Synopsys (SNPS) 18 May 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Synopsys Earnings Conference Call for the Second Quarter of Fiscal Year 2022. At this time, all participants are in a listen-only mode. [Operator Instructions] Today’s call will last one hour.

As a reminder, today’s call is being recorded. At this time, I would like to turn the conference over to Lisa Ewbank, Vice President of Investor Relations. ahead. go Please

Good Caroline. Thank afternoon, you, everyone.

are CEO and today Geus, Officer. Chairman Synopsys; and de of Trac Here Aart Pham, Financial Chief

Before results. call, to course like statements regarding targets we that and forward-looking begin, the its Company during financial and remind other of will Synopsys everyone conference the discuss forecasts, the I’d

results to performance today, our actual actual While these current differ best could of our to and judgment about that are what as subject many from statements represent future risks uncertainties results we and materially results cause expect.

that In any results highlight to most important today’s addition call, in release. factors described may risks recent future we our press during and reports earnings affect the SEC our that are

Reconciliations supplemental earlier most measures financial to GAAP financial In press information the that financial comparable we their released today. financial addition, we will discussion. to directly and refer be and X-K release, non-GAAP earnings found can supplement in the measures during

presentation, plus available All items, of synopsys.com. our website are on these the at recent most investor

In the at turn the addition, the on our Aart I’ll of that, will website remarks call. With over Geus. the conclusion to de posted call be prepared

earnings non-GAAP our strength raising of billion. half With GAAP margin we and confidence significant flow. non-GAAP of Good XX%. afternoon. all reaching our per share the Backlog substantially to high very for in $X.XX was exceeding product revenue, and $XXX our with second per We all outstanding areas and and million We cash the earnings year. flow. $X.X targets geographies. guidance share grew are $X.XX an operating operating earnings $X.XX, margin, were cash Revenue billion. Business of quarter, ops record and guidance for business, of generated first was delivered quarter strong across

than will the milestone, We expect more more approximately and financials flow. per Trac detail. $X.X operating grow $X to earnings annual to further discuss share billion XX% by while billion revenue in XX%, generating cash margin the ops drive expansion approximately pass grow in

for financial semiconductor to demand for portfolio the in This safety. an three that builds plus backdrop empowered data excellent for is consumer data capture unmatched Smart innovations; new growing intersection robust electronics for momentum the relentless, a storage machine at and synonymous and demand; outlook by AI. and The massively for and business learning on the of for and faster product intensifying of stating chips Our dedicated amounts and sits our and electronics execution. and data drivers: Everything, applications, security both, high-bandwidth market for computation, data need with of huge groundbreaking more transmission, chips course, IoTs, and, and for need is and operational

not impactful All such number as many of and mounting creative deliver uncertain across security era forward markets. these geopolitical invent for this entrants chips chips Notwithstanding catalyst this highly customers from chips, companies and and vertical of are macroeconomic our and seen raise is start-ups of but semi and chiplets in growing complex new only new Smart opportunities customers, and enabling a Synopsys. a in We’ve heavily in optimized initiatives. systems. highly investing means also escalating from demand, an nontraditional hyperscalers, as and systems traditional companies choppiness systems systems Synopsys environment, Everything to

customers particularly software, and and and innovations, momentum. crucial fueled of flows are Our AI-driven hardware accelerating in intersection the our at design have our for

advanced IP growth. second and focus, high-speed particularly is yielding and our multichip in interfaces addition, excellent connectivity design none In to business supporting

continue AI to with begin results as as learning we this quarter’s deliver highlights machine and groundbreaking design. is revolutionizing me Let chip

production Intel, improvement, design with MediaTek, were resulting Samsung dramatic had time to XXx in March, seeing companies achievements productivity QX, use. engineers. ahead reduction time the opportunities cornerstone a user profile Synopsys’ fellow differentiated the hyperscalers of selected tremendous and our four DSO.ai at Orders are remarkable, a as plan, benefits rapid XX% reported for using single Critical which well backlog truly the turnaround a powerful solution, product The automates competitive shared customers. DSO.ai growth. wins and engineer designs. were to multiple design for of in semiconductor productivity half results significant adoption reporting largest, completing learns using our much Compiler their digital in and highly is semiconductor blocks Fusion Our of in DSO.ai In with of X% portion systems and our as two Sony Many substantial flow, our At impact impressive to contributing production design highest lower high DSO.ai. engineers today. four took conference previously and the that solution, is in advanced cross-selling major power

to I We had semiconductor months our broadly. XX the not for trailing In capabilities also significantly opportunity such and at share is expanded verification, conference, highlight revenue user top U.S. Synopsys also transform come to AI design exciting of our Compiler the EDA a using the some more communication aggregate, only more helping than At company. but doubled. Fusion to overall how as technically

design full-flow custom are including seeing strong well, example, solutions, market as XX competitive displacements for year-to-date. Our disruptions

grow example the at complexity continued scale chips them. large impact the electronic automotive in with Over by this grew With excels is year, chips drive to connecting systemic -- our Synopsys complexity, the systems software advanced to memory at nodes leadership while ideal product past many and foundation are advanced companies vendors. designing adoptions An to tightly and systems IP this. from revenue advanced semiconductor area, digit of of chips now increasingly double ranging line.

also design IP. We interface most Simultaneously, as X-nanometer IP business with the traction we processes. report high-performance AI, QX, generating networking, in in semiconductor compute momentum and markets. and XX investments, achieving and notable as extended remains automotive AI quarter we decade-plus commercial wins with leading of high-performance introduction In only not engagements IP, continued more certifications than momentum for Xs Tier the industry’s and with applications. well continued very the compute significant as own automotive companies lead demand our but and with leading performance automotive, developing another our now suppliers, highest X XX We mobile excellent customers are automotive our XX high, enhanced advanced neuroprocessor with can semiconductor comprehensive top Tier in the In their too, the our worldwide. OEMs wins among market Here, OEMs our especially suppliers, portfolio foundation XX chips. count safety and

automotive nodes, This our is demonstrating verification the solutions is where of have and advanced we IP, close portfolio. the the of hardware targeted. to precisely are software. At system wins For top design XXX our strength of in the intersection

Let me success drivers. highlight three

record First, Fueling and application-specific there we’re this powerful products. Demand emulation our new prototyping for HAPS-XXX is are our is demand high and towards and prototyping market-leading another high, heading ZeBu emulation systems. year. hardware

as we in customers usage to geographies, growth expansion largest While demand hyperscalers across significant is see of the world. continue broad-based in many the and

sometimes with both called multi-die, XDIC Second, essential. industry’s for a and our Compiler chiplet-based of need Synopsys system die-to-die the uniquely driving is differentiated strong which leading solution innovation. is IP, interface are of design, portfolio

telecom segments, engagements driving adoption And execution cloud-enabled including and design. aerospace. servers, multiple market across and with are focus AI automotive, third, momentum Our

designers compute chip for power. is yet access challenges the of to One sufficient flexible

industry’s Azure-based QX, EDA compute access unique SaaS using offering our business model. been three we with years, hasn’t our broad-scale in the have offers true solution. cloud Synopsys of customer’s first bring customers cloud to but now. cloud expanded with pay-per-use now reception companies usable Initial choice approaches One, and for seeking It third-party cloud flexibility. peak available flexibility three, compute the compute; for with access been flexibility on cloud customer with deployment: Of and small In verification course, until large excellent, peak offers both, full cloud demand a ranging very Microsoft SaaS ZeBu has model flows been hardware-based own your from provider; two, to Cloud. startups tools,

security enabling both we all that year-over-year as Integrity, and sold products safety across XX Software to through by we’ve Bolstered plan. and for strong momentum our partners. exceeding best channel geography before Now, broadening which another never our as intensifying and strength, of demand XX% quarter to from delivered verticals. consulting quarter we growth, reaching market benefiting internal countries well with new ever, Internationally, our had is

improving market, logo metrics. is stakeholders, broad a make renewal engagement the in From DevOps product our team. developers, to continue progress the as portfolio our new for our the the and all approach differentiated three-pronged security also We rates unique and perspective, value group good provides corporate

we’ve continue to past Over excellent. and strength. new year, Synopsys’ launched these recognize the customer analysts of in has each response areas, Industry significant been products

to the fifth year, Magic fourth farthest Gartner Quadrant up a row, we year the the application and For we leader named testing, straight the in and were for for the right. security rated in were a

Security, solutions. Trac. fueling forward raising third quarter. are and and WhiteHat our look Building technology cross $X SaaS to you in poised few our we’re that, turn possible team and growth, weeks security the expand expect of teams. quarter These unwavering acquisition In on We billion our agreement I’ll DAST a the With testing, mark excellent employee will build-out to of welcoming we we and the commitment it for a dynamic markets substantially provider This our resilient fiscal strong to year. announced we momentum which and be summary, acquire operational ago, after revenue a outlook close, application fiscal milestone to results without SaaS-based not of execution, are fiscal currently thank high or portfolio financial over our the wave this of Finally, diligence a innovations, leading to We delivered the and accelerate technology. ‘XX. all. definitive further a WhiteHat

Good revenue, non-GAAP and Thanks, flow. EPS QX, operating Aart. delivered In afternoon, margin, record cash we everyone.

our to environment. a execute discipline. markets This continue in uncertainties healthy robust is macro exceptionally portfolio, despite testament well financial the and to We

execution time-based backlog. and noncancelable resiliency of also the by of is strong enhanced $X.X our stability business and billion Our model

was over & up revenue $X.XX, were operating XX% $XXX all Total a was $X.XX. product resulting with million. the costs for GAAP groups Non-GAAP of EDA prior software million, the Semiconductor of in XX%, & System Design in Design were lead unless in XXXX IP. After raise are otherwise results confidence billion $X now billion, XX% XXXX, $X.XX our our with full XX% year. and the growth total All our again third our strength $X in stated. growing for results. I’ll Our grow straight quarter margin over targets. and $XXX per Semiconductor earnings year, review non-GAAP share costs revenue expenses System up were prior year. and adjusted operating revenue us XX.X%. accelerates generated across earnings expect XXXX margin Total year and comparisons and segment $X.XX We GAAP were billion, XX.X%. and non-GAAP cross second year-over-year, as expenses up share surpassing in per to geographies. demand to billion we robust business

segment Integrity adjusted up $XXX And Software margin revenue was operating XX.X%. XX%. was million,

Turning We to generated $XXX $XXX have repurchased XX cash we record for in flow. cash, months. trailing our stock used $XXX a and million of the of cash in operating million buybacks million

sheet million. the $XX ended investments balance quarter billion, and very of and $X.XX Our of strong. short-term remains with debt We cash

let on guidance, me is and acquisition, to customary subject providing comment closing Before briefly review regulatory WhiteHat the which conditions.

will pay Based $XXX quarter. this preliminary earnings when million closes, expect we the we cash We which in non-GAAP transaction acquisition year. roughly neutral review, occur on to approximately to be our the to this expect

which from the to any WhiteHat Now impact the acquisition. guidance, excludes

revenue, outlook operating and flow. We full-year cash earnings, our are for raising margins,

XX% non-GAAP million and to XXXX, of from Non-GAAP flow to Non-GAAP growth. to headquarters of GAAP points. and improvement a between per Total share, $X.XXX and and from of at operations $X.XX $XXX Capital XX% growth to footprint. operating billion $X For rate representing versus revenue expenses per $X.XX of expenses campus our are tax billion $X.XX XX%. efficient XX% non-GAAP approximately represents consolidate economical million, full $X.XX to billion fiscal of to our between outlook. the year XX% $XXX as basis earnings of a and $X.XX we costs our $X.X billion, targets billion earnings $X.XX and prior margin in billion. to guidance $X.XX more GAAP billion. XXX $X.XX up $X.XXX Total create costs share. approximately increase resulting of expenditures billion, this Cash prior year

of growth billion improvement, and non-GAAP for we operating continue in billion. $X.XX million. $X.XX between that, non-GAAP execute expenses operating and to Total margin GAAP Now to $X.XX well. between costs it GAAP and XXX based conclusion, we $X.X on costs In earnings I’ll share, more $XXX $XXX $X.XX $X.XX to million and cash and exceptionally XX% strong over non-GAAP for the questions. Revenue of XXXX. $X.X billion. deliver turn $X.XX revenue to And earnings targets the quarter. $XXX expenses per per the basis billion operator our points flow Total to third and expect of XX% between momentum, earnings share. non-GAAP than growth fiscal With to of and

the [Operator Fargo comes question first from Wells line Instructions] Our of Mobley from Securities. Gary

Let percent I question year-over-year me sequentially. least. extend or the high want to believe, up, on roughly the my congratulations backlog, multipart to on and mid-single-digit say ask execution, XX% a I percent single-digit good

extent longer growing duration a what backlog start longer Excuse number Maybe of is that to longer average there. So, -- as average we duration? result -- me. can

overall Gary, remains X past, the within is X.X we due backlog which Duration run rate communicated to the to in growth. is up years. model the

long-term -- your to well, for view grow And double-digit your lot guess, company people. this could the percent mean and to technically But much that’s growth. of it’s year, different Okay. a here different with within of things obviously I that sit XX% we potential today

wondering target. long-term view we get if on growth I’m revenue So, updated an can your

that Well, not feel to any term, up targets market that of conjunction would so, And general, digit what right continue a a well importantly quite in for answer. for the now, the demand say we’re the I that we in while and virtue backlog, have changing has long but aligned. double particularly in more building of but we’re position strong of only by the potential end we’re to a right not the we being offer by the at clearly, the

right strong So, the I objective very we considerably started for is we you where and that saw from Company the now, changed the the think, year year.

line comes KeyBanc. from of the with question next Our Celino Jason

impressive Really guidance here. raise

maybe or improved second guess, your has as back take I a kind what Or we half, you months so to the level into surprised coming think versus in we exactly visibility I year step -- what point? of now, into second cross the has confidence if much? six this

surprise. has well. a it’s say It’s been that wouldn’t hard work I Well, worked really

right and chips we’re field I every are have valuable very time. point think well future understanding breakpoints in sideways, a that cater that of lot are noise Obviously, innovation down the for this for products market extremely including where a serves around differentiation that that a us renewed in some us the time, think well. highly of up the having at but is how at executing the truly markets And have in is we the of and competitive of. important are part can to literally there you needed

tools, where And positioned so, with think customers the faster to with well that want better that. is faster and we’re an area solutions, I move in

see in have business, and continue strong in Jason, and is momentum we we to keep right? the for had that, with for year, off we very And the already we bullish raised six months worth of communicated. business, enter coming booked strong very based six years months of what outlook the the mind, consistent long-term we What’s several in are we our about when now that the very Because and improvement. December, different -- growth business. margin we’ve feeling we are on be

well So, we’re feeling and of right the now, us, outlook we’re we’re like is against really opportunity the feeling positive. -- executing ahead

impact lower which on you of of but year, framework, And to maybe kind kind then, typically back a seems kind plans the margins. If implied hiring on timing margins, that? of a or Okay. bit one may basis. one QX points just quick some XQ know Maybe this than investments, it of I speak is little into of on maybe the and of we lower maybe can your sequential a

for with by points the basis the year fact raising the I’ll we are overall ‘XX. XXX versus Well, margins that start

really improvement. in are a of other increasing variable contributing With Good business is in the the half the to fact profile, regards hiring, QX the half. continue back we our second it’s the to year. invest the accrual that we strong So, part strong the it outlook is to compensation in frankly, that so the that’s and

next from And line the our WestPark from Ruben comes question Roy of Capital.

congratulations extend solid to on like I’d you execution. to my

something just orders mentioned quarter you kind around that well Trac, backlog of et thinking changed, plan, last durations and First ahead just but haven’t of about cetera. question,

talked year being more you’re much as could comment seeing between if last a or you able et areas about the environment just negotiations. pricing across year? the cetera. Have across product about extract bit value this wondering business And to You in the had kind tools I’m and dynamics expansion of little customers, large of changed pricing

are value it products effective I’d say, ability us remarks, it’s they when as that in good customer -- solving right prepared conversation a competitive. an fact much products more a way, comments are the the we And of the on their with Aart’s And that’s much And healthy and the problems you’re for our coming pretty in pricing -- lot our really or you of incredibly customers. a environment is heard for creating pricing. with now. are engagement to constructive efficient, scalable more starts

that vice general, add, certain more software Yes. much lot the and are software I not chips, would just In chips versa. of is the software optimize designing and complex, is for chips. certain between for intersection those demand. optimize want just meaning The chips there they People to the important, but systems chips more or a of

a lot is by these IP. And market growth these our so, towards problems all difficult need And that of of continued parts. semiconductor all our I relatively are overall require sheer and the the tools lot a think heading of

a Helpful. follow-up guess, that, IP the around just I Aart. itself. Thanks, on All Aart, right. quick

about companies the how of should up how of sort are to IP for and do or existing grow move of as -- it continue -- think IP kind other we, your the your Is sales? IP guess, and the as right, forward are using way talking to or it continues obviously -- going complexities around? I into lot As for a tool about competitor, a you driver is you you

You’re build, in let’s things, the years, some what of immediately about point would a to decide been decades people first follow. the ones world, right design that dramatic building driving blocks they meaning with bit you XX of Synopsys, big the building and when the that I clearly, get and then from both, little often in then is, course, has EDA the in go often IP and can of have system last catalog ago, okay, ready look that can effort. IP was EDA decisions which both. decision-making have, say, the the sell But then a in some architecture or line, and And regions in it’s they they’re I blocks going in very modifications. on which shortcut And make with some to come

the I coin. in same perspective, of, think sort two So, they’re of sides my

be You both need both, well. and working need to very

Our Charles the next Needham of Shi from & line question comes from Company.

IP. kind in the results. between term? Congratulations numbers, view results I that it start want fiscal IP far do been far answer is look the looks year? your When question wonder, like than mid-teens. long-term that Or think for do you long faster on your above Really given are strong the target, so mid-teens the still strong grow far synergy holding just has your year how Aart, the with at may growth so you Thanks, this and IP. of it EDA growth IP on I on to another in like your

we’ve been doubt Well, At directives far, that to we strong as for general the this and term. strong for a that the the IP time, to want actually quite while. you particularly no same so whatsoever there’s hold has quarter on long was given know,

IP IP subject of it, need pick purpose. milestones some their often be are little if to a and customers because for of period the that as then you tends IP so, the that’s up modified it lumpy And want they time over a sell to they or have things to

strong other new that new particularly sometimes not in new things the So, well already as very reflect be will those it’s as in when types also of predict interconnectivity they also overall, blocks more the chiplets. chips chips, chips. used as of the always you but that time-based. put tight designs, But the easy are to proximity, refer And very some very, we’re to

of opportunity so, a whole wave for And that’s us. new

I a probably the -- Maybe quarter, subpoena last press end last the of us what you mean, the you I year. update was second year, to or received this you closed, expect is administrative about of Can give an it investors in by it any about you when during think update know close? as there question. subpoena do like a the kind -- article an overhang, terms is And Synopsys? of

in update. there’s We if not Well, November mistaken, really an received I’m not this, ‘XX.

you these on number typically, and questions. those so, questions, to given get being of a the by a follow-up And there’s of And out companies. lot way, of are number then a some

followed It’s to And for so, us up. not we things finish. diligently have these know when actually

So, up, it’s our issues and no but far. we’re wait following perspective from see, so and

And next from Vruwink Baird. of from Joe the comes question line our

do possible that is and this kind think than there seem to cycle was is product era compare it moment I maybe a compare XXXX we of greater How was hardware, at if the product big the thinking with sense in prior a think, is DSO.ai you and be mean, Compiler XDIC? XXXX to, does big verification, one? different recent fusion the new of of I or experience? some get cycle that this I better one, of the wondering IC traction I’m to

that fun our That’s actually ‘XX, question products markets know had great In substantially advanced existing state-of-the-art. and ‘XX that we seem some here. a hit of to because birthdays you the absolutely better

the you’re a flows, And of of after that because as have are interaction, a I in a new problems whole state you with point felt art. AI talking demonstrated results already long like verification. talk doing brought is and similar now the right synthesis applicability you at had the own of time, can beyond privilege of new you design so what early to for be we’re feel lens or the it literally days very a essentially has applied view of our when that AI through better, way strongly And having to about to the can some revolutionary hardware-software here things patterns think new I essentially about DSO the month from recognize deductive we science do design better but look getting and versus also broadening calculations. just a month also computer to

fun so, there’s runway our excited I time think And watch also literally is long But to a it get that. they some how with own teams are every results. better

and be within of uptake would of quarter new sequential the that logo And advanced and is much be X Okay. some renewal-driven of a How but renewal getting these period And went lot of actually through you ‘XX another big ‘XX, growth? your and we’ve step-up. step versus time scope more a was backlog, fiscal sequentially where thinking now behind That’s great. what then, had actually this up, about of stable. a might big it XXXX solid solutions

that. of It’s a all little of bit

to We have you get you and revenue is gets goes decreases backlog always do, then that backlog wanted if gradually to years, up, let’s multiple down then a transaction say, as go your because the say it it over recognized large and up renewed. and

flag that’s I have course, aggregate. of not in to one many we for it’s backlog. renewals, spiky Now, the But want raise so that

renewals growing there’s portfolio that we as our a On the no company. of other many and strong broadening business the have are question offer we and what hand, is that

for at the in purposefully we this growth Company so, are very time. And building point

you make the with sure And that so the forward. we’re give is watching in backlog going we guidance that to sync

vary It’s because the in the in great of run backlog what’s have momentum full I’ll Yes. rate that noisy, comments described. is Aart’s add the outlook is and billion about for will It’s And really of growth better that $X.X backlog. first increasing is quarter-to-quarter. backlog. the the as to to confidence it half run the from even year. rate Aart driving in growth, terms of That

Vleeschhouwer question from line Jay from next Securities. our of Griffin the comes And

new know itself. new is a that in the you new cited much certainly history that there has products all terms EDA over EDA But in repeating accelerated requirements, and of you customers, Aart, is growth, time, like. of new way customer

we about example, way, The -- you interesting historical tools. comments new AI is when for so, ANSYS the precedence I for there’s think by a And in very and have at AI. started earlier the thing this with morning Synopsys about, the conference question your that presentation there on

our eventually to So, in there blocks, for the capacity, implementation, instance, and of about device methodology. to early synthesis sure and issues of tools for in great extensibility flat with terms or for remember days, debate respect the synthesis were hierarchical and I’m example, the you tool example, new types applications.

XX So, you meeting capacity, is question to in that for are with viable at necessarily how eventually years run respect device to you some AI of AI confident a terms that X the is the the platform kind have tools ran of earlier of performance doesn’t types, and the question number That’s perhaps one. walls into. the and set of that wider wider of so into, needs

for example, X,XXX midpoint OpEx? than headcount-driven positions you growth the $XX terms of fill margin your Trac, the you now if, guidance you that were raised and would for of the to And expectation for more able one you you, in year? For have of every talk raise to still opened, for objectives million. you Could the expense your be meet that year by about behind non-GAAP

in problems them those they of and car, later do always we say, hope something has starting at synthesis licked first let like possible, them the place with fast faster I those route. all give entire mentioned, Synopsys is X, exactly news fortune a part have for every customer "Can revolutionized with The state good who me success the because the in race that start drivers, it kept growing its that faster?" car of with drive digital history. you the questions. All wants me more. automations X, that things give you And the It’s art. the good made you of X Well, and to our X we with fact stayed simulation, they history is the together design, and fairness, your have that’s And we

So, in this is evolution. sense, that normal

"Oh, think that have have building and right actually a And be a have but is to we’re for very know Secondly, And compute now I also want you if if capabilities of add SaaS model the I for there’s now. the light-hearted for AI you fact here, on you us this, announced that to just right that side limitation waiting quite we pay want we theoretically applicability. compute about saying, don’t that the the are that not in cloud, that’s infinite price." we is terms I the the fact broad

area I migrate part problems system the are single that the number work. And we Synopsys plays absolutely we for put that for strength complexity. systemic to is meaning of the its Synopsys’ deep touch, that of every are thinking to in scale because now emphasis years to high from degree you play so a and doesn’t what we’ve have of and many one complexity a all every complex, systemically addressing there be nail things to are together, will think that them, challenging highly we’re different that otherwise,

on there, in we’re fear here. no is have actually but on execution this think a the always roll I so, direction. And Trepidation I

commensurate the with to the of margin investment over OpEx. the to way sure in really Jay, sustain parts invest a One growth. the that drive can years. improvement is we investments We’ll business primarily questions growth is on with this time And to making business your can second There’s continue in the in the two to strong regards that we next increase. that expense part scale the few over business.

in driving for an second us a in also outlook I the highlighted what year, of variable for The to with accrue the the is to compensation which it’s -- strong allowing increase increase reflect what’s earlier, part is expenses the more overachievement.

On hire the hiring the margin continue to the to year ability ops our points outlook front, in of our contemplates XXX and in ability invest improvement our business. for basis to

loop closed all it’s numbers. factored and So into the

line the America Vivek from comes Arya question next Bank of of Securities. Our from

I questions. conceptual two of more actually had kind

business? IP EDA rates should trend. why your I’m one, first the they is levered the large the Conceptually, for to growth such gap So a underlying same curious, between the of be there and

I outgrowing year, why like other last growth, year when XX%. the much? kind X% was your EDA XX%, one full so of at like And So, look is more

to see in acceleration also be don’t when compare So, mid-teens, I is difference a it the in your that who I growing same there to are And appears you the peer describing. growth.

So, I sure I’m at make to just things want looking apples-to-apples.

that’s first I question So, the have. that

areas, competition. have mid-single-digits it’s quarters At the we’re recall, precedents time, many business other up. our we IP to double rate. And the all digit. the that is were in. you And EDA as ago we’re in outgrowing how clearly growth if not those in and IP same areas referring the all historical the we’re that that includes that set of And today, and of Well, in

of shortcut of that’s up ways, many has in fast. tried is The is IP moved you design So, that, very the leading give to bit up. that a a has of already the moved situations, is, And right, IP have I in done. IP number part EDA, explanation as which earlier little is

And growth. in really this should them is so, together, EDA predicting IP well essentially XX% the XX% and take in And to aggregate, works aggregate. actually combination a the for what Company one of and year is

can numbers you split so, And anyway want. you the

I see.

describing don’t competitor you gains shifts agree or market last share with their So, that the your in call? was

critique what about -- others I their cannot fully business. cannot say I

well. doing are We

the all needed be all There’s software are in that’s growing the industry I semiconductor think the no is heart chips to nations question that at competitive. advanced that understood the world of most rapidly. have

well And think, we the very with change. very so, technologies a this playing have. I And we that fundamental in is are,

the new, highlighted or few that also we other that we’re are doing areas well. such could SLM DSO.ai, some highlighted, And a have relatively but really have areas as I of

a just it hiring right? to do QX get Right. I that have implied of just just The And would hiring to because right OpEx Is of it earnings be year-on-year. math follow-up. earnings with down it your on the growth. Is still way quick that understand the just math the based down is suggests pretty timing are... conservatism? Did how strong of year-on-year. guidance be why you But flowing? pace sales and kind Is still QX more will suggest it’s I imagine actually could

at would just I profiling. look Yes. the

at delivering EPS I of if look would we’re and growth the are the you’re have stand on out going years two year, unusual. that -- But particular year, the a and XX% out got result, to it’s quarter margin and north -- that’s different really comparing zoom you the full to profiles. growth. strong And You’ve And last comparisons very heels as improvement. relative year seem of revenue any this

line Ramani the next of Pradeep UBS. comes question from from Our

feels not I question the sustainability on growth. this revenue your you’re you call XX% model. just the is the just yet the financial are accelerating structural that growth up are taking a had of business, like there are everything It saying that drivers of and on

or of reset interpret lower this to -- Are are sort or sort when we been back it’s interpret structurally higher growth sort is IP this? a to growth to -- do is how the than a before? be we you of EDA XX% level, take as is I type we you other XXXX which side, then EDA should of and going So, growth EDA, say is to and

me this it Pradeep. Let put try in to context,

really We are of off The we’re the executing strong. well. of momentum a XX% growth business year. year And last showing incredibly is record

very We talking just this, go. are the are our would I into over questions to business, are the in and from over raise the But only just on the in changing say months multiyear in updated still this model six multiyear business a a confident not that six business about left we be very regards coming but literally a feeling the Where all we bullish December. model, are with for model our changing about back feeling year, you in multiyear period. months we to midyear, to while It’s and period. premature have we confident

terms term. So, and I concerned ability about the the sustain anything are very over would our strong of results not long to read results in

Great. a ask in me asked, it this been but let has And I sort follow-up, of maybe, as mean, a different way.

even If hardware or customer so foundry customer the respect is year, product of just or big you maybe Both is in with grow driven broad-based? mix who’s by on? EDA especially maybe in in the to one or pursuing and plans terms being back terms IP it of it and mix of half

are can geographies very all seeing you Well, across growth the lines. in and in all product see that strong our we disclosures

gives across of growth driven you really these the the a base. where broad it strong by growth with So, from. areas regards the detail, don’t in the sense are We all to coming is customer obviously, just disclose, the breadth growth that but -- customer we have

run -- the the any the for sustainable I to not we’re model attributing just So, the That’s to change in a one way outlook a business. area. or year not

from comes the Mobley question Wells Gary next of Securities. Fargo from Our line

go Your line [Operator open. Please ahead. is Instructions]

timely we very had our but you guess go Well, your much I a will strong said, as on only in We It more of finish Okay. for interest. quarters. business. a very saw can Thank for, quarter, momentum entire Trac importantly, fashion. forward a not number

And we so, be to and appreciate shortly on that you support, one-on-ones. we’ll your talking the in basis,