June 21, 2010
WORKS IN PROGRESS: The Economy & EDA
Please note that contributed articles, blog entries, and comments posted on EDACafe.com are the views and opinion of the author and do not necessarily represent the views and opinions of the management and staff of Internet Business Systems and its subsidiary web-sites.
On May 19, 2010 it was reported that the
Executive Committee of the Design Automation Conference (DAC) and theEDA Consortium (EDAC) planned to host their annual Kick-Off Reception at this year's DAC conference in Anaheim, California. The reception was to be held at the Hilton Anaheim on Sunday, June 13, 2010, and for the first time was sponsored by EDA customers under the theme 'Customers Celebrate EDA Vendors.' “A positive sentiment is building between semiconductor leaders and the EDA community,” said Kathryn Kranen, vice-chairperson of the EDA Consortium and board sponsor of the EDAC tradeshow committee. “As the semiconductor business continues to increase from a year-long global slump, major leaders in that industry have stepped forward with a symbolic
gesture to thank EDA vendors for their continued innovation and support. The 'Customers Celebrate EDA Vendors' sponsorship is a testament to both communities and to the significance DAC plays in bringing customers and vendors together each year.” The DAC 2010 Kick-Off Reception sponsors were ARM, Intel, NVIDIA, QUALCOMM, and STMicroelectronics.
By the time this edition of the EDA WEEKLY is posted (June 21, 2010), this year's
Design Automation Conference held in Anaheim CA will he history (June 13 - 18, 2010). But as of press time, DAC 2010 is just around the corner:
Over 8000 attendees were expected to examine the EDA product capabilities of over 200 exhibitors. Four of the EDA G5 (Cadence, Magma, Mentor Graphics and Synopsys) will each have been well represented at the show, with the “Big 3” acting as major exhibitors:
Exhibits were scheduled from these additional companies who have been featured in the writer's EDA WEEKLIES to date: Agilent Technologies, EVE-USA and Virage Logic. Even IBSystems EDACafe.com will have had a booth.
Readers may obtain access to all the pre-show information about DAC 2010 at this URL:
III. The Now: How did the G5 EDA Vendors fair during the nominal First Quarter of 2010?
Table 1 reveals, the combined G5 revenue total of $785.5 million for nominal Q1 2010 barely edged the $781 million for Q1 last year, by less than 1%. Both Cadence and Synopsys were up, but Mentor and Magma were down.
As is quite natural, nominal Q1 2010 combined G5 revenue was less than the sequential combined total in Q4 2009, but this time Mentor was primarily responsible, with its Q1 2010 revenue off by -24% from a monster Q4 2009 revenue result.
earnings inTable 2, Q1 2010 found that three of the four EDA Vendors reporting had slipped into red ink on a GAAP basis, with only Synopsys’ consistent profitability keeping the G4 total Q1 2010 net income barely into black ink. But hey, what’s a sequential negative difference like Q4 2009 to Q1 2010 of $167.29 million in quarter-to-quarter profit mean among friends? It means that the G4 total profit of $4.07 million in Q1 2010 was $167.29 worse than the $171.36 million total G4 profit in the just prior Q4 2009! On the other hand, Q1 2010’s G4 total profit of $4.07 million was an improvement of $41.89 million over the G4 total loss of $37.82 million in Q1 2009 (i.e. year
Last year in Q1, the same three vendors were also in red ink, but even Synopsys' Q1 2009 profit of over $48 million could not offset the losses among the other three back then, especially Cadence's $63 million Q1 2009 net loss.
IV. Company by Company Q1 2010 details:
On April 14 2010 Altium Limited (ASX: ALU) reported sales and revenue results for nominal Q1 2010, the quarter ending March 31, 2010.
Nick Martin, CEO of Altium, commented, “We still find ourselves in a very difficult climate, and while we need to be careful not to read too much into these results, there are some positive signs of change in Europe.”
“Even though we are expecting to release a significant upgrade to our flagship AltiumDesigner product during Q4, and the momentum of companies switching to our design solutions continues, we will continue to manage things tightly in an unpredictable environment."
On a region by region basis, measured in local currency, on a year over year basis, sales in the Americas were up 5% to $4.33 million; sales in Europe were up 31% to € 3.21 million,; sales in Asia-Pacifc were up 32% to $1.34.million; sales in China were down 16% to 0.925 million, and consulting was also down 80% to € 0.04 million.
EDA Commentary readers are encouraged to sift through the detailed profile on happenings at
Altium Limited posted in
EDA Weekly on EDAcafe.com on March 01, 2010, available permanently at the following URL:
Altium's self description:
Altium Limited (ASX:ALU) provides next-generation electronics design solutions that break down the barriers to innovation. Altium's solutions are unique because they unify the separate processes of electronics design, all within a single electronics design environment, working off a single data model, linking all aspects of electronics product design into one process.
This unified design environment helps electronics designers easily harness the latest devices and technologies, manage their projects across broad design 'ecosystems', and create connected, intelligent designs.
Founded in 1985, Altium has headquarters in Sydney, sales offices in the United States, Europe, China, and resellers in all other major markets. For more information, visit
On April 28, 2010
Cadence Design Systems, Inc. (NASDAQ:
CDNS) announced its financial results for the first quarter of its fiscal year and the calendar year 2010, the period ending March 31, 2010.
Cadence reported Q1 2010 revenue of $221,938,000 [$222 million], less than 1% better than the $220,279,000 [$220] million in sequential Q4 2009, but 7.58% improved compared to revenue of $206,302,000 [$206] million reported for the same period year over year in Q1 2009.
On a GAAP basis, Cadence endured a
net loss of $11,785,000 ($11.8 million), or $(0.04) per share on a diluted basis, in the first quarter of 2010, going in the wrong direction compared to a
net profit of $1,790,000 [$1.8 million], or $.01 per share in sequential Q4 2009, but of course significantly improved over the disastrous
net loss of $63,257,000 ($63.3 million), or $(0.25) per share on a diluted basis in the same period year over year in Q1 2009.
Cadence's Q1 2010 revenue of $220 million was at the top of the range of guidance provided last quarter, and loss per share of 4 cents was much better than the guidance of a loss of 8 cents to 10 cents.
"Cadence is off to a good start in 2010. The team executed across the board and our focus on customer engagement continues to yield success," said
Lip-Bu Tan , president and chief executive officer.
"Business improved in all geographies with strength in Asia and North America, and in all platform areas, especially verification, custom and digital design."
"We put up another consistent operating performance in the first quarter with our key operating metrics meeting or exceeding our expectations," said Kevin S. Palatnik, senior vice president and chief financial officer.
For Q2 2010, the company expects total revenue in the range of $215 million to $225 million. Second quarter GAAP net loss per diluted share is expected to be in the range of $(0.05) to $(0.03).
For the full year 2010, the company expects total revenue in the range of $865 million to $900 million. On a GAAP basis, it still expects a net loss per diluted share for fiscal 2010 in the range of $(0.23) to $(0.13).
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. Cadence 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 Cadence and its products and services is available at
www.cadence.com . Cadence and the Cadence logo are registered trademarks of Cadence Design Systems, Inc. All other trademarks are the property of their respective owners.
On May 27, 2010
Magma® Design Automation Inc. (NASDAQ:LAVA) reported revenue of $33.609 million for its fourth fiscal quarter ending May 2, 2010, which is treated herein as nominal Q1 of 2010. While Q1 2010 revenue was above the $32.5 to $33.0 million guidance range given three months ago, Q1 2010 revenue was still down 1.35% compared to the same quarter last year, when Magma recognized $34.070 million in revenue. For the just prior nominal Q4 2009, Magma reported just $30.96 million, so Q1 2010 was up 8.56% sequentially.
Magma also reported $123.077 million for its 2010 fiscal year, the period ending May 2, 2010. This result was above the guidance for the year given 3 months go, but it is down some 16.2% from the revenue of $146.857 million realized last year.
"Magma is in a much stronger position than a year ago, both in terms of products and financial performance," said Rajeev Madhavan, Magma chairman and chief executive officer.
"Our key product groups - Talus, Titan, FineSim and Quartz - are demonstrating competitive strength and continuing to improve their traction in the market. As to our financial performance in fiscal 2010, we beat all guidance ranges and continued consistent cash generation. We are optimistic as we enter the new fiscal year."
GAAP Income Results
In accordance with generally accepted accounting principles (GAAP), Magma improved to a net loss of $728,000, or $(0.01) per share (basic and diluted), for nominal Q1 2010 compared to a net loss of $9,894,000, or $(0.21) per share (basic and diluted), for the year-ago Q1 2009. In the just prior Q4 2009, Magma lost $2,600,000 or $(0.05) per share.
The net loss per share in nominal Q1 2010 of one cent was far better than the guidance for nominal Q1 2010 given three months ago, when the guidance forecasted a Q1 2010 loss per share of 8 to 9 cents.
For the entire year, fiscal 2010 Magma reported a GAAP net loss of $3.334 million, or $(0.07) per share (basic and diluted), compared to a net loss of $129.242 million, or $(2.89) per share (basic and diluted), for fiscal 2009.
Since revenue was down fiscal 2010 to fiscal 2009 by some 16%, the reduction in net loss this year vs. last year of $125.908 million must have been what Mr. Madhavan was referring to in his comments about “stronger financial performance” above.
For Magma's nominal Q2, ending August 1, 2010, the company expects total revenue in the range of $31.0 million to $31.5 million. GAAP net loss per share is expected to be in the range of $(0.07) to $(0.06).
Then for Magma's fiscal 2011, ending May 1, 2011, the company expects total revenue in the range of $130.0 million to $133.0 million. GAAP net loss per share is expected to be in the range of $(0.16) to $(0.14). A Financial Data Supplement containing additional first quarter and full fiscal year 2011 guidance, as well as detailed financial information intended to provide further insight into Magma's business is available online on the Magma website:
Magma self sescription:
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. Visit Magma Design Automation on the Web at
www.magma-da.com . Magma is a registered trademark and "Fastest Path to Silicon" is a trademark of Magma Design Automation. All other product and company names are trademarks and registered trademarks of their respective companies.
On May 28, 2010
Mentor Graphics Corporation (NASDAQ: MENT) announced results for its fiscal first quarter ending April 30, 2010, treated here as nominal Q1 2010.
For the nominal Q1 2010, the company reported revenues of $180.6 million, down 6.81% year over year from revenues of $193.8 million in Q1 2009, and down 23.83% sequentially from $237.1 million in the just prior and traditionally stronger nominal Q4 2009. Guidance for Q1 2010 given some 3 months ago was for Q1 2010 revenue to be $180 million.
GAAP net loss in Q1 2010 came to $23,025,000, or a GAAP loss per share of $0.22. This compares unfavorably to a year over year GAAP loss of “only” $12,956,000 in Q1 2009 ($0.14 loss per share). The $23.0 million loss in Q1 2010 is fully $62.4 million worse than the $39.4 million in net income achieved in the just prior Q4 2009. Mentor missed its Q1 2010 earnings forecast by plenty; guidance for Q1 2010 some 3 months ago was for earnings per share to be in the range of $0.00 to a loss of only 5 cents per share.
“While the quarter's bookings were lower than last year due to the concentration of scheduled renewals in the second half of this year, the renewals that did occur in the first quarter were very strong, growing 25% from their prior contract values for the renewals within our top ten contracts,” said Walden C. Rhines, CEO and chairman of Mentor Graphics.
“Leading indicators that we have historically tracked were also very positive: support reinstatements grew 70%; our base business, orders less than $1 million typically from smaller customers, grew 20% over the year ago quarter; and consulting and training bookings grew 25% over last year.”
For nominal Q2 2010 ending July 31, 2010, the company expects revenues of about $180 million, and GAAP loss per share of $0.17 to $.022. For the full year the company expects revenues of $870 million, and GAAP earnings per share of $.10 to $.15.
During the quarter, the company reported that it had extended its customer partnerships with three significant new relationships:
“Despite two sizeable acquisitions in the last year, our operating expense is still down on an absolute basis year on year. We expect our continued strong emphasis on cost controls, as well as an improving foreign exchange environment, particularly the Euro, positions us well for the year,” said
Gregory K. Hinckley , president of Mentor Graphics.
“This fifth consecutive quarter of meeting or beating guidance, given our transparent real-time financial model, gives us confidence that the (economic) recovery is continuing.”
During the quarter, Mentor strengthened its offerings to the DO-254
 market with a joint announcement of a product flow with The MathWorks, extensions to Mentor's HDL Designer product to support DO-254 coding standards, and a new product, the ReqTracer™ tool, that helps automate requirements capture.
The company's Mechanical Analysis Division launched FloTHERM® IC for semiconductor package thermal characterization and design. Mentor launched 3D electromagnetic analysis for its HyperLynx® printed circuit board product line.
The company completed its previously announced acquisition of Valor Computerized Systems which offers PCB manufacturing software and also acquired technology that provides on-demand electrical schematics for automobile dealerships. In early May 2010, Mentor launched its Calibre® InRoute software which fully integrates its Calibre tools into its Olympus-SOC™ place and route environment. This allows designers to invoke Calibre verification and design-for manufacturing tools from within the place and route environment to verify and improve designs much faster, significantly speeding time to design
In April 2010, the Valor® MSS Software suite won the Circuits Assembly New Product Introduction Award and the 2010 Surface Mount Technology Vision Award. Design News granted FloEFD™ mechanical analysis technology its Golden Mousetrap Award for Best Product.
In February, the International Engineering Consortium honored HyperLynx Power Integrity with its annual Design Vision Award in the System Modeling and Simulation Tool Category. Additionally, Mentor's Dr. Vladimir Székely received the Dennis Gabor Award for Innovation, the country of Hungary's highest technical honor.
EDA Commentary readers are encouraged to sift through the detailed profile on happenings at the Mentor Graphics
Mechanical Analysis Division posted in
EDA Weekly on EDAcafe.com from December 07, 2009 to December 22, 2009, and available permanently at the following URL:
verification than Level E compliance.
Mentor Graphics self description:
Mentor Graphics Corporation (NASDAQ: MENT) 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 electronics and semiconductor companies. Established in 1981, the company reported revenues over the last 12 months of about $800 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, FloTHERM, HyperLynx, Calibre, and Valor are registered trademarks and ReqTracer, Olympus-SOC, and FloEFD are trademarks of Mentor Graphics Corporation. All other company or product names are the registered trademarks or trademarks of their respective owners.)
On May 19, 2010 Synopsys, Inc. (NASDAQ: SNPS) reported results for the second quarter of its fiscal year 2010, the period ending April 30, 2010. As is our practice, this quarter will be treated as nominal Q1 2010 for purposes of this EDA WEEKLY article.
For nominal Q1 2010, Synopsys reported revenue of $338,106,000 [$338.1 million], less than 1% growth compared to $336,835,000 [$336.8 million] for year over year Q1 2009, and up 2.4% compared to $330,167,000 [$330.2 million] in sequential Q4 2009.
Guidance provided 3 months ago by Synopsys for Q1 2010 was for revenue between $331 million and $339 million, so they actual result of $338.1 was near the top of the forecat range.
"Synopsys again delivered solid results this quarter," said Aart de Geus, chairman and CEO of Synopsys.
"While the customer backdrop remains cautious, we continue to execute well on our strategy to address customer needs ranging from mainstream to the most advanced silicon design flows, all the way to the rapidly growing IP and systems space. This quarter we made particular progress in the latter, where we believe we have an especially promising outlook."
On a generally accepted accounting principles (GAAP) basis, net income for Q1 2010 was $39,549,000 [$39.5 million], or $0.26 per share, down 18.1% compared to $48,288,000 [$48.3 million], or $0.33 per share, for Q1 2009. Synopsys of course had no prayer that the net income [$39.5 million] in Q1 2010 could match the extra-large sequential Q4 2009 net income of $132,786,000 [$132.8 million].
Synopsys also provided its financial targets for the nominal Q2 2010:
Revenue: $330 million - $338 million
GAAP expenses: $275 million - $292 million
Other income and expense: $0 - $3 million
Fully diluted outstanding shares: 149 million - 154 million
GAAP earnings per share: $0.21 - $0.27
Revenue from backlog: greater than 90%
Synopsys' self description:
Synopsys is a world leader in electronic design automation (EDA), supplying the global electronics market with the software, IP and services used in semiconductor design and manufacturing. Synopsys' comprehensive, integrated portfolio of implementation, verification, IP, manufacturing and 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 more than 60 offices located throughout North America, Europe, Japan, Asia and India.
V. EDA Vendor Q1 2010 Stock Performances
The first four columns of
Table 3 below reveal that the
combined total of the G4 stocks appreciated in value during the three calendar months of Q1 2010, but only by less than 1%. Meanwhile, both the NASDAQ and the DOW gained value in mid-single digit percentages. Both Cadence and Magma managed to add double-digit percentages to their stock prices during Q1 2010, but Mentor was down more than 9% and Synopsys was flat.
Turning to the last two columns in
Table 3 , one can see that over the course of the entire EDA G4 year April 2009 to March 2010, the
G4 total stock value gained almost 32%; however, both the NASDAQ and even the DOW did better, the NASDAQ by a handy 15+ percentage points and the DOW by 11+.
VI. Post Q1 2010 Stock Prices
To better understand the impact of the Deepwater Horizon disaster on both the general economy and on the EDA G4 vendors, let's next take a look at the G4 stocks' performances after Q1 2010 closed.
Table 4 below provides a picture of the post-Q1 2010 positive rise in the EDA G4 stocks within a rising NASDAQ Composite, increases which lasted until ~April 23, 2010, i.e. until a few days after the news of the Deepwater Horizon explosion on April 20 became common knowledge. Whereupon, a post-explosion decline began that has continued until press time for this issue of EDA WEEKLY.
The EDA G4 total had gained nearly 11% in value in the first 23 days after April 1, 2010, while the overall NASDAQ Composite had risen 5.5%. Between April 24 and press time, the EDA G4 total had forfeited its entire 23 day gain and then some, while the NASDAQ had given up more than 14% of its April 23 peak value.
A chart of the NASDAQ Composite for the post-Q1 2010 three months was shown in section
I. The Economic Environment: Progress Interruptus . That chart verifies the trends of Table 4 above. Each of the G4 vendors possesses a similarly-contoured chart for the 3 month period.
It is also constructive to look at the stock charts of each of the G4 vendors for the last six months. Both the behaviors of the stock during Q1 2010 and the stock after March 31, 2010 can be observed, as well as the performance of each stock vs. NASDAQ. Lastly, the NASDAQ Composite index chart is shown by itself for the last six months. Once again, the deterioration after ~April 23 is clearly visible in all these charts.
For the record, and to maintain the proper perspective, here are the Market Capitalizations for each of the EDA G4 vendors, as of June 9, 2010:
… and for an interesting comparison:
The writer would like to acknowledge the sources of data and information for this issue of EDA WEEKLY: Yahoo! Finance; Google Finance; The SIA; and The EDA Consortium. Ongoing support by the team at IBSystems, Inc., including but not limited to Sanjay Gangal, Adam Heller, David Heller, Jon Heller, Nitai Fraenkel, and Sumit Singhal, is also appreciated.
About the Writer of this EDA Weekly:
To obtain details of the brand new "2010 Business Planning Tool Kit Promotion" from HENKE ASSOCIATES, please click on the URL below and scroll to the last entry on that page:
http://www.henkeassociates.net . March 31, 2010 marked the 14th Anniversary of the founding of HENKE ASSOCIATES.
You can find the full EDACafe event calendar here.
To read more news, click here.
-- Russ Henke, EDACafe.com Contributing Editor.
Be the first to review this article