August 23, 2004
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February 2004 and
May 2004 EDA Commentaries by the authors (published on EDACafé.com), the then-current yearly and quarterly financial performances of a selected group of publicly traded Electronic Design
Automation (EDA) companies were analyzed and compared. Expectations regarding the future financial performances of these same EDA entities were documented as well. This August 2004 report covers their performances for the second quarter of 2004.
How did the EDA Vendors fair during the second quarter of 2004?
The combined performance of the nine EDA vendors was up a modest 3.5% year-over-year and 2.2% sequentially. Compared to the same quarter last year Magma, Nassda and Altium were big winners with 58%, 46% and 36% growth respectively. Ansoft, Synplicity and Verisity also managed double digit growth. Synopsys was the only decliner with a drop of 6.2%. On a sequential basis Altium and Verisity stood out with 33% and 24% increases respectively. Nassda also hit double digit growth. Ansoft at -29% and Cadence at -4.4% were the only decliners.
(based upon 2Q Revenues)
On a market share basis Cadence barely beat out Synopsys for the top spot. The top three vendors accounted for 88% of total revenue.
Synopsys was the
second largest decliner in absolute numbers with a drop of $6.7 million. On a sequentially basis Synopsys was the leader with a gain of $13 million followed by Cadence with a gain of $12.5 million reversing prior losing periods. Note that in the prior quarter Synopsys recorded a $10 million charge related to the termination of the MoSys acquisition.
Company by Company Q2 2004 details:
On July 13th,2004 Altium Limited announced preliminary results for its fourth fiscal quarter ending June 30th. Total revenue was AU$12.8 million or about US$10.4 million. On a product by product basis, compared to the previous financial year, Protel sales were up, P-CAD sales were down, and with the exception of the reduction of a long-term service contract TASKING sales were flat.
“June was a record month for sales in real dollar terms in North America, Europe and Australia,” said Kayvan Oboudiyat, Joint CEO, Altium. “There was a 28% increase in sales booked in the second half of the financial year as compared to the first half. We are also pleased by the early results of sales from our new Nexar products seen in the three months to June, but we still expect that Nexar sales will take 12-18 months from its initial release (in February 2004) before material contribution to Altium sales revenue is realized.”
Analyzing Altium's financial performance is difficult since only a small fraction of revenue is generated in Australia. The impact of currency exchange rates is considerable. Altium's last report gave the total in AUD$ and geographic breakdown for the quarter and year in various local currencies. Previous quarterly reports during the fiscal year gave YTD numbers in both local and Australian currencies. By my calculations quarterly revenue was up in AUD$ 10.8% year over year and 72% over the prior quarter consistent with Altium's usual high fourth fiscal
quarter. In local currencies US based revenue (43% of total) was up almost 9% year-over-year and 66% sequentially. European revenue (26% of total) in Euros was down 7.7% year-over-year but up three fold sequentially. No earnings numbers were given.
On August 18th, 2004 Ansoft Corporation announced the results for its first quarter of fiscal 2005. Total revenue was $12.7 million, an increase of 19% compared to $10.7 million reported in the previous fiscal year's first quarter but an almost 29% decrease sequentially. (Ansoft had given guidance 3 months ago for this quarter's revenue of between $12 and $12.5 million). There was a 49% drop in license revenue relative to the previous quarter mark of $12 million, although service and other revenue was up 14%. Net income for the first quarter was $30,000 as compared to a net loss of $1.2 million last year but down
considerably from $2.8 million net income last quarter.
Nevertheless Nicholas Csendes, President and CEO, stated "Ansoft had a very successful first quarter,". "With the continued high level of activity we are experiencing worldwide, we expect to see good revenue growth and profitability for the balance of the year."
On July 21st, 2004 Cadence Design System reported its results for the second quarter. Total revenue was $287 million up 3.8% compared to $277 million in the same period last year and up 8% from the prior quarter. (Cadence had provided guidance 3 months ago that this quarter's revenue would be between $285 and $295 million). Product revenue of $165 million was up 2.8% and 6.8% respectively. Maintenance revenue of $84 million was up 4.4% and 7.5% respectively. Service revenue $37 million was up 15% and 7% respectively. Design for Manufacturing grew 62% and Services grew 53% sequentially. However, Digital IC Design was down 9.2%.
Net income for the quarter was $3.8 million up dramatically from loss of $8.8 million the previous quarter and loss of $5.3 million last year. Non-GAAP earnings in the second quarter were $42 million, as compared to $29 million in the same period last year.
During the quarter Cadence released Encounter 4.1 and First Encounter Global Physical Synthesis (GPS), a second-generation global physical synthesis solution. The company also introduced NanoRoute with super-threaded route acceleration. A partnership was created with ASML to develop advanced resolution enhancement, or RET, solutions that operate seamlessly with Cadence custom design flows. Cadence also signed an agreement with Rambus, which will provide customers with first-time access to serial-link IP and design services from a single source.
"We had solid financial results demonstrated by growth in the second quarter and we delivered innovative new technology," said Mike Fister, Cadence President and CEO. "Through collaboration and innovation, we have continued to help our customers address their most important design and manufacturing challenges."
On July 28th, 2004 Magma Design Automation, Inc. reported results for its first quarter in fiscal 2004 ending June 30th 2004. Total revenue was $36 million at the high end of its forecast, a 58% increase over the prior year and a 6% increase sequentially. Net income for the quarter was a loss of $2.5 million compared to a net gain of $73 thousand the prior year and a net gain of $4.4 million the prior quarter. On a pro forma basis net income was $7.7 million versus $4.9 million a year ago and $7.1 million a month ago. Expenses for the quarter
included a $4.0 million in-process research and development charge related to Magma's acquisition of Mojave Inc., a $502 thousand charge for restructuring and $458 thousand for amortization of stock based compensation. In the corresponding period last year there was a $4 million charge for amortization of stock based compensation.
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-- Dr. Russ Henke and Dr. Jack Horgan, EDACafe.com Contributing Editor.
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