May 31, 2004
Commentary: EDA Industry Update May 2004 -- What did the Last Quarter Bring?
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Dr. Russ Henke and Dr. Jack Horgan - Contributing Editor

by Dr. Russ Henke and Dr. Jack Horgan - Contributing Editor
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February 2004 EDA Commentaries by the authors (published on EDACafé.com), the then-current yearly and quarterly financial performances of a selected group-of-nine (G9) 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 May 2004 report covers their performances for the first quarter of 2004.

News highlights

The major news item of the first quarter of 2004 was the on-again off-again merger of Synopsys and Monolithic Systems Technology (MoSys). This was covered in detailed in the authors'
May 2004 Electronics IP Commentary. At Synopsys' quarterly conference call on May 19, 2004, CFO Steve Shevick commented “As you know, we terminated the MoSys transaction and paid a $10 million termination fee on April 16, 2004. MoSys has sued us in Delaware seeking to force closure of the acquisition or, alternatively, damages. The trial is scheduled to begin on July 6, 2004. Given that this is active litigation we cannot provide any comment or additional color beyond what is already in the filed court
documents. However, we firmly believe that we terminated the transaction validly and in good faith, and we continue to move aggressively with our IP strategy.”

The other significant piece of recent news was that Cadence named Michael Fister as president and CEO, succeeding Ray Bingham who has been elected chairman of the Cadence Board of Directors. Mr. Bingham will continue as a full-time executive, working with Mr. Fister to help ensure a seamless transition. Mr. Fister was most recently senior vice president at Intel Corporation and general manager of the Enterprise Platforms Group.

How did the G9 EDA Vendors fare during the first quarter of 2004?

Company Last QTR Revenue Prev QTR Revenue Last vs. Prev QTR Comparable 2003 QTR Last QTR vs. Comparable QTR
Altium (AUD) 8,590 9,984 -14.0% 10,630 -19.2%
Altium $ 6,254 6,869 -9.0% 6,208 0.7%
Ansoft 17,761 13,982 27.0% 15,112 17.5%
Cadence 265,724 307,608 -13.6% 263,052 1.0%
Magma 34,047 31,052 9.6% 20,529 65.8%
Mentor 164,405 201,909 -18.6% 159,340 3.2%
Nassda 9,787 9,727 0.6% 8,799 11.2%
Synopsys 294,600 285,300 3.3% 292,000 0.9%
Synplicity 13,498 13,212 2.2% 11,563 16.7%
Verisity 11,042 12,260 -9.9% 11,697 -5.6%
Total 817,118 881,919 -7.3% 788,300 3.7%

Table 1 -- Nine Public EDA Companies' Latest Quarterly Revenue Performances


The combined revenue performance of the nine EDA vendors was down 7.3% sequentially and up only a meager 3.7% year-over-year, as Table 1 reveals. On a sequential quarterly basis, Ansoft and Magma were the revenue growth % leaders while Synopsys and Synplicity had modest growth. Altium, Cadence, Mentor Graphics and Verisity experienced double-digit declines, not unusual just after traditionally hearty Q4's.

On a year-over-year basis, Magma had a whopping 66% growth with a record quarter. Ansoft, Synplicity and Nassda enjoyed double digit growth.

Figure 1 - EDA Vendor Relative Size

(based upon Q1 2004 Revenues)

Among this group-of-nine public EDA vendors, Cadence, Mentor and Synopsys continue to dominate with a combined 89% share of the revenue pie (Figure 1).

Company Last QTR Earnings Prev QTR Earnings Delta Last vs. Prev Comparable 2003 QTR Delta Last vs. 2003
Altium $ --- ---
Ansoft 941 -22 963 -58 999
Cadence -8,755 25,523 -34,278 -13,038 4,283
Magma 4,226 3,761 465 2,647 1,579
Mentor 2,178 13,050 -10,872 3,599 -1,421
Nassda 752 572 180 1,022 -270
Synopsys 28,739 32,152 -3,45 22,289 6,4
Synplicity 296 445 -149 -632 928
Verisity -2,212 2,343 -4,555 1,877 -4,089
Total 26,165 77,824 -48,249 17,706 2,015

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-- Dr. Russ Henke and Dr. Jack Horgan, Contributing Editor.

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