Dr. Russ Henke
The writer of the following article has posted over 100 articles on EDACafe.com since 2003, in the form of Quarterly Commentaries on the worldwide EDA and EDA IP Industries as well as monthly Editorials covering vendors, products, finances and new developments. Beginning April 2012 these … More »
New Commentary: EDA & MCAD/MCAE Industry Mini-Almanac – Nominal Q4 2011
April 23rd, 2012 by Dr. Russ Henke
Whether or not we realize it, some of the EDA and MCAD/MCAE vendors that we have followed in EDACafe.com and MCADCafe.com since 2003 — vendors that tend to represent the economic progress of their respective industrial niches — have already completed their fiscal first quarters of 2012 and are focusing at this moment the bulk of their operational attention on delivering actual software, service and advice that will characterize their second quarters. Except of course those few hardy souls in the vendors’ accounting departments who are busy with their Q1 2012 sums and the executives who craft quotations for the traditional Q1 quarterly news releases.
Examples spring immediately to mind: Cadence in the EDA world and ANSYS in the MCAD/MCAE world use the regular (Gregorian) calendar for their financial fiscal quarters, and will soon publish their Q1 2012 financials (Cadence on April 25, 2012 and ANSYS on May 03, 2012).
Alas, other leading vendors have chosen fiscal calendars that are different than traditional calendar quarters. For example, EDA vendors like and Mentor Graphics and Synopsys end their quarters a month later than Cadence; likewise, MCAD/MCAE vendor Autodesk ends its quarters a month after ANSYS, Dassault and PTC. Moreover, even when companies start and end their
Further delays before the news reaches the public may be introduced by the reporters and analysts who attend the quarterly vendor announcements, but the use of joint telephone conference calls and the Internet have largely eliminated any previous delays from this step. Except of course from news outlets that may have their own news and article production schedules for different reasons.
Use of “Nominal” Quarters
To mitigate some of the reporting anomalies listed above, this writer has long since used his own system of “Nominal” quarters, for IP, EDA, and MCAD/MCAE vendors.
With our new blog capability, we can publish on a more flexible schedule. Thus we have created the current “Mini” Commentary posted April 23, where we add MCAD/MCAE financial results for Nominal Q4 2011, to the Nominal Q4 2011 EDA results previously published on April 03.
MCAD/MCAE Vendors Included in this Report
To see a sample of a full-fledged Almanac article, click on
For purposes of comparative brevity, only the Top Three MCAD/MCAE vendors will be covered here, together with just the Big 3 EDA vendors.
Table 1 below shows the revenues in millions of US dollars for the four “nominal” quarters of 2011, for the “Big 3” EDA vendors followed by the Top Three MCAD/MCAE vendors, based on revenue volume. As the footnotes to the tables indicate, sequential and year over year percentage comparisons are given for revenue, and sequential plus year over year differences are used to
Table 2 shows similar data for Net Income or Earnings.
Various insights may be gleaned from these data. For example, for all three EDA vendors Q2 is the weakest revenue quarter, then all three steadily increase revenues each quarter to where Q4 is usually the best quarter of the year. In both 2010 and 2011, Mentor eclipsed Cadence in total revenue for Q4, but Mentor remains in third place in total annual revenue, despite being the oldest of the three. But Mentor eclipsed $1 billion in annual revenue for the first time in 2011, and remember, one has to be second however briefly when coming from third to become first. But Synopsys has a formidable lead in annual revenues; 56.6% more revenue in 2011 than 3rd place MGC and 41.2% more than number 2 Cadence. And Synopsys’ revenue totals have yet to benefit revenue-wise from its MAGMA acquisition announced late last year; MAGMA should add $35 million per quarter in revenue almost immediately once full quarter revenue recognition begins.
And Synopsys routinely creates more net income than the other two with each dollar of revenue.
1 Notice that these Table 1 columns calculate the percentage of one quarter over the other, as
2 In both Tables, FX rates used were supplied by Dassault Systemes.
EDA versus MCAD/MCAE
There is still more one can conclude by looking at EDA vendors vs. each other, just as one can do with MCAD and MCAD/MCAE companies vs. each other. But additional insight also comes from comparing one discipline to the other. Above in the Tables, the combined 2011 Return On Sales percentage (ROS %) for the Top 3 MCAD/MCAE vendors easily exceeds that of the three leading EDA vendors, by six (6) percentage points on significantly higher sales volume as well.
Moreover, the daily stock market assesses the absolute and relative worth and prospects for our favorite vendors. The stock curves give you the trends and the Market Capitalizations give you the relative value of the subject companies in the marketplace.
Below is the stock curve for the NASDAQ Composite over the last six months through and including April 16, 2012.
NASDAQ Composite (^IXIC)
What about the two categories of CAD vendors under discussion?
About the writer:
Since 1996, Dr. Russ Henke has been active full time as president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. The number of client companies served by HENKE ASSOCIATES during those years now numbers close to fifty. Engagement lengths have varied from a few weeks up to ten years and beyond.
During his previous corporate career, Henke operated sequentially on “both sides” of MCAE/MCAD and EDA, as a user and as a vendor. He’s a veteran corporate executive from Cincinnati Milacron (Research Scientist), SDRC (President & COO), Schlumberger Applicon (Executive VP), Gould Electronics (President & General Manager), ATP (Chairman and CEO), and Mentor Graphics (VP & General Manager).
Henke is a Fellow of the Society of Manufacturing Engineers (SME) and served on the SME International Board of Directors. Henke was also a board member of SDRC, PDA, ATP, and the MacNeal Schwendler Corporation, and he currently serves on the board of Stottler Henke Associates, Inc.
Henke is also a member of the IEEE and a Life Fellow of ASME International.
In April 2006, Dr. Henke received the 2006 Lifetime Achievement Award from the CAD Society, presented by CAD Society president Jeff Rowe at COFES2006 in Scottsdale, AZ. In February 2007, Henke became affiliated with Cyon Research’s select group of experts on business and technology issues as a Senior Analyst. This Cyon Research connection aids and supplements Henke’s ongoing, independent consulting practice (HENKE ASSOCIATES).
Dr. Henke was also a contributing editor of the EDACafé.com EDA WEEKLY from November 01, 2009 until March 31, 2012, posting thirty-two EDA WEEKLY articles during that period; URL’s available. Effective April 01, 2012 he contributes to EDA COMMENTARY and MCAD COMMENTARY, and also writes a periodic blog for EDACafe.com and/or MCADCafe.com.
Since May 2003 HENKE ASSOCIATES has also published more than 100 independent commentary articles on MCAD, PLM, EDA and Electronics IP on IBSystems’ MCADCafé and EDACafé. Such Commentaries are now part of the EDA and/or MCAD COMMENTARY entries.
Further information on HENKE ASSOCIATES, and URL’s for past Commentaries, WEEKLIES, etc., are available at
March 31, 2012 marked the 16th Anniversary of the founding of HENKE ASSOCIATES.