On October 27, 2005 Cadence Design Systems, Inc. reported its results for the third quarter, the period ending September 30, 2005. Total revenue for the quarter was $337 million, a 12% rise from the $301 million a year earlier and a 5% rise from the $320 million in the prior quarter. This $337 million easily exceeded the guidance of $320 million to $330 million given last quarter. Product revenue of $218 million, accounting for 65% of total revenue, grew 19% year-over-year and 8% sequentially. Services revenue of $32 million declined 8% year-over-year but rose 8% sequentially. Maintenance revenue of $87 million increased 3.6% year-over-year but dropped nearly 3% sequentially.
North America accounted for 53% of total revenue, Europe 21%, Japan 20% and Asia 6%. North America was up 6% year-over-year and 14% sequentially. Europe was up 18% year-over-year and 30% sequentially. Japan was up 49% year-over-year but down 16% sequentially. Asia was down 25% year-over-year and down 30% sequentially.
The table below presents the breakdown by product segment. The original data provided by Cadence was in terms of percentages of total revenue. Functional Verification and Digital IC Design had solid growth both year-over-year and sequentially.
Net income for the quarter was $21 million, an 8% increase over the $19.6 million in the same quarter a year ago and a major step up from the $483K in the prior quarter (which included $13 million in restructuring and a $9 million write-off of in-process R&D).
Mike Fister, president and CEO of Cadence Design Systems, Inc. said, "We had great response across the board in the third quarter, including a number of significant competitive wins. Customers are buying from Cadence both for the depth and breadth of our technology, and our ability to deliver at an enterprise level."
Bill Porter, senior vice president and chief financial officer added "Once again, we had solid results in the third quarter across product lines and geographies. Both our verification and digital solutions continue to build momentum."
On October 27, 2005 Magma Design Automation Inc. announced the results for its second quarter of fiscal 2006, the period ending October 2, 2005. Total revenue for the quarter was $39.9 million, an 8% increase over the same quarter a year earlier and a nearly 3% increase over the $38.8 million in the previous quarter. This $39.9 million was near the midrange of the guidance given a quarter earlier. License revenue at $32.7 million, accounting for 82% of total revenue, was up nearly 5% year-over-year but down nearly 4% from the prior quarter. Services revenue at $7.2 million, accounting for 18% of total revenue, was up 27% year-over-year and 46% from the prior quarter.
North America accounted fro 74% of total revenue, Europe 11%, Japan 9% and Asia Pacific 6%. On a year-over-year basis North America was up 46%, Europe down 17%, Japan down 62% and Asia Pacific up 38%. On a sequential basis all geographies except Japan (-12%) were up single digit percentage points.
Net loss for the quarter was $6.6 million, a slight improvement form a net loss of $6.9 million a year ago, but down considerably from the net loss of $23K a quarter ago.
Rajeev Madhavan, chairman and CEO of Magma, said, "It was another good quarter for Magma - we again achieved record revenue and all key financial metrics finished within our target ranges. Our most recently announced products continue to be well received, and customers who presented at our MUSIC users conference in Silicon Valley last month described their use of Magma on very impressive designs - complex, 65-nanometer chips with high gate counts. These are precisely the kind of designs our products are best suited for."
On October 25, 2005 Magma sued Synopsys, claiming that Synopsys' Astro and IC Compiler products infringe a Magma patent. Magma seeks relief that includes preliminary and permanent injunctions to prevent Synopsys from selling any products - including IC Compiler and Astro - that infringe Magma's patent and also seeks an award of treble damages based on Synopsys' willful and deliberate infringement of the patent.
On October 20, 2005 Mentor Graphics Corporation announced the results for the third quarter, the period ending September 30, 2005. Total revenue was a record $164.8 million. This was a 1.8% increase over the $162 million in the third quarter of 2004 and a 6.4% increase over the $155 million in the second quarter this year. The $164.8 million was at the high end of the guidance given a quarter earlier. System and software revenue of $91.5 million, accounting for 55% of total revenue, was up 1.7% year-over-year and 12.4% sequentially. Service and support revenue of $73 million, accounting for 45% of total revenue, was up 1.8% year-over-year but essentially flat sequentially.
Revenue by region was 35% Americas, 35% Europe, 15% Japan and 15% Pacific Rim. Year-over-year revenue from Americas was down 19%, Europe up 15%, Japan down 27% and Pac Rim up 78%. By product line, revenue was 30% Design-to-Silicon, 30% scalable verification, 25% integrated system design and 15% new and emerging products.
Term bookings were 55% of total, perpetual was 35%, and subscription was 10%. Top ten accounts were 45% of total bookings, unchanged from the third quarter of 2004.
Net income for the quarter was $0.2 million compared with a net loss of $5.7 million a year earlier, a quarter that contained $14.7 million in merger-related costs, and compared with a net loss of $6.8 million in the prior quarter.
Walden C. Rhines, CEO and chairman of Mentor Graphics, said, "The expected Calibre rebound resulted in a strong booking quarter for Mentor. Bookings for our Design-to-Silicon family of tools were up about 50% sequentially and nearly double the third quarter of 2004. Calibre usage continues to expand. For the third quarter, average dollar value of Calibre family bookings was up 60% versus the third quarter of 2004."
Gregory K. Hinckley, president of Mentor Graphics, added, "We saw positive signs of growth in demand from customers in the quarter. Four of our top ten transactions were renewals, and these deals grew in both absolute dollars and units. Three years ago when these deals were signed, the market looked bleak and customer demand was down. As these deals are coming up for renewal, we believe our customers' businesses are in much better shape and demand is up. However, while the third quarter booking trend is positive compared to the prior year, total year-to-date bookings still lag the first nine months of 2004 due to first half weakness."
As the last of the selected vendors to report, on November 30, 2005 Synopsys, Inc. announced results for its fourth quarter and the fiscal year 2005. Revenue for the quarter was $255 million, an increase of 10.5% over the $230 million in the same quarter a year earlier and a 1.3% increase over the $251 million in the prior quarter. This $225 million was above the midpoint of the guidance given a quarter ago. Time based licensing (TBL) at $193 million, accounting for 75% of revenue, was up 17% year-over-year and 2.2% sequentially. Upfront licensing at $16 million, now accounting for only 6.4% of total revenue, was down 11% year-over-year but up almost 1% sequentially. Service revenue at $45.6 million, accounting for 19% of total revenue, was down nearly 3% year-over-year and down 2% sequentially. Backlog accounted for 92% of revenue in the quarter. Backlog at the end of fiscal 2005 was $1.9 billion, an increase of 25%.
On a geographic basis North American revenue at $136 million accounted for 54% of total revenue, a 6% increase year-over-year and a 1.3% rise sequentially. European revenue at $41 million accounted for 16% of total revenue, a 10.5% increase year-over-year and a 3% rise sequentially. Japanese revenue at $40 million accounted for 16% of total revenue, a 13.6% increase year-over-year and 0.5% increase sequentially. Revenue from the rest of AP at $37 million accounted for 15% of total revenue, a 26% increase year-over-year but flat compared to the prior quarter.
In the quarter Galaxy Design accounted for 54% of total revenue, Discovery Verification for 23%, IP for 8%, DFM for 10% and Services & Other for 5%.
Net loss for the quarter was $13.1 million, compared to a net gain of $74.3 million in the year ago quarter and compared to a net income of $8.5 million in the prior quarter. The Company's fourth quarter and fiscal year 2005 GAAP results include $11 million in incremental tax expense related to the repatriation of $360 million in cash from its international subsidiaries.
For fiscal year 2005 total revenue was $992 million, a 9.4% decline from the $1,095 million in fiscal 2004. TBL revenue at $744 million, accounting for 75% of total revenue, was up nearly 12% from the $666 million in the prior year. Upfront revenue at $60.5 million, accounting for 6% of total revenue, was down 72%. Service revenue for the year was $188 million, accounting for 19% of total revenue, a decrease of 12% from $213 million in fiscal 2004. Net loss for fiscal 2005 was $13 million compared with a net gain of $74 million in fiscal 2004.
On a product segment basis, Galaxy Design revenue at $553 million was down 18%, Discovery Verification revenue, at $216 million, was down 4.3%, IP revenue at $72 million was up 2%, DFM revenue at $102 million was up 25% and Service & Other revenue at $49 million was up 26%.
The geographic breakdown by percent of total revenue was fairly constant between the two fiscal years. North American revenue was $532 million, a decrease of 12%, European revenue was $158 million, a 7.5% decrease, Japanese revenue was $167 million, a decrease of 6.5% and revenue from the rest of AP was $136 million, a decrease of nearly 3%.
Aart de Geus, chairman and chief executive officer of Synopsys, said, "We had an excellent quarter to complete our fiscal year, with business above target in all product areas, technology indicators consistently strong and sound financial execution. We have a solid foundation for continued growth in fiscal 2006."