01—Abstract
Summary
Summary of the 10-Q filed October 25, 2012. Cited figures are marked; the original filing is the authoritative source.
Cadence Design Systems Inc. (CDNS) reported strong financial results for the quarter ended September 29, 2012.
Total revenue increased by 16% year-over-year to $338.5 milliona, driven by a significant 32% surge in product revenue. This growth was fueled by increased business levels and effective revenue recognition from prior period bookings. The company also successfully integrated the acquisition of Sigrity, Inc. during the quarter, which is expected to enhance its product offerings in signal and power integrity analysis.
Financially, Cadence demonstrated robust operational performance. Income from operations more than doubled to $59.4 millionb, leading to a net income of $58.6 million, a substantial increase from the previous year's quarter. The company's cash position strengthened, with cash and cash equivalents reaching $649.1 million.
The company also managed its debt effectively, with convertible notes being a significant component. The classification of convertible notes as current liabilities reflects early conversion conditions being met due to stock price performance.
02—Key points
Key Highlights
- Total revenue increased 16% year-over-year to $338.5 million.
- Product revenue saw a significant jump of 32% to $216.6 million.
- Income from operations more than doubled to $59.4 million.
- Net income rose to $58.6 million, up from $28.1 million in the prior year's quarter.
- Cash and cash equivalents increased to $649.1 million.
- Acquired Sigrity, Inc. to enhance signal and power integrity analysis capabilities.
- The 2015 Convertible Notes were reclassified as a current liability due to early conversion conditions being met.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2012, Cadence Design Systems Inc kept $0.17.
- Revenue$338.5M100.0%
- Cost of revenue−$23.3M6.9%
- Gross profit$315.2M93.1%
- Operating costs−$255.8M75.5%
- Operating income$59.4M17.6%
- Interest, other & tax−$857,0000.3%
- Net income$58.6M17.3%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2012filed October 25, 2012Financial Statements
Q3 FY2012 against Q3 FY2011
| Line item | Q3 FY2012Q3 FY2011 | Change |
|---|---|---|
| Revenue | $338.53M$283.27M | +19.5% |
| Cost of Revenue | $23.34M$20.07M | +16.3% |
| Gross Profit | $315.20M$263.20M | +19.8% |
| Operating Expenses | $279.09M$258.31M | +8.0% |
| Operating Income | $59.44M$24.96M | +138.2% |
| Interest Expense | $8.74M$10.77M | −18.9% |
| Net Income | $58.58M$26.91M | +117.7% |
| EPS (Basic) | $0.22$0.10 | +120.0% |
| EPS (Diluted) | $0.21$0.10 | +110.0% |
| Shares Outstanding (Basic) | 271.35M263.19M | +3.1% |
| Shares Outstanding (Diluted) | 283.33M270.88M | +4.6% |
05—Questions
Frequently Asked Questions
What was the primary driver of revenue growth in this quarter?
The primary driver of revenue growth was a significant increase in product revenue, which rose by 32% year-over-year. This was supported by increased business levels and the recognition of revenue from bookings made in prior periods.
How has the acquisition of Sigrity, Inc. impacted the company?
The acquisition of Sigrity, Inc. on July 2, 2012, is expected to enhance Cadence's product offerings, particularly in signal and power integrity analysis. The company is integrating Sigrity's technology into its Allegro product offering and recorded the acquisition-related assets and liabilities.
What is the significance of the 2015 Convertible Notes being classified as a current liability?
The 2015 Convertible Notes were reclassified as a current liability because the company's closing stock price met certain early conversion conditions (exceeding $9.81 for at least 20 of the last 30 trading days). This means that noteholders have the option to convert their notes into cash within a specified period.
How did the company's profitability change compared to the previous year?
Profitability significantly improved. Income from operations more than doubled to $59.4 million, and net income increased from $28.1 million in the same quarter last year to $58.6 million this quarter. This was driven by revenue growth and effective cost management.
06—Continue