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Cadence Design Systems' CEO Discusses Q4 2012 Results - Earnings Call Transcript

In addition to financial results prepared in accordance with generally-accepted accounting principles, or GAAP, we will also present certain non-GAAP financial measures today. Cadence management believes that in addition to using GAAP results in evaluating our business, it can also be useful to measure results using certain non-GAAP financial measures. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures with the most direct comparable GAAP financial results which can be found in the quarterly earnings section of the Investor Relations portion of our website.

A copy of today's press release dated February 1, 2012, for the quarter ended December 31, 2011 and related financial tables can also be found in the Investor Relations portion of our website.

Now I'll turn the call over to Lip-Bu.

Lip-Bu Tan

Good afternoon everyone and thank you for joining us. I’m pleased to report that Cadence finished a successful 2011 with a very strong Q4. For Q4, revenue totaled $308 million. Non-GAAP operating margin was 21%, and we generated $62 million of operating cash flow.

For the year 2011, revenue grew 23% to $1.15 billion. Non-GAAP operating margin doubled to 18%, and operating cash flow totaled $240 million. For 2012, we are forecasting revenue growth of approximately 8% to 11%. Geoff will present our full outlook in a few minutes.

Now I will recap our successes in 2011 and then provide some of our Q4 highlights. In 2011, Cadence demonstrated the readiness of our digital custom analog and [unintelligible] solutions for 20 nanometer design. We completed seven 20 nanometer test chips with companies including ARM, Samsung, TSMC, and other foundries and customers. Many more are in progress for 2012.

We established our product capabilities for designing SOC using advanced multicore processors including the first ARM Cortex A15 test chip designed for the 20 nanometer TSMC silicon. 2011 was a stellar year for the Palladium XP Verification Computing Platform and increasing numbers of customers, both semiconductor and system companies now use Palladium to develop complex SOC and for hardware, software co-design.

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