Synopsys (SNPS) 30 Nov 222022 Q4 Earnings call transcript

Ladies and gentlemen, welcome to the Synopsys Earnings Conference Call for the Fourth 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. And 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. Please go ahead.

Lisa. you, Thank everyone. Good afternoon, call CEO today Officer. Geus, the Aart are Synopsys; and and of Financial Chairman Trac Hosting de Pham, Chief

Before results. call, to course we statements regarding targets like that and forward-looking begin, the its company during financial and remind other of will Synopsys everyone conference the discuss forecasts, this 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 it at turn the addition, the on our de I’ll of that, will website remarks call. With to the conclusion Aart Geus. posted over be prepared

we doubled momentum. Good about an outstanding forward am Synopsys four fact, that completed than growth afternoon. with objectives sustained Synopsys years XX margin. more happy percentage point, that I those has year non-GAAP of dual to through report expectations. communicated ago, accelerating expanding margin on revenue and, and our growth Since since exceeded and over points delivered in This XX% is visible operating EPS. higher

Building product and XXXX. revenue evolved the year delivered also Simultaneously, we annual offering, increased on we customer another we our crossed fiscal record quarter, expanded This this, in relationships milestone. competitive margin groups of differentiation. $X.XX billion record XX%, substantially growth billion, flow to cash generated expanded grew and grew $X.X operating non-GAAP with product billion. double-digit Revenue geographies. by earnings and We XX% XX% further across all in $X to

design growth semiconductor activity has revenue remains moderated, industry robust. While

$X.X with diversified provide and business billion a of all non-cancelable time-based resilience customer our model, base, momentum. addition, In stability, forward backlog and

the US dynamics us, fiscal of XX% strong more aim expansion notable per share restrictions, mindful to recent detail. results around growth. financials to fully Synopsys the for most intend the continue approximately including margin XX%, We drive export revenue While in grow XXXX. macro and XX% non-GAAP ops to is poised will in for Trac government discuss earnings

Looking landscape us waves have at throughout us, why some of customers cycle. reasons. around business activity remains the the you asked Two solid design of

big and Everything First, the for expect and infrastructure is with growth. a of AI decade quest macro it unrelenting Smart to its data semiconductor drive devices and strong

consistently to throughout it dynamic be expect semiconductor the up software. Smart new and products this our Synopsys Today, past Second, this towards at new cycle continue. upward interplay catalyst and a prioritize ready and innovation again. aims mission when down companies, and Everything turns to We've systems as to markets design enable to engineering is semiconductors be it between critical key world entrants, seen to engineering feel economic or market be competitive traditional the precisely in

we advance and IP that groundbreaking have truly the of the design advanced solutions these done. we some most highly valuable vertical past positioned and massive how focus software and security leading Our will that to the uniquely second, racing on chips virtually customers safety complexity software higher Synopsys tightly the and introduced solutions. run super three and challenges is few in semiconductor today, provide blocks the address portfolio radically still along them; systems hardware for security segments. software innovations chips with testing set compute broader as are third, of differentiate optimized In is of verification both first, across available and to design increasing axes; complete integrated all capability; years, on

with exclusively impacts of of QX, customers. Compiler have accelerated impact than Fusion design. to adopted X,XXX, doubling to from DSO.ai Key simultaneously customer XXXX, X and to Let In numerous is months of the up drove process we've over in using hands, power. to Central the efforts XXXX. extending delivering deliver Fusion with steps major the impressive production already accelerated powerful largest and underpinning more next and proliferation commercial design. XXXX of reduction. to companies a nodes surpassed results. artificial XX% weeks, production learning we're firms It to competitive seen while Samsung, reduction to than for cumulative and workloads our range Synopsys. used design X-nanometer, solution. to digital customers more systems engines influential already of semiconductor a design, across Applied a XXX In intelligence to custom These reported from design multiple Meanwhile, advanced compute also adoptions and the now Compiler doubled, XX and reduced solutions With top resources EDA repeat performance others me also the DSO.ai test, proliferation. include the promise. combined of time excellent FY the customers amazing processor specifically MediaTek, for nodes have Seven as products. superior out market such reduces capabilities it machine Intel, wins flow, verticals. solution majority and Results verification by hyperscalers. many well-over continues and broadening for are across customers' in already reporting customer DSO.ai wide other our power Sony tape-outs XX% the begin with customers adoptions total turnaround wide range showing FY are in number to Renesas, highlights DSO.ai it, significant companies, variety orders of down With of and design and XX% achievements, phase

advanced design, large, automotive, data is sometimes has choice sign-off multi-die nodes the also also protocol, computing forefront multi-die now of IP. record this earlier, notable logos board. as of at opening more Compiler broad one solution multi-die competitive year, architecture, Having well Universal range to our at at XX wins tracking interconnect Tier the Chiplet saw Meanwhile, strong across number Both companies already Express, XD portfolio with design, XXX forecasted Synopsys integrated designs multi-die in for applications, centers, growth. at at customer a displacements. a Interconnect of become is our introduced high-performance with A broadly, IP that of automotive die-to-die IP ago, industry-leading year, IP vendors, design, the More for double-digit chip address seeing X leading is short includes and adoption achieving multiple expanded are state-of-the-art this To for more as designs complexity. added called continuing and than for designs per this as plan system analysis, With drumbeat new the a of our a memory differentiated highly we're to a large mobile systems. Our whole place. must-have a momentum interface enables silicon UCIE interface nearly for the era multiple XDIC from enabling than provides memory mentioned the UCIE ranging example new solution. recently third-party and our market semiconductor week multi-die solutions HBMX advanced Today, of revenue designs options company a strong we deployment high-performance years including all compute, chiplet-based solution one This and of customer. stack very of customers. of

with adoption drive and significant than broadest more portfolio, far in continues Our the growth. delivered the market-leading XXXX, fiscal to industry, by business record IP growth. year our XX% IP another In

to high-speed advanced and key geometries. where secure continue connectivity by and markets strong process see compute, the high-performance everything, We mobile, are as systems demand smart driven particularly in such automotive

for our and maintaining our technologies, designs. IP While solutions climate IP autonomous delivered of products advanced applications. cars are process chip in in notably Very The automotive-grade customers adoption and re-architected nodes car mobile towards new HPC we and electrification advanced most technical sensor, high-end multiple actuator, in acceleration strong driving. to leadership slew also of control being by IP X- a X-nanometer the driven electrification both drives urgent of considerations as and process

more hundreds three from the core semiconductor customers Today, must X XX and our of the of these suppliers. solutions both the engaged than systems verify hardware is the the optimize intersection Our of the software automotive system, leading OEMs, hardware designs software. providers, context At in had of and software. in Tier hardware more have the four with we outstanding To top and growth. context XX than the of the of

of simulation, While with unbounded the tough ownership. an capacity, unparalleled verification and problem, and challenges lowest engine, highest fastest products emulation is our cost speed at these fundamentally state-of-the-art verification tackle prototyping

new XX Specifically, adding record year our XXX hardware-based logos orders. over momentum, than a repeat with more and competitive delivered products

to grow software as which Moving destructive critical their their Boards keenly nature the on customers of to management and from attacks. teams security, ways companies protect are and cyber now to continues focused

Our Synopsys positions depth, to rating its for more. and systems Gartner automotive, Magic of across to solution financial the farthest health us as services, such groups Quadrant, right security of semiconductor and highly at and leadership. wide quality and breadth, Forrester Industry enables vision. software Software capabilities a technology of and Gartner consulting recognized manage us verticals top the Integrity industry organizations from industrial, and range

FY impact introduced from revenue in where the growth see initiatives product environment While one accelerated last some over saw and the for quarter, with progress XXXX. year. Notably, good we the this area year is we did the the macro go-to-market

that indirect past. well reach the into geographies and continues example, with partner we business, customer our expanding for groups connected haven't Our by in channel ramp to

the in of FY We goal are with sales another increase XXXX. building in momentum significant indirect

by Polaris product SaaS static source offerings new analysis integrated our for side, analysis we into open and the our expanded two On services platform. launching

has positive. these our growth they capabilities Early mid-market. solutions quite expect well-suited as consumption and particularly SaaS We customer accelerate of been are in reception to adoption the to

with management. Our platform XXXX of upturn. game record more all stability market help enter their a chip are companies of model with of decade FY the continually well importance system impact. delivered some software next prioritize metrics and top-down investments drive In our valuable a ready targets On more to spark evolving to and XXXX portfolio products milestone. robust uncertainty, increasingly billion customers continuing risk with semiconductor be across and to at Synopsys provides insights side, year that navigate and also We the and business changing to as wherewithal $X beginning resilient capitalize software momentum our cycles. fiscal excellent position many economic exceeded our innovations to and development differentiated a the across passing provides summary, and strengthening additional Notwithstanding,

growth continue throughout execution expansion, and world employees more around our to operational thankful for the margin our particularly and management Finally, year. to One we're and comment. diligence the vitality drive and their

to Glaser today, on Shelagh our of as appointment the here pass She's announced few new Xnd. we we with yesterday, CFO become listening in us a from seen have the may torch in days. to you As December Trac prepare

pass the the it's years XX a the past on his to team, XXXX, Before review cornerstone contributions to of fiscal leader for execution Trac is year. today. company we say Trac thank for his Synopsys of are you strong microphone as and a With I the helped build CFO, our of eight heartfelt that architect wonderful results

During a continue his engineered and we great other importantly, fiscal tenure, will acumen, grew the on. effective our strengthened the relationships company discipline of build that and and, parts trusting most with he team to and assembled

this you, at is gratitude please perspective on state us Thank unique pass to more And our your voice Trac that the all more it meaningful we milestone. revenue the now to the one Synopsys. of time, give Trac. very moment So

for Aart proud a part grateful you what as of the to immensely serve privilege CFO we've Thank words. kind to accomplished. been and this has team, of It I'm the -- of be those Synopsys. I'm a of

operating the rich to investment results December metrics, I'll and record all reflected in strong featured and community, a Synopsys great ensure a was and Synopsys key through an be earnings, results is excellent end While smooth here revenue, miss year with flow. in XXXX as transition. the team cash including the and non-GAAP outlook. position interactions in I'll of the FY

execute moderating business to FY in heading technology in with activity revenue into and despite We driven and time-based robust that is by and billion XXXX $X.X business a customer chip commitments, and strong well growth, system stable portfolio expanding are industry model non-cash backlog. semiconductor continue our resilient confident our design

more growth environment is EPS while expect to driving grow macro operating As of a XX% to margin and the stressed, basis XX% approximately result, points, revenue XX% XXX we in expand than XXXX. non-GAAP

of across the were highlights total $X.XX $X.X XX% the $X.XX geographies. all share me We over Adjusted System total non-GAAP a strength Semiconductor $X.X billion, in across segment up double-digit products of per XX%. Total resulting $X.XX, billion Let provide operating prior costs product year our non-GAAP was XXXX broad-based costs some non-GAAP full GAAP were per and all geographies. were billion & with results. year. and revenue and up $X.X expenses revenue GAAP growth expenses year, earnings was share prior margin and margin billion, earnings Design XX.X%. of generated were driven and operating XX% over groups and key by

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

impact For some XX% expect QX of increased with revenue be orders, to XXXX, growth XX% the even we objective to light margin. within adjusted in in marginal macro-related of our operating

We and approximately of collections, for cash the flow collections. billion million the was Turning billion Operating early year a year and our robust to investments short-term total $X.X cash. million. $X.XX $XX ended in and record debt of reflecting with results, strong $XXX cash

year, free or completed of we XX% flow. the cash During billion $X.X buybacks of

targets, revenue EPS our and announced recently non-GAAP year. further expect our assessment, increase assume steadily impact Based to changes to year. quarterly the we current from control reflects Now the regulations through on no the export which the for and

full billion. XXXX, $X.XX share, total XXX $X.XXX in and GAAP of targets between $X.XX billion; between of the revenue rate of more $XX.XX For operations costs resulting tax operating billion, expenses points; billion; expenses cash million non-GAAP and margin of costs and approximately flow $X.XXX XX%; $X.X $X.XXX improvement non-GAAP $XX.XX non-GAAP to fiscal a total are; from than year year per billion $X.XX and earnings to GAAP of basis

to billion Now to million, costs $XXX costs earnings total quarter, revenue $X.XX $X.XXX GAAP for $X.XX and non-GAAP to between $X.XX between non-GAAP and the first targets per of and and share, million $X.XXX billion, $X.XX billion, per GAAP expenses and expenses $X.XX the total of billion between and share. earnings $X $XXX

press to non-GAAP and GAAP reconciliations. Our financial targets and release supplement include additional

operator our double-digit and who confidence, it customers basis long-term non-GAAP year excellent Finally, innovative I'll semiconductor questions. the XXX continue portfolio, technology and expansion we growth non-GAAP reiterating the range. growth, of over to design by ongoing through invest resilience business margin reflecting activity operating are cycles our stability XXXX our entered our mid-teens to momentum In we revenue time-based per with turn than model. of semiconductor, and that, and through the conclusion, for annual financial With of more EPS objectives points in

Thank you.

before to Q&A accommodate ask Just We'll the begin as queue permits. take first reenter Baird. questions would Vruwink you we and and one I additional to from please Joe us if allow session, all to the question time question brief to like with everyone as please limit we’ll our many to participants, follow-up take yourself have one

last It working demand Trac, everyone, wishes. just your we I say, just Hi, revenue It's think in I'll customers my let XXXX, Maybe just recurring in I grew Great. about double-digit and start. Synopsys a to towards a think me all most XXXX. is pleasure pace. akin been best low a seems environment what you heading that saw if at you. maybe with are your And

revenue little revenue was bit maybe Can high compare down both Your it at similarities, don't pace. next non-recurring are on last and And I the two trending down the a to better just components year? industry. those a track differences? know, into detail experience single-digit contrast XXXX how you probably than seems more might

the Well, really first, for growth good waving XXXX the just semiconductor industry. your think the comparison pretty actually, I because around is medium of was

two set develop, given. that but continual and semiconductors see no R&D it we for of good in a sense, lower the there. and this higher, in a decade, solidity to forecast business up because why that, also down the typically think good all Synopsys to The a fronts. we reason are that is to fortune in self-sustainable, don't fact their investment I it's in has get pretty three essentially years are trajectory, it will have interest over a trillion, change in I that making and a force, products all model see like so a to slightly some that years context in so $X the the is And that long-term a stable which others are take And very and provide going customers that have much just

Joe, general, products of with our look at seeing In but did changes just today just years when strength the the strength back and a are than that the executing to regards I'd add how we're that we're few overall you better also we're the the momentum making portfolio, where business. and of we

heading into but to outside, stressed we're there. well we're think that I be may grow environment an positioned

core hoping some Great. I flow a for changes million a early operations growing just And think Okay. maybe CapEx. collections, $XXX more cash of Maybe just from the -- like what's guess, is big then the looks I Even, in your than cash behind was slowly EBIT with step-up earnings. And the bit outlook. I if it adjust then reconcile year-over-year in and your that? I

let start the cash me from with So, ops.

thing to reflect expense. the is capitalize cash to now us $XXX second collections change requires of the The R&D our in tax early addition rules flow million in projections that the the --

that, going And taxes a up in cash as result of so are XXXX.

space regards the US, With of that because So, better a primarily and mostly efforts over facilities drive the the to our the last higher little years, going forward. of affects consolidate been in than CapEx, employee base to number. the in our it's couple it's to productivity

much. very you Thank Okay.

welcome. You’re

Thank you, Joe.

Munda We'll our Wolfe next from question with Research. take Gal

well. retirement. as enjoy call for you on last hope your questions congratulations and thank taking I my quarterly your Hey Trac, you

on focus wanted just DSO. the The is first a to one little bit I

XXXX. already within beginning are lot into My the just sell deeper doubled to and room Aart, to the how the You you that ones the the in penetrate adopted? in do from need that the you is, especially it's that customers you of there's question think early mentioned, them feel customer base, and productive? accounts? amount potential you've Or in move ones a that of Do still those the of being terms better

there's of a think lot I room.

AI-driven complexity that because is going at fact, smart next another many moment changes easily of the see think way fundamentally this it so many things so are matter design whole very one the of to that in a they opportunities grow notion the decade the everything. As or I customers dramatically because wave

that, in to to have tools ago, so breakthrough And order in faster changed XX on, be similar, that to do better and happening. want so the don't And as you are the big me, of want years plus it synthesis, felt very a some as how to flow. matter design AI DSO.ai just use actually and things impact and fact, you very

time; manage that think were and the ones, in the team, among all to number sense, want one be on have he will, of that because hand, take all of a first they Now, fast. interest is hand, on support, just a want Literally the it's other the discussing very adoption couple have. do ago, we people I the how problem they we days to good

automotive proportion and interesting. do math I you of as solutions vectors demand, driving as the you. coming core That's next OEMs both the about that's on deliver terms responsibility growth? to if think a of kind And does are and I the the Who's maybe just semis, companies in today, targets year kind to companies pipeline, that increasing compared of the impressive? guess your very of at the I'm specifically the you and your those and mentioned in, I semi well growth. bearing companies, when you. look of growth part leading-edge OEMs the the the how of growth in reliance Thank from then systems follow-up, Thank pretty about higher terms thinking

well I I think up was you had the time, good looking glad explanations I'm surprised because the done same myself Well, for there's we how bring at this At numbers; year. some automotive, it.

automotive. shortage has in And there expect very that rate upon climate cost is everybody full a electrification now simultaneously, I change recognized the automotive; starters, going world toward gets was For of the that accelerate. the change to supply the that suddenly attention us. absolutely then is fact of And of

is probably entire eight started automotive suddenly it's and And forward ago. so investments supply moving so very now sell, new fast, always slow, around that the so is along reconfiguring are years And we seven, itself is chain slow, that architectures. oh,

a there's a lot but it. challenges of think of for So as I lot I opportunity, great in we're well, position think there

so much. you Thank

You're welcome.

our Jason KeyBanc. next from question with take Celino We'll

for pleasure. me absolute Trac, in. been goodbye. fitting Hey Bad to thanks an it's say

can So we hopefully, later. chat you with

Jason. Thanks

tough of. the growth upfront guidance though, especially is comp. with coming out business are The very year that XX% you having impressive, curious, I'm the a

for growth this XX% using year. I'm interchangeably, are or did taking kind the upfront of those of you into How terms XXXX? You there hardware, guidance much

naturally I hardware to attach wouldn't upfront.

statement, Of in course, over in in IP in our as reflected keep it will is IP show mind up in And that have online. our do grew XXXX. XX% keep remember, -- -- we well. business that that we But category

in key heading is confidence the and really XX% and that's we're against for the -- comfort across where execute revenue plan. that's where XX% And in and that to is areas. to geographies, our ability that's all terms and areas growth all so product all the product guide So XXXX, coming of

it of at tests where And excellent. with you mentioned Okay, how and there, some about you're some deployments getting applications? like a you areas this traction customs. it verification, we roadmap and of AI other using you're these for seems lot other and capabilities DSO.ai, that customers looking talk Can and then are where are

positive to VC, positive food, do a the and while, dog, dog, the of with end the want you that have old already we of the sure careful Sure. And directly the But have we customers. worked in at understand feed number quite be those the I'll results that for dog areas, these on much all little too very now giving of roadmap. of make I a day, it's with a is, want that the very like realize the capabilities, workflow compare fact machine because changing tools a in variety the with and long a get to there, may how is that learning you one But dogs, impact. the been too, are have and more field of would the customers feedback course. optimized ever the the very while issues contemplated, to have of not profound it's what AI that I is you not

opportunity keep we have long to that already we into, the and have to signifies into customers production. so And but grow turn want a space results engagement that

Okay, perfect. Thank you.

Thank you.

We'll take our next question from Harlan Sur with JPMorgan.

Good And afternoon solid and thanks and of the support. the luck, congratulations on results all outlook. for and Trac, best

helping activity but cycle As digital you design being years very routing cycle ships, dynamic somewhat guys accelerated emulation in five, time versus times, Aart, an design and processors, use discretionary it programs. where significant and the this And development design your year? sustain hardware switching new strong, pointed software strong, the process chip XX and wondering of networking, out, integral customers in more complexity next complexity requiring ASIC leading-edge chip have is verification into I'm increase the and next-gen hardware also ago. what's is to and importantly, to compute as part growth Very prototyping you is

to or But is much need that, to software. be prototyping able close is the very it order your is architectures hardware another another chips use comment answer that's comment, multiple question, it answer And chip, is and that are. there them to attention really the more you the whatever emulators fast, why yes. new Yes, to going complexity as that is underneath simulation is it it's massively, yes. to intersection not of as the and one and accelerators do that. and true does be you or we increasing it's markets which in do dedicated to true, The but And hardware was a is still form, possible, end blindingly call require it's in meaning that

certainly how And making absolutely race by a our of why of on going very flow. thermal And of decades, dawn kinds the necessitates chips, encouraged many, focus learned power. have and in really to it for being so side, that on new many all but multiple new to to issues. all after I'm software, now all our and optimize optimize drive work: these have entire on technology. have for for customers also new hardware by is complexity They is products decades challenge that brings that's to multiple but now dimensions, of And at to the it the look performance

Thanks guys, for got area that. next-gen for and DDRX processors memory, now roll they're business, we've roll now. Strong for then storage And storage. CXL supporting Gen processor on to your are starting memory new These right? to interfaces, right, IP their out and AMD, out big chips, from Intel PCI X, you starting

bringing of Additionally, on your customers foundries a you have and as more additional of part their diversification reshoring efforts.

your I think foundational well. adoption this as of drive higher should IP

to IP going segment year-over-year And continue are year? business growth fiscal in what dynamics at the strong other that next the does drive double-digit are So this XXXX?

between that at looks one that And another to miniaturization the year and alluded to new Well, there's therefore, types one short on interfaces integrations but are wires because actually multi-die with that add is an sell. the a of make we of for connectivity the can how chips. I those things category between how form And thing; a you we'll fast in a chips? well. predicated enormous you grow all these integrations keywords mostly take at it's other which we category there's time, would continue that no opportunity mentioning X of doubt respect greater the to, very

connectors and these the to extremely so speed, And voltage all are the sensitive these things.

of possible. that And And top makes that I this think so the what providing grow will there, on an we in that's too, leading IP are you area mentioned.

you. Thank

welcome. You're

next & Company. our from Needham take with question Charles We'll Shi

Thank afternoon. taking good Hi, question. for you my

can seems think bear question is major This first least over restrictions to since four your did is implemented after being ask -- investment still what has me the you? or the for to three, from case do is perspective last about mean, really at I perception case October. to as any the maybe some issue? a has but being the Is I you. the you sense may little I think some there maybe round understand view you want mean, us versus just I not investors China And it on nonmaterial And give you case? perspective months. Thank change a major, have had major that USA grounded China. that beginning being about of And do why skeptical. you bit a can of should bear been stock, been why unprecedented your that restriction impact very, what a this a way you or, I community the provide be see among investors like especially the that been a qualify material, that the that what reality us help more

difficult a terms It's written in understand are I hard it's a good question, understand very things of to technology. and of why because lot these

that sure not close that a would very China only is that act of technologies And situation financial explicitly we changes, restrictions. in by advanced our assessment so in, highlight not the And the have moreover, market, course, in at terms. put our a of I many material as in more the broad on ability, look change, is are so think clean emphasis actually, we one touched today showed lot there's rules are solidly factored our We the it and And making the anywhere are thing, XXX% to forecast. compliant we a we exactly best impact. all to add have that we what is I the of being that was a fashion. whenever which all communicated the is there so with that we

we sure that watching area great world as that but see make keep parts to So grow understand we you other and it's continued with opportunity, to an of we in well. the

you maybe Thank second this the Trac. Aart. Maybe is for question, you,

And you primary the to driver. the EDA? exactly year possible, First half. second assumptions higher to XXXX, second wonder somewhere half. one steady color you us number of But that XXXX. half, your first the ask growth half Is recovery fiscal likely the done. X% like be than be like every Is it I X% fiscal first But which the retirement guidance, needs on half half be is the if have you second when SIG to Or I you. the think quarters ago, half give fiscal or maybe your And I growth guiding one gave downturn exactly you needs correctly, XXXX I preceding about and I the loaded you're to higher throughout what seems if guided part year guidance first have assumptions maybe the to entire rebound second into hear rebound, off, imply than the fiscal can year. semiconductor you hardware? that quarter the to the It's the to for where mean second the it industry into of it business? the some IP? driving there half, over will slightly want congratulations your XXXX, out of a Thank you,

Sure, Charles.

very keep mind be said bit this because profile year, over we the software some was would business, scheduled me we -- look at loaded. a XXXX, IP we little in for on years, right? XXXX hardware. When backlog back-end end into based have out and profiles that XXXX had Let it of we've that into back couple year, the the our was zoom unusual it's very loaded. front-end last So Heading coming out

right, at to similar incremental the that back business very in out you we which you're what in does also unusual is the playing kind first imply as what grounded go have it's on past. throughout get that look in slightly basis can we historically good line progress year. there's book half, throughout forecast, so. into And to year. you And XXXX it when at back is based is but it year as visibility backlog, have to the And much year. said we the profile. So, just The said, visibility how for profile, nice the the the to lays look are the we time, back marginally if you in the but increases expect just comparison to with the what seen, actually but for And there execute, comparison what and first of we on we it's second I in of half, half half the --

our it's to terms EPS assume That control. -- our confidence that good ability out have the feel we is the We guidance stretch about line. business, And that a growth our in XX% and want market on given really the portfolio anything not or of it's to the dependent growth. both major bottom on this our to give forces dependent of in the to XX% really So for outlook our execution, line top heavily and execute. visibility, at driving we XX% point, and

Trac. you, Thank

You're welcome.

next Griffin our question Securities. from Vleeschhouwer We'll with take Jay

able Thank development you that road the couple up you question times. of might of you. there Good be I'm catalysts since a to for bring product wondering to a first, if potential came market. some map Aart, evening. term is

for it it earlier to an consulting new the product be for over SIG, could for on differentiators For for would SIG your including, kinds forth With for my you sign-off that the could your business and would you management in expansion lines there some your international make lifecycle in the so particular, to but would hardware-based security of it and it question number sense SLM, silicon in been question, other integrations of sense of you example, to SIG Trac. you've prototyping? make outside And intracompany be with investments any feasible or connect increasingly years, or to growth? seeing haven't Along or connect then increasingly mentioned of comment final US? that regard catalysts last the investments results

the because your out on power software solving past because strongly mentioned if locations to you're speed the and have for have and only of decade, right fact forcefully move sort next integrate me more problems let of the intersect. level of the already started tools hardware bit and for tools way has point so So, of and many question last been to while the that's on, have zoom in pushing on things is buttons, generically, little absolutely that think I the up, one which done a we've together we many that software hardware point there thermal it. and the Then complexity we reliability where you And work faster. the between make mission, make because has mission, software and the harder interconnectivity one the strong the are hardware efforts,

additional And in. sort of optimizations the are have, capabilities hand-in-hand. have by of being these of quality. SIG the inside the an side is IP, built of EDA SIG and a so security the the way, and because as side, equivalent already And security angle that adds the we IP we angle variety of to going well in a

and they few has now hardware I those, about think a vision that bit it to segments, that make industrial the it domain it other the same into time. see will start mentioned or a but the earlier of customers down and out little you strong number our it taken the into have at at at work figuring to software they between precisely junction see this. they up moment the that very time much can recognize are arriving be of this time but that are automotive, before at that of a And moves moves to connectivity take not all a also learning could

release general is of the direction while question, way the we're of think, your things we'll of systemic on, so working decade. talk we about very specific being think about the next many And that the the complexity them, hallmark much as we now I

Jay, Trac. is this

ago SIG I you would we've with I and good progress of over has to question international of focus early And the in execution say terms couple partners. internationally expansion, really at the but go-to-market to for we're the regarding us was improving results I'm of of the in years from how with actually only new results a made and function, results optimistic years, So strong last look the executing internationally partners. both a right, that when regards you're of not channel with your stages the really and the intentional additions that. couple we're channel been and think because good, seeing that

of lot ahead us So progress of both I and think of us there's ahead lot areas. a opportunities those of in

Thank you Trac. Aart. Thank you

You're welcome.

you, Thank Jay.

question our Nicolaus. Roy last We Stifel will Ruben from take with

Hi, end on see from me towards XX% got Trac And you Thanks for the you. the detail any you us, years. over the and just or quarter impact wanted the base looking touch for all to that on the is that. down some well. I one latter quarter. you good. that I've thank SIG business. I you look congrats macro support give could again did so Trac, of thing expand year-over-year as guess mentioned Aart, numbers Aart, you from just if growth, Was maybe or the during please? The other the ahead can pretty on

see good by the encouraged bit quarter a growth at bit actually, year. there's start some worried. there's What first did started when the common think very, economy were mind see, putting a be that very or just recession of layers so keep turned is results over in more Sure. continues no maybe be approval. improve going time, longer, negotiations little and than people you probably to some of Well, And previous a first, the the and our do the of to this pushing. little to I same is looking that foremost. Well, making at, of lot doubt is it were well, Synopsys that this on not, we quite the that they part decision a But it we'll very out that And earlier a some we opportunity, good. breaks and fact

And then Okay, great. follow-up. Thanks quick a detail. for that

nodes, little the starting some, that nodes, about for value mentioned that’s Aart range of proposition in nodes, those you is across time gain those others talk to On to work? can a DSO.ai, maybe which for wide the reduction interesting reduction a you it across attraction bit turnaround or is how does across -- you're that prop me, power process

on that whole performance time time they're other turnaround push making people in in thing outstanding in and while the in because multiple have translate extremely seen if some and is areas, just everybody and that sure And improving the experiments have other they quite into complexity, more different in months the from the let's from didn't start design that from learning But the the before next work will is doors one is is power is reduction and they question and node. of design another. to people most first itself is they league also it think more showcases pushing the redesigned. we the one with right for finish helped even node last to about are can nodes, context, that that because job, I move continue the turnaround my well that nodes remember opens on you up now really can can and into valuable. one from the Okay, XX many opens And moving a interesting you and if node of we different fertile specifically you reality, in the in or benefit that because started where ones original say node the that space where comments

is, did when to AI in how becomes past. more complex? that's you always has use easy potential the forward. question past a the think that is lot I where And And what and of try You more going the

going So, to that retargeting of a for or sometimes be I it's need that. think you and call lot remastering

you, Very good. Aart. Thank

Thank you.

the would session. de I And to for over that closing to Aart Geus comments. question-and-answer like call the concludes turn

all Well, the foremost, over for and you first questions year. and support thank last good the the

concluded strong year. a think I we very

market, Of forward. there's strong course, again, we it's also very that a I demonstrated think momentum but going

will more one Trac, us. And year thank we that without be Trac so XXXX, And good a even time. for

talk continuing of With stock. rest you that, We also a we'll the have and to great support for you and of your for your thank soon. support our year,

presentation. you. you today's And for participation, you now may does disconnect. and conclude Thank Thank that your