May 31, 2004
Commentary: EDA Industry Update May 2004 -- What did the Last Quarter Bring?
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Earnings for Q1 2004 were $2.2 million, down from the earnings of $13 million of last quarter but an improvement over last year's loss of $1.4 million in the same quarter.
First quarter bookings were up 17%, an all time Q1 record. Seven product lines had Q1 booking records, ModelSim and PADS had all time quarterly booking records. Bookings in Japan climbed 65% and Pacific Rim bookings grew 35%. Deferred revenue was up 20%, also an all time record. Revenue by product segment widely variable on a percentage basis due to a few very large orders in this or in a prior quarter.
“Mentor saw strength within all product areas, but particularly in our Scalable Verification Environment, driven in part by the second largest order in the company's history, for ModelSim," said Walden C. Rhines, chairman and CEO of Mentor Graphics. "But the strength in Scalable was broad-based, with analog-mixed signal bookings up 40% year-on-year and with 18 new customers in the quarter. VStation emulation also made excellent progress and was also up strongly year-on-year."
“With record bookings for the first quarter, and a 20% market share according to EDAC numbers for the fourth quarter of 2003, Mentor believes that we continue to outgrow the overall EDA market," said Gregory K. Hinckley, president of Mentor Graphics. "And, still being early in the deployment cycle of Calibre products, as well with a number of strong emerging businesses like TestKompress, cabling, and embedded software, we believe Mentor is positioned to outgrow the market for some time to come."
For the record, Mentor Graphics revenue grew 13.3% in 2003 over 2002.
On April 14, 2004, Nassda announced the results for its second quarter of fiscal 2004 ending March 31, 2004. Revenue for the quarter was $9.8 million, a 1% sequential increase from $9.7 million and an 11% increase from $8.8 million in the same quarter last year. The $9.8 revenue figure was at the low end of the company's forecast made in mid-January 2004. Net income was $752K, an increase of 31% from $572K for the previous quarter and a decrease of $270K from $1.0 million, for the same quarter last year. Time-based licensing was lower (48% of revenue) than expected as was major account business. Geographical breakdown was as follows: domestic 60%, Europe 12%, Japan 20% and rest of
analysis products to meet the challenges of complex nanometer silicon success.”
a year ago. On the product segment front, Galaxy Design products accounted for 63% of total revenue and grew a modest 4% sequentially (but dropped 8% year-over-year). Discovery Verification products (which accounted for 20% of revenue) were flat sequentially and up nearly 6% from the prior year. IP, DFM and Services revenues averaged around 50% year-over-year growth.
Net income for the quarter was $28.7 million, down almost 11% sequentially but up 30% year-over-year. This quarter's net income was $10 million less opulent due to the fee paid by Synopsys to Monolithic System Technology, Inc (MoSys) in connection with the termination of the acquisition agreement. On a non-GAAP basis, net income was up 5.6% sequentially and down 6.6% year-over-year.
On April 20, 2004, Synplicity Inc. reported results for its first quarter of Fiscal 2004. Revenue was $13.5 million, a modest 2.2% growth sequentially but up nearly 17% year-over- year. The $13.5 million in Q1 2004 revenue was slightly above the upper range of Synplicity's guidance of late January 2004. License revenue comprised 55% of total revenue, increasing 16% from the 1st quarter of 2003 and flat with the 4th quarter 2003. Maintenance revenue increased 18% over the 1st quarter 2003 and 5% from the 4th quarter 2003, primarily due to a large amount of back-maintenance charges for customers returning to active maintenance, as well as improved maintenance renewal rates. The
percentage of revenue coming from recurring sources, which includes maintenance, time-based licenses, and OEM relationships, accounted for a record 67% of revenue in the 1st quarter 2004.
FPGA product bookings were up slightly year-over-year and comprised 76% of product bookings for the quarter. For the quarter, international business comprised 50% of total bookings.
Net income was $296K, a sequential drop of 33% but over $900K better than a year earlier.
“Our first quarter performance was outstanding on many levels. Most importantly, we saw an increase in customer activity, which led to our record high quarterly revenue and deferred revenue," said Bernard Aronson, president and CEO of Synplicity. "Maintenance revenue increased 18 percent on a year over year basis and maintenance renewal rates improved as well. We were also pleased by the improvement in our North American FPGA product bookings, which were up on a year over year basis, after having declined year over year each quarter for the last two years. Our cell-based and Structured ASIC bookings nearly doubled over the same quarter last year," Aronson concluded.
On April 26, 2004, Verisity Ltd announced its financial results for the first quarter. Revenue for the quarter was $11 million compared to $12.3 million for the prior quarter and $11.7 million for the same quarter a year earlier. This revenue includes contribution from the acquisition of Axis Systems on February 10, 2004. The $11 million of actual Q1 2004 revenue was below the range of $11.5 to 11.9 million forecast by Verisity in January 2004. License revenue was $5.9 million down 19.6% sequentially and down 15.6% year over year. Maintenance revenue of $5 million was up 6% sequentially
and 10.3% year over year. Time based licenses accounted for 98% of license revenue and 61% of bookings. Existing customers accounted for 99% of revenue. The semiconductor sector contributed 65% of revenue and the system sector 25%. There were several significant orders from new customers.
The net loss for the quarter was $2.2 million compared to net income of $2.3 million in the prior quarter and net income of $1.9 million a year ago. There was a ~$2 million non-cash charge related to equity issuances, amortization of deferred compensation, and amortization of intangible assets related to the acquisition of Axis Systems. For its Fiscal 2003 ending July 31, 2003, Axis had revenue of $20 million and a net loss of $2.4 million.
On April 19, 2004, Verisity announced SpeXsim, a product that integrates its flagship Specman Elite with the Xsim mixed language simulator from Axis.
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-- Dr. Russ Henke and Dr. Jack Horgan, EDACafe.com Contributing Editor.
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