Net loss for the recent quarter was $13.6 million, compared to a net loss of $8.1 million in the corresponding quarter last year, and compared to a loss of $12.4 million in the just previous quarter. The costs of Magma's patent litigation with Synopsys in the quarter were $2.3 million (see News Highlights above regarding the Magma/Synopsys disputes).
At the end of January 2007, Magma announced expanding operations in India and the United States. Magma's Bangalore operation has moved to a new 40,000 sq. ft. facility. Magma already has over 200 employees in India. Magma also announced its corporate headquarters would relocate to San Jose as of March 12, 2007.
Rajeev Madhavan, chairman and CEO of Magma, said, 'We achieved record revenue as we execute on our fiscal 2007 plan. Our R&D teams continue to develop products that deliver superior results. We had a very good third quarter."
On February 1, 2007 Mentor Graphics Corporation reported financial results for the fourth quarter and the year, the periods ended December 31, 2006. For the quarter, Mentor announced record revenue of $246.2 million, some $17 million above the guidance given a quarter ago. This $246.2 million revenue was up 11% from the $222 million in the prior year's fourth quarter, and up 29% from the $191 million in the previous quarter. System and Software revenue was $168 million, up 15% year-over-year and up 47% sequentially. System and Software revenue accounted for 68% of total revenue. Services and Support revenue was $78 million, up 3.4% year-over-year and up 2.4% sequentially. Services and Support revenue accounted for 32% of total revenue.
On a geographic basis, revenue from America accounted for 55% of total revenue, revenue from Europe 27%, revenue from Japan 8% and revenue from Pacific Rim 11%.
By product segment, revenue scalable verification revenue was 35% of total revenue, Integrated System Design 25%, Design to Silicon 25% and New and Emerging 15%. By license type, term license revenue was 65% of total revenue, perpetual license revenue was 25%, and subscription revenue was 10%. No customer accounted for more than 10% of revenue.
Gregory K. Hinckley, president of Mentor Graphics, said, "2006 saw significant improvement in operating margins as the investments the company has made in new technologies served us well. On top of the record results of 2006, and in particular the fourth quarter, we also exited the year with the second strongest book-to-bill the company has ever had."
Note that Mentor Graphics Corporation is moving to a new fiscal year ending January 31st, rather than December 31st. As a result, fiscal 2007 will be the month of January 2007, and fiscal 2008 will run February 2007 to January 2008. Historically the fourth quarter has always been the largest revenue quarter, and a significant amount of revenue typically closes in the last week of the year. There is a risk that key decision makers of customers are on vacation, making closure a risky proposition.
On February 21, 2007 Synopsys reported financial results for its first quarter of fiscal 2007, the period ended January 31, 2007. For the first quarter, Synopsys reported revenue of $300.2 million which was at the high end of the guidance given a quarter earlier. This revenue figure is a 15% increase compared to $260.2 million for the first quarter of fiscal 2006. Time based revenue, accounting for 84% of total revenue, was $251 million. This was an increase of 19.2% year-over-year and an increase of 9.6% sequentially. Upfront revenue, accounting for 4.5% of total revenue, was $13.5 million, an increase of 61% year-over-year, but a decline of 11% sequentially. Maintenance and service revenue, accounting for 12% of total revenue, was $35 million. This was a decline of almost 14% year-over-year, and a decline of 11% sequentially.
From a product perspective, 50% of revenue came from core Galaxy design, 26% from Discovery verification solutions, 8% from IP, 11% from DFM, and over 4% came from professional services and other.
From a geographic point of view, North America accounted for 52% of Synopsys' total revenue, Europe 16%, Japan 17% and Asia Pacific 15%. North American revenue increased 11% year-over-year and 4% sequentially. European revenue increased 16% year-over-year and 8% sequentially. Revenue from Japan grew almost 21% year-over-year, and almost 5% sequentially. Revenue from Asia Pacific grew 26% year-over-year, and 10.5% sequentially.
One customer accounted for more than 10 percent of the recent quarter's revenue.
Aart de Geus, chairman and CEO of Synopsys, said, "After a very successful (fiscal) 2006, we continued our excellent execution with a strong first quarter of 2007. We delivered excellent financial results, and saw continued product momentum with technology advances, competitive wins, and customer adoptions."
On February 1, 2007 Synplicity Inc. reported financial results for the fourth quarter and the year, the periods ended December 31, 2006. Total revenue for the quarter was $16.4 million, essentially flat compared to $16.3 million in both the fourth quarter of 2005 and the third quarter of 2006. This $16.4 million revenue figure was $1 million below the range given as guidance last quarter. License revenue was $5.3 million, accounting for 33% of total revenue. License revenue was up nearly 5% year-over-year and up 5.5% sequentially. Maintenance revenue was $6.9 million, accounting for 42% of total revenue. Maintenance revenue was up nearly 2% year-over-year, but flat sequentially. Bundled license and services revenue was $4.2 million, accounting for 26% of total revenue. This figure was down nearly 6% year-over-year, and down over 3% sequentially.
Net income for the quarter was $1.6 million, down 39% from the $2.6 million in the same quarter a year ago, and down 3% from the $1.65 million in the previous quarter.
Gary Meyers, president and CEO of Synplicity, said, "2006 was a year of innovation and progress for the Company as we refocused our business on our core competency in FPGA tools. While revenue in the fourth quarter of 2006 was lower than anticipated, with cautious spending by some North American customers, we believe we can deliver double-digit FPGA tools revenue growth and continue to improve our operating margins in 2007. I am particularly excited about further developments in Synplify Premier, our most successful product launch since Synplify Pro, and the production release of our unique TotalRecall technology in 2007."
EDA Vendor Stock Performance
Shown in Tables 8 and 9 and Figure 3 below, are the combined stock prices for the EDA vendors. In absolute terms, the combined stock prices were up a remarkable 31% from the same quarter in 2005 while the average stock price increased 40%, easily eclipsing the popular stock indexes. Altium was the price growth percentage leader at 120%. Mentor and Ansoft had excellent stock price growth at 75% and 63%, respectively. Only Synplicity's stock price declined (-25%) year-over-year. On a sequential basis, the combined stock prices rose 16% in absolute terms and on average 11%. Synopsys and Mentor were the sequential leaders at 36% and 28%, respectively. Synplicity and LogicVision stock prices declined slightly.
Forecast Guidance from Individual EDA Providers
The combined forecast for next quarter (from the 5 EDA vendors who provided guidance) calls for nearly 9% growth over the same quarter last year, but a 9% drop sequentially from the traditionally strong fourth quarter.
Individual Company by Company Guidance