SNPS - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Synopsys Earnings Conference Call for First Quarter of Fiscal Year 2022. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, instructions will be given at that time. [Operator Instructions] Today's call will last one hour, five minutes prior to the end of the call, we will announce the amount of time remaining in the conference.

As a reminder, today's call is being recorded. would Vice turn President I to conference time, Ewbank, Lisa of this like the to over At Investor Relations. ahead. go Please

Lisa Ewbank

Thank Financial Officer. With everyone. Geus, of Good are and Eric. Synopsys, Chief de Co-CEO Chairman us Pham, Trac Aart and you, today afternoon,

call, I'd forward-looking this statements results. company its will we regarding course begin, that the targets, financial to the like Before discuss everyone forecasts, remind during of Synopsys other and and

as of these uncertainties future performance While results represent results subject from are current our that materially we what actual and our about judgment today, to statements best cause to risks results differ expect. actual and many could

our any press important that affect results may most addition highlight during reports in future risks and today's recent factors to release. SEC earnings that the call, our In described we are

earnings non-GAAP information we their to and directly discussion. addition, refer In be released and will earlier can measures found release, supplemental during the financial today. Reconciliations financial the X-K that comparable press measures financial financial we GAAP supplement, most to in

of most presentation our available on recent at items, the synopsys.com. All are website investor plus these

And addition, the that, remarks the posted call. be the I at In the Aart the of will will site turn de to call conclusion over on Geus. prepared with

Aart de Geus

range product earnings of target of was key $X.XX and afternoon. Good all we strength and QX guidance high share GAAP at at of on and Revenue year, or targets the end earnings geographies. billion, building met with the all our to strength across exceeded the groups an non-GAAP was our excellent per start XXXX momentum $X.XX. $X.XX with from

of margin We're in earnings objectives this we we new in our three will increasing of business, full products. raising with executing strong growth adoption you long-term on execution teams communicated financial market, solid As the guidance. differentiation, details. well year by strong and are revenue our accelerated revenue a results and to can expansion attributed provide our reasons, more The be strong and December. start confidence and excellent also to semiconductor technology result Trac

very market positive is landscape for in the a Assessing that and sound Synopsys. is way growing

As continues for massive of intensify. big realized, everything the smart impact amounts data are to demand increasingly power and of

customers ways as semiconductor design companies more and chips, to AI are security big highly and result, complex all safety. and from vertical brought hyperscalers heavily Rapidly prioritizing ranging means system a products data today's and As escalating together chips, startups, that require traditional investing complexity technical AI software increasingly of and activity. advanced in are systems houses

everything are As heavily segments. a five across a customer AI wave These in enabling center suited smart more ideally faster. of past investments market are technical for unique develop differentiation At this new result, the the era. investments and sits increasing and targeted power chips of complex to the all results. Synopsys yielding over innovations, business invested of excellent era apps years and has the better

new and flows. but of individual AI though, that featured have not results half multiyear development groundbreaking we released after and major the a on many greatly design solutions effort, a for driven a year just About machine Our technology segments impacts ago productivity tools a years. learning solution directs

in design. Samsung design the mobile design the been multiple in chips teams, of and we hyper semiconductor five autonomously tape only award the across learns our kind deployments using DSO.ai process excellent saw of cloud, a the solution the processor work market the production outs to leading adopted space latest deep combination first opportunities multiple DSO.ai of than manifest demonstrates design accelerating including verticals best across is the and for platform. boosts in DSO.ai optimization. by performance, overall in seeing its results while results in area. QX, are power automation and Customers breakthrough fusion completed tools Critical mobile, is abundance substantially find design can significant compute has of Our integrated that including design the scalar the of hundreds SOC. design leverage accelerates top manufacturing in are processes. powerful to and winning the AI platform. sit outcomes and flows. delivering growth CPUs cloud has state-of-the-art solution design on production of our remarkable the use. performance by spectrum These customer success episode DSO.ai verticals results Momentum Today. across space better and A how is traditional deploying technology. leaders. of and proven DSO.ai to underneath additional for wide the high achieved of production resulting XX advanced The are environments. quickly their drives In This datacenter one engines design and cross-selling already a

at we node design top processor the of world's including SOC record X-nanometre During at for mobile leading wins CPU X-nanometer plan and a multiple provider, XXX% the largest events achieved wins, a adoption flagship quarter, a provider, at providers.

wins competitive driver established leading nodes, at as including provider. a LCD achieving also We’re

critical our to smart across As A focus software maxim that puts a longstanding fusion complexity a multiple tackling continue innovations these system. everything result entire Synopsys in the bellwether position is design. unique enable also to but silicon us on truly from A is their of indicative of leadership of not differentiating our the designs of reliance is on portfolio platform. technical systems including today's system, throughout hyperscalars The only the new enabling us high our aspect expand to value portfolio, using IP.

and deliver portfolio relying for remains increasingly designs XXXX, by Customers market results complexity, demand build to high. years. Driven to tremendous market pressures. QX on record and and the time leading more a jumpstart to than more we in more their IP very with choose and hold excellent continue XX Following by

Consumer support providers ranked in highest Synopsys Electronics research and one compared Show for active the TCXx Securing number high automotive, fact, consumer. security In of We independent priority technologies. We're which the And rapidly date datacenter IP customers. strong with to virtualization automotive microcontroller best seeing growing firm best market for other a Synopsys our IP a mobile industry. family, key for AURIX market across IP the and our study demand comprehensive IP at an performed to and XX-plus encryption Infineon see top and performance the the including generation great is next on compute, example, recent momentum IP for opportunities. segments a wins announced by quality designs data number integrity utilizes

well. is market data skyrocketing the important an requirements, Given storage us for as

of PCI IP. processors Smart generation next our Express, to mobile protocol and storage continue adoption We wide gain

Let driving me the our bit innovative about talk of a some system solutions results.

with bring ZeBu for prototyping capacity fastest record Demand up. adjacent suit critical year and based compelling our especially the with in XXXX, longstanding complex another static Building strong products. prototyping, in hardware software is spot at we intersection a leadership analysis is early lowest system. debug our technology, HAPS and market of in as solutions very now continue First both of ownership, chip to of highest today's and software engines software, sweet a Synopsys’s system simulation, verification innovators enabler we growth cost on our hardware and the to see strong and emulation hardware excellent are of with

included over hyperscaler hardware quarter several at newest and wins companies semiconductor competition. This where was world. our and solutions This the expansions of achieved our systems the in noteworthy from we major newest HAPS-XXX the largest ZeBu

to Second This massively chip XDIC management. stacking more connection use that a new of specialized or generation enable design. a tightly design order in multiple is on storage abutting systems data compute, and this dies

systems solutions. that combines production performance the Our strong XDIC XDIC compiler a environment continued competitor platform ease deployed capacity company. exploration, differentiation large outs showcases design much unified quarter its analysis. over momentum construction is It of older signoff and hyperscaler and leading a as U.S., single use a on tape and In significant networking

optimizing electronic TSMC’s XDIC IP Leadership entire that Customer platform by winning develop of terms analysis. an And innovative leveraged to what's an Award possible redefines have was for manufacturing our Our design, in design and in and system. expands Choice third, XDIC expertise we approach and and recognized

tested Silicon Lifecycle allows monitor, systems platform are Management field. they Our and deployed the designed, to and analyze, optimize manufactured, customers as in

traction application AI key The software. thermal across monitors and understand power who Zebra and voltage seeing greatly pioneer of dynamic safety [ph], to chip to the conditions complexity in used up performance. requirements all embedded are expand of way and to by customer adoption from and growing chips including growing strong the on systems the optimize elements, our We order spectrum security

very services. Our challenged products testing business portfolio is and attacks software security with of leading integrity industry

financial are hyperscalers, special, security wide mil Companies for to supply groups including to XX-month challenge by very and developers, of a at and the range of consulting strong recent trailing integrity million Software entire geographies. the government good with the the $XXX a year source reinforced industrial aero from revenue bolstering vulnerabilities verticals continue grapple growth their of software across mind directives Security top including software for breaches. with product publicized chain, crossing and posture. start open services,

efficiently evident space. customers, services including to was velocity. see In in consulting And services integrate becoming also into address financial prioritize are development findings traction correlate testing In orchestration strategic Dx engagements. solutions, more Our maintaining product increased particularly longer while intelligent adoptions the driving sales, this not we only QX, they're and with DevOps, security to to developers Code vital help workflows. DevOps increasing and customer term our application remediation to

globe, very of the resulting an delivered around new results addition, our the the In In indirect outlook we financial partner the reason that year, strategy plans. is to for strong and company summary, our program the Even ahead of and fiscal early in in QX start encouraging. business was many stages, ’XX. progress excellent our is adoptions is

amounts innovations outstanding customer systems The changing designs serve in strong, we game intensifying investment market and significant software. technical and Our driving of with business immense is critical are results. chips,

we've share Annual to publish made Responsibility year carbon over Report will the we've and set which we environmental that, stewardship, our solid Trac. Lastly, achieving turn and in it social of solidarity, our goals progress of the we neutrality, corporate I'll third including Corporate the areas With Third in governance. Social

Trac Pham

afternoon, Thanks, Aart. Good everyone.

is opportunities, and and a reflect Driving unprecedented and GAAP combination results earnings at momentum good year flow. quarter the our across operating customer compelling products strong of execution. delivered margin, high solid non product First groundbreaking start our market --expanding new cash range accelerating adoptions non-GAAP groups company. excellent to revenue the of very the expanded these of geographies, We end operating a target our significant across growth all results with

otherwise XXXX confidence of XX% quarter are Our full year-over-year generated billion results. over comparisons and I'll targets. review All revenue in We up is year unless our $X.XX now our year. we the are a strong, raising stated. our business first total prior

per and IP and for were margin operating of strengths expected, $X.XX the IP earnings reflected a $XXX up as earnings prior million, the costs $XXX GAAP and expenses performing system non-GAAP EDA share non-GAAP well in over were $X.XX, XX.X%. was design as $X.XX demand Total both XX% revenue well. share were total quarter GAAP and year. segment with per in and software, hardware. costs Semiconductor As resulting EDA outstanding billion are billion expenses non-GAAP

Software revenue $XXX than integrity the million expected better a start segment was to year.

XX% our objective We adjusted software integrity margin to XX% are on track operating with expanded to in reaching XXXX. for growth

of cash collections. short we with cash buybacks to of the of flow cash to with ended million. and and planned debt early our million billion stock in cash, term used $X.XX generated operating $XXX total We investments primarily higher $XXX Turning million quarter due $XX than for

Now the guidance.

outlook raising and earnings are year revenue, full flow. cash We our for

$X.XX of billion. share, than growth, to per rate $X.X improvement of billion. earnings the fiscal and $X.XXX $X.XXX costs of billion resulting GAAP and non-GAAP revenue and to year $X.XX $X.XX XX% non-GAAP Total to and flow full from points. billion to in of Total GAAP billion to non-GAAP growth. earnings $X.XX per of a $X.XXX expenses share, year Non-GAAP basis targets margin XX% cash costs $X.XXX XXX representing between operating tax of billion XXXX, XX% expenses $X.XXX are, to between XX% billion $X.XXX and XX%, For representing $X.XX billion, more operations

the billion. and quarter. $X.XX to and $X.XX Total earnings between total costs GAAP second non-GAAP Now earnings and share; $XXX and GAAP and $X.XX million million of targets to Revenue million, costs $X.XX million, share. $XXX the per of $X.XX expenses $XXX to non-GAAP $X.XX per $XXX billion expenses and for between between

revenue for be roughly with to anticipate and to skewed continue QX distributed QX. We evenly expenses QX to

good In our December, a to EPS non-GAAP expansion year conclusion, annual in As raising deliver range. we and revenue start XXX delivered are to announced we basis objectives XXXX in more are growth, of margin long-term growth operating points mid-teens financial than and outlook. very double-digit the year a non-GAAP our the

current growth we've had, commitment has but most business for product the us market portfolio the also long-term uniquely to landscape. enduring compelling only not positions Our the well dynamic managing generated longstanding ever for

As accelerated questions. a you I'll we result, long-term operator for it we turn remain in confident December. to communicated With targets the in over financial that, the to

Operator

And Vruwink we'll Joe ahead. Instructions] of from start [Operator the Baird. go questions Please from line

Joe Vruwink

fair Great/ I the million on hoping revenue the product was a driving thinking in then $XX Hello get And the for everyone. bit to geographies year. increase full or detail more guidance about since upside maybe areas original in coming the thinking most about maybe sequencing of of XQ the is quarters guidance this just your that is this it year within in finished expectations? maybe range, XQ,

Aart de Geus

and part Trac can first second do part. the maybe the with start me Let

But to board. as well. EDA of are more going the showing we certainly stand continues and the more We been new that strength IP capabilities see Our at across much really has tools forward. the very can out say some growing really that opportunity very

about as possible lastly, is the heard the well. as now most even an at on And sort a of as hardware growth we trying that at the improving area, the was intersection will optimized systems systems between to software run Group. and you return like the well we growth there end Integrity power the as to call be the silicon optimize the responsive -- are on grow software as They of path. make Software all get software the Now section way because to is Last possible area which to an the of it now really good consumption. excellent so to to the continue to and and the hardware to between continue the year

that these are hardware for strong. and linked have suited been So extremely solutions and things are prototyping well our very to

Trac Pham

don't delivered take we characterize of only the QX, that planned. business forward. me the then in saw see the revenue, in as the year for growth the upside. strong the of rest second but terms biggest we point we through a upside year, was It highlighted. as momentum in year give and full this let the but year. saw raise deal And us the that for of year, we this year. the The QX would which simply demand trajectory continue but demand, raise last -- year nice And IP QX QX continued of for I just $XX we to traditionally, Joe, visibility overall very in very We That's Hi, of not a part. the at software, hardware. QX early not the The point results Aart million. EDA quarter but strong the the for going -- booked this given should only just we have, in largely also

the overall have guidance. the raise to We confidence

Joe Vruwink

an just open the source vulnerability. just I remarks, prepared curious up then move came year? the lift And benefiting given of software Duck attention growth to in a recent portfolio, if within for seen a helpful. for That's the I'm end maybe wanted bit it could the focus interest through in in that up acceleration Black more bit Okay. as integrity around you've we a

Aart de Geus

attention bears Well, better I well But what because have truth better general Software of U.S. it have pay moments been said in is think still really they and their high and capabilities. managed you Group is to in have of open is Integrity systems. in to well. mandates some executing the doing because on the source you past have year, made number a saying this hacking Even of government visibility also the more

that what consulting in have also Duck capabilities need. helps the think Black general, degree of And precisely I there. a is higher recognition we our because capabilities that so and there's And customers

Joe Vruwink

Great. Thank you very much.

Aart de Geus

welcome. You’re

Operator

to Jackson we'll Ader ahead. line JPMorgan. the Next, of with move go Please

Jackson Ader

my taking for Thanks Great. guys. questions,

was there on of cloud, there’s in one, the customer's first kind kind cloud, customer versus maybe leakage? that private I CPUs. -- The the do chooses then cloud? that cloud depending deployed the is DSO.ai hundreds number chooses the I to any other If Is deployment their being revenue I'm that think of And Synopsys where of mentioned, offices private in follow-up the something the And guess, on curious to customer cloud? the the run the cloud. in one you hyperscaler

Aart de Geus

they me at use all there's let leakage, to licenses do other Well, No, clouds start no any like much large Pretty themselves. have the end. the the hyperscalers licenses. have

or case, these a it extremely it's competent a clouds cloud cloud managing Some results. commercial providers, are doesn't this that And In you to cloud commercial if cloud. private are on the are so it obviously. also considerate have if is people both, commercial same matter

Trac Pham

just very but to cloud is opportunity, and We We regard. or do strong is Jack, using that third-party can a gain other the they're Synopsys of incremental independent business whether support that a would as overall. not add see I cloud. cloud scenarios, or goal that growth

Jackson Ader

Yeah. and the maybe customer I it, over point take see ball is going now hey, just that your that would market. right, the my thanks answers But the mean in right, hiring actually then there slowdown and DSO.ai I'm suggest a go try question more in with say, around a And no, the the for labor if second question, might market here of play and the game you traditional, to licenses. tight labor might of semiconductor you. that that. anything Is maybe engineers see at companies? is the Thank and

Aart de Geus

slowdown hire. attempting no certainly to is there think I

lot there's you years share. a most sitting an been are for for looking of As increase at A throughout and fair few industries, turnover. in home well have know, people

And industry entire semiconductor looking people. so for is the now right

negative bit of amounts have that a people. hired we substantially that, had turnover, have much actually, And substantial but so of ourselves -- we not

no space, opportunity because the to very end that the sight and And very, so need I fertile. think this will in I think, is there's continue

things these year, And to half. they a then tend gradually last So again. and for year equalize

Jackson Ader

you. right. All Thank

Aart de Geus

welcome. You’re

Operator

we with of Please Wells the Fargo Securities. next, And Gary Mobley ahead. line to go go

Gary Mobley

my Thanks and wanted Good taking I And to afternoon, the so question. year. on last wage pick congratulations question to everybody. to ask fiscal strong for about the inflation. start a up more

inflation structural here it's least whether that wages say I stay. to nature. debate it's think transitory a at fair wage higher are But to Just probably or in or

of there this question And business my you to pricing the are so you intensive are a you've where in able mismatch be pass period you're the a wage And got way might in a license in in for labor you're versus that way is, deals? along priced time inflation? deals

Aart de Geus

It's an the conjunction tends especially Jackson see the in and question wouldn't in to wages excellent move question the because, there obviously, increase whenever be with there some people is same. because otherwise, had, we necessarily movement,

have have more the many to had Fortunately, tends many of to continues terms multiyear more transactions. are business that little in it very we larger because grow our customers a we tools, And be capabilities. change well. more becoming good need transactions because bit stable fortune of the But want

are costs we but ops it. also more from track growing these how margin pass Having the in staying perspective, that gradual the And are improve along. continuing we not but the only said of profitability so business and emphasize and track to we with on

project been as forward. taken of all into things these we So have account

Trac Pham

that's best those not year. effect, margins we're the do and improving incremental factor obviously, technology in reflected our to to And it us in I -- the -- we our products. in that continued is guidance invest expectations and over is up. and way with that One The and into negotiations really business. the would that, add, certainly our in our costs we several and helped deal growth extract accelerated that this continue drive to in value The the expense twofold. manage drive able in helped to and more is to the Gary, invest innovation way has has the cost value the new wage way the last margins for installation in we've still years, it's business

to last Secondly, resources we been critical really over return. in best get order the we've being years redeploying few about the of path also deploy and on where

is the us helping So wage in inflation way. that those combination really manage of things

Gary Mobley

Got specific ask I the RPOs color. Appreciate the about it. to wanted And backlog. then a question or

If that least that And can you you you well? the a end the of license of us at duration don't published as are moving built high sense we are average you front degree the And can't longer a know give whether fiscal you year. on on has factor? to metric record give give anymore, at I that but amount, what us higher

Trac Pham

Backlog billion. remained at $X.X

Gary Mobley

And average duration, you Got say either it. it could --- license

Trac Pham

normal In traditionally that unusual. to, managed the we range normal In range. that nothing

Operator

to Securities. we'll Griffin of next, Vleeschhouwer go the go line Please And ahead. with Jay

Jay Vleeschhouwer

Thank for you. Aart, Good evening. first. you

contracts the is have contracts what support of your And the about that of another as you talk and and of are and like general, perhaps You've of respect of semiconductor like in and how do spoken are evolution about companies that software as that could course, companies the hardware implications more of companies behalf you customers is question portfolio. the profile customers on to forth. a just of to the with center intersection gravity evolving your business, to systems semiconductor the of vis-à-vis systems of perhaps say growing which given so is you growth becoming support becoming the companies. business, often more for saying your your The to way the to need provide complexity,

increase For over engineers, R&D a year. the in last than the more XXX% year last openings we've that over there's in increase even been application than for more the seen instance, openings your

we of customers. So hiring, the perhaps your a your out what segment then component ARR, like in business IP. like, say, QX. a the north Trac. what it increase like to supporting well second strip $X.X of as correlated look for question specifically the it well IP the have And compared Integration segment, was in may fairly and Systems think for the that billion coming out the QX When critical China results, we to questions in earlier looks annualized And we at looks your if as in quarter. from tying to the IP was environment so on looks increase Clearly your hardware of been, run-rate AE the substantial $X.X to of billion billion-$X.X

you perhaps those within business. about talk correlations So could IP the

Aart de Geus

the about hour. take only question Jay, half you Okay. asked an will

everything touch do. You pretty we on have much to

years silicon software Let logo. we the of the everything, under where gravity to was It intersection will meant me everything of put impact of big I because it number gravity our was various at phrase ago, like to that moving. this. that two. convinced am absolutely aspirational center time moving center automation in the A that data, smart the of for those ways is it actually

And devices, go so clearly, from smaller, continues, And that's trend sophisticated first downwards me hardware. more let the technology evolution. there, still one

is is but that The -- And want that is you feasible. and chiplets. that is technically or in multichip point trend not times XXX time, because second some at transistors, complementing more that a

chips just is so for And of the the to processes this specialized you And new we'll limited graphical third become accelerators that essentially see pixels. And split is and many of architecture trend manage XX of they ago, a not were that. it already years tasks. with up, more set because

a management of direction that and direction the or lot Now goes course, there's so on. data of AI in

many slash do ambition, move the has automation is domains, learning value the software, equation, software. domains. of we that course one add of of domain applications a the the lot of, machine can you every at the other to data And including side big which is think then So the which of

effective wish be matched is be to times XX the else, to And software anything and just the do And be then software. because XX and is needs people that hardware rapid to faster growth. the And the would the from matched prototyping could needs both times where this so perspectives another to we're prototype they like more. seeing hardware

And so while. think quite that for I will a continue

important more taking that Now there you're down, is XX hardware to tasks. different very absolutely now semiconductor the correct area, an evolution for it's regards AI is on And in years. multi-step the much the the we've more or of what support, it done because last complex in

there start. that's are you IP or because design. so is give lot they to design only much a the have the are And really type finished so of in they support. system blocks, they chip realization, we But substantially electronic also invested the of that buy companies upwards, houses if Whereas partially that where these few can past, the is investing. the big system software solutions a now And in closer if like where look

so because look increasingly example IP additional of And matters places. case. security last applies the And our for many, prime safety into automotive that in for often a verticals, at is reaching Security, comment needs. the that a course is are as of to And then each safety there and middle. is many subcategory that of

a opportunity big to that our Synopsys. for And short, lies story long players of between multiple make So something successful. become touch we opportunity is therein all these players and increasingly a catalyst

Trac Pham

Jay. Hi,

the of question. take me second Let part your

geographies strong a IP strong But and all business the QX very very right, products. diverse to in you're for at base. IP So in a addition quarter high level, is was customer all the a across other areas,

misleading. in very And across well very had fact doing connection our would be did EDA of growth good And to in all we're in software. Hardware addition product we China, so tying We to China that IP. well categories. in

give to would think the at So results a that of I conclusion. would misleading top level be trying that -- the you make connection

Jay Vleeschhouwer

Thank you very much.

Trac Pham

welcome. You’re

Operator

go Celino Jason to we go the Please of ahead. with KeyBanc line Markets. Capital Next,

Jason Celino

from semi design margins is of the were Trac. the taking them. Maybe for nature That's the that ever Great. first just really upfront impressive, strength? quarter the IP XX%. in we've The highest one strength hardware my for questions. How Thanks seen and and much of

Trac Pham

of overall, well. to do skew a think quarterization flat the the more you I But December, improve when remember, multiyear the are timing And margins. year, margins over in to of it margins revenues of we'll end. we relatively characterize revenue doing Because very would continue we front the throughout as as being the and period, described talked expenses to results, I'd the we Jason. expect mix but that

Jason Celino

Aart, to was the then, mentioned thought I with with didn't And levered business business. comments. Interesting. SIG Perfect. your at think how all was SIG strengthen I you Okay. hyperscalers interesting it hyperscalers the

separately? these So they my SIG do products Thanks. typically the to question EDA do bundle and Or is, purchase hyperscalers them the have together? opportunities

Aart de Geus

a different In There in often And company denominator. relatively the lowest kept are are separate. somewhat than things that. better looking general, it common business to we proactively these that at sell the we negotiating have everything practice It's very buyers separately.

big And hyperscalers absolutely of so but have needs in security. -- course, these

collaborating are we so well And them. with

Jason Celino

Excellent. Thank you.

Aart de Geus

You’re welcome.

Operator

ahead. Ramani And next, we Pradeep of go UBS. Please go line with to the

Pradeep Ramani

Thanks my for couple. questions. a taking I had

So saw big a your revenue deferred pop.

I think it terms standpoint first all, you EDA sort And in product or that? of would concentration or or helpful. EDA? customer drove hardware? could amongst or expand if from is -- be IP that geographical driving delta of of that either just upon or sort that what Is broad-based IP that a of concentrated that, Sorry, is

Trac Pham

sorry, reflects across when start to and the hear of from the really bill second of broad-based invoice didn't all of question, next I'm quarter customers. the product timing and with part just one I I'll very The the Pradeep. your deferred question. deferred we is first our lines variability clearly

Pradeep Ramani

was the geography that well? whether one around drove more upside Yeah. It customer broad-based whether was or as sort any one of or

Trac Pham

overall -- The globally. broad-based customers really across customers was growth

Pradeep Ramani

now? Yeah. are and my your about follow-up, the revenue forward path in terms you're And about growth SLM. how going think for design contributors? semiconductor just two of they percent of Okay. would sort How And these talking what right for I at characterize should guess you system we of and DSO.ai

Aart de Geus

to areas back of set an mention both I And early that Yeah. products. quickly to grow the they're a We're they in And we and offer. our customer. also people the because have value the order than potential to to new certainly early stage, in help stage. in customers because values question, don't hire whole the that those also succeed of get for but individual of of capabilities faster rest high in company these the more But earlier to didn't we areas, disclose these both typically, bring the

Pradeep Ramani

Thank you.

Aart de Geus

You’re welcome.

Operator

Company. Next of Please [Operator ahead. comes question the Needham go Instructions] from with Shi & Charles line

Charles Shi

question. the Maybe is my first Thank afternoon. for good question Hi, taking Aart. for you

the about You -- we be there at cycle are now semiconductors longer. the may is in well cycles, very peak a stronger on industry semiconductor for we're debate or aware whether right debate of

both how XX-year do this the Is the Or probably the cycle give specifically a Given is business something or think us -- the affect one to it sense way and the industry you same do does industry, cycle and think your seen? what how in about cycle? you've previous your you of current different? ones another? there can you experience And in EDA the kind as

Aart de Geus

this. about clear very I'm Okay.

are with has vertical. we big wave. opportunity great long-term automation the that and with the of very, learning, ultimately, think impact world amount a opportunity change every operates to how combined very for the machine combination AI into Because enormous I data economic of

that one many so benefits. that for has could technology Law argue And pushed decades, while Moore's sort and forward always new of had

just of even computation simultaneously understanding from all I world. XX a And markets hey, I realize as years economics would end there solutions. is is say profound or impacting that find data the profound, ago shave that their by is could XX or that the years operations potentially Now as out think so better pool some better that they

have been at that to due parts. some parts. and same things there call we There global are chains supply been in well but the a a have There -- I'm of Now people mostly all limited older that interruptions politics. are a to cycle. stop been actually that time, from fairly crucial set set ordering. shortage aware COVID lot And certain of the have it's There of hesitate

yes, capacity built actually the advanced nodes being opportunities. I earlier because point these so there's some for being additional is Most of new some lined made the there. all And of in. capacity up There's shortage

maybe this the into software there of always the the being a so catalyst that of add course. there alignment. because part be was we semiconductors. with with And optimization bit providers of great of a question design, end the think the cycle I deepest the very technology And and all we we're should of middle interact us little in will system, literally the the key decade But with the general, By that the the in we're opportunities way, in for of a a much configuring in and term Yeah, Synopsys. of supply love that way I Yeah, that. security. includes the for of

us where interact And puts it so that for a that's enthusiasm in very success. have much position players well with to our of part the And interact all to a from. big comes

Charles Shi

Thank for question you. Maybe a Maybe a quick follow-up. Trac.

kind seem year, a growing the of second here it in of a I Thank typical through of linear, a bit of in revenue either think has fiscal and you're does your don't and I any year to time-based IP revenue sort if your bit non-linear quarter moderation or guidance of the there. going your maintenance contracts upfront it's the the I perpetual imply the into the expect the year. there's to moderation expecting fiscal was little you. quite or second half terms linear full there, In of revenue a parity wondering have the of half. hardware been steadily licenses guidance, second service,

Trac Pham

profile function -- IP when Charles, the expect down the when customers we the quarterization is and customer a pull hardware. to of

really it's linear. but little items. as bumpy those linear. little as is but bumpy very you quite generally, as A two else, well, described, well, Yeah. So Everything

Charles Shi

me. you. Thank you. all That’s from Thank

Aart de Geus

welcome. You’re

Operator

conference Teleconference. participation your And ladies and Thank for for AT&T our that today. gentlemen, using for does and conclude you

You may now disconnect.

Synopsys (SNPS) 17 Feb 222022 Q1 Earnings call transcript