The EDA and MCAD/MCAE Almanac -Nominal Q3 2011

Indeed, the G5’s total US revenue after three quarters YTD 2011 is already within $802 million of exceeding the total achieved in all of 2008. Thus for the first time in three years, the G5 will in 2011 easily eclipse 2008 in revenue, a feat which both 2009 and 2010 failed to accomplish.

Table 1 further reveals that every member of the MCAD/MCAE G5 experienced an excellent nominal Q3 2011 revenue increase relative to the previous year’s counterpart, with each vendor scoring at least a double digit year-over-year (YOY) percentage increases in revenues, led in this third quarter by PTC’s 27.68% YOY revenue increase.


1 Notice that these Table 1 columns calculate the percentage of one quarter over the other, as labeled, whereas in Table 2 below, the relevant columns provide the numerical dollar differences in earnings between two different quarters as labeled.

2 In Table 2, FX rates used for ESI Group were the same FX rates used for Dassault Systemes.

Turning to earnings in Table 2 below, we see that the total MCAD/MCAE G4 earnings in nominal Q3 2011 were far larger than the total Q2 2011 sequential total, with all four reporting vendors well ahead (except ANSYS and Autodesk were only narrowly ahead). Of course, all four of the group’s vendors reporting earnings were well ahead of their year over year (YOY) counterparts in Q3 11, with PTC easily winning the YOY improvement sweepstakes with a $50.8 million earnings increment compared to the runner up DS’ $41 million difference.



3 Notice that these Table 2 columns calculate the numerical dollar differences in earnings between two different quarters as labeled, whereas in Table 1, the relevant columns provide the percentage of one quarter over the other, as labeled.




On October 26, 2011 Cadence Design Systems, Inc. (NASDAQ: CDNS) announced its financial results for the third quarter of its fiscal year 2011 ending October 1, 2011, a quarter which corresponds to our nominal Q3 2011.

Cadence reported third quarter 2011 revenue of $292.457 million, compared to revenue of $237.934 million reported for the same period in 2010. Sequential Q2 2011 revenue was $283.270 million.

For the third quarter of 2011, three months ago the company expected total revenue to be in the range of $280 million to $290 million.

On a GAAP basis, Cadence recognized net income of $28.106 million, or $0.10 per share on a diluted basis in the third quarter of 2011, compared to net income of $126.753 million, or $0.48 per share on a diluted basis in the same period in 2010. Sequential Q2 2011 net income was $28.908 million, also $0.10 per share on a diluted basis.

Recall that three months ago, third quarter 2011 GAAP net income per diluted share was expected to be in the range of $0.04 to $0.06.

(Recall also that GAAP net income for the third quarter of 2010 included the effect of $148 million in income tax benefit related to the settlement of an Internal Revenue Service examination of Cadence’s federal income tax returns for the tax years 2000 through 2002. Without the income tax benefit, Q3 2010 would have produced a net loss).


Lip-Bu Tan


“Strong design activity in multiple market segments continues to drive demand for our products and solutions,” said Lip-Bu Tan, president and chief executive officer. “In response to customer requirements, we have established our readiness for 20-nanometer design and demonstrated product leadership for the design of SoCs using advanced multi-core processors.”

Geoff Ribar


“Cadence again posted strong results as operating profitability continues to improve,” added Geoff Ribar, senior vice president and chief financial officer. “Given the risks in the world economy we looked at our prospective Q4 business very closely but still see good demand for products and services as reflected in our increased outlook.”


The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially.

Business Outlook Improved for the Year 2011


For the fourth quarter of 2011, the company expects total revenue in the range of $295 million to $305 million. Fourth quarter GAAP net income per diluted share is expected to be in the range of $0.08 to $0.10.

For the full year 2011, the company now expects total revenue in the range of $1,135 million to $1,145 million. On a GAAP basis, net income per diluted share for 2011 is expected to be in the range of $0.31 to $0.33.

As indicated, both full year revenue and EPS guidance now are higher than that given just three months ago. Back then, for the full year 2011, the company expected slightly lower total 2011 revenue in the range of $1,115 million to $1,135 million. On a GAAP basis, net income per diluted share for thr full fiscal year 2011 was also expected to be lower, in the range of $0.20 to $0.26.

In some auxiliary data published by Cadence, we note that the heretofore steady rise to 33% of total Q2 2011 revenue of the software related to IP, flattened off in Q3 to 30% of total revenue, still the largest % of any revenue category:

Revenue Mix by Product Group (% of Total Revenue)

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, hardware, IP, and services to design and verify advanced semiconductors, consumer electronics, networking and telecommunications equipment, and computer systems. The company is headquartered in San Jose, California, 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.




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