiple we the that silicon, about activity industries companies ongoing other such custom computing, by global aerospace, trends autonomous AI, system at silicon such industrial or transformation being and driving medical applications. IoT, as fueled

to to over Our Design Intelligent will addressable our while System the more billion enable expanding current to market also estimate five value $XX capabilities next years. us billion $XX strategy about provide our total and customers, from

strategy EDA The is is comprised foundation of the of design business. IP core excellence, which and our

addition, core we in building expand into computational new are competency our two upon areas. to software In

is Clarity, XD system domains Solver last numerous interest into was new evaluations with underway. innovation launched Clarity quarter. we new that where products our one first system are The like received with expanding has EM customer considerable

And Intelligence specific we algorithmic our second our to and and new beginning area Pervasive business core apply AI to verticals. where are knowledge is

business. highlights our Now let for us our to core quarterly turn

new products new significant the by customers revenue customers with Our and Signoff Digital innovation in in nodes. both market-shaping and proliferation by through four at as year-over-year we We deliver engine advanced quarter. to ongoing introduced adoption continued grew double-digit

next-generation, in Digital leader a R&D high CPU Samsung for Solution mobile has high-end Austin Center, a Cadence design. design selected Implementation performance core

enables the meet for to R&D that best design Austin its delivered objectives. of flow Samsung Innovus-based quality advanced node process Center state-of-art Cadence results

including seven of full the five switch ten scalable digital has Implementation active Innovium, and customers Innovus, TERALYNX half Innovus XX flow for nanometer. first of a Ethernet below at its XXXX. nanometer innovative tapeouts highly more Solution for solutions using over our provider switching in and than XX were nanometer There below designs datacenter at design. And adopted Digital leader seven our

to revenue which of grew I X% year-over-year. Next design want for our system solutions verification highlights and discuss

our also an system SOC part hardware, verification across integrated are comprehensive verification suite validation an IP Protium software had SX, we provide Our regressions, another verification, which the solutions and software good products, and developments. hardware-assisted of earlier addition quarter of with

ZX, their Chip. added new development for industry’s repeat Labs, Palladium Palladium customers nine startup and integrate that leading and orders. and first platform, Ethernet Gaudi, had natively our Habana processor was flagship emulation the training GOYA instrumental a that Inferencing processor RDMA AI AI for the six say of

a microprocessor reliability of and computing is scales. combination Fungible, of systems revolutionize Palladium datacenter economics data-centric in The type DPU and use the SX products. will a of of at that Protium the ZX family a new DPU of performance, development the all

which the Protium and system platform billion-gate based prototyping is SX, prototyping introduced accelerating for first FPGA optimized earlier megahertz enterprise and speed development the hardware convergence. provides datacenter designs multi software software We

SX XX also of has NVidia. seven market-shaping and received new Protium very adoption SX been Protium and reception repeat three added Customer earlier customers including orders. from positive customers with some

XX enable also JasperGold We Formal the of runs that technology. out smart an XX Platform proof box the delivers regression of by average faster and proofs new leveraging Verification faster smart delivered machine learning

been boost a its Analog to productivity Custom verification significantly able with grew JasperGold. strong XX% has year-over-year. STMicro Smart

Spectre Xx massively to product, Simulator, In Spectre an while we XXx larger the to customer analog, expect the up performance endorsed design by provide Renasas, in designs accuracy, Mellanox, signal quarter, Silicon from solving and circuit applications. Works. RF gains simulator maintaining which next-generation MediaTek, mix introduced XX and parallel while years X new important of is Spectre X leadership was and golden industry

the Now let few geopolitical me on a make situation. comments

and Export with continue The Commerce to will it. the situation of fluid continue and monitoring we We to closely is Regulations. will Control United comply States Department have

an continued While innovation there uncertainty, and to strategy, ongoing our execution. thanks operational is

growth the activity. We are opportunities to trends well capture positioned strong driving design longer-term from arise

emphasize not do have we details a to we about broad global want I customer, specific and do base. While diversified provide customer very any that

our to results the John provide over the call to financial I would review and that, With outlook. now turn updated

John Wall

results were imposed am QX during today. our outlook took our I place the and a and fiscal The on updated good remain that limitations little Thanks to for that with in due respect QX May pleased the for XXXX. effect quarter. unusual export customers export to certain XX afternoon limitations in June XX was QX Lip-Bu, and everyone.

aware is fluid We situation. a very that this are

So effect purpose year. of second guidance of for we current XXXX, the have providing the the for limitations these the in that remainder assumed half remain of export for

the walk the $X.XX. EPS P&L. XX.X%. you results beginning GAAP Now was million. through revenue and EPS let operating Total for margin non-GAAP me Non-GAAP $X.XX, QX $XXX was was with key was

sheet totaled And $XXX value the cash million debt $XXX flow, of to turning Operating cash the DSOs the outstanding $XX principal and we while of Next, for balance the QX, $XXX repurchased flow Cadence were of million. days. during million at was was shares. XX million. QX end quarter, cash

Now, I updated will provide our guidance.

$XXX of range $.XXX For QX, $XXX operating in the EPS non-GAAP EPS range Revenue $.XXX. to XX%; following million; we and non-GAAP of margin the of to in $X.XX; of in expect GAAP the range approximately the results: $X.XX to

expect of for non-GAAP XX%; the operating range the updated million to the in range flow Our margin $XXX free fiscal range range now in is EPS to $X.XX; approximately EPS to follows: to for the XXXX non-GAAP repurchase the and guidance cash $X.XX to cash of range in of of the $XXX use flow in as million; to Revenue billion; stock. $X.XX; continue Cadence of to billion of $X.XX XX% year, XX% operating $X.XXX $X.XXX GAAP in to we

guidance Commentary our available find website. as will analysis on You in for additional as well further items, the CFO

this so year. execution In far pleased with summary, our I’m

fluid We environment. living I are proud in we times to how uncertain of adapting and a am are

outlook throughout strength achieving diversification of key the solutions Our company on and speaks of our for financial of our improved employees metrics. to and customer base, our the the demand our technology continued focus the underlying

to updating throughout employees. look like would our I partners the second of XXXX. customers, of progress course and you half to on thank forward We our our

that, now operator, questions. take we’ll with And

Operator

[Operator first comes Your Tom D.A. Instructions] from Davidson. Diffely with question

Tom Diffely

good if the different of from relative the of could China wondering give quantification earnings more the of would can or a size you in right you Yes, be now, that any Maybe I afternoon. way of there anything do of impacts kind are? is controls exports the great. impact was

John Wall

in to happen limitations. on with what clarity not or Tom, export current relation expectations to we may guidance regard without half may second speculating wanted and to So, provide

don’t we have on that to provide what very a details we do we that emphasize global diversified While want speculation customer and might broad be, base.

Tom Diffely

Okay.

be So a upside case give is there in it guidance? potential what your size the it to does a to to way could sense back come of us

John Wall

hard to say. to It’s We want very speculate. don’t

Tom Diffely

Okay. there? is the margins the on, about about Is more it the versus moving could lower. on maybe talk guided And quarter then margins just mix or you XX% going in

John Wall

with happy was Yes, more certainly, in Functional mix the in revenue. were there Verification. – profitable performance QX We was

of growth those continue considering XXXX We and even modest export impact limitations. to for expect the

export margins We QX the expect of like limitations. gross to course unusual a was little

We’d expect to the the for second return to more margins typical gross half levels.

are investing to our in opportunities. with TAM business market-shaping investing and customers in We expand opportunities expansion

forecasted So that's is XX%. why half is, for at the approximately margin second the op

Tom Diffely

structure And growth a look or System Okay. then for meaningfully point when in several over Traditional next the either Intelligent model cost the EDA? that view years, you finally, margin the at change Design of versus does

John Wall

– any things like know XXXX. focus our be are beyond again a I model one longer we against expect current We think not would for out to midpoint in guiding take we compare current included I a over consistent. results tend our guidance I of view quarter, and everything XXXX, Well, on guidance pretty to XXXX, is term the against with

Tom Diffely

Okay. Thank you.

Operator

from John question next comes with Your Credit Suisse. Pitzer

John Pitzer

just the what gross heard looks from June of the I thought year fact gross the with had taking I saying the to export but still issues. are Yes, you unusual make half for last related that excluding quarter? tariffs, about the question. tariff the return business want despite are to the a you in good John, like understand that normal it the I sure margin back back Thanks say afternoon you follow-up some the guys. I to then do to on to it was question, margin. the

John Wall

took more the Services, had results, more unusual again profitable limitations Well, expected. QX XX bit June and hardware certain on in was today. you in export results I profitable like those was things then, customers in terms than in a a May XX few little of we and a place hardware to we on remain effect respect expected. mean, And little say than we revenue were that

– half the QX. that of return that that expect gross the for And just non-GAAP it generally of kind to was margin to was profitable typical a levels in it extrapolate more guidance wouldn’t second great But future we wouldn’t any I quarter year. like into

John Pitzer

just to kind or going follow-up longer maybe try term might that that to a generate provided. Lip-Bu. is China a you. barriers China business That’s Clearly, U.S. on there be it very have of curious, of high EDA difficult for Any should for what own for concern that be am the of so kind are long-term to as helpful customer any trade, and do continue is of them that for China just kind sort given helpful. entry to would I strategic tension, would to heightened to sources their and you be domestic there we

Lip-Bu Tan

Sure.

to So we clearly to broader I and are for tool we the the companies clearly point include China. China-based not in have a EDA to solutions. customer focus best partner going number hypothesis, clear offering but of be our think, speculate And field

John Pitzer

Thank you.

Operator

Fargo with Securities. Your from next question Wells comes Mobley Gary

Gary Mobley

you guys. for my me alright? Hey Can question. Thanks taking hear

John Wall

Yes.

Lip-Bu Tan

Yes.

Gary Mobley

to All – ask respect know anything or going John, you question margins XXXX to or fiscal at are want the budget your looking the meeting, margin? guiding say use revenue I enter right. you revenue revenue to year XXXX. outlook. in growth going of Good. not with the rule your whatever to of in you relating growth of is, anything still at terms a operating growth you as But principle all to about I XX that are the of some

John Wall

groups. we are guiding have But Certainly, with across we Gary. we not we’ve guiding and that, to the at beyond. being I we're different we expect XXXX and report apply business is for something consistently model you looked mean, Yes, the

Gary Mobley

fruition customer. with Is when Understood. would the that in you able at to to the recognized presume product And Understood. expect assume case full from to fair the the any point? if your this you And are with to this relationship that bring be market-shaping you revenue? that's investment you respect revenue I it recognize customer, still mode to haven’t and

Lip-Bu Tan

the I marquee a industry. assume Yes, so you to important that the customers. we think think, a mentioned few refer U.S. I Gary, quite market-shaping leader quite That’s I few And in semiconductor one, the company.

win. Clearly, this a breakthrough a wide-ranging with have we and breakthrough we semiconductor wide-ranging and based while win have U.S. company

are while our heavily product across engaging the line, breadth very We them early stage with of partnership of the engagement. in the

But on we to we So about are focused. stay continue it. excited close and

Gary Mobley

Thank questions. you Okay. taking the for

Lip-Bu Tan

Sure.

Operator

Your Vleeschhouwer Securities. Griffin next Jay comes from with question

Jay Vleeschhouwer

in me Thanks. a recently becoming they including always Good they acquisition verification, it’s competitive areas is doing were you they’ve XXXX it since well with also and evening. Lip-Bu, most question the recently That two-and-a-half well years ask market in let for reported hardware. last ago, the leader which beyond apparent Mentor. TSP regarding been news what that the and looks in particularly quite

were adjustments, Mentor follow-ups. to And have The you is encountered have question the fact much than couple you so they make then say, had competitive in that of doing is, And that fact before? pre-acquisition? let’s to better

Lip-Bu Tan

respect Siemens and we big billion very tremendously all, $XXX a Mentor of part first is Jay, right of now company. Yes,

don’t lightly competing products a and we there respect are lot us. we are take meanwhile that then and and them clearly, them with So some

you hardware think emulation side and the I course caliber earlier products. verification mentioned their of

respect we them treat I are that So, usual. business clearly, effectively to them, we think we and competing them but with so as continue

Jay Vleeschhouwer

AEs well REX, and back that grown on And significant your specific for to bring to the had about talk headcount could how QX believe We’ve a pretty open to this engineers. also right. I to substantially you talked this in domestically. you’ve going been last year-to-date applications able All product, year increase your about particularly you’ve you’ve

the items Mentor good - number looking now for. And of beyond we were looking AEs well for are

you for price talked so terms about I able lastly doing years quality, can you’ve about in to and number how kinds talk about you John, optimization been those last So, some, but of people onboard bringing are deal And imagine of forth. of you’ve then, on.

in cohort base the contracts at the of of much of or how about done can is terms contracts contracts, how or be When of you you contracts of done far outstanding you terms cohort your the think optimizing in you’ve to aging do terms think customer optimize? of so to left base in renewal

Lip-Bu Tan

second first Jay, and the let so, John Yes, answer answer will then question. question me the

pretty AE So – is how going much pretty headcount, are we board on of much plan of on the are also and we that the to in terms the on terms bring the in and talent to in drive trying engineering and the really I executive talent success. on and talent team we bring our with continue and our focus to John thoughtfully to customer we very bring in

are now have clearly, we lot market-shaping and a have success. to we And focused so, support we of that on multiple that’s very something to are need customers customer that. And AEs we proliferating the

support increase, to In the of just also resources our not AE customer. internationally clearly terms domestically,

proliferation green say, continue us, add much the with So and I the from support light and all terms AE of pretty on see of I customer think talent to all, we terms commitment, plan we it. that think and we the in to as always it’s engineering in when drive in we only then

John Wall

in believe pricing, we disciplined questions value-driven collaborate differentiated products are deliver deal Jay, and and value optimizing and best DPU derive clearly innovative and solutions. way and very I about the to is customers our to your for mean, and we Yes, to quality respect

opportunities, I expansion Lip-Bu retaining talents. intelligence business end, about in as attracting, all expand mean, and customers our design we investing opportunities market-shaping top system and highlighted, the TAM innovation are investing in the our And which from with we it’s incentivizing are to means strategy. result in

Jay Vleeschhouwer

you. Thank

Operator

JP Sterling Morgan. from comes Auty question next with Your

Sterling Auty

understand in back the but to in, Yes. to what got and control, how start you way by is just a us from want we give speculate backwards circling quantification quantification. want look to come on guys. customers don’t some Thanks. off might contribution to there Hi I I export the the past? much back of these

John Wall

Sterling, guess, mean.. I I

Lip-Bu Tan

So let think, John. me first, start I

John Wall

go ahead. Yes,

Lip-Bu Tan

of subject relationship related the all I products entity we that are all, which of we with list the that and First customer regulation complying limitations. on and support to some clearly the of Sterling, our some the limit to portfolio think, determine product and the – maybe read any clearly

maintenance think to we I what support something best But the with we really that best this do and customer we provide very So the focus and the regulation. can wanted comply we want meanwhile, the and important can. are on we to is is

John Wall

no Yes, change. guidance allocated we that change that or That’s global we and positive are base. may on diversified not going and if to to the may negative change, customers But highlight for have speculate to we to existing assumes current fiscal emphasize regulations when our regulations customer ability either want the XXXX very would export and those either under broad limitations. our service

Sterling Auty

then half margins or out the the we’ve that mean year, usually think profitable timing be quarter software would and margin about like enterprise the guidance is that’s since on the third half other but counterintuitive gross of the anything most dictate you and some than kind the half of you operating stand operating being thought about And in for the of kind why should would the rolls-off down Okay. margins, of there front usually kind when second beginning we is even the half. for I talked cycle you in startup the the about back more margin investments back when guys –

is why down next that just the margin else at So, we describe than margins look anything sequentially? operating gross quarter. will looking can margins, be the Other guide there to for

John Wall

side, TAM we expansion most point kind that’s the you reversion with and and op on are course, margins. opportunities a margin for investing of expectation yes. opportunities. in And to in market-shaping like say, to our gross of me customers Of Sterling, I’d of the like out But

effective employees at in the Cadence. here annual pay also We increases July have are for

of what’s the half kicks in So, second an the expectation to second year. And for the taken that half. XX% us of that’s for

Sterling Auty

perfect. you. It’s Thank

Operator

next Company. Needham question Rich Your with comes Valera from &

Rich Valera

in prepared has remains change any Lip-Bu, attrition? buying tension tension already last would any remarks obviously increased demand quarter you or to perhaps Have patterns geopolitical most your which seen this that Thank your so. due referenced the customer in customer very unexpected you. business agree notwithstanding fact And probably you any over your I think the healthy. increased

Lip-Bu Tan

clearly, so impact. have process and serving Yes, customer, right we But far impacts. based are clearly, we'll And see so we now any long, don’t broad very see then and John in that. But now, then a far, as clearly we for don’t see happy we some those customers. mentioned,

Rich Valera

then, sort trend this think than we business custom analog anomalous? we growth should strong Got think of there somewhat Or quarter, rate to that anything has growing do it. I And particularly this think might so justify Is that as you was and was of be XX% point a was this provided. you of faster that can I at above rate the why historically? it think sort

Lip-Bu Tan

Yes, are really meanwhile, mentioned very with with the have and is we big XG earlier our tools it applications calling the and reflects and of clearly, that And delighted we driving delivering the – growth they on of autonomous products lot then then base I and the that us design. are we some the IoT have we signal. And that mixed the the and to that leading all have. XX% customer in a

have digital analog the in strength that of then signal And our grow now portfolio RF that strong and that we a it and in mix very make compelling combination so, very a area. really the strong to is

John Wall

but nature the then quarter, the And QX you look – not we’d to on I I a one of any the at And period. export focus quarter, over are given kind wouldn’t one always, unusual certainly if limitations on picking extrapolate the impact you encourage during of there wouldn’t to results is have of focus you quarter. longer imposed

Rich Valera

Got then, follow-up it. QX margins. just And a on gross the

provide if margins like than hardware or that understand restrictions just there the and would the sounds color on it that why any why just the you is suggesting you could export would trying gross to helped and that limitations your up confused, help less bumped be? to margins? little a ship Just mix you export actually Did gross are expected you

John Wall

more a say, Essentially, little Certainly, it’s in quarter the not it’s unusual we anticipated. profitable was hardware was bit respect. originally just during restrictions. more quarter. limitations itself revenue imposed Like QX export combination a of is But unusual And anticipated. little the little than given was then than quarter. bit the that a in Services we a the originally just you in events bit export profitable

I you focus but am look I but one what at – on any QX, focus really. wouldn’t saying focus quarter, the it’s year I on on That’s extrapolating wouldn’t

Rich Valera

Got it.

Thank Okay. you.

Operator

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

Mitchell Steves

taking Thanks Hey for my question. guys.

don't say at So, your XX%, you your are revenue really And China you couldn't up if growth, remarks, guys then sequentially. look ship. I that in XX% prepared you

when say not anomaly is the revenue the that a that quarter negative was a So impact actually in it actual you QX, or in there did volume?

John Wall

that in So, was China is from And up of that’s up, Yes, like the course, into the XX% the comparison are in hardware a of But was of IP for QX. assumes read in is anyway. XX% the any export nature second year wouldn’t QX. in up, it we But, and bit – forecast effect our course to remain in China down the in that QX yes. place was I of of limitations rest nature our the yes, quarter. lumpy it one say, XX% year. half yes in for But revenue of today

Mitchell Steves

to that. clarify just It’s yes. Sure,

a you for that of realize was negative environment as I So it results? today, are a assuming neutral but QX

John Wall

results been our no higher if there would have were think limitations. I Yes,

Mitchell Steves

you. Okay. Perfect. Thank

Operator

Capital. is from Munda Gal with Your next Berenberg question

Gal Munda

Hey guys. for Thanks my taking question.

to that follow-up Just argument. on China

X%, it the ago, for XX% trending kind was up X% it’s a today XX% was our except of which QX between revenue versus heavy. probably So and to of year hardware

customer you that about of the are a semi it the just up it trying players demand seeing ignore is are kind the particular or ramp for it space? smaller talk if players we are overall that Can a driving restrictions to more basically growth? Where trade their big there you for lot Is the now? a bit of

John Wall

the quarters has Like below QX XX% say, mean, to am of Sure. revenue five high inclined over XX% ranged China attribute to you mix not QX, in I XXXX. our past motivation. Well, X% I in

the customers on been quarters, Our certain now BIS has services list are to over strong limited. and for that several China past the ability deliver business our entity to is but products

So expect first lower second of to percentage for we’d the the of half China XXXX the revenue in fiscal than half. be

Gal Munda

Okay. sense. just without And then, had the as this margin I follow-up, margin about, about a gross bump for if thinking That mix helping just think we've makes Thank outlook you. future, a but recently particular number, the and in in helping.

margin going would thinking to forward, business are you the the do expect based as you or continued on start well, margin But about? to you the mostly improvement think contributing operating the gross it’s operating leverage,

John Wall

expect more we were invest and as investing typical Yes, is to operating half be then TAM in because in expect of gross opportunities to annual in new with I the return in because the increases the non-GAAP and XX% we expand levels the customers are also to would July. second to employees opportunities for margin expansion business margins we the we market-shaping employees reason effective And our pay have year.

the op second in gross and more – That’s to QX the levels margins. impacting of half margin But I our return wouldn’t I QX to expect year. typical

Gal Munda

the and that in to try operating improvement year to there a if look John, are margin gross asking kind ahead two margins of in analyze, future? contributes potential Is and from we for now is maybe the leverage? operating be you or it going mostly just guidance a

John Wall

know we we guiding in guidance XXXX XXXX. not are for and everything Again, beyond is our

Gal Munda

Okay. Thank you. Thanks guys.

Operator

Your Celino Markets. Capital next question KeyBanc with Jason from comes

Jason Celino

hear you okay? Can guys. Hey me

John Wall

Yes.

Lip-Bu Tan

Thank Yes. you.

Jason Celino

Yes.

from one me. quick a Just

market-shaping expansion more opportunities. the area But and be investments, comments your there Or is TAM kind there be is half you of then going your assuming term, area to going your more is term feel that kind of in So, you longer I one investments long-term. equal? investments near appreciate one second to these and investing as over around about think customers next and

John Wall

of as have in regularly where actually to that really is is part the operating we're assess XX, the review areas our guiding am the expenses. normal in right approach because earlier number, revenue We Gary’s we not rule of saying But annual highest not think invest XXXX. our back of terms of beyond XX comment to we growth. I and

the essentially, add of growth. to you the whole premise on But operating rule is your margin revenue XX

have areas a we we of have will where growth – the for growth opportunities, more we bit less revenue profitability. we little there invest heavier basically look So, where revenue more will

Jason Celino

Thank you. Okay.

Operator

final Krish Sankar with comes question Your from Cowen.

Krish Sankar

I your IP with Yes. Hi. Number or anymore guys are taking is John. all at have done Lip-Bu on business, hyperscale behind is for us my two point? it either them of customized for projects your or one especially Thanks customers, question. you this doing mostly

think is few blip? just on seen is, Thank if do months you. question something activity that so, second longer PCB have last the the a on you else interesting there term short-term in then business, you the And you think any horizon Or design is incremental over do and PCB? in the PCB

Lip-Bu Tan

then John address let Krish, me color. add, will and would these add I some So, two topics

that you look growth at a for us first we double-digit just all, of our and clearly, very and like that and if And a it’s half announced we secondly then business IP Tensilica lumpy QX. First was that.

very are XXX about on XX XX, mobile this excited release and have We VR, whole wins that. XX, X-nanometer. we automotive put high like that surveillance and in vision a a part datacenter, lot we just and applications then and we performance And so for mobile double AI, AI speed the couple gig of the automotive at other application. is then And design

are with them. very And working and then very intensely customer we demand have we strong

of excellence we overall, in that like strategy. as build the is our That it design call and continue IP. we part core business EDA to So IP we whole our and – the

to XD clearly side, billion market growth our that whole and terms Clarity clearly in interconnect Solver, system analysis good have the customers. In and the system then PCB, the TAM X.X very side business and area system will a and double-digit we the analysis by so solid interconnect increase well received of whole that also and in and very our

evaluations interest. numerous strong a have We engagement and customer and

in are think all on that. all, solid we So, pretty I

John Wall

IP first in And of But system with our would analysis strong be as at – and looking that, half we we PCB But can again, quarter add for lumpy happy there. I just double-digit packaging and the are and IP, any that. said, says, single and products to it double-digit as growth with security it a had there had growth quarter. interconnect, Lip-Bu was IC Lip-Bu we regard

pleased with very the there. So, we are results

Krish Sankar

Okay. Thanks, Lip-Bu. Thanks, John.

Lip-Bu Tan

Thank you.

John Wall

Thanks.

Operator

Lip-Bu at closing Mr. this there further please. time, If no remarks your questions are

Lip-Bu Tan

for Thank afternoon. you joining this us all

Next pervasive design the addressable our new total phase in an intelligence of the expand design system intelligence and system and innovation strategy excellence, market. opportunities brings

Of was export situation. regulation to and with course, complying to adapt all Cadence continue will and the access

summary, and In are solutions a waves proliferating on thank for further our capitalizing customers hard and technology the and of continued base all our our we to our shareholders, with closing, would of customers. broader In employees support. multiple Directors partners, Board I like their working

Operator

participating second This Thank call. Cadence you earnings XXXX concludes today’s in quarter conference call. for today’s

disconnect. now may You

Cadence Design Systems (CDNS) 22 Jul 192019 Q2 Earnings call transcript