Commentary: EDA Industry Update March 2008 -- What did the Last Quarter Bring?



Company by Company Q4 2007 details:
On February 26, 2008 Altium Limited reported financial results for its fiscal half-year 2007/2008, the period ended December 31, 2007. Total revenue for the calendar fourth quarter alone was $AU14.3 million, a modest increase of 3.3% year-over-year and 21% from the just prior quarter. For the half year, there was a net loss of $AU2 million after tax. Altium reports geographic information in dollars or euros. The table below converts euros to US dollars.



There was year-over-year revenue growth in all geographies in the half-year, with China growing at 129%.

Nick Martin, Altium CEO, said, “These results reflect the planned investments made during the period in product development, recruitment, and organizational systems and meet the expectations set by Altium at the end of December, with EBITDA better than expected. With two major product releases in this second half-year - the launch of the Altium Innovation Station in February, and a new Altium Designer product release scheduled in May - we are confident that we are on track to deliver the planned growth in sales, revenue and profit for the full financial year compared with the previous financial year.“

“The investment made during the half-year in identifying and recruiting senior regional business management also gives us confidence in the full year,” said Emma Lo Russo, President and COO. “In the Americas, Altium ended the half-year period by appointing Gerry Gaffney as Senior Vice President & General Manager Americas, to provide the senior regional and strategic sales management and expertise that the company lacked in that region for the first half year period.”



On February 14, 2008 Ansoft Corporation announced financial results for its third quarter of fiscal 2008, the period ended January 31, 2008. Total revenue for the quarter was $26.1 million, up 15% from the $22.7 million in the third quarter of 2007, and up 12% from the $23.4 million in the prior quarter. License revenue was $15 million, representing 57% of total revenue. This was a 14% increase year-over-year and a 21% increase sequentially. Revenue from services and other sources was $11.1 million, or 43% of total revenue. This was an increase of 16% year-over-year and almost 2% sequentially.

International revenue accounted for 57% and 61% of the Company's total revenue in the three-month periods ended January 31, 2008 and 2007, respectively. Revenue in Asia accounted for 40% and 41%, and revenue in Europe accounted for 17% and 20% in the three-month periods ended January 31, 2008 and 2007, respectively.

The Electromechanical area accounted for 16% of total revenue, down a tad from 18% a year earlier, while the High Frequency area was 84% of total revenue, up from 82%.

Ansoft's three largest customers during the most recent quarter were Samsung, Freescale Semiconductor and Intel.

On November 30, 2007 Ansoft announced that Thomas A.N. Miller, the company's Chief Financial Officer, would retire on December 31, 2007. Miller, who was one of the company's founders and had served as Chief Financial Officer since February 2004, was succeeded by Shane Emswiler, Ansoft's Vice President of Finance. Emswiler joined the company in September 2004.

Net Ansoft income for the recent quarter was $6.5 million, an increase of 3.1% from the $6.3 million in the year ago quarter, and a 24% increase from the $5.2 million in the just previous quarter. Operating income for the last quarter was $10.0 million, representing a 36% increase when compared to operating income of $7.4 million in the previous year's comparable quarter. Net income for the prior year's comparable quarter included a tax benefit of $1.1 million.

Nicholas Csendes, Ansoft's President and CEO, said, "We are pleased to report strong revenue growth in both domestic and international markets. For the fourth [upcoming] quarter, we expect continued revenue growth of around 10-15%."


On January 30, 2008 Cadence Design Systems, Inc. reported on financial results of the fourth quarter and the 2007 year, the periods ended December 31, 2007. Total revenue for the fourth quarter was $458 million, an increase of 6.2% from the $431 million in the fourth quarter of 2006, and an increase of 14.2% from the $401 million in the third quarter of 2007. Product revenue was $328 million, or 72% of total revenue. This was a year-over-year increase of 10.3% and a 20% increase sequentially. Maintenance revenue was $100 million, accounting for 22% of total revenue. This was an increase of 1.5% year-over-year and a sequential increase of nearly 4%. Services revenue of $30 million accounted for the remaining 6% of total revenue.

Revenue from North America accounted for 50% of total revenue, revenue from Europe 17%, revenue from Japan 22% and revenue from Asia 11%. North American revenue was down 15.4% year-over-year, but up nearly 27% sequentially. European revenue was down 9% year-over-year, and down 30% sequentially. Japanese revenue was up 123% year-over-year and nearly 4% sequentially. Asian revenue was up 1.5% year-over-year but down 4.8% sequentially.

In terms of functional areas, Functional Verification accounted for 26% of total revenue, Digital IC Design fro 27%, Custom IC for 25%, DFM for 6%, System Integration for 9% and Services for 7%.

Net income for the fourth quarter was $119 million up 147% from the $48 million in he fourth quarter of 2006, and up 66% from the $73 million in the previous quarter.

Mike Fister, president and CEO of Cadence, said, "Our strategy is on track, our technology has never been stronger, and we continue to focus on delivering solutions to help our customers manage their businesses in a challenging environment.”

Bill Porter, executive vice president and chief financial officer, added, "We achieved our long standing goal for operating margin for the year, and will keep our focus on improving our operating efficiency through 2008.


On January 31, 2008 Magma Design Automation Inc announced financial results for the third quarter of its fiscal 2008 year, the period ending January 6, 2008. Total revenue for the quarter was $55.7 million, an increase of 23.6% from the $45 million in the same quarter a year ago and increase of 4.2% from the just prior quarter. License revenue was $35.6 million, accounting for 64% of total revenue. This was an increase of 49% year-over-year and essentially flat sequentially. Service revenue was $8.8 million, or 16% of total revenue, a decrease of 20% year-over-year but an increase of 2.4% sequentially. Revenue from bundled license and services was $11.2 million, accounting for 20% of total revenue. This was an increase of 12.5% year-over-year and 22.4% increase sequentially.

In the quarter, 82% of revenue came from backlog-related transactions and 18% from orders completed in the quarter, an improvement over the 76% of revenue in the prior quarter.

In the quarter North America accounted for 66% of total revenue, Europe 12%, Japan 12.5% and Asia Pacific 10%.



Net loss for the quarter was $5.9 million, compared to a net loss of $13.5 million in the year ago quarter and compared to a net loss of $6.4 million in the just previous quarter.

Rajeev Madhavan, chairman and CEO of Magma, said, “In Q3 we delivered another quarter of record revenue, and we continued to see improved profitability and strong cash flow. Our research and development teams continue to deliver capabilities for products serving both our traditional and new markets, maintaining a strong technology edge over our competitors.”


On February 28, 2008 Mentor Graphics reported financial results for the first quarter of its fiscal 2009, the period ended January 31, 2008. The results were records in revenue and earnings. Total revenue for the quarter was $285 million, an increase of 14% from the $250 million in the same quarter a year ago and a 53% increase from the unusually low $186 million in the just prior quarter. System and software revenue was $201 million, accounting for 71% of total revenue. This was an increase of 17% year-over-year, and a 93% increase sequentially. Service and support revenues for the quarter were $84 million, or 29% of total revenue. This was an increase of over 7% year-over-year, and an almost 2% increase sequentially.

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