In January 2011 the EDA WEEKLY adopted a new tradition that replaced the previous 2003 through 2010 practice of posting separate issues of the Electronics Design Automation (EDA) Commentaries and Electronics Intellectual Property (IP) Industry Commentaries on EDACafe.com. Starting in 2011, the EDA WEEKLY would publish a consolidated report each quarter that combines the two segments of EDA and IP into one posting.
In January 2011, the new tradition began with breaking the new tradition, at least partially, because two separate articles a week apart were needed to cover the two segments: January 10, 2011 Schedule A, which covered the Group of 5 (G5) EDA vendors’ Q3 2010 financial results, followed on January 17, 2011 by Schedule B, which discussed the Q3 2010 financials of the G5 Electronics IP players.
Then on April 04, the EDA WEEKLY succeeded at last in covering both sets of results for Q4 2010 in a single posting, cleverly entitled, “The EDA and the Electronics IP Almanac: Q4 2010.” Check it out at the following URL, but first bookmark the current article so it’s easier to return:
The Vendors discussed in that April 04, 2011 issue were:
The vendors named in the group of ten listed above, evolved from a longer list of companies originally selected for coverage. For the quarterly EDA Industry Commentaries published in EDAcafe.com starting in May 2003, Henke Associates chose nine (9) publicly-traded entities: Altium, Ansoft, Cadence, Magma, Mentor Graphics, Nassda, Synopsys, Synplicity and Verisity.
Subsequently, Verisity and Nassda were acquired by EDA vendors Cadence and Synopsys, respectively, and hence were dropped from the quarterly EDA Commentaries. More recently, EDA vendor Synplicity was acquired by Synopsys, and EDA vendor Ansoft was acquired by MCAE vendor ANSYS. Consequently, both Synplicity and Ansoft no longer independently appeared in the EDA Industry reports.
So most recently, the EDA Group was down to five vendors.
On the Electronics IP side, Henke Associates had selected eight (8) publicly-traded companies originally (called the "Group-of-8" or "G8"), as representative of the financial state of the Electronics IP industry circa 2003. At the end of 2004, ARM completed its acquisition of Artisan Components, Inc., thereby reducing the "G8" to "G7". In August 2009 Mentor Graphics completed its acquisition of LogicVision, thereby reducing the “G7” to “G6”. Then on June 10, 2010 Synopsys and Virage Logic announced that Synopsys would acquire Virage Logic. This transaction was completed on September 2, 2010.
Accordingly, the Electronics IP Group was also down to five vendors.
Are you following all this?
More recently, as explained in the EDA WEEKLY of May 02, 2011, SpringSoft was added to the “EDA G5 list” of EDA vendors covered, temporarily making the list the ”EDA G6 list”:
However, by removing Altium Limited from the formal EDA list for the foreseeable future, the EDA list for coverage going forward will continue to be five vendors in length.
Structure of the presentation in this June 27, 2011 issue:
The two Groups of vendors, five in EDA and five in Electronics IP, will be reported separately herein. Each group will begin with summary charts of revenues and earnings, followed by individual financial summaries on each vendor in turn. Recent stock performances will also be included.
Finally, some comparisons among all TEN vendors will be presented.
The EDA G5 Results for Nominal Q1 2011
As always, we begin our EDA review by looking at the summary Revenue List of the most recently reported quarter; this time it’s the nominal Q1 2011 EDA G5 vendor performances (Table 1) below. Note that SpringSoft has been added to Table 1 for the first time, together with its revenue history stated in $US; Altium has been removed from the G5 for the time being; and all group totals have been updated accordingly.
While several of the G5 vendors (Cadence, Magma, and Synopsys) enjoyed nominal Q1 2011 sequential revenue totals greater than their respective traditionally-strong Q4 2010 revenues, the total G5 Q1 2011 revenue figure of $946 million and change, was lower than Q4 2010‘s total of almost $975 million, but only ~3% less.
Indeed, Q1 2011’s total revenue ($946+ million) beat its year over year counterpart Q1 2010 total ($789+ million) by almost 20%! All G5 vendors scored double-digit percentage revenue improvements YOY.
As predicted in this space 3 months ago, Mentor Graphics’ Q1 2011 endured a fall from a giant revenue cliff of 25% less than its record-high revenue total reported in Q4 2010. MGC’s stay in the “Over $300 million Quarterly Revenue Club” was short-lived, as Synopsys reclaimed its exclusive membership in Q1 2011, exclusive at least for awhile.
For as the 2007-2008 Recession recedes, a number of the EDA G5 vendors will inevitably come-a-knockin’ at the door of the “$300 million in quarterly revenue club.” By then, however, Synopsys will have matriculated to the even more exclusive $400 million a quarter club, joining the rarified environs occupied by the likes of MCAD vendors Autodesk and Dassault Systemes (Oops...those last two vendors are already ensconced in the “$500 million a quarter” club!); see Footnote .
Turning to earnings in Table 2 below, we observe that Mentor Graphics also relinquished its temporary one-quarter leadership position in net income, falling some $51+ million back into red ink in Q1 2011 from its lofty but temporary Q4 2010 perch of $49+ million in black ink.
And there to reclaim the earnings title for Q1 2011 was the perennial profit champion Synopsys. Not only that, but Synopsys’ net of $81+ million represented over 88% of the entire EDA G5 total net income of $91.54 million in Q1 2011!
Every member of the G5 save MGC was in fact in black ink in Q1 2011, but the three vendors other than Synopsys that produced a profit each delivered only single digit millions. Moreover, every one of the G5 did better in absolute profitability in Q1 2011 than they did a year ago in Q1 2010, leading to a G5 YOY total improvement of $84.52 million in net income (the figure in the lower right hand corner of Table 2).
 Footnote: See the latest financials of the leading MCAD and MCAE vendor companies in the recent MCAD/MCAE Commentary:
G5 EDA Vendor by Vendor Details for Q1 2011
On April 27, 2011 Cadence Design Systems, Inc. (NASDAQ: CDNS) announced results for the first quarter of year 2011 (our nominal Q1 2011).
Cadence reported first quarter 2011 revenue of $266 million, up 19.9% compared to revenue of $222 million reported for the same period in 2010. Moreover, as mentioned above, in Q1 2011, Cadence also beat its seasonally strong Q4 revenue of $249 million by nearly 7%.
The $266 million in Q1 2011 revenue was just above the top of the guidance range or $255- to $265-million provided three months ago.
On a GAAP basis, Cadence recognized net income of $6.32 million, some $18 million more than its net loss of $11.78 million in Q1 2010. The $6.32 million on the plus side in Q1 2011 was also some $43 million more than the Company’s net loss in sequential Q4 2010. Q1 2011 EPS were $0.02 on a diluted basis, compared to a net loss of $(0.04) per share on a diluted basis in the same period in 2010. Guidance for Q1 2011 EPS three months ago was a range of $(0.02) to $(0.00).
“Demand was strong for our products and services across all regions in the first quarter,” said Lip-Bu Tan, president and chief executive officer. “Demand for the Cadence Verification Computing Platform continued to be strong. We also introduced the industry’s first complete DDR4 memory controller solution, and saw strong renewals and increasing run rates in our Silicon Realization products.”
“We met or exceeded expectations for our key operating metrics in Q1,” added Geoff Ribar, senior vice president and chief financial officer. “The continuing momentum in our business gives us the confidence to increase our outlook for fiscal 2011.”
The company also announced today that Charlie Huang, currently senior vice president and chief strategy officer, has been appointed senior vice president, worldwide field operations, effective immediately.
Mr. Tan continued, “I am pleased that Charlie Huang, an EDA veteran with deep technical expertise and a successful track record, will be leading our field organization. Charlie led the development of our strategy and is well positioned to further develop highly collaborative technology-based relationships with customers and partners. I am excited to have Charlie take on this new role.”
Mr. Huang has served as senior vice president and chief strategy officer of Cadence since January 2009. Since April 2010, he has also served as chief of staff. From 2007 to 2009, he served as senior vice president of business development. Mr. Huang was general partner at Telos Venture Partners, a Cadence-affiliated venture capital firm, from 2004 to 2005. From 2001 to 2007, he held several positions at Cadence in engineering management and business development. Before joining Cadence, Mr. Huang co-founded and was chief executive officer of CadMOS Design Technology, Inc., an EDA company that was acquired by Cadence in 2001.
Tom Cooley, who previously held the role now being assumed by Mr. Huang, is leaving the company. “I want to thank Tom for his many years of significant contributions and dedication to Cadence,” said Lip-Bu Tan. “Most notable among his accomplishments were 1) leading a successful transition to a highly ratable business model, and 2) building a world class sales team.”
For the second quarter of 2011, the company expects total revenue in the range of $270 million to $280 million. Second quarter GAAP net income per diluted share is expected to be in the range of $0.04 to $0.06.
For the full year 2011, the company expects total revenue in the range of $1,075 million to $1,115 million. On a GAAP basis, net income per diluted share for fiscal year 2011 is expected to be in the range of $0.11 to $0.19.
Cadence self description
Cadence enables global electronic design innovation and plays an essential role in the creation of today's integrated circuits and electronics. Customers use Cadence software and hardware, methodologies, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, Calif., with sales offices, design centers, and research facilities around the world to serve the global electronics industry. More information about the company and its products and services is available at www.cadence.com
On May 26, 2011 Magma® Design Automation Inc. (NASDAQ:LAVA) reported revenue of $38.04 million for its fourth quarter ended May 1, 2011. For our purposes, we treat this time period as nominal Q1 2011.
Not only was nominal Q1 2011’s $38.04 million greater than nominal Q1 2010’s revenue by over 13%, it was also over 9% more than the traditionally strong-fourth calendar quarter (nominal Q4 2010)! Finally, the $38.04 million was also $2.54 million more than the top of the revenue guidance range provided three months earlier ($35.0 to $35.5 million).
This last quarter continued a string of solid financial performances and capped off a great fiscal 2011, as for the ninth consecutive quarter we met or exceeded all guidance targets and generated cash," said Rajeev Madhavan, Magma chairman and chief executive officer.
"Bookings were up strongly and exceeded the high end of our guidance range as the semiconductor industry's push to 28-nanometer and smaller designs created opportunity for Magma's entire product line. Our core digital platform Talus gained traction, benefitting from the recently announced Talus Vortex 1.2 and Talus Vortex FX. In analog implementation, Titan added 5 new logos and now has a total of 25 customers, primarily added during fiscal 2011. The FineSim circuit simulation products had another year of great growth as they continued to replace legacy simulators. And our partnership with Applied Materials generated a lot of excitement for our yield management products and created new opportunities for growth by that product group.
In accordance with generally accepted accounting principles (GAAP), Magma reported net income of $1.749 million, or $0.03 per share (basic) and $0.02 per share (diluted), for nominal Q1 2011, compared to a net loss of $0.728 million, or $(0.01) per share (basic and diluted), for the corresponding year-ago quarter, a net profit improvement YOY of $2.477 million.
For the record, for the entire fiscal year 2011 Magma reported a GAAP net loss of $(3.3) million, or $(0.05) per share (basic and diluted), compared to a net loss of $(3.3) million, or $(0.07) per share (basic and diluted), for fiscal 2010.
In the nominal 2011 first quarter, Magma generated cash flow from operations of approximately $2.7 million.
For Magma's fiscal 2012 first quarter (a.k.a. nominal Q2 2011), ending July 31, 2011, the company expects total revenue in the range of $36.0 million to $36.5 million. GAAP net loss per share is expected to be in the range of $(0.04) to $(0.03).
For Magma's entire fiscal 2012, ending April 29, 2012, the company expects total revenue in the range of $158.0 million to $160.0 million. GAAP net income per share is expected to be in the range of $0.04 to $0.06.
Magma self description
Magma's electronic design automation (EDA) software provides the "Fastest Path to Silicon"(TM) and enables the world's top chip companies to create high-performance integrated circuits (ICs) for cellular telephones, electronic games, WiFi, MP3 players, digital video, networking and other electronic applications. Magma products are used in IC implementation, analog/mixed-signal design, analysis, physical verification, circuit simulation and characterization. The company maintains headquarters in San Jose, Calif., and offices throughout North America, Europe, Japan, Asia and India. Magma's stock trades on Nasdaq under the ticker symbol LAVA. Follow Magma on Twitter at www.Twitter.com/MagmaEDA and on Facebook at www.Facebook.com/Magma. Visit Magma Design Automation on the Web at www.magma-da.com.
On May 27, 2011 Mentor Graphics Corporation (NASDAQ: MENT) announced “final” financial results for the company’s fiscal first quarter ended April 30, 2011 (which, as you know by now, we treat as nominal Q1 2011 for EDA WEEKLY purposes).
The company reported nominal Q1 2011 revenues of $230 million and a GAAP loss per share of $.02. (The company stated that the GAAP loss was driven primarily by non-cash charges associated with retirement of convertible debt).
The $230 million in Q1 2011 revenue was 27% higher YOY than the $180 million achieved in Q1 2010, a fine quarterly YOY growth percentage ordinarily worthy of significant praise and celebration.
Except perhaps when that $230 million revenue quarter comes in some 25% below the revenue spike reported for the just-prior (sequential) quarter, with a negative bottom line to boot, which is precisely the situation that befell MENT in nominal Q1 2011!
How could Q1 2011 be viewed otherwise? After all, the normally admirable $230 million Q1 2011 appeared on the heels of a spectacular, “one-time only” Q4 2010 results display:
- Q4 2010 reported revenue of $307.31 million
- Q4 2010 reported GAAP net income of $49.16 million
- Q4 2010 reported GAAP EPS of $0.43
Those Q4 2010 numbers were in Synopsys’ territory, folks! Such lofty numbers accorded MENT momentary admission to the exclusive “$300 million revenue per quarter club,” In addition, the Q4 2010 net income at $49+ million led the entire EDA pack in Q4 2010... heady environs for an EDA vendor that has long occupied the third place slot among the “Big 3.”
Of course, no observer could expect that such Q4 2010-like results could be sustained, or even soon revisited. Not in Q1 2011, and not in Q2 2011 (MENT’s Q2 2011 guidance is for revenues of about $210 million and a GAAP loss per share of approximately $.05). Indeed, the guidance for the four quarters of the current year is for quarters that each average about $251 million in revenue with EPS just shy of $0.17 per quarter, numbers which if actually achieved would be themselves quite admirable, but far below Q4 2010 results).
The final May 27, 2011 MGC Q1 2011 financial results recounted herein, came after company management had issued a blitz of news releases to prepare for a contentious stockholder’s meeting eventually held on May 12, 2011. Indeed, of the 43 news releases issued by MENT between January 01, 2011 and May 12, 2011, as many as a dozen were arguably related to meeting the challenges mounted by one Carl Ichan.
For example, MENT took the unusual step of issuing a preliminary Q1 2011 financial report on May 5, 2011, reporting $230 million in revenue and EPS in the range of $ (0.6) to $(0.02). As we now know, the “preliminary” release was spot on in its revenue estimate, and actual earnings were at the better end of the spread suggested.
More pointed was MENT’s initial anti-Ichan news release of February 22, 2011, entitled,” Mentor Graphics Confirms Receipt of Unsolicited Conditional Proposal from the Icahn Group. In this news release, MENT confirmed that it had received an unsolicited conditional proposal from Carl Icahn and certain of his affiliated entities (the “Icahn Group”) to purchase all of the outstanding shares of MENT (other than those the Ichan Group already owned) at a reasonably-attractive price of $17 per share in cash. In the Feb 22 news release, MENT’s Board of Directors promised to review the Icahn Group’s conditional proposal and make a recommendation to MENT shareholders in due course.
|MENT stock was trading in the $14.50 per share range at the time. With the release of the news confirming the $17 offer, the MENT stock price immediately began rising, up over a dollar per share to $15.67 on February 23, just a day after the existence of the Ichan offer was announced. Two days later the stock was headed back down, but then cleverly or coincidently, MENT announced its gargantuan nominal Q4 2010 financials, reversing the stock price fall and driving the stock price upward again. By March 03, the stock price was up to $15.96, before heading back down, staying above $15 till slowly descending to the high $14’s, nudging slightly above $15 March 24-28, back down to $14 around April 18, then dancing around in the $14+ level for over three weeks till the May 12 MENT shareholders’ meeting.|
What else was happening during the February 24 to May 12 period?
Why, not surprisingly, MENT management rapidly rejected the Ichan Group’s offer.
So the battle was joined:
Ichan argued that Mentor is a chronically poor performer that needs new owners, or at least new leadership; whereas
Mentor management and the board of directors wanted neither Icahn's money nor his help, and they jointly asked the Mentor shareholders to re-elect all eight existing board members.
Forthwith, Mentor commenced a series of aggressive measures to retain control, including but not limited to the aforementioned PR blitz of some 32 “positive progress” news releases between February 25 and May 12, with arguably at least eleven of these aimed directly at persuading shareholders that current management and then-current board members collectively knew what’s best for Mentor.
Such news release titles included (last one first):
- Egan-Jones Joins Glass Lewis in Recommending that Mentor Graphics Shareholders Vote for the Election of all Mentor Graphics' Board Nominees May 3, 2011
- Mentor Graphics Issues Open Letter to Shareholders Apr 25, 2011
- Mentor Graphics PCB Design Investment Strategy and Execution Results in 50% Worldwide Market Share Apr 11, 2011
- Mentor Graphics Corporation Announces Redemption of 6.25% Convertible Subordinated Debentures Due 2026 Apr 7, 2011
- Mentor Graphics Corporation Announces Pricing of Private Placement of 4.00% Convertible Subordinated Debentures Due 2031 Mar 30, 2011
- Mentor Graphics Corporation Announces Intention to Offer Convertible Subordinated Debentures Mar 29, 2011
Did Mentor Management’s Campaign Blitz Work?
Well, loyal readers, you know the answer already: No, and Yes!
On May 12, the company’s shareholders voted all three of Carl Icahn's hand-picked candidates onto Mentor's eight-member board, rejecting three of management’s slate, and thereby giving the Ichan Group strong (but not decisive) influence going forward.
Ichan’s three new board members are Jose Maria Alapont, Gary Meyers and David Schechter. They replace incumbent directors James Fiebiger, Marsha Congdon and Fontaine Richardson.
So on May 12, neither side won, nor lost. Mentor’s current management stays and the Ichan Group can’t force a sale of the company with only three board votes out of eight.
For the time being, that is.
While the stock price jumped 77 cents on the day the shareholder’s voted, up to $15.13, it has since declined more than 19% to close at $12.23 on June 17 (press time for this issue of the EDA WEEKLY).
To their credit, both sides appeared gracious after the voting was completed. But if the social media blogs in recent weeks contain any consistent theme, they would suggest that many Mentor employees remain worried about their futures, with the pervasive belief that this whole saga is far from over.
For his part, Carl Ichan is still around, even if his public appearances and utterances about Mentor have recently become far fewer. Indeed, the Wall Street Journal this week speculated that Carl may now have lost interest in Mentor. Others believe that having achieved the aforementioned inroads, if Mentor does not show significant performance improvements going forward, Carl will be back, looking for far more drastic changes.
Back to the May 27 Financial Release
“Our strategy of leveraging our strength in design automation into adjacent markets is working,” asserted Dr. Walden C. Rhines, still chairman and CEO of Mentor Graphics.
“The company reported record (high) revenues for a first quarter, as our New and Emerging product category delivered strong growth. In addition, our Integrated Systems Design product category continued to strengthen with year-on-year bookings up 45%. Leading indicators of the business remain strong with services and new customers both up sharply,” concluded Dr. Rhines.
During the quarter, the company refinanced a convertible debt offering, reducing annual cash interest expense, increasing conversion price, and reducing dilution. The company also announced a new four-year $125 million revolving credit facility. During the quarter, the company unveiled its 3D integrated circuit (IC) strategy and released test products designed to support 3D IC. The company extended its Calibre® product line with the Calibre RealTime platform which allows IC designers to optimize their designs while immediately verifying the manufacturability of the chip. The Mentor® Embedded Sourcery CodeBench won best software product of the show at the recent Embedded Systems Conference.
“We are well on track to achieve our full year goal of a non-GAAP operating margin of 15% of revenues,” said Gregory K. Hinckley, president of Mentor Graphics.
“Looking forward, we will extend our cost-cutting efforts with further consolidations of facilities and IT, while we continue to raise the bar on commission and variable compensation expense to further align rewards with increasing shareholder value,” said Hinckley.
For the second quarter, the company expects revenues of about $210 million and a GAAP loss per share of approximately $.05. For the full year, the company now expects revenues of about $1,004 million and GAAP earnings per share of about $.67.
As if it were responding to this writer’s distaste for using non-GAAP numbers, Mentor included the following cautionary verbiage in its May 27, 2011 financial news release:
“In certain instances our GAAP results of operations may not be profitable when our corresponding non-GAAP results are profitable or vice versa. The number of shares on which our non-GAAP earnings per share is calculated may therefore differ from the GAAP presentation due to the anti-dilutive effect of stock options and restricted stock units in a loss situation.
Non-GAAP gross margin, operating margin, and net income (loss) are supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. Moreover, they should not be considered as an alternative to any performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. We present non-GAAP gross margin, operating margin, and net income (loss) because we consider them to be important supplemental measures of our operating performance and profitability trends, and because we believe they give investors useful information on period-to-period performance as evaluated by management. Non-GAAP net income (loss) also facilitates comparison with other companies in our industry, which use similar financial measures to supplement their GAAP results. Non-GAAP net income (loss) has limitations as an analytical tool, and therefore should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. In the future we expect to continue to incur expenses similar to the non-GAAP adjustments described above and exclusion of these items in our non-GAAP presentation should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Some of the limitations in relying on non-GAAP net income (loss) are:
- Amortization of intangibles represents the loss in value as the technology in our industry evolves, is advanced, or is replaced over time. The expense associated with this loss in value is not included in the non-GAAP net income (loss) presentation and therefore does not reflect the full economic effect of the ongoing cost of maintaining our current technological position in our competitive industry, which is addressed through our research and development program.
- We regularly engage in acquisition and assimilation activities as part of our ongoing business and regularly evaluate our businesses to determine whether any operations should be eliminated or curtailed. We therefore will continue to experience special charges on a regular basis. These costs also directly impact our available funds.
- Our stock option and stock purchase plans are important components of our incentive compensation arrangements and will be reflected as expenses in our GAAP results.
- Our income tax expense (benefit) will be ultimately based on our GAAP taxable income and actual tax rates in effect, which often differ significantly from the 17% rate assumed in our non-GAAP presentation. In addition, if we have a GAAP loss and non-GAAP net income, our non-GAAP results will not reflect any projected GAAP tax benefits. Similarly, in the event we were to have GAAP net income and a non-GAAP loss, our GAAP tax expense would be replaced by a credit in our non-GAAP presentation.
- Other companies, including other companies in our industry, calculate non-GAAP net income (loss) differently than we do, limiting its usefulness as a comparative measure.”
Mentor Graphics self description
Mentor Graphics Corporation is a world leader in electronic hardware and software design solutions, providing products, consulting services and award-winning support for the world’s most successful electronic, semiconductor and systems companies. Established in 1981, the company reported revenues in the last fiscal year of about $915 million. Corporate headquarters are located at 8005 S.W. Boeckman Road, Wilsonville, Oregon 97070-7777. World Wide Web site: http://www.mentor.com/. (Mentor Graphics, Mentor, Calibre and Valor are registered trademarks of Mentor Graphics Corporation. All other company or product names are the registered trademarks or trademarks of their respective owners.)
May 12 15.12 $1.70B
June 03 13.10 $1.48B
June 17 12.23 $1.36B
On April 25, 2011 SpringSoft, Inc. (TAIEX: 2473) announced consolidated revenue of NT$549.377 million, net income of NT$139.411 million, and earnings per share of NT$0.67 for the first quarter ended March 31, 2011 (Nominal Q1 2011).
First‐quarter revenue decreased 4.7% from the just prior quarter but increased 2.6% year‐over‐year despite NT dollar appreciation against US dollar. Converting the quarterly NT$ revenues into $US using the actual average exchange rate in effect during each quarter, Q1 2011 revenue decreased 3.0% from the just prior (sequential) Q4 2010 quarter but increased 11.2% in Q1 2010, i.e. year‐over‐year. See Table 1 above ($US).
Operating margin for the quarter was 26.7%, higher than the 23.1% in the previous quarter and 23.5% in the year‐ago quarter.
Net income in NT$ increased 85.6% from the just prior quarter and 46.2% from the year‐ago quarter. In $US, the same figures are 89.1% and 56.7%, respectively. See Table 2.
EPS was NT$0.67, compared with NT$0.36 in the prior quarter and NT$0.46 in the year‐ago quarter. All figures were prepared on a consolidated basis.
SpringSoft self description
SpringSoft, Inc. is a global supplier of specialized automation technologies that accelerate engineers during the design, verification and debug of complex digital, analog and mixed‐signal ICs, ASICs, microprocessors, and SoCs. Its award‐winning product portfolio features the Novas™ Verification Enhancement and Laker Custom IC Design solutions used by more than 400 of today's leading IDM and fabless semiconductor companies, foundries, and electronic systems OEMs. Headquartered in Hsinchu, Taiwan, SpringSoft is the largest company in Asia specializing in IC design software and a recognized industry leader in customer service with more than 400 employees located in multiple R&D sites and local support offices around the world. For more information, visit www.springsoft.com. Novas, Verdi, Laker and MCell are trademarks of SpringSoft, Inc. All other trademarks or registered trademarks are the property of their respective owners.
FOR MORE DETAILS ABOUT SPRINGSOFT AND WHY IT WAS TAPPED FOR THE EDA G5, SEE THE MAY 02, 2011 EDA WEEKLY AT:
On May 18, 2011 Synopsys, Inc. (NASDAQ: SNPS) reported results for the second quarter its fiscal year 2011, a quarter which for our purposes is labeled nominal Q1 2011.
For nominal Q1 2011, Synopsys reported revenue of $393.7 million, compared YOY to $338.1 million for nominal Q1 2010, an increase of 16.4%; moreover, Synopsys also exceeded the revenue of its traditionally-strong sequential Q4 2010 by nearly 8%! The $393.7 million in Q1 2011 revenue was just about at the top of the range of revenue guidance issued 3 months earlier by Synopsys.
"Synopsys delivered a strong quarterly result as we continue to execute well," said Aart de Geus, chairman and CEO of Synopsys.
"Our technology pipeline, delivery and customer adoption remain strong, and we continue to see momentum in our IP and Systems products."
On a generally accepted accounting principles (GAAP) basis, net income for nominal Q1 2011 was $81.1 million, or $0.53 per share, compared to $39.5 million, or $0.26 per share, for nominal Q1 2010. And here we witness another one of those distortions due to a tax situation from another period, albeit a positive distortion: Synopsys’ net income for Q1 2011 includes a one-time $32.8 million, or $0.21 per share, tax benefit associated with a settlement with the IRS for audits for fiscal years 2006 through 2009. The tax benefit to profit was also just about precisely the extra kick by which Q1 2011 exceeded Synopsys’ nominal Q4 2010 profit. Obviously, the tax benefit allowed Synopsys to blow the doors off Synopsys’ guidance for earnings issued three months ago, wherein the top of the EPS range for Q1 2011 was predicted to be $0.31.
Synopsys also provided its financial targets for its next quarter and full fiscal year 2011. These targets do not include future acquisition-related costs that may be incurred this year. These targets constitute forward-looking information and are based on current expectations that may or may not materialize.
Synopsys Nominal Q2 2011 Targets:
- Revenue: $378 million - $386 million
- GAAP expenses: $319 million - $337 million
- Other income and expense: $0 - $2 million
- Fully diluted outstanding shares: 149 million - 153 million
- GAAP earnings per share: $0.25 - $0.31
- Revenue from backlog: greater than 90%
Full Fiscal Year 2011 Targets:
- Revenue: $1.5 billion - $1.525 billion
- Other income and expense: $1 million - $5 million
- Fully diluted outstanding shares: 149 million - 153 million
- GAAP earnings per share: $1.33 - $1.46
- Cash flow from operations: approximately $300 million
By the way, here is Synopsys’ take on the “GAAP vs. Non-GAAP” Issue
“Synopsys continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Accordingly, Synopsys presents non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Synopsys' operating results in a manner that focuses on what Synopsys believes to be its ongoing business operations and what Synopsys uses to evaluate its ongoing operations and for internal planning and forecasting purposes. Synopsys' management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Synopsys' management believes it is useful for itself and investors to review, as applicable, both GAAP information that includes: (i) the amortization of acquired intangible assets, (ii) the impact of stock compensation, (iii) acquisition-related costs, (iv) other significant items, including the effect of tax benefits from settlements with the Internal Revenue Service, and (v) the income tax effect of non-GAAP pre-tax adjustments from the provision for income taxes; and the non-GAAP measures that exclude such information in order to assess the performance of Synopsys' business and for planning and forecasting in subsequent periods. Whenever Synopsys uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure.”
The above is only a portion if the non-GAAP discussion by Synopsys, Readers interested in the complete non-GAAP discussion are welcome to check out the Synopsys web site. You won’t find more on the Synopsys non-GAAP discussion in the EDA WEEKLY.
Revenue Information by Synopsys’ Product Groups
For management reporting purposes, Synopsys organizes its products and services into 4 groups: 1 Core EDA (Electronic Design Automation), which includes the Galaxy™ Design Platform, the Discovery™ Verification Platform and the FPGA (Field Programmable Gate Array) design products; 2 Intellectual Property (IP) and System-Level Solutions; 3 Manufacturing Solutions; and 4 Professional Services and Other. This information is actually quite useful.
1 Core EDA. Includes Galaxy Design Platform, Discovery Verification Platform and FPGA design products.
Galaxy. The Galaxy Design Platform provides its customers with a single, integrated IC design solution that includes industry leading individual products and incorporates common libraries and consistent timing, delay calculation and constraints throughout the design process. The platform helps reduce design times, decrease integration costs and minimize the risks inherent in advanced, complex IC designs. The principal products included in the Galaxy platform are the IC Compiler physical design solution, Design Compiler® logic synthesis product, Galaxy Custom Designer® physical design solution for analog/mixed-signal designs, PrimeTime®/PrimeTime SI timing analysis products, StarRC™ product for extraction, and the Hercules™ and IC Validator physical verification product family.
Discovery. The Discovery Verification Platform is a comprehensive, integrated portfolio of functional, analog/mixed-signal, & formal verification products. The platform includes its simulation and verification products and design-for-verification methodologies, and provides a consistent control environment to help significantly improve the speed, breadth and accuracy of its customers’ verification efforts. The principal products included in the Discovery platform are the VCS® comprehensive RTL verification solution, Formality® formal verification sign-off solution, NanoSim® FastSPICE circuit simulation and analysis product, HSIM® hierarchical FastSPICE circuit simulation and analysis product, HSPICE® circuit simulator, and CustomSim™ circuit simulation solution.
FPGA Design. FPGAs are complex chips that can be customized or programmed to perform a specific function after they are manufactured. The principal products included in FPGA Design are Synplify® Pro and Premier implementation and Identify® debug software tools.
2 Intellectual Property and System-Level Solutions. This broad IP portfolio provides customers with high-quality, silicon-proven digital, PHY, analog, verification and memory IP for SoC designs to reduce their design risk and time-to-market. Its IP solutions include the DesignWare® Library of infrastructure IP, VCS Verification Library of popular chip function models, and DesignWare Cores, which are pre-designed and pre-verified digital logic and mixed-signal blocks that implement important industry standards, including USB, PCI Express, DDR, SATA, HDMI, Ethernet and MIPI. Its analog IP solutions include analog-to-digital converters, digital-to-analog converters, audio codecs, video analog front ends and touch screen controllers. Its memory IP solutions include embedded memory, including SRAMs and non-volatile memory, logic libraries, embedded test and repair IP and configurable processor cores. Its System-Level solutions enable customers to, among other things, accelerate verification and embedded software development. These solutions include its virtual prototyping portfolio and Confirma™ Rapid Prototyping System, the portion of the Certify®, Identify Pro, and Synplify Premier software tools used for system verification, and Synphony High Level Synthesis. Synopsys also offer specialized System-Level solutions, such as products that focus on interactions with optical components in the system.
3 Manufacturing Solutions. The Manufacturing Solutions products and technologies address the mask-making and yield enhancement of very small-geometry ICs, as well as high-level modeling of physical effects within the ICs and include the Technology-CAD (TCAD) device modeling products, Proteus OPC optical proximity correction (OPC) products, CATS® mask data preparation product, and Yield Management solutions, including Odyssey and Recipe Manager and Editor (RME), and Yield Explorer.
4 Professional Services and Other. The Professional Services group provides a broad range of consulting and design services that address all phases of the SoC development process, including design methodology adoption, specialized systems design services, turnkey design and training, along with its Lynx Design System, a production-ready chip implementation environment that helps customers improve their productivity and optimally deploy Synopsys tools and methodologies.
The following table summarizes the revenue attributable to these groups as a percentage of total revenue for the last ten quarters and two fiscal years. Synopsys includes revenue from companies or products that Synopsys has acquired during the periods covered from the acquisition date through the end of the relevant periods.
EDA WEEKLY readers will note the steady rise in the percentage of Synopsys’ IP business, from 9% in Q2 09 to 24% in Q2 11.
Synopsys self description
Synopsys, Inc. (NASDAQ:SNPS) is a world leader in electronic design automation (EDA), supplying the global electronics market with the software, intellectual property (IP) and services used in semiconductor design, verification and manufacturing. Synopsys' comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and field-programmable gate array (FPGA) solutions helps address the key challenges designers and manufacturers face today, such as power and yield management, system-to-silicon verification and time-to-results. These technology-leading solutions help give Synopsys customers a competitive edge in bringing the best products to market quickly while reducing costs and schedule risk. Synopsys is headquartered in Mountain View, California, and has approximately 70 offices located throughout North America, Europe, Japan, Asia and India. Visit Synopsys online at
We finally come to the Electronics IP portion of The EDA and Electronics IP Almanac: Q1 2011.
Recall from the Introduction, that these are the G5 IP Vendors that we planned to cover here:
The Electronics IP G5 Results for Nominal Q1 2011
We begin our review of the Q1 2011 Electronics IP G5 performances by looking at the Electronics lP Revenue Summary (Table 3) below.
As a group of five vendors (The IP G5), we are not surprised that the Sum revenue for Q1 2011 was less than its seasonally-strong sequential Q4 2010 predecessor, although both ARM’s and CEVA’s Q1 2011 revenues topped their Q4 2010 levels. As a positive trend, the G5 Q1 2011 Sum of nearly $287 million was the second best of the last four quarters. To assert a positive trend, of course, one must ignore the anomaly of Q1 2010, when the Rambus royalties’ windfall distorted the Sum radically).
And the distinction among the five IP vendors continues with two dominant vendors and three runners up. ARM Holdings’ strength and steady growth are once more on display, with Rambus’ sinusoidal revenue still number two. While the business models of each are dramatically different, together the “odd couple” again in Q1 2011 took seven-eighths of the IP revenue Sum (just as occurred in Q4 2010), leaving the last eighth divided among the bottom three companies.
Ah, the bottom three. The revenue numbers for the last four quarters would suggest that while second smallest, CEVA is on a roll; MIPS is flat to a slight decline, and tiny MoSys is “bumping along.”
Table 4 reveals the traditional earnings decline of Q1 vs. its sequential Q4 predecessor, even for ARM... but wait, here comes little CEVA breaking the tradition. And it would seem that the stock market likes what it sees in CEVA (see the one-year stock charts that accompany the individual vendor write-ups in the sequel).
Over all, Table 4 shows lots of red; indeed, 40% of the entries in Table 4 are in red font this quarter. CEVA’s line is the only one with all black font.
Electronics IP Vendor by Vendor Details – Q1 2011
On April 27, 2011 ARM Holdings plc announced its unaudited financial results for the first quarter of 2011, ended March 31, 2011. ARM continues to see its IP technology chosen by leading companies for a broad range of end markets, helping to deliver its highest-ever revenues and profits.
ARM Progress on key growth drivers in Q1 2011
Growth in adoption of ARM® processor technology
o 39 processor licenses signed for all target end markets
o Broadcom and LG Electronics both sign subscription licenses, enabling access to a wide range of ARM’s processors for use across multiple end markets
o Several major semiconductor companies developing chips for set-top-box and digital TV applications licensed ARM technology, for the first time in this application area
o Long-term strategic agreements deliver further growth in order backlog
Growth in mobile applications
o 1.15 billion ARM-processor based chips shipped into mobile devices, including smart phones and tablets
Growth beyond mobile into consumer electronics and embedded products
o 0.7 billion ARM-processor based chips shipped into a broad range of end applications, including digital TVs, disk drives and microcontrollers
Growth in outsourcing of new technology
o Physical IP: 3 Processor Optimization Packs licenses signed for Cortex™-A family processors, further increasing the royalty opportunity from high-value chips in mobile computers and smart phones
o Graphics: 7 licenses signed for Mali™, ARM’s advanced graphics processor family
Warren East, ARM Chief Executive Officer, said, “Influential market leaders are licensing ARM technology to gain access to a growing ecosystem of operating systems, software applications, tools and service providers. Many of these companies have been ARM licensees for many years, and are now deploying ARM technology across a multitude of applications; in mobile, consumer electronics and embedded devices. This licensing drives ARM’s long-term royalty opportunity. Shipments of ARM-processor based chips increased 33% on the same period last year driven by growth in smart phones, tablets, digital TVs and microcontrollers. ARM’s revenue growth enables us to continue to invest in innovative technology development at the same time as delivering strong increases in profits and cash flow.”
ARM believes that it has made an encouraging start to 2011 with more leading companies choosing to deploy ARM technology in their products. Looking forward, ARM anticipates normal seasonality for royalty revenues in the second quarter and, notwithstanding the current uncertainty as to the economic impact of the Japanese earthquake on the semiconductor industry supply chain and end-product markets, ARM expects that group dollar revenues for the full-year 2011 will be at least in line with “current market expectations.”
Total dollar revenues in Q1 2011 were $185.5 million, up 29% on Q1 2010. Q1 2010 sterling revenues were £116.0 million, up 26% year-on-year. By comparison dollar revenues for the semiconductor industry were up only 13% over the equivalent period, according to ARM.
License revenues and backlog
Total dollar license revenues in Q1 2011 increased by 49% year-on-year to $63.9 million, representing 34% of group revenues. License revenues comprised $51.3 million from PD and $12.6 million from PIPD.
During Q1 2011, several Partners entered into long-term commitments to use ARM technology where much of the revenue associated with these agreements will be recognized in future quarters. As a result, group backlog at the end of the quarter was up about 15% sequentially and more than double year-on-year, to a record high.
Royalties are recognized one quarter in arrears with royalties in Q1 2011 generated from semiconductor unit shipments in Q4 2010. Total dollar royalty revenues in Q1 2011 increased by 27% to $98.6 million, representing 53% of group revenues. Royalty revenues comprised $87.9 million from PD and $10.7 million from PIPD. Total PIPD royalties of $10.7 million included $0.6 million of catch-up royalties.
Development Systems and Service revenues
Sales of development systems in Q1 2010cwere down 10% year-on-year to $13.3 million, representing 7% of group revenues. As reported one year ago, Q1 2010 revenues for development systems of $14.8 million were higher than normal partly due to additional revenue coming from backlog from two large software tool deals signed in prior periods reaching payment milestones.
Service revenues in Q1 2011 were up 21% year-on-year to $9.7 million, representing 5% of group revenues. The increase in service revenues is consistent with the strong growth in licensing activity in recent quarters.
Total ARM Net Income for Q1 2011 was $34.569 million, up 13.95% compared to Q1 2010 net of $30.337 million. Not surprisingly, net income in Q1 2011 was down 26.39% from the net for Q4 2010, the latter being a very strong seasonal quarter.
Foreign Exchange rates used by ARM in report
Effective fx rate ($/£): 1.60 in Q1 2011; 1.55 in Q1 2010.
As of March 31, 2011, ARM had 1,922 full-time employees, a net increase of 33 since the start of the year. At the end of March, the group had 788 employees based in the UK, 511 in the US, 221 in Continental Europe, 286 in India and 116 in the Asia Pacific region. Worldwide annualized revenue per full time person based on Q1 2011 revenue, is about $386,000.
Principal risks and uncertainties
The principal risks and opportunities faced by the ARM “Group” were included within the “Risks and risk management” section of the 2010 Annual Report and Accounts filed with Companies House in the UK. Details of other risks and uncertainties faced by the Group are noted within the Annual Report on Form 20-F for the year ended December 31, 2010 which is on file with the Securities and Exchange Commission (the “SEC”) and is available on the SEC’s website at www.sec.gov.
There have been no changes to these risks that would materially impact the Group in the foreseeable future. These include but are not limited to: ARM's quarterly results may fluctuate significantly and be unpredictable which could adversely affect the market price of ARM ordinary shares; general economic conditions may reduce ARM's revenues and harm its business; ARM may have to protect its intellectual property or defend itself against claims that we have infringed others’ proprietary rights; an infringement claim or a significant damages award would adversely impact ARM’s operating results; companies within the semiconductor industry may consolidate reducing the number of customers that ARM may sell its technology to; for ARM to enter new markets or develop new technology may require significant investment and may not result in profitable operations; and ARM competes in the intensely competitive semiconductor market.
LATE BREAKING NEWS
On June 17, 2011 ARM announced that it had acquired privately-held Obsidian Software, a vendor of verification and validation tools used in the design of complex processors. Obsidian Software has offices in Austin, Texas. According to the news release, as Systems on Chips (SoCs) and processors grow in complexity, there is an increasing need to develop more sophisticated verification strategies. This acquisition is said to augment ARM’s drive to match its verification strategies with the rate of change in its high performance, complex SoC IP components. The news release stated that the Obsidian Software validation team will become part of an ARM Processor validation group based in Austin, Texas.
ARM self description
ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM's comprehensive product offering includes 32-bit RISC microprocessors, graphics processors, video engines, enabling software, cell libraries, embedded memories, high-speed connectivity products, peripherals and development tools. Combined with comprehensive design services, training, support and maintenance, and the company's broad Partner community, they provide a total system solution that offers a fast, reliable path to market for leading electronics companies. More information on ARM is available at
On April 27, 2011 CEVA, Inc. (NASDAQ: CEVA); (LSE: CVA) announced its financial results for Q1 2011 ended March 31, 2011.
- Record quarterly total revenues of $15.1 million, record royalty revenue of $9.2 million, up 42% and 85% year-over-year, respectively
- Record GAAP operating margin of 32%
- Three licensing deals concluded for flagship CEVA-XC DSP
Total revenue for the first quarter of 2011 was a record $15.1 million, an increase of 42% compared to $10.6 million reported for the first quarter of 2010, and up 16% from the $13.0 million achieved in sequential Q4 2010.
First quarter 2011 licensing revenue was $5.1 million, representing an increase of 8% when compared to $4.7 million reported for the same quarter a year ago. Royalty revenue for the first quarter 2011 was a record $9.2 million, an increase of 85% compared to $5.0 million reported for the first quarter of 2010. Revenue from services for the first quarter was $0.7 million, a decrease of 18% compared to $0.9 million reported for the first quarter of 2010.
Gideon Wertheizer, Chief Executive Officer of CEVA, stated, "We are very pleased with the level of earnings growth recorded during the first quarter, which reflects the strong licensing and royalty revenue generating capabilities of our business model. Our rapid market share expansion in cellular baseband for both handsets and non-handsets continues, with more than 210 million CEVA-powered wireless chipsets shipped during the quarter.”
“On licensing, our best of breed DSP, the CEVA-XC, was selected by new key players in the wireless infrastructure and smart grid markets, thereby continuing our expansion beyond handsets to new, strategic and high volume markets," Mr. Wertheizer concluded.
U.S. GAAP net income for the first quarter of 2011 was $4.7 million, an increase of 126% over $2.1 million reported for the same period in 2010. U.S. GAAP diluted earnings per share for the first quarter of 2011 were $0.19, an increase of 111% compared to $0.09 for the first quarter of 2010.
During the first quarter of 2011, the Company concluded seven new license agreements. Four agreements were for CEVA DSP cores, platforms and software, and three agreements were for CEVA SATA/SAS product lines. Target applications for customer deployment are 3G and 4G baseband processors for handsets, infrastructure, smart grid and SSD drives. Geographically, three of the agreements signed were in the U.S., three were in Asia and one in Europe.
Yaniv Arieli, Chief Financial Officer of CEVA, stated, "Our first quarter 2011 financial performance exceeded our expectations and produced the sixth sequential quarter of record royalty revenue.”
“We achieved strong financial results in all aspects of our business, including GAAP and non-GAAP gross margins of 94%, as well as GAAP and non-GAAP operating margins of 32% and 39%, respectively, excluding, for purposes of non-GAAP operating margins, an aggregate equity-based compensation expense of $1 million. We also bolstered our strong balance sheet with the addition of approximately $12 million in positive cash flow. At the end of the quarter, our cash balance, marketable securities and bank deposits totaled $143 million."
CEVA, Inc. self description
CEVA is the world's leading licensor of silicon intellectual property (SIP) platform solutions and DSP cores for the mobile handset, portable and consumer electronics markets. CEVA's IP portfolio includes comprehensive technologies for cellular baseband (2G / 3G / 4G), multimedia, HD video and audio, voice over packet (VoP), Bluetooth, Serial Attached SCSI (SAS) and Serial ATA (SATA). In 2010, CEVA's IP was shipped in over 600 million devices, powering handsets from 7 out of the top 8 handset OEMs, including Nokia, Samsung, LG, Motorola, Sony Ericsson and ZTE. Today, more than one in every three handsets shipped worldwide is powered by a CEVA DSP core. For more information, visit
On April 26, 2011 MIPS Technologies, Inc. (NASDAQ: MIPS) reported consolidated financial results for its third fiscal quarter ended March 31, 2011, which is nominal Q1 2011 for our reporting purposes. All financial results are reported in U.S. GAAP unless otherwise noted.
Summary of Nominal Q1 2011 Financial Highlights:
Revenue in Q1 2011 was $20.0 million, a year-to-year increase of 14.5%
Licensee royalty units grew to 163 million units from 135 million units in nominal Q1'1
Cash and investment balances ended the quarter at $108.4 million, a year-to-year increase of $57.1 million
Revenue from royalties was $13.4 million, an increase of 11% from the first quarter a year ago, driven by a 20% increase in units. License revenue was $6.6 million, an increase of 23% from the $5.4 million reported in the first quarter a year ago.
Nominal Q1'11 GAAP costs and operating expenses were $16.0 million, an increase of $2.4 million over Q1'10. The increase compared with Q1'10 was due mainly to higher R&D and marketing costs.
"We announced the first MIPS-Based mobile handsets and tablets during the quarter, and also received our first mobile-related royalties for these devices. These are significant milestones for MIPS as we continue to make inroads into the mobile device market," said Sandeep Vij, chief executive officer, MIPS Technologies.
Nominal Q1 2011 net profit was only $3.365 million, down 44.4 % sequentiallly and up only 9.93% year over year’
MIPS Technologies, Inc. self description
MIPS Technologies, Inc. (NASDAQ: MIPS) is a leading provider of industry-standard processor architectures and cores that power some of the world's most popular products for the digital home, networking and mobile device markets. These include broadband devices from Linksys, DTVs and digital consumer devices from Sony, DVD recordable devices from Pioneer, digital set-top boxes from Motorola, network routers from Cisco, 32-bit microcontrollers from Microchip Technology and laser printers from Hewlett-Packard. Founded in 1998, MIPS Technologies is headquartered in Sunnyvale, California, with offices worldwide. For more information, contact (408) 530-5000 or visit www.mips.com.
On April 28, 2011 MoSys, Inc., (NASDAQ: MOSY) reported financial results for the first quarter ended March 31, 2011, a period which precisely matches our nominal Q1 2011.
First Quarter 2011 Highlights
- Reported total revenue of $3.5 million;
- Ended the quarter with total cash and investments of approximately $34.6 million;
- Closed first order for multi-protocol SerDes IP at 28-nanometer;
- Continued sampling of the Bandwidth Engine(R) family of ICs with prospective customers; and
- Achieved interoperability of the Bandwidth Engine IC with SerDes from Avago Technologies and with FPGA devices from Altera Corporation and Xilinx, Inc.
"During the first quarter, we implemented several initiatives aimed at strengthening our IP sales and marketing efforts, as we pursued an increasing number of IP opportunities in our target markets," commented Len Perham, MoSys' President and Chief Executive Officer. "As a result of these initiatives and the hard work of our team, we had a strong first quarter in the IP business, including MoSys' first order for a 28-nanometer SerDes solution. Our IP business remains the foundation for revenue growth in the near-term as we transition toward becoming an IP-rich fabless semiconductor company and bring the Bandwidth Engine family of ICs to market. “
"In addition to strengthening our IP business, we made solid advancements in the characterization and verification of our Bandwidth Engine IC platform. We expect to complete these efforts in the third quarter of this year and are targeting the second half of 2011 to begin prototype production builds. We continue to work toward an ISO 9000 certification, a necessary step in becoming a top flight preferred supplier to our customers and partners. Additionally, in close collaboration with our foundry partner, TSMC, work has begun to optimize the yield, quality and reliability of our new family of advanced networking system integrated circuits. We remain optimistic that we will achieve an enterprise grade rating for the Bandwidth Engine IC family.”
Mr. Perham concluded, "Demand for stand-alone Bandwidth Engine samples and for reference boards remains strong, and feedback from potential customers has been very positive. We are closely collaborating with potential customers in order to facilitate the early adoption of this very advanced networking system IC family. Our goal is to begin securing identifiable design wins in the fourth quarter of this year. Presently and for the remainder of the year, we will remain focused on leveraging our core IP portfolio to achieve near term revenue goals, while simultaneously making a targeted effort to accelerate the adoption of our Bandwidth Engine IC family."
First Quarter Results
Total net revenue for the first quarter of 2011 was $3.5 million, compared with $4.0 million reported in the fourth quarter of 2010 and $3.6 million in the first quarter of 2010.
First quarter 2011 total revenue included licensing revenue of $1.3 million, compared with $1.4 million for the previous quarter and $1.5 million for the first quarter of 2010. First quarter 2011 royalty revenue was $2.2 million, compared with $2.6 million in the previous quarter and $2.0 million for the first quarter of 2010. First quarter 2011 royalty revenue was driven by royalties from licensees in the gaming and networking markets.
Gross margin for the first quarter of 2011 was 81% compared with 81% for the fourth quarter of 2010 and 78% for the first quarter of 2010.
Total operating expenses on a GAAP basis for the first quarter of 2011 were $8.9 million, compared with $8.9 million in the previous quarter and $8.6 million for the first quarter of 2010. First quarter 2011 operating expenses included $0.7 million of amortization of intangible assets and $0.7 million of stock-based compensation expense.
GAAP net loss for the first quarter of 2011 was $6.0 million, or ($0.16) per share, compared with a net loss of $5.7 million, or ($0.17) per share, for the previous quarter and a net loss of $5.7 million, or ($0.18) per share, for the first quarter of 2010. Earnings per share for the first quarter of 2011 were computed using approximately 37.3 million shares on a GAAP basis.
As of March 31, 2011, cash and short and long-term investments totaled $34.6 million.
This write up may contain forward-looking statements about Mosys, including, without limitation, benefits and performance expected from use of the Company's embedded memory and interface technologies, anticipated benefits and performance expected from the Bandwidth Engine product and the Company's future markets and future business prospects.
Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements.
Mosys self description
MoSys, Inc. (NASDAQ: MOSY) is a leading provider of serial chip-to-chip communications solutions that deliver unparalleled bandwidth performance for next generation networking systems. MoSys' Bandwidth Engine ® family of ICs combines the company's patented 1T-SRAM ® high-density memory with its high-speed interface technology. A key element of Bandwidth Engine technology is the GigaChip(TM) Interface, an open, short-reach, low-power serial interface developed by MoSys to enable highly efficient, high-bandwidth, low-latency performance not achievable using currently available serial protocols. MoSys' IP portfolio includes silicon proven SerDes and DDR3 PHYs that support a wide range of data rates across a variety of standards and 1T-SRAM memory cores that provide a combination of high-density, low power consumption, high-speed and low cost advantages for high-performance networking, computing, storage and consumer/graphics applications. MoSys is headquartered in Santa Clara, California. More information is available on MoSys' website at WWW.MOSYS.COM
On April 21, 2011 Rambus Inc. (NASDAQ:RMBS) reported financial results for the first quarter ended March 31, 2011.
First Quarter Fiscal 2011 Business and Financial Highlights
Signed five-year patent license agreements with Panasonic Corporation and Toshiba Corporation.
Demonstrated differential signaling for SoC-to-memory interfaces to 20 Gbps and extended single-ended signaling to 12.8 Gbps.
Introduced FlexModeTM interface technology, which enables both differential and single-ended memory systems to be implemented in a single SoC package design with no extra pins.
Revenue of $62.5 million
GAAP diluted loss per share of $0.04.
GAAP Financial Results
Revenue for the first quarter of 2011 was $62.5 million, down 31% sequentially from the fourth quarter of 2010 primarily due to one-time catch up revenue from the Elpida and Renesas license agreements in the fourth quarter of 2010. As compared to the first quarter of 2010, revenue was down 61% primarily due to large amounts of revenue recognized from agreements signed with Samsung during the first quarter of 2010.
Total operating costs and expenses for the first quarter of 2011 were $54.2 million, which included general litigation expenses of $9.2 million and a credit from gain from settlement of $6.2 million. This is compared to total operating costs and expenses for the fourth quarter of 2010 of $48.0 million, which included general litigation expenses of $5.8 million and a credit from gain from settlement of $10.3 million. Total operating costs and expenses (recoveries) in the first quarter of 2010 were a recovery of $40.3 million, which included general litigation expenses of $7.0 million and a credit from gain from settlement of $95.9 million.
Net loss for the first quarter of 2011 was $4.2 million as compared to a net income of $33.1 million in the fourth quarter of 2010 and a net income of $150.9 million in the first quarter of 2010. Diluted net loss per share for the first quarter of 2011 was $0.04 as compared to a net income per share of $0.29 in the fourth quarter of 2010 and a net income per share of $1.28 in the first quarter of 2010.
Other Financial Highlights
Cash, cash equivalents, and marketable securities as of March 31, 2011 were $508.6 million, a decrease of approximately $3.4 million from December 31, 2010. The decrease was primarily due to cash used in operations and for purchases of property, plant and equipment during the quarter.
During the quarter ended March 31, 2011, the Company paid withholding taxes of approximately $4.2 million. As the Company continues to maintain a valuation allowance against its U.S. deferred tax assets, the Company's tax provision is based on a projected annual effective tax rate consisting of state, foreign and withholding taxes applied to year-to-date pretax income results for the -1687 (domestic) or (706) 645-9291 (international) with ID#58589190.
Rambus Inc. self description
Rambus is one of the world's premier technology licensing companies. Founded in 1990, the Company specializes in the invention and design of architectures focused on enriching the end-user experience of electronic systems. Additional information is available at www.rambus.com.
EDA and Electronics IP Margins & Market Caps
In this section, the table comparing early January and late March Stock Prices and Market Caps, first presented in the EDA WEEKLY of April 04, 2011, is extended below to early June 2011. While five EDA vendors and five Electronics IP vendors are again listed, SpringSoft has replaced Altium in the above Tables 1 & 2, and in Table 5 below.
Table 1 above provided revenue numbers for Q1 2011 and the three prior quarters, listing each of the G5 EDA vendor's revenue results for each of those quarters. Table 2 presented earnings numbers for Q1 2011 and the three prior quarters, listing each of the G5 EDA vendor's earnings results for each of those quarters.
Likewise, Table 3 exhibited revenue numbers for Q1 2011 and the three prior quarters, listing each of the G5 Electronics IP vendor's revenue results for each of those quarters. Table 4 gave earnings numbers for Q1 2011 and the three prior quarters, listing each of the G5 IP vendor's earnings results for each of those quarters.
All ten vendors, side by side
To gain a side by side comparison of all ten vendors, in a format which lists both the Stock Prices and Market Caps for January 07, 2011; March 25, 2011; and June 03, 2011, we present below Table 5. After each time period, the percentage the later Market Cap increased over its predecessor is listed in two-digit bold black font. If the Market Cap decreased over the period, the percentage is displayed in two-digit bold red font.
Note that 7 of the 10 vendors gained in market valuation over the seventy-seven day interval between January 07 and March 25, 2011. These trends are consistent with the up slope portions of the stock charts also included above. But over the following seventy days between March 25 and June 03, Table 5 reveals that four of the ten vendors lost market value, and so on.
Electronics IP vendor ARM Holdings’ market strength is again evident, compared to all the other nine companies listed.
Parting Comment: Over the two weeks between June 03 and June 17, 2011, Magma was the only member of the G10 whose Market Cap did not further decline. During that 2-week period, the NASDAQ Composite lost another 4.25% of its value.
About the Writer of the EDA WEEKLY:
Since 1996, Dr. Russ Henke has been and remains active as president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. The number of client companies served by Henke Associates during those years now numbers close to fifty. Engagement lengths have varied from a few weeks up to ten years and beyond.
During his previous corporate career, Henke operated sequentially on "both sides" of MCAE/MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron (Research Scientist), SDRC (President & COO), Schlumberger Applicon (Executive VP), Gould Electronics (President & General Manager), ATP (Chairman and CEO), and Mentor Graphics (VP & General Manager).
Henke is a Fellow of the Society of Manufacturing Engineers (SME) and served on the SME International Board of Directors. Henke was also a board member of SDRC, PDA, ATP, and the MacNeal Schwendler Corporation, and he currently serves on the board of Stottler Henke Associates, Inc.
Henke is also a member of the IEEE and a Life Fellow of ASME International. In April 2006, Dr. Henke received the 2006 Lifetime Achievement Award from the CAD Society, presented by CAD Society president Jeff Rowe at COFES2006 in Scottsdale, AZ. In February 2007, Henke became affiliated with Cyon Research's select group of experts on business and technology issues as a Senior Analyst. This Cyon Research connection aids and supplements Henke's ongoing, independent consulting practice (HENKE ASSOCIATES). Dr. Henke is also a contributing editor of the EDACafé EDA WEEKLY, and he has published EDA WEEKLY articles every four weeks since November 2009; URL's available.
Since May 2003 HENKE ASSOCIATES has also published a total of ninety-six (96) independent COMMENTARY articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADCafé and EDACafé.
Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at http://www.henkeassociates.net.
March 31, 2011 marked the 15th Anniversary of the founding of HENKE ASSOCIATES.