On April 27, 2005
Mentor Graphics Corporation announced the results for the first quarter of 2005, the period ending March 31, 2005. Total revenue was $164 million, flat relative to the same quarter a year ago but down 34% from the $140 million in the previous sequential quarter. The recent $164 million figure was well below the $177 million that the company forecast three months ago. System and software revenues were $91 million or 56% of total revenue, a decrease of 3% year-over-year and a decrease of 35% sequentially. Service and support revenue was $73 million or 44% of total revenue, an increase of 4% year-over-year but a decrease of 3% sequentially.
America had revenues of $71 million or 48% of total revenue, a 9% increase year-over-year but down 21% sequentially from the usually strong calendar Q4. Europe showed revenues of $44 million or 30% of total revenue, essentially flat year-over-year but down 32% sequentially. Japan had revenues of $32 million or 22% of total revenue, a decrease of 16% year-over-year and a decrease of 0.6% sequentially.
By product line, revenue was 30% scalable verification, 25% integrated system design, 25% design to silicon, and 20% new and emerging products.
Net loss for the quarter was $4.3 million, compared to a net loss of $6.5 million in the same quarter a year earlier and a net gain of $15.8 million in the just-previous quarter.
Dr. Walden C. Rhines, CEO and chairman of Mentor Graphics, said, "Weakness in the business was driven primarily by softness in demand from semiconductor companies, while demand from system businesses was better. As a result, Mentor systems products like FPGA synthesis, embedded software and selected PCB products performed well. On the other hand, Calibre product line bookings were particularly weak in the quarter. We expect strength in this product line in the second half of the year based upon the number of current customer engagements."
Gregory K. Hinckley, president of Mentor Graphics, added, "As the drive to time-based licensing continues, our business is increasingly driven into the fourth quarter. While we are not satisfied with our first quarter performance, our second half continues to look solid."
On May 10, 2005 Synopsys completed its acquisition of Nassda. However, prior to the close, on April 14, 2005
Nassda Corporation announced the results for its second quarter of fiscal 2005. Total revenue for the quarter was $12.3 million, an increase of 26% from $9.8 million for the quarter ended March 31, 2004 and an increase of 10% from $11.3 million for the quarter ended December 31, 2004. Product revenue of $2.6 million, accounting for 21% of total revenue, increased 67% year-over-year and 19% sequentially. Subscription revenue at $6.9 million, accounting for 56% of total revenue, increased 20% year-over-year and 7% sequentially. Maintenance revenue at $2.9 million increased 23% year-over-year and 8% sequentially.
Net income for the quarter was $1.9 million, an increase of 157% from $752 thousand in the same quarter a year ago and an increase of $8.9 million from a net loss of $7.0 million in the prior quarter.
Sang Wang, Nassda's Chief Executive Officer, said, "We are very proud to have achieved another quarter of sequential revenue growth and returned to profitability with a 12% operating income, despite the substantial costs incurred related to the pending acquisition. Our total cash, cash equivalents and short-term investments balances have also increased to $107.9 million at March 31, 2005. Due to the pending acquisition, we are not providing any business outlook or guidance for the coming quarters."
On May 18, 2005
Synopsys, Inc reported the results for its second quarter of fiscal 2005, the period ending April 30, 2005. Total revenue in the quarter was $244 million, a 1% increase compared to the first quarter of fiscal 2005 and a 17% decrease from $295 million in the second quarter of fiscal 2004. This result was in the middle of the company's forecast three months ago. For the six-month period revenue was $486 million, a decrease of 16% from revenue of $580 million for the same period in fiscal 2004 as the company shifts to an almost-fully ratable license revenue model initiated in the fourth quarter of fiscal 2004.
On a year-over-year basis, Time Based License (TBL) revenue, which accounted for 72% of total revenue and 91% of product revenue, grew 8% while Upfront License revenue which accounted for 7% of total revenue and 9% of product revenue, declined 77%. Service and other revenue declined 8%. On a sequential basis TBL declined 6% (due largely to terms of a specific deal), while upfront licenses grew 59% and services 16%.
On a geographic basis, North American revenue at $130 million accounted for 53% of total revenue, a 17% drop year-over-year and a 2% drop sequentially. European revenue at $40 million, accounting for 16% of total revenue, was flat year-over-year and increased 9% sequentially. Japan's revenue of $34 million accounted for 17% of total revenue, a decline of 30% year-over-year and a decline of 11% sequentially. Revenue from Asia Pacific at $34 million declined 14% year-over-year, but it grew 26% sequentially.
In the quarter Galaxy accounted for 55% of total revenue, Discovery Verification for 21%, IP for 8%, DFM for 10% and Services and other for 6%.
Net loss for the quarter was $4.9 million, better than Synopsys internal targets and an improvement over the net loss of $14.5 million in first quarter of fiscal 2005. In the second quarter of last year, net income was $28.7 million. The quarter's loss includes an income tax benefit of $19.6 million.
On May 10, 2005 Synopsys completed its acquisition of Nassda, as reported above. Synopsys closed the acquisition of Nassda for $200 million in cash or a net of $46 million after subtracting $92 million in Nassda cash and $62 million in litigation settlement by individuals.
Synopsys also announced that Steve Shevick, Synopsys chief financial officer, has decided to leave the company to pursue an opportunity with a private company outside the EDA industry.
On April 20, 2005
Synplicity Inc. reported its results for the first quarter of 2005, a period ending March 31, 2005. Total revenue for the quarter was $14.6 million, an 8% increase from revenue of $13.5 million in the same quarter a year ago and a 4% sequential decrease from revenue of $15.1 million in the prior quarter. The recent $14.6 million in revenue was slightly higher than the $14.3 million the firm forecast three months ago. License revenue of $8 million, accounting for 55% of total revenue, was up 8% year-over-year primarily due to higher FPGA and ASIC bookings and the impact from a growing level of time based bookings, but down 7% sequentially. Maintenance revenue of $6.6 million, accounting for 45% of total revenue, was also up 8% year-over-year but only up 0.4% sequentially. The percentage of revenue coming from recurring sources was 67% of revenue in the quarter. ASIC product bookings were up strongly year-over-year and comprised 25% of total product bookings for the quarter. During the quarter the company reported adding over 50 new customers.
From a geographic perspective, product bookings for the quarter were 56% from North America, 18% from Europe, 13% from Japan, and 13% from the rest of Asia.
Net income for the quarter was $515 thousand. This compares to net income of $296 thousand in the same quarter a year earlier, a 74% increase, and compares to net income of $803 thousand in the previous sequential quarter, a 36% drop. All three quarters included amortization of intangible assets from acquisitions of approximately $223 thousand.
Gary Meyers, president and CEO, said, "The momentum we felt in both our FPGA and ASIC business at the end of last year has continued into the first quarter of 2005. During the first quarter of 2005 we grew product bookings, revenues and earnings over last year's first quarter, with solid execution across the product lines. We believe our focus on products for the FPGA and structured/platform ASIC markets will lead to continued growth this year."
EDA versus MCAD
The detailed quarterly performances of a selected group of public MCAD Vendors has been provided in the authors' May 2005 MCAD Commentary recently published on MCADCafe.
The three top mechanical CAD companies (Autodesk, Dassault Systemes and UGS) sported revenues of $869 million in Q1 2005, 24% more than the top three EDA companies (Cadence, Synopsys and Mentor Graphics). See Table 8 below.